What do you think will happen to Silver in the next few years??

There have been many recent global events from Euro zone problems to middle east issues that have caused a "flight to safety". I heard some commentary and read a news article about the recent "flight" prompted by the events in Libya. The interesting thing is that some of the money is going into US treasury offerings, more going into gold but for those who opt to go into cash, people are choosing to move into the Swiss Franc vs. the dollar. As a result the dollar index is moving lower (currently at about 77.16) against the Franc and even the Euro. The reasons cited for the move into Franc's instead of the dollar are US fiscal problems and mounting deficit spending.

There are so many factors in play right now that can move markets up and down based on the day's news. So the recent flight to the Swiss Franc instead of the dollar does not spell doom for the dollar but is not insignificant either. We are living in very interesting times and there is a lot of turbulence out there. I expect a healthy dose of volatility in the price of gold and silver this year but I do think we are headed higher; just too many destabilizing factors to calm the fear trade.

Regards,

Bluesboy65

 

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The US Economy is 27 times that of Switzerland. There may be movement but there isn't enough room to move very much.

 

Interesting statistic. My point is really not about Switzerland or the Franc. It's that there is an amazing amount of market forces in play right now that create market risk and that people are seeking alternatives to our stalwart dollar as a safe place to park their cash.

Regards,

Bluesboy65

 

But why ? Why fill one's head with nonsense like The End of American Life As We Know It ?

Unfortunately, Chicken Little has a megaphone. For some reason, large numbers of people have a taste for the negative. Negative sells. Strange.

Oh well.

No one has a worse batting average than Chicken Little. Right one time, wrong 999 times means a batting average of 0.001 . And that's about par for "End of the World as we know it" propaganda. They were wrong about The Coming Ice Age, they're wrong about global warming, and they're wrong about The End of American Life As We Know It.

To each their own.

 

Uh oh, uh ooooooo. Not a can, but a barrel......a barrel of worms, just got opened up. I'm gone.

 

There has been a doom and gloom industry for a long time. Most of the authors are far better writers than economists, and copy from each other depending on what line of thought is currently most popular. It is often difficult to separate the nonsense from the few analysts who really understand the bear market case. It is true that things are bad now, but they were bad in the 70s and 30s and at other times also. The debt to GDP ratio in 1945 was much higher than it is today. So things can get worse but they can also get better. Nothing is a certainty.

 

You indeed have the rights to think what you want. That is part of your personal freedom.
But if you think our Country will retain World Currency Reserve status having some of the worst debt in our Countries History you are sadly mistaken.
Part of the problem is that we Americans are complacent with our lives and we have not tasted the bitter pill other Countries have of these modern times.
Our internal ID(s) have not the capacity to even consider such a disaster could happen to us. Well look very close Sir, your/our elected officials have catapulted you and the rest of us into a no win situation on a finance standpoint. So go ahead a sit back and be complacent, satisfied and unprepared. It will people like this that we will have to defend ourselves from in the future.
Nothing is certain and there is no way to be 100% accurate in any prediction, but not being prepared is total stupidity. If I were you, I would look a little closer to the actual situation and design my plan accordingly.
When this debt crisis can no longer be covered and the big ole ballon gets popped, Silver will be the poor mans gold and gold will be what makes the poor man rich, along with ammo, food, clothing, water and shelter.

Good luck and GodSpeed.

 

Two thoughts. First, the debt to GDP ratio at the end of World War II was far worse than it is now, and a post-war depression was widely anticipated. It didn't happen and debt as a percentage of GDP was lowered rather painlessly to reasonable levels. Second, this whole "world reserve currency" issue has become a talismanic response that completely blocks intelligent discussion. There isn't any replacement for the US dollar at the present time, and even if this happens, people will recall that the nation did just fine before the dollar was the reserve currency. It might even finally force some financial dicipline that everyone says they want. As they say in chess, the threat is stronger than the execution.

 

You guys just keep coming back with the same ole responses.
If China is not earning enough interest on their $472 Billion in US Treasuries, they will sell them and move away from the dollar. When this occurs, infaltion will be instant! The dollars demise will fall from that point. Silver will sky rocket as will all the PM's as a hedge against "I" but it will be too late! Hyperinflation will wring the life out of our currency and the worst will play out.
As mentioned, I do not know why you can not see this, it is very clear. A call for a NWO and new mix of curriencies has already happened. It is just a matter of short to mid term time. 2-5 yrs.

BTW.. this is not 1941-44

 

If China decides to liquidate all their US Treasuries - who is going to buy them? Treasuries are not payable on demand. They'd have to peddle them in the secondary market. Certainly wouldn't be able to sell them at a price anywhere close to par.

 

Thanks for the example to prove my point. If China sells T-bonds, how will that cause "instant" inflation? I'd like to know the mechanism whereby that transaction increases the US money supply. Let's run through it... China sells the T-bonds to Japan. So what? Whether they pay with dollar reserves, yen, gold, or yuan, there is no increase in the money supply - just a transfer. Let's try another scenario where China sells the T-bonds in the USA. It probably drives down the price of the bonds temporarily [unless the Fed buys them] until the transaction is completed, and China gets $0.50 on the dollar in US dollars to spend and the pension funds or other buyers get T-bonds at a bargain price for their cash. If China spends the cash in the US for wheat, timber, cars, etc..., the economy improves -- this is what the Fed and US Treasury have been praying for for two years -- someone to spend money other than the Federal Government. Otherwise it is a wash if they reinvest it in the stock market or commerical real estate to create an investment boom. I guess we should send them a thank you note for that one. Another thing to consider is that a half trillion dollars in bonds isn't that big a deal anymore -- it's smaller than QE2. How does this transaction cause hyperinflation? It doesn't, except in the imagination of a few doom and gloom authors with no training in economics. Hyperinflation doesn't happen because someone sells existing bonds. Please explain the mechanism to us.

Edit: One other thought... The most likely scenario might be that the US Treasury will purchase the bonds sold by China for some discount to par for a bulk sale, and pay for them by selling additional bonds to the Fed at par. This will instantly decrease the national debt by an amount greater than the new cash required to do so. Again, thank you China!!!

Edit2: What I should have pointed out is that bond trading in the US exceeds $800billion per DAY. Even if China wanted to dump all of their holdings, it would just be a small blip on the long term chart although the psychological damage to the market could last for months.

 

I think that China's currency is highly over rated. The Yuan will never (IMO) be considered for the "world's currency" because of 100% government control and uncertainty of stability, both political and internal finances. Who wants a world currency that can be manipulated entirely with no transparency as to backing economy? Even if China doesn't like the interest, the presence of US bonds does give a floor to China's currency. Without the US bonds, they would be even less to accept as a strong currency.IMO.

Jim

 

You simply do not get the meaning of what "chain reaction" will occur if this first level event occured. With them selling is the catalyst for the unfolding of many World Events that will lead to the destruction of the dollar. It will not be 1 event, but many.
As mentioned, you can think what you want, if you or I were so dam'd good at economics then we would not be on such a forum. We would be in a position to do something about it before it happens. If our Country turly were self efficent then we would be back in a state of surplus. The only President to ever actually have that was Andrew Jackson.
Unless I am mistaken and you are on the economic Advisory panel of Obamanomics, then it would be different. It is a 50/50 departure. Either it will or will not occur. I err to the side of protection even though I am Chinese/American.

Good luck in whatever path you take. Mine is one where I am prepared to protect and defend what I have. I will not sit back and be complacent, idle and unprepared.
Sounds as though you are taking that approach.
Hope the best for you.

 

Of Course the Chinese currency will not be the "only" one. (they are in a state of surplus) It will be a mix of currencies as the European Finance Minister asked for a few weeks ago.
I do think China will play a major role in the NWO and NWO Curriency mix.
That is why I feel Silver is a safe bet for now and the next few years as it will take time to establish the system.
It is the hold out period that will reek havioc among the ill-prepared.

Just my opinion.

 

I feel that silver and gold does have a place in one's portfolio, but not as a hoard nor as a constant amount. The value of each varies mainly ( especially at this level) on the reaction to geo-political stability, speculation, etc. Hyperinflation is still a scary thing like Bird flu is/was, A Strong stock market is hope like Christmas. One must weigh PM each day with the Stock market , and all events and adjust one's holding as needed. IMO.
Jim

 

I just want to point out a few things…

… that all of China’s US Treasury holdings only amount to 20% of an average week’s bond trading in the US
… that selling EXISTING bonds does not increase the money supply or cause inflation
… that the Fed can sterilize the transaction through the futures market, repurchase agreements, and offshore banking facilities if they choose
… that China may not welcome or be able to afford the bond losses
… that Wall St. would welcome the fees and the short term traders would profit at China’s expense
… that the junk on the internet was written by people who don’t understand anything except they are making money by scaring folks with the specters of hyperinflation and the China bond boogyman

I’m not picking on you and I apologize if it sounded that way, but I just want everyone to realize that much of what you read on the internet is the economic equivalent of horror movies – meant to be enjoyed but not believed.

Good luck to you also

 

Cloudsweeper

I do not care if you try to pick on me or not.
We have different view points. You seem to be a person stuc in the mode of disbelief and think this can not happen to the USA.
I am of opposite opinion and think it will happen.

Regardless of what you point out, it does not cover the current expenses of the USA trying to police the entire world, just a Rome did. All fiat currencuy is doomed to fail when more is spent than taken in. Even an idiot can figure that out. For me I am willing to try to preserve my little bit of wealth during what I think will be trying years ahead (2-5 yrs)

If the dollar does fall and becomes worthless, then my little stash of 200oz Silver will serve me well. If not, well I will loose some of my investment, however, it will still retain some value. There are many influences on the position of this Country and it's physcial well being, not just the percentage of the normal indicators which can be easily fudged and are at times. I for one would much rather be in a situation of surplus than debt. I am sure in your heart of hearts you would be too.
I do not trust the Gov and you seem to. Wall St is full of criminals and massive greed, it will suffer along with the rest of the Country.

 

On that we can agree; but it is too political for this forum.

 

That's very true. No investment is always good. Someday, gold and silver will be the worst thing you can own. I don't think that time will be soon, but mental flexibility is key.

 

I agree, but that doesn't mean we won't get a different global currency. The Yuan won't be ready for that role for probably 5 years if you look at the amount of gold reserves they would need for support, and by then the role will probably be filled.

http://www.guardian.co.uk/business/2011/feb/10/imf-boss-calls-for-world-currency