Silver is on the rise!

Putting all of my stock on silver. Although it is not as much of a hedge against inflation as gold, it still is. Also silver could sink to the bottom of the ocean, be dug up 200 years later and still have it's value. Big investors can still buy ETFS if they are opposed to the physical storage of silver. If the silver price shoots up, which I suspect it will, the storage problem starts to decrease. Also, people of my generation are just not interested in the appeal of gold. This is not a gold generation. We like the eye appeal of silver. Look around in any college and you will see silver jewelry, not gold. Also, for us that don't have deep pockets, silver is easier to get our hands on. I will be investing atleast 20% of my disposable income on silver for the next 30 years, and when I retire I am going to sell my silver and take my family on a trip around the world. That is the plan atleast. That being if, or when we climb out of the future depression. Looking forward to a silver buyers market for the next 10 years.

 

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The potential flaw in your plan is that 30 years from now it is entirely possible that silver will sell around the same price as now, just as it now sells for about the same price as 30 years ago. You will lose 30 years of compounding. On the other hand, if you put that money into the stock market, there is a high probability that it will be worth many multiples of the current averages and throw off a huge dividend income, especially if you are committed to saving 20% every year. I think your generation will live to see the Dow Jones Industrial Average break 100,000, although it will be a bumpy ride along the way just as it was from 1,000 to 10,000.

 

I don't anticipate an apocalypse any time soon. However, severe fiat currency devaluations are most certainly coming. The Euro has to take a huge dump considering the enormous debt burdens of Greece, Italy, Portugal, Spain and Ireland. There is not enough money in all the world to bail all those countries out if they default on their bonds. Italian bonds are yielding in the high 6 percentile. That's near junk status. Portugal, Spain and Ireland are more or less in the same boat. European leaders are not fully disclosing the problem honestly either.

There is still time for a long term solution to the U.S. debt issue. But do the U.S. politicians have the cojones to do the budget tightening AND raising taxes as necessary? Personally, I don't think so. In fact I believe the unspoken plan is to inflate our way out of the $15 Trillion debt burden we've created. It's not just Obama but Bush and Dems and Repubs alike.

 

One more thing, going ALL-in on silver or gold is a bad strategy as well. Having cash and other investments is also smart. The key is to be flexable, being able to move quickly from one asset class to another is the key. BTW: JCB you have a beautiful family.

 

Don't disagree, I suppose it is all in the mindset of the investor. I am hoping my precious metal investments will keep pace with inflation, anything more to me is just gravy.

 

You should check your facts. Russia by treaty has 3500 deployed strategic nuclear warheads. (more in reserve) and they are currently in a modernization program. That is way down from the 10,000 plus they once had but it's still enough to destroy the world about 3-6 times. The USA has an equivalent stockpile. So instead of being able to destroy the world multiple 10s of times, the two countries together only have the ability to do it 7-8 times. It should be noted: once would be enough.

These limits don't cover tactical nukes. Fascinating video of one here

I do agree at this time, China isn't a player with this kind of global destructive power.

None the less, I don't think it is going to happen anytime soon.

 

Duly noted, LOL.

 

I agree with JimofOakCreek - if you are that bullish on silver why not at a minimum invest in gold also? Personally, I believe in diversification as much as possible. Real Estate, Mutual Funds, Money Market, Bullion.

 

Bring it on! :devil:

 

My reason would be that silver moves the same as gold does, but in greater magnitude. If both are going to go up then silver is going up more. If both are going down then you wouldn't be buying them most likely. My strategy is diversification of assets in hand. Nothing I have to rely on another person or entity to guarantee for me where the value is ultimately dependent on that guarantee.

 

This gives me flashbacks to 1999 talking to tech stock investors who thought they were "diversified" because they owned a half dozen high flying hot tech stocks. But when the crash came, they sadly realized that they weren't diversified at all because it was a single asset class. I have a lot of sympathy for concentration of investments as a path to wealth, but it should be done with eyes wide open that this is what you are doing.

 

Wow! This is the most bullish outlook I've ever heard. I'm 31 and I don't believe we'll ever see 30k. It works like a pyramid scheme. 1k to 10k is easy compared to going from 10k to 20k. Where is the money going to come from just to double this market? It's not there. I think it will be lucky to sustain 10k. Once the baby boomers clear out of it and all need to sell to fund their retirement, who's buying? They just said we have the worst income gap in US history. If that isn't a signal to get out, I don't know what would be. It's already flat lined for a decade. If it gets back down to 5k range, it might be worth taking a chance on again.

 

I could have made the same arguments in 1980 – “The dollar is collapsing, we’re running out of oil, interest rates are 15%, Business Week just ran a cover on the end of the stock market, major companies are failing, the budget deficits are huge, people don’t have money to invest anymore, etc…” There are always reasons. But stock market advances are about return on capital and reinvestment of earnings. The last decade was something of an anomaly and this will change at some point. It’s not a big stretch to believe the market will double every decade from here. It’s only about 7% per year when most companies earn more than that on their capital. Others will give you a thousand reasons why it can’t happen, but young investors today just can’t see that they are staring at one of the great investment opportunities they will ever encounter. Can the market drop from here? Certainly. But this is the type of situations from which fortunes are made by those with the foresight and courage to take advantage of it. The old saying is to buy low. This is low. The market is at the same level as the 1990s even though revenues, dividends and earnings are sharply higher now than then. So write this down and remember where you heard it first.

 

This is a associative logical fallacy. The events of 1980 have nothing to do with the events of 2011. The market was behaving as designed in those days when interest rates were raised to 16%+ in order to cool off spending and debt growth. It injected the necessary throttles to allow the economy to correct itself. The government and federal reserve were not doing everything they could to protect the TBTF banks because they didn't exist.

Nothing like this is happening now. The production economy we had in 1980 doesn't exist now, and there is deliberate action by the government and federal reserve to keep the credit bubble inflated. (0% interest & constant give aways for people to indebt themselves) If they did what should happen to fix the US economy for the good of the people they would raise interest rates, put up trade barriers, reinstate Glass Stegall. Of course they won't do this. It will kill off the very thing you mention about fortunes being made by this economic destruction. This is why they are called the 1%.

It's not a question on whether the market can drop more. The market has already crashed. What we have now doesn't reflect the economic reality of the USA and it's being papered over by corruption and scams. The collapse of MF Global just this past week is example enough of that. People who ignore all of this, ignore that necessary regulation of the finance industry isn't taking place, ignore the collapse of the Eurozone because of the same sort of thing, and instead look back at unrelated events in decades past, are fooling themselves.

Exactly my point. We will never see Dow 100,000. The results of the real economy in the USA speak for themselves. Record numbers of people on foods stamps and 1 out of 15 living at poverty levels. It's unprecedented and if the powers to be don't fix it, the people will do it for them.

 

You are entitled to your opinion. I'm entitled to mine. Every generation has its challenges and reasons why the market "can't" rise whether it is Japan in the late 80s, near collapse of the economy around 1980, energy shocks of the 70s, Cuban missle crisis of the 60's, post war depression fears of the late 40s, Great Depression of the 30s, or what we are experiencing today. Markets adjust to conditions. That is an economic law, not an associative logical fallacy. The market in the early 80s was at the same level as the mid-60s. It was proclaimed dead then, as now. Both predictions will turn out to be wrong in my opinion because markets tend to bottom when things look darkest. So I'm sticking with the market and highly encouraging my kids to do the same regardless of short term setbacks. You can hide in your bunker in fear and spout trendy internet analysis. Everyone has to choose their own course and attitude in life and I'm choosing to be positive about the future because this is what has always worked. I also own PM investments because I think they have a high probability of going higher over the next couple of years -- not because of fear of permanent recession.

 

This is exactly my point. The "free market" is not being allowed to correct what is wrong. Anyone with just a basic understanding of economics should be able to see that. Anyone who denies it is suffering from delusions. These facts are not subject to opinion or debate as it's been proven repeatedly since the first bailouts of 4 years ago starting with the government borrowing money and handing everyone checks. Each dose of snake oil since then has gotten progressively worse and done little to change the fundamental problems with today's economy that I outlined above.

I don't think so. However as you said, are entitled to your opinion. Never said otherwise. How you raise your kids is your business, but it's irrelevant to why or why not to keep money in the stock market.

The US finance industry including the stock market is no longer acting as a utility for the economy. It has been turned into a gambling machine that feeds on huge risk backstopped by sovereign governments/taxpayers. Only a few win at it now as anyone who has had a 401K for the last 15 years will tell you. This isn't hiding in a bunker, it's looking at reality and sensible people understand the difference.

 

Silver and gold are on the rise. Silver just blew thru $35. If it rises above $36 I predict it will make it to $40. Gold is above $1800.

Here's a possible senario. This is only my worthless opinion:

Italy is showing cracks in its bond market with yeilds approaching 7%. That's junk status. Greece is going to default. If Italy goes down then Spain, Portugal and possibly Ireland could follow. There is not enough Euros in the world to bail out all those countries.

If the Euro begins to collapse expect the Europeans to exchange their paper money for gold and silver. If that happens all bets are off on the ceiling of precious metals.

This just my opinion.

 

I agree with these statements. Things have changed so much with this global economy that I don't see what's on the horizon that's going to boost our markets and make them profitable for everybody. I only see it hurting our economy and the markets going forward. In the 80s, we were in much better shape than we are now. A lot of business was still here that is gone now, never to return. The country didn't have anywhere near the debt burden that exists now, at all levels.
You have 50% of the country that pays zero taxes. So you can assume that 50% of our population is not contributing a penny to the markets. Of the other half, you could say the majority is fighting to maintain a middle class lifestyle and contributing very little to the markets if anything at all. Many struggling just to keep their homes. I don't see this changing. I just can't figure out who's going to be buying all this stock and driving prices up. Gone are the days of millions graduating highschool and going straight to a blue collar job, contributing to a 401k with a company match their entire lives.

Now everybody goes to McDonalds or college and has to pay back school loans for 20 to 30 years. 1 in 10 people work for Walmart. They aren't going to drive the markets. People have to, pay their own multitudes of bills (many that did not exist in the 80s), still enjoy life, save for every day emergencies and save for their kids. And then somehow save something for retirement. Only about 15% of households in America are bringing in 100k a year. They're the only ones that have a chance to invest (take a gamble with it) and that's assuming they aren't maxed out on bills and paying school loans back. There isn't enough real wealth out there to drive this market much higher than it is. I just don't believe it.

The only way the market could double may be from rampant inflation some day. I could see that happening but then you haven't really gained anything.

 

As you probably know by now, my goal is not investment for monetary gain, but rather for quality of life and self preservation under any circumstances. I don't want to be wealthy. It's easier for a camel to pass through the eye of a needle...

I should admit that I do have mutual funds and bonds in my retirement plan (though bonds are what I am least comfortable with in the long term), only because I can't cash them out outright. So I am more diversified than I'd like to be but I don't find any asset class as desirable as what I have in my possession. Anything reliant on financial institutions that make their money through legalized fraud is not what I consider a safe bet. And let's be honest, this is gambling.

 

I agree with you for the most part, but I wouldn't underestimate people seeking the US dollar as a safe haven which could create resistance for metals priced in dollars initially. I don't think gold and silver can fulfill their roles as money as long as the US dollar is still the world reserve currency and money printing is a viable method of eliminating debt. Lindsey Williams has been right about a lot of things, and he says if the Euro goes down it will be a matter of weeks before the USD does as well. Ultimately precious metals will need to be the new standard since sound monetary policy is reliant upon them as history shows, but as the scenario plays out anything could happen before that potential outcome. Maybe we have a deflation like in 2008 and metals drop like everything else because they are a paper dominated market. Maybe the renminbi emerges as the new world reserve currency and dollars revert to their true value. Anything can happen, but that's the draw of precious metals. They aren't dependent on any of these circumstances or entities because they have intrinsic value. Longterm I am very bullish on metals and I do think we will see QE3 at any signs of significant deflation, but there is plenty of room for more margin increases that the CME can use to keep metal prices down, and position limits aren't going to have any teeth until 2013 so it will probably continue to be a bumpy ride. Currently silver requires over 43 times more initial margin than bonds do, so it should be obvious which is the real bubble.