How Low Will Silver Go?

16.818 trillion, wait sorry another billion was just added in the last couple minutes 16.819 trillion.

Just wait a couple more months and we'll be at 17 trillion in debt, with 59 trillion in total debt and 123 trillion in unfunded liabilities, sounds sustainable to me, lets keep it going!!!!!

 

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shhhh! The sheeple don't like the truth!

 

Ok, I can deal with sarcasm, so Here is some back.

Gee, Gold has all of the unspecified value, the best defense against your idea of a diminishing USD, which is as you say "unsustainable", So why are precious metals dropping and not extending the price since there is a shortage of bullion, and PM are predicted ( just as your projections for the USD) to continue to do so. You would think that as the USD increases in numbers, PM would take up the slack Not so for new comers in bullion "investing"~~ In fact PM stands a good chance of being the poorest performing class in the near and who knows how far future. Hey wait, maybe we can increase the output of USD and really dump PM 50% more

You don't know, I don't know , Inflexion and Medoraman , and all the rest don't know the future. We all will have to live long enough to see $300 oz gold ( not too long ago) or $3000 oz. gold, or just where we are now.

 

Ha, nor do the aluminum foil hat people with a conspiracy behind every bank

 

I would bet on the dollar only relative to other currencies, although a strong dollar is trouble for the reason implied in my posts: a strong dollar lowers corporate earnings and GDP, and eventually will halt the bull market in stocks. So the Fed has every reason to continue QE. Were it to stop QE, we would risk a recession.

 

Some people need to look back in history and study "The Great Horse Manure Crisis of 1894"

 

BINGO!! As long as America stays strong the dollar remains strong. The corollary is similarly true.

 

Haven't we gone over this? The price is denominated by proxy. The valuation method is broken on both fronts; by debt-based dollars being measured against other devaluing currencies instead of gold (and silver), and also by the dollar's measure against gold being usurped by something other than gold.

Gold has no practical utility to justify its high value which is determined by the strength of a currency except when contracts take precedence over free market forces.

Especially with silver there is no reasonable explanation for such great levels of volatility. Metals are inanimate objects. Value fluctuations like we have seen are saying something more than simply the price. The price was relatively static for hundreds of years.

 

Usually when interest rates go up, the silver and gold markets go down. Since the rates can't really go much lower (and it's being hinted at that the rates are going to go up next year), it seems inevitable that gold and silver must go lower in the next year or two. The problem with the silver demand right now is that it's what I would call "soft" or "speculator" demand...people who are buying it purely for profit/trading and no other reason (i.e. business use). The market is probably going to overcorrect itself due to these people abandoning the market altogether when it goes too low. I would agree with some of the sentiment above, that it will probably stabilize between 10 and 20, probably bouncing off 10 before settling to some middle ground number.

 

That's true, there are tons of people stocking up on silver as we speak. I think the drop in price actually brought in a whole new world of investors. I don't expect silver to go lower than $18 dollars an oz, and after that a few years will pass and then look out! Supposedly, according to Investment Contrarians all he11 is gonna break loose and the price of silver will then go crazy and easily pass $100 an oz. I don't know if that's gonna happen the way they tell it or not but I do believe that silver will go up and over $100 an oz either way. :yes:

http://www.investmentcontrarians.com/why-contrarian-investing/

"The affects of unprecedented government debt and a historic increase in our money supply (also known as old fashioned money printing) are working together to push inflation higher. As inflation rises, so will interest rates. And if there is one thing the stock market and housing market cannot take, it’s rising interest rates! But at the same time, there are other investments that benefit from inflation and rising interest rates."

 

Yes inflexion, we have gone over this many times, but that doesn't mean it makes sense. Gold is valued in USD. If you have the spot value price for a delivery contract, you can get the gold. That is the way commercial users of PM such as jewelers stay in business, but you have to have a lot of those "worthless" USD to do that, and evidently the people buying hand over fist ( which I sincerely doubt except as hearsay) don't have it or don't want to risk spending it for PM, so they pay large premiums and are convinced they are doing the right thing. Gold is worth the spot price in USD plus/minus a normal premium and no more. The problem is that 'stackers' want to buy it way below and sell it way above because they know its secret higher innate value.
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Yes, the military supports the dollar, but I cannot see the national debt growing, largely from military spending, without long-term repercussions economically. The U.S. can simply refuse to pay off its debt, or can print endlessly, but we have no way of knowing what the final result will be, or at least when the fireworks will begin.

 

Yes, the Fed hints at raising rates, but this can potentially kill off the recovery. An assumption behind that idea is that organic growth will overtake the artificial (Fed-driven) growth. The market is so addicted to low rates that the Europeans are even thinking about negative nominal interest rates.

 

Say tin foil hat all you want, but just look at the IRS scandal and the illegal tapping of the Press' phone lines. Every day these "conspiracy theories" sound less crazy and more factual.

 

I can't imagine this is the case. Most of the investment world has absolutely no interest in PMs. The bull run on metals - gold in particular - has been running for years now, and has gotten a TON of media coverage along the way. Do you really think that any significant portion of the public has suddenly found religion on metal and has just started buying in April of 2013 - 10 years after the start of the bull run in metals? Sure, there are always new entrants coming to the market, but until somebody can show me otherwise, I'll assume that the vast majority (90%) of physical demand is coming from existing stackers who feel that the drop in prices is a buying opportunity. There is a school of thought that once an investment opportunity reaches main street, the opportunity is gone. Metals have been on main street since 2010.

I do, however, wonder what will happen to physical demand in PMs when the late joiners to the party who were buying at $1800 and $40 respectively start to become disillusioned with the notion of owning metals at all. Just as with the stock market, there are those who have bought high and will allow emotion to force them to sell low. When they exit the market and halt their physical purchases, can the die hard stackers take up the slack? I have no idea. I started buying bullion a few years back at $14 an ounce, and can remember refusing to pull the trigger on a roll of ASE's that were selling for $20 per. I haven't bought much of anything in bulk since $22 silver, but would likely start buying regularly again at anything under $20.

I'll avoid the dollar/world currency debate...It's clear that the U.S. and western Europe needs to wean themselves from their deficit addiction. But I struggle to see any outcome that richly rewards PM holders and punishes the rest when 98% of the modern world relies on fiat, not metal, for their economic success. I, for one, root only for mild inflation that slowly drives the value of my metal higher over the long term. Anyone rooting for runaway inflation, the collapse of the dollar, etc., etc., just to see their metal hit $100 or $10,000 an ounce is inviting an economic ruin that will leave none standing, including themselves.

 

Howdy,

Good points. The gurus as the Hard Asset conference don't see inflation as being a problem for a number of reasons, BUT basically because the Fed has some heavy weaponry to combat it. The signal would be rising interest rates and we're not seeing that. They also hate the major miners in spite of the fact that gold/XAU is around 13.5. They prefer juniors but caution that at these POGs we'll see a demise of 500-600 juniors over the next year or so as they operating cash runs out.

Unlike some of the uberbulls, I'm with you in having a balanced asset allocation with 5-10 in pm's. I much prefer hands on physical but that's me.

VanEeden who was the only bear last year and called for the pullback sees a true value of gold around 950 or so but doesn't think it will go that low. You are correct that the miners are on sale, but you need to be very careful and check their cash on hand.

Technically, gold has support at 1320 and 950 and silver is around 22. We'll see.

peace,

rono

 

We haven't seen it yet, but there was a small shudder through the markets late last week/early this week as a result of some "speculation" that the fed would be moving to raise rates by year's end. The first volley of fair warning that QE infinity might be winding down?

 

Agreed about the bull market.

But about that assumption...Aye, there's the rub!

 

Well said...sums up a lot of the chatter here on CT and elsewhere.

 

we can only hope it gets really low, maybe $10 an ounce? i'd be buying a couple pounds of it, then it can spike up i would be buying my coin shop's entire supply of "junk" (mostly just worn) morgans and peace dollars, i can tell you that for sure..