How Low Will Silver Go?

You are correct about the current state of things, and my point is that the current state is backwards and undermines the credibility of the valuation method.

If you don't believe people are buying hand over fist you must not have seen the pictures of lines going for blocks in Asia, or haven't watched the online retailers supply as closely as I have. Sure they aren't empty, but far more coins are sold out than usual even with the high premiums.

A stacker does not want to sell, understands that gold and silver are real money, and values them higher than dollars which are not worthless but have no intrinsic value. Anybody who wants to buy low and sell high is an investor, speculator, or flipper, not a stacker. Stackers are basically accumulators waiting for a return to sound money.

 

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I used to agree with this until I considered that a break above $50 could potentially spell the end of the dollar as it would tip off people at large that fiat is no longer safe. While I think fair value is far above $100/oz, and that if the dollar lasts long enough we will see it, I am not convinced that will be the case.

Once the shift is complete from measuring wealth in dollars to measuring wealth in ounces there won't be a dollar denominated prices for metals. It will be everything else that is denominated based on how many ounces of gold or silver it's worth, as always occurs in these monetary cycles.

 

Why would $50 be the tipping point? And if so, why didn't the recent high of $49 and change do the trick? And who exactly would it tip off? Not Joe Six-Pack working 4x12's plus overtime to pay the mortgage. Institutional investors? Hedge funds? Rich people? Politicians? Most of these people of wealth measure their wealth in fiat. Will they suddenly see the light and pour dollars into metal en mass?

It's almost impossible to fathom the ruin that would be wrought upon the global economy should a major currency like the U.S. dollar fail. The interdependence of modern economies would cause a chain reaction...We talk about U.S. institutions that are too big to fail, well, the U.S. dollar is too big to fail. Which is why it won't happen. NOBODY (outside of PM stackers) wants to see the dollar fail. And that's why they won't let it.

 

Except for that if the price goes so low your lcs probably won't have any junk in stock.

 

With today's latest leg down in silver (about $22.50 at the moment), some of my local shops have stopped selling any again; not that they have a lot of it available anyway.

My strategy has always been to couple my silver acquisitions with inherent numismatic value, and if it's bullion, with some aesthetic or collectible appeal. Then you're not totally at the mercy of a speculators' market.

 

Stopped by my LCS earlier today. They are now paying $13.50 for common date Morgans, and selling same for $21.00; eBay prices remain at $30 plus.

 

Short term is difficult/impossible to predict, long term is not since the fundamentals do win out in the end.

 

I can't imagine anyone is selling for 13.50

$21 is a pretty good price to buy at, beats any online retail I've seen easily.

 

The fundamental of PM is supply and demand and there is lessening need for industry, so the fundamental aspect is downward. Of course this is where many come in and say ~ Gold has been money for thousands of years, PM has an intrinsic ( which means they hope it has) value beyond its cost in USD, civilization based on paper or digital economy is doomed for destruction and PM or Ammo will allow the 'smart' to survive.

What is the physical fundamental that will send Gold upward?

 

I'm enjoying reading your opinions on pm's. Seems to be a calm rational view of what the pm market is right now. Of course we will all have to wait and see if this trend changes or not. But I believe silver is is going to keep trending down to who knows where. Barring something new and major happening in the world.

 

$50+ = New all time high.
$49 and change = Short lived, and gee, it was smacked down 15 cents below $50. I wonder why.

Yes, Joe SixPack who doesn't pay metals any mind until they are at all time highs. Just like all the bandwagon Apple investors who got cleaned out.

Institutional investors / hedge fund managers are already buying physical gold. That's why the exchanges are experiencing record outflows of it.

We may all agree that these institutions and the USD are too big to allow them to fail, but as the Austrian school of economics tells us there is a level of debt saturation where markets become unsustainable. Maybe you prefer Keynes, who never had children and never had to worry about the consequences of eating a hamburger today and sticking posterity with the bill. Some of us care about the future.

You think stackers want the dollar to fail? That is absolute absurdity. I would give up my stack and my house to right this ship, but I'm not going to follow the lemmings off the cliff either if I can save myself. Don't blame us because we have a nation run by irresponsible tyrants who think 100%+ debt to GDP is AOK. I surely didn't vote for anybody who got us into this.

 

This is simply false. Silver Institute numbers clearly show advancing demand in industry. While that may or may not match the growth in mining supply the numbers also clearly show that mining supply never meets total demand.

The fundamental aspect is upward. This is not debatable in reality.

 

I guess this is the wrong URL?
http://www.silverinstitute.org/site/supply-demand/

The production ( supply) show that the last 10 years, supply was greater than total fabrication. Only when you add dehedging and implied disinvestment to make it all come out even. Take out the hedging/dehedging and investment/disinvestment on each side and see what it is then rather than implied.

 

I love watching Gold & Silver Bugs equivocate their opinions as prices fall.

 

I gotta say, it makes for some very interesting debate. I'm really learning quite a bit from this thread

 

I see people selling Silver all the time when I go to local Coin shops. The Crack Head that has stolen some coins from somewhere. The single mother that is trying to make ends meet. The sadest is when you see some poor elderly couple that doesn't know what to do with the coins. I always give them thier space and go to the other side of the coin shop so they can work out a sale.

 

Why is there a lessening need for industry?

 

For example.
The use of silver in photographic film is almost zero today. It is very hard to get silver based film, it is old school. Every thing is , or is getting there, digital. Even Radiography such as x-rays for dental and other medical x-ray use ( chiropractors , etc.) is going digital and will be entirely such when the old film is not available. Millions of old x-ray films are being recycled for silver value after digitizing, increasing the supply of industrial silver. My dentist said that new bonding material ( ultraviolet hardened) may replace silver amalgam filings and even newer materials may replace gold crowns in the future. ( I am not betting on that but ....)

 

No kidding. Who wants to sell me some Morgans for $21 each?

 

Yeah, I'm surprised it's used at all for photography; didn't realize it was for the other stuff either. What about electronics and stuff? I heard silver was going to see increased industrial demand, but that could just be stacker propaganda...