...and down she goes!

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What are the "strengthening" stock and bond market fundamentals you have in mind? Last I checked, the stock and bond markets are in a bubble. The economic indicators of late have come out poorer than expected.

 

"Price" and "Market Fundamentals" don't always equate. They should...but they often do not. Knowing the difference can make you some money.

 

They eventually equate. I follow the currency market and have done very well this month, so believe me I'm watching the economic indicators very closely. From what I can see, the main driver of the stock and bond markets is the Fed, but the Fed cannot keep real interest rates negative forever. Moreover, the vast majority of Americans don't own stocks at this point, so the stock market does not reflect the larger economy very well. I think the bigger picture here is that the dollar is strengthening relative to other currencies, hence the dip in precious metals. But a strong dollar will eventually threaten the stock market, so further monetary easing is required. The economy's dependency on easing will undergird gold and silver and prevent the prices from retracing to what they were in the early 2000s. Still, we can easily see the teens if the dollar continues to move up.

 

Do you have a source for this information?

 

The Fed has a lot of influence on markets, no doubt...but it's not the only influence. The Sequester is having a lot to do with the firming of the dollar. A strong dollar doesn't necessarily portend a drop in stock prices. If dollar strength is the result of strengthening economic fundamentals (lower debt, higher productivity, etc)...a strengthening dollar can be positive for stocks.

 

Your charts are 3 years old and the Silver Institute numbers do not support your claims. The value has been trending down obviously. That's how inventory gets depleted, when an asset is undervalued. If the trend is valid then the metal is heading for zero, which is not possible for something with intrinsic value.

 

Silver Institute numbers - http://www.silverinstitute.org/site/supply-demand/

As for the multi-century lows in available supply I need to correct myself. That low came in 2007, with inventory increasing slightly since then.

Mike Maloney explains it here starting at around 17 minutes.

http://goldsilver.com/video/silver-...r-until-the-fundamentals-say-so-mike-maloney/

Above ground stockpiles used to meet a few years worth of demand. That got down to about 3 months, and he says it's bullish because investors are bidding silver away from industry, and paying the commodities exchanges to store it so the stockpiles rise. Last time this occurred silver went from $4 ultimately to $50 in 1980.

 

every night around midnight i listen to the show on headphones at work he should do a show on silver

 

?? How does any message that involves events beyond the functional future lifespan of any known religion become construed as being a post about religion? The physics teachers? Yeah, go ahead and fire them, they died of old age decades ago. LoL. Clearly you don't understand the implications of an insufficient number of Neutrinos being captured in Neutrino traps designed to capture pesky Ns originating from our own sun. Presumably your own physics classes included discussions of Neutrinos,their origins and how many our sun should be emitting, if our understanding of fusion and other events occurring inside the sun are correct. Agreement that the failure to detect Y# of Ns could mean we have a cyclical sun, which would also explain at least one great extinction (the first one) event, but even then that would be a bad news for anything living on this mudball, well less than a million years from now. Your best hope is the Neutrino detectors are faulty, because if they aren't, our sun will never make it to red giant stage.

 

That was important in the days we stockpiled it, like a grocery store of yore with a smokehouse in back full of meat for the winter. Now that we no longer do, how much is physically in the Mint today is of no more importance than visiting one of today's supermarkets and noticing they are running low on ground round. Trust me, tomorrow the shelf will be full again.

 

It's hard to tell what will happen with the price of silver, but it seems to be holding today. That's something. Peter Schiff thinks we may have hit bottom, for now.

 

Sorry, I know this is a tangent but I have to ask.
Are there beliefs among psysicists that the sun has
turned off for awhile. Like a light going out for a few
hours when a ballast is going bad?

 

A strong dollar will lower corporate earnings and may significantly lower GDP expectations. If a strong currency were so advantageous in this environment, the Australians would not have cut interest rates recently. You still have not mentioned the strong fundamentals in the economy you continually allude to. This leads me to believe that the stock market bulls are simply following the direction of the Fed, which is fine, but it's not the same as carefully following fundamentals and aligning a long-term plan with them.

 

Perhaps a continuation of Zimbabwe Bopp
will help PMs?
http://mobile.bloomberg.com/news/20...ightening-would-endanger-recovery.html?cmpid=

 

Ok, I lasted over three weeks, but I have to talk about this assertion you make over and over. Let's look at this data:

New silver mined is 787 million ounces in 2012. Lets look at demand. Photography is a true loss, so that is 57.8 million. Lets ASSUME, (even though its not true). ALL industrial applications are never recoverable. That gives us another 465.9 million usage. Every single other "use" is recoverable. People can and do melt jewelry, silverware, coins and medals, and inventory. Where do you think the old scrap comes from? "Old scrap" is not a finite resource, every single day old silver pieces are scrapped out, and we keep making MORE. just last year we made 323.2 million ounces of jewelry, silverware, and coins. Eventually most of that will be scrapped. We only scrapped 253.9 million ounces, so we actually GREW our scrap pile.

So, bottom line, we mined 263.3 million more ounces than we physically used up, (and that is a high estimate, as some industrial uses are recoverable), AND we added 69.3 million more ounces of future scrap. From this, (which is exactly how this trend has been going for quite some time), how anyone other than a commissioned salesman can say with a straight face we are at "500 year lows of above ground silver" is simply beyond me. If a salesman was to tell me that, I would call him a bald faced liar to his face and take my business elsewhere. That is the most twisted, intentionally misleading statement I have heard in quite a while.

 

Lot of quibbling over the meaning of the word 'off' but we may indeed be in the position of someone noticing a light bulb has begun to flicker. Lot of back and forth debate as to what that means. You and me would normally probably leave the room in search of a new bulb, but that isn't currently an option for this world's inhabitants. The smart astrophysics guys decided a few years ago that they thought they understood how things worked and built (in the bottom of some really deep mine shafts) Neutrino traps to test and 'prove[ their hypothesis. A lot of upset amongst that group when they detected a lot fewer Neutrinos than the best theorems said they should. A consensus emerged that either a) the Neutrino traps are faulty, b) our understanding of the theory of everything needs a lot more work, c) something is happening in our sun and the fusion reactions are dying down, d) our understanding is correct however the time period we have even been aware of fusion or even on this planet is very short in galactic terms and it is possible our sun is something called a variable star (this position is gaining adherents). If a variable star we would expect fluctuations in the amount of Neutrino generation from time to time and we just began our measurements on a slow 'day,' and with time the numbers will climb back up to (or even beyond) the numbers we should expect to see from a 'stable' star. There was a Geneva conference about this only about a month ago, but the debate is still going on. To you and me, none of it makes a difference short term. Probably not to our grand kids either, although their own great grand kids may start having bad days.

 

Btw, since I am posting, just wanted to touch base on the silver market changes in the last few weeks.

1. A couple of months ago, "silver would hold its own or go up", we have seen now a 25% decline YTD.
2. A few weeks ago, "well the manipulated markets went down, but physical is high and that PROVES there is a physical shortage" - well I see I can buy ASE's for $26.50 and Philharmonics for about $2 over spot now. The major suppliers are reloading with stock, and you can buy at will now. Not much proof there either
3. "yes the market is down, and premiums are returning to normal, but QE88 is going to sent the price of PM to the moon!". - Always nice to get disproven on two recent assertions but still get people to believe an unprovable prediction.

I wrote on CT a year ago or more how silver could drop, and if it did premiums would widen for a period of time. Gee, its almost as if some of us have been through more than a couple of years of metal market pricing, huh? 25% decline is enormous, and that is where we are sitting with further downside possible. TBH the silver market has fallen a little more than I thought it would. Think about it, though. If the Dow fell 25%, everyone on the bullion forums would be screaming how its the end of the world, how they were right and only PM will save you, etc. Have PM drop 25%, though, and all you here are strings of excuses, mainly parroted from the lies salesmen are saying to keep people buying.

Bottom line, my PM has dropped 20% or so, but my stocks are up 30% in the same period. I am ok with that. That was the entire PURPOSE of me buying PM. PM is a better deal now than before, so those who wish to have a contra asset its a better time to buy than it has been in the past 5 years. Keep buying. However, you should know WHY you wish to own PM, and not just blindly accept the arguments PM salesmen force feed you. Honestly, I do see the market overbought, and personally I am looking at buying PM near these prices. That is only my view though, YMMV.

 

Sure, a strong dollar may help some eBay importers, but given the state of affairs today that's not a foundation for the economy. Let me be clear that I favor a strong dollar in an environment in which nations are not competitively devaluing currencies. The fact of the matter is that a strong dollar is a significant threat to the major multinational companies composing the Dow, and a strong dollar will eventually affect stock market returns in this environment. Right now, Germany is in panic because it is now disadvantaged by Japan's devaluation, given their manufacturing rivalry. Currency debasement is being practiced worldwide now, and it's not limited to raw materials exporters such as Australia.