The NOT Wall Street Perspective

Demand for ASE's have quadruppled during this period of upward pressure on price. Certainly you cannot attribute this rise in ASE sales to people acquiring collectable coins? I lean more towards this increase being due to regular Joe building an inventory of raw refined silver of his own.

 

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The ASE sales are on the Coins & Medals line and don't account for the difference. I don't know how many regular Joes are building personal inventories of refined silver in forms other than bullion coins. I suspect it isn't a lot, or at least not enough to account for a six-fold increase in the world price.

 

I would say this is the "monetary" aspect of the metal working. Even if industrial use was not using up mining production, the extra demand of the metal for monetary reasons more than took up the slack.

Cloud, you may not agree, (and probably don't), but my view of the price rise in silver is:

1. Artificially low for 15 years due to many factors.
2. Cheap oil also made the price low
3. More expensive oil now needs to be factored into cost of production
4. Government and investor buying now instead of selling

It may seem weird, but in many markets 1% extra demand can move the price 20-30% or more. I simply view inventory building and extra coinage demand as being this incremental demand that is having great effects on pricing. If that is true, the one must be cognizant of it since it could also work the other way. What is the long term "real" price? Probably close to cost of production, and for that you need to pay attention to oil prices and cost of machinery.

Btw, just yesterday, I had two people who never have invested in PM tell me, as investment advice, "buy gold and silver, that is what everyone is saying is the best investment". That advice makes me nervous as heck about the PM market.

 

Oh my gosh - I was just pointing to another indicator that suggests investment demand in silver has risen significantly.

 

I just want to point out the other side of things. As I've said before, I like gold and silver and invest in it. I agree that the long term price will probably be close to the cost of production, but for now it's still a bull market.

I view inventory building as the result of lack of demand. It shouldn't have the same effect on pricing as consumption, so I don't think it accounts for the rise in price.

Anyway, I've made my point so I'll stop now and let everyone interpret the data the way they see fit.

 

Fair enough sir. like most topics in economics there is no easy way to "prove" it. Interesting discussion and hope no hard feelings in any direction.

 

No hard feelings at all. I enjoy the discussion and trying to explain my position to others in writing clarifies my own thinking. And it isn't as if we always agree anyway... :devil:

 

Inflexion, there is a little story I will relate that you may think is unrelated but please bear with me.

In the late 60's an admitted former prostitute and drug addict who had been arrested and in jail numerous times wrote a memoir. In that memoir she told many provable falsehoods, but in a little section she talked about J Edgar Hoover and his sexual interests. She said he liked to dress up like a woman.

J Edgar Hoover had made many enemies over his 4 decades in charge of the FBI, many criminal, many honest citizens whose rights had been violated. All of them latched onto this comment from this book to tell everyone they could that J Edgar Hoover was a crossdresser and sexual deviant. If you look up nearly any source on the man you will read that he was a cross dresser. Almost none of these "sources" will report where this accusation came from, that is was from a book from a former druggie and prostitute whom by her activities had a serious hatred of any law enforcement, you will simply read it reported as a "fact".

Now, I am not a Hoover lover, I believe he violated citizens rights, but I tell you this story to see the danger and falsehood of believe that simply because one person makes something up, and many others who WISH to believe its true repeat it, DOES NOT mean its true. The source of a comment, and data to back it up, and the source of the data, are all needed. If not, its simply rumor mongering for who knows what purpose.

I write this sir not even to argue about silver, but to let you know how much this occurs. I could fill a book with items reported as "facts" by many that are all simply rumors and lies thought up by one person but then repeated by others so much that many simply believe "it must be true if all of these people are saying it". If I were you, and wish to base your investment decisions on the "fact" about above ground silver, I sure would wish to KNOW where is came from, who said it, and what facts he had to prove it.

Chris

 

Just so I'm clear, you're saying there is no way that former druggie and prostitute could've been telling the truth? Let's go forward a step, since nobody that has ever had any legal issues or used drugs is capable of telling the truth, does that make MSM incapable of lying?

 

No I am not. I am relating that story since it is the ONLY instance of someone saying such a detrimental thing about the man, (conveniently published after his death I may add), but the circumstances of the quote, and the fact there are many demonstable lies in the book, are never related. All anyone ever says is, "he was a crossdresser" like its a known fact. Doesn't KNOWING where that only one instance of an allegation comes from, and whom it comes from, change the the way you would look at this often repeated "fact"?

That is all I was getting at. That many times these oft repeated "facts" all come from one source who's credibility may not be what you think it is, or may have a serious agenda as to why they are saying something to begin with.

Edit: Btw, I could care less what her profession or habits were. The point was someone who had been arrested many times has reason to hate the police, she said it in a book, (assuming to increase sales of the book, so therefor financial motive), and the book has other things she said that are provably false. That was the reason for my indictment of her story. Again, none of these things get brought up when people casually relay the "fact" he was a crossdresser.

 

I'm also just trying to point out another side of things and agree it wouldn't be inventory building in the traditional sense.

 

You see here is the issue I have with how you set it up. You couldn't just mention that many of the things in the book were discredited, you needed to add the person was a "druggie and prostitute". I've got some news for you, prostitution and drug use are considered "blue" laws, and while I don't think they're 100% victimless crime, I do believe they are moral issues. Now, if that were to be reversed and we actually prosecuted the many crimes that are committed on wall st and used your parameters and labeled them "thieves and book cookers", all of those links would have a lot more credibility.

You see, you live in a world of face value, many of the people you spar with on a constant basis try to look at things in a different way, or behind the face. Not saying anybody is right or wrong, just perspective.

 

Geez, sorry. I thought the fact someone who by their profession and habits broke laws on multiple occasions, and the fact that we were talking about the nations top law enforcement official for 4 decades, may have some connection. I probably would not have mentioned it as it really wouldn't have been pertinent.

It was mainly a story to relate how one thing, regardless of its validity, can get repeated often enough that everyone assumes its common knowledge and inarguably true.

I will drop it completely.

 

Really? I don't think you can drop it at all. You missed the point too.

 

At least one of you did.

 

Term doesn't matter. Supply is less than demand each year. Continuing to dig over time does not change anything. I didn't misrepresent anything. I am not quoting someone else's link. I haven't provided one. Take it up with BU if you like. I said what I said. People can research how they like and believe what they like. I'm not spending any effort to do for you what you should do yourself.

 

I completely agree. Unfortunately I did not keep my source, and I am not motivated to research it simply to a prove a point. I am no longer interested in doing legwork for others when at times they have more desire to argue than to figure it out for themselves. I have read it so many places that it is not a question in my mind. None of which are rumormillnews mind you. A simple web search will be sufficient to satisfy one way or another for anyone who wishes to delve further.

 

We differ on this point also. Considering people read these boards and may spend considerable amount of money buying silver, I believe it is our RESPONSIBILITY to back up what we are saying, or at minimum, provide the source of the info so folks can make informed decisions on the credibility. If the info is only your opinion, that should be stated as well. It is my belief, if we are not willing to make this very small effort we should remain silent.

 

I disagree. Inflexion is entitled to share any information that might have been run across in the course of investigation and analysis. I know I don't save everything I read or calcuate, and I doubt anybody else does either. It isn't a small effort. To do as you suggest would restrict discussions to whatever appeared in recent news. Some of us routinely point out information for readers to research further on their own if they have a mind to. If the reader is too lazy to research, don't blame the poster. This isn't an endorsement of any particular post or point of view, but sharing experience and knowledge frequently doesn't come with footnotes. Life isn't a term paper.

 

So you're of the belief that people come to this board believing they're getting the best advice and information for investing in PMs? If they are, I feel very bad for them.