Where is silver going?

I see Silver heading towards $25 - $30 this year.

As for what Jolumoga said two posts ago, I was reading an article a while back that stated about half of a normal economy is generated by people raising kids. Some food for thought.

Edited: Religious/political comments are not allowed in the forum.

 

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What a lot of people seem not to realize is that coin collecting, and even bullion stashing, are leisure pursuits that are feasible only under relatively stable economic conditions.

I can see two inflationary scenarios that would destroy the present vitality of these hobbies, both arising out of our persistently rising national debt.

One would be an episode of straightforward upward pressure on prices (or downward pressure on the dollar, if you prefer to look at it that way) that largely slips way from the government's ability to restrain as to its severity. It's tempting to rub your hands together at the prospect of precious metals appreciating by a few, or even several multiples of their current levels, but if necessities like food and energy take a corresponding hike up, what are you really getting out of that situation? If you're dissipating your hoard (provided you can find a ready buyer) just to meet your basic expenses, all you've done is maintain a portion of your purchasing power, not gotten rich. I'd like to think a Weimar-like currency death spiral wouldn't develop, but regardless, if the intrinsic value of silver and gold items becomes the overriding consideration, I can envision numismatic and collectible premiums becoming severely depressed, and in many instances, disappearing entirely. The actual utility of things becomes paramount during such a severe disruption.

The other thing that could happen, and this could either be a result of or encompass the devaluation event described above, would be that the dollar ceased to be the world's reserve currency. That would render any rough patch a more permanent condition, and might even compel the substitution of a "new" dollar or other unit as legal tender, much as what regularly happens with Latin American economies. In any event, the yuan or the euro (or even some amalgamated worldwide creation) becoming the benchmark denomination in which commodities and exchange rates are calculated would force the U.S. to confront its fiscal circumstances in much the same manner as a household with all its credit cards and other borrowing maxed out, and unable to get another card, credit limit increases, or interest rate reductions. Belt tightening would be the order of the day, with government benefit programs having to be cut regardless of the human cost or protests to the contrary, and with an overall slash in the in everybody's standard of living virtually certain. Greece is your model in this dire case, but we'd be Greece on steroids, so to speak.

 

Seeing some real volatility now in the spot silver market, price early this morning was twice driven down to about $21.27, then went up all day long to $21.98 as I write this.

 

Hi folks,

The silver market seems harder to 'manage' than the gold market. It's been diverging from gold but more odd is that the silver miners are going nuts. I watched the gold/XAU ratio go completely out of whack for the entire bull run - waiting for the miners to join the party - never happened. Yeah, the bullion ETFs screwed things up and no one really knows where equilibrium is. Well, we may be finding it now. I'm not playing gold at all but silver . . . that's where the leverage is boys and girls. Check the charts for ASM and MGN. If you want to be safer, you can go with SIL the ETF for silver miners. Or surf over to kitco and check the silver mining stocks. Some of Canadian miners can be lots of fun. I bought a cute little number back in 2003/4 called Silver Wheaton SLW in the $2-3 range. It topped out around $43. chaChing! My only home run.

peace,

rono

 

I bought some SLW also, but at around $22. I hope it keeps going up, but it looks like we are at one of those moments again where silver either goes up tomorrow, or it crashes back to around $19 like it's been doing lately...

 

Hi ?Revi,

Seems to be consolidating right now so I'm sitting and watching my play to see if I have to scale it back. I really think silver miners are the nut right now. OH, and nat gas if you can play it somehow. Yeah, I know but I always get my fingers burned when I play with the fuels. What I do is buy and hold my local utilities and take the dividend and hope for some appreciation. It softens the blow of the monthly bill.

good luck,

rono

 

Well, as of today, silver seems to be decisively breaking through the $22 level. We'll see if it closes there. I'd still maintain that it needs to run up to over $24 before I'd concede that the outlook is really bullish.

 

Silver is going down today, but not as fast as bitcoin!

 

Silver touched $22 again this morning, but as of mid-afternoon is down to $21.25 (and that's off its intraday low). Should it get back down to below $20 nytime soon, it'll make for a very bearish chart over the last 8 months or so.

 

It will eventually come back up because of this:

 

It's worth watching. The first 20 minutes or so is about the economics of mining.

 

Hmm, is that dated 2013 or 1973? Same arguments have been made for the past 40 years I am aware. Even if we hit a peak, you are assuming that demand will remain the same. "Peak mining" for lead was hit quite a long time ago, I think the last lead mine in the US just closed. I sure am not seeing lead going for $100 an ounce. This just shows how DEMAND is also important. What if they announce tomorrow a nano-carbon substance that outperforms silver in industrial use that can be made for $8 a pound?

I buy silver for other reasons, not "peak" theorists who have been wrong so many times in my life I have lost count. Way too much stuff can change before, even if they are right, it will affect prices.

Just my opinion.

 

Silver's kaput!

 

Silver is the metal of commerce, and I think it could be used for that again. One reason is that any kind of digital money is easily stolen. Witness Mt. Gox and the Target credit card debacle. Just because you have money in an account doesn't mean it's safe, as long as it's digital.

 

A big difference is that if digital money is truly stolen, not just from a person being careless or scammed, can be tracked and if you use an understood mechanism, the loss to you can be minimal. Try and get your silver back if it is stolen ( yes,everyone has guns or hidden it so well that no thief no one will ever find it, etc.) but the loss is much higher or total. Most of the theft , either silver or electronic exchange, happen because of carelessness or ignorance rather than the medium of exchange. IMO.

 

Going back to PM's is sort of like going back to using slide rules. Both are quaint ideas, but it just is not going happen. We outgrew them both.

 

SPeaking of the whole Mt Gox thing, I was reading a prety funny story yesterday. The story was about the growth of bitcoin vaults. No, its not a virtual database storage service, they physically print out the bitcoin keys and store them, on paper, in a physical vault. They say this is being done because it is simply way to dangerous to key bitcoins online, because of the massive thefts happening.

So.......let me get this straight. You invent a virtual currency to facilitate online commerce and usher in a "new age" of money, yet you now have to physically store them because its way too dangerous to keep them online. So a bitcoin, (random series of numbers), is now being stored in vaults like its a bar of gold or something? The repurcussions of this article simply left me bewildered. If it can't be online, what is the value of these random series of numbers again?????

 

Yeah,

Add me to the group that doesn't fully understand this Bitcoin stuff........

 

Eh, I think it has partially been responsible for taking speculation pressure off of gold and silver. I wish they would allow more speculation on them so I can feel good about buying my stupid gold and silver coins.

 

I've always been skeptical of bitcoin and don't even care to understand it.