2012 Silver Crash?

There is a bubble going on in paper right now and you better believe it. I tend to agree with Jim Rogers on Silver.

[video=youtube;nZi5JjHVrBI]http://www.youtube.com/watch?v=nZi5JjHVrBI[/video]

 

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Does anyone here actually believe that metals move? No fiat currency moves around metals. What is instore for fiat currency? I see nothing on the horizon but inflationary monetary policy = devalued dollar.

 

If that's the case, and silver and gold are well off their high's, does that mean that you believe the dollar has soared in value lately?

 

I am a big believer in history repeating itself. Its previous high in the late 70s steadily trickled down to around $6/oz on the early 90s. I think $6 is a little too optimistic these days, but $10-$12 is where I'm thinking the new low will be.... after at least one full decade of steady decline.

Read more: http://www.cointalk.com/t206351-2/#ixzz20QTiBf00

 

No, not especially. Actually at the moment I believe the depressed prices are because of the flooding comming from central banks selling off precious metals.

 

I follow the websites of a dozen (silver) bullion dealers, and there seems to be plenty of product out there, including monster boxes, etc.

I think the key is the number of short contracts (for instance, SLV) that "might" have to be covered on short notice; then you might see a spike upwards, a short window of opportunity to sell out in expectations of buying bullion back at a lower price 3 to 6 months later. A real puzzler. But I would not sell mine below $45, so there's some ambiguity in my thinking.

 

edit: Meh, stupid inflation adjusted charts ruining my thought process...

 

If central banks sell gold and, in effect, "retire" the currency collected to pay for it and contract their balance sheet, isn't that the same thing?

 

In November 2011, from the Financial Times:

"...Central banks made their largest purchases of gold in decades in the third quarter as a sharp drop in prices in September spurred buying to diversify reserves.

The scale of the purchases at 148.4 tonnes on a net basis was far bigger than previously disclosed and puts central banks on track to buy more gold than at any time since the collapse of the Bretton Woods system 40 years ago, the last time the value of the dollar was linked to gold." (more)

I am looking for more recent statistics.

 

Well I'm not really sure. I'm not a day trader. Matter a fact most of my information is 2nd and 3rd hand information off of blogs, youtube, and google searching. Once in a while someone will get drunk and spill everything that they know about gold/silver speculation. Some theories suggest that the ones putting preasure on central banks to sell precious metals and flood the market (depreciation) are also the same individuals buying. One of the things that confuses me is the JP Morgan Short. I just don't understand it. Flashing red lights go off on my head the the same people responsible for the short loaded up on silver.

As far as fiat currency is concerned I just cannot bring myself to have any confidence in it. Historically and I mean throughout the last 5,000 years how many times has the value of fiat currency gone to nothing. Now how many times has the value of Gold/Silver gone to nothing?

 

So you make a post where you first insult was cast at me, in the second paragraph you tell us that you are smarter than most investors because you don't fall for magic, and finally you say something sensible in the last sentence.

Seems to me you might have just said to "invest on fundamentals" and been done with it. It's stating the obvious but I do agree that people tend to drift of on everything but that when discussions of silver prices are the topic. Everyone should hear these 3 words "invest on fundamentals", including you and I, from time to time.

 

China alone has bought 350 tons this year. They are taking advantage of their surpluse of pretty American confetti and the suppression of gold prices.

 

OK, I found a good example from a silver chart that shows prices in nominal dollars, not inflation adjusted dollars.

If the price silver is tied to the value of currency, then there was zero inflation between 1974 and 2004.

Price of silver in 1974: $6.70
Price of silver in 2004: $6.70

Of course, that's not the case:

Average price of a new house in 1974: $34,700
Average price of a new house in 2004: $274,500
Price of gas in 1974: $0.55
Price of gas in 2004: $2.10

Of course the value of a currency does have an impact of how much silver you can buy with that currency, but it is merely one of a great many number of things influencing the price of silver.

 

The Federal Reserve does not list any real gold on its balance sheet. it lists gold certificates for gold bullion owned by the US Treasury. (presumably this gold is in Ft. Knox) So in the case of the USA, the gold if in fact the Federal Reserve were selling gold, it would not affect their balance sheet for currency.

The Federal Reserve is authorized to deal in additional gold holdings as part of its secret monetary operations in support of its monetary policies.

 

It would still decrease the money supply. I know there are other factors at work, but a theory that increasing gold prices equates to a falling dollar, and decreasing gold prices equates to a falling dollar isn't much of a theory.

 

I have read, but cannot confirm, that China [I don't know if this refers to the central bank or government] may be one of JP Morgan's large clients. They are supposed to be a very large owner of silver, and may be acting through the bank to earn an income stream on their silver holdings through basis trading in the futures market.

This makes sense, but like all other second hand information, there is no way to verify it because neither the bank nor the Chinese are talking.

 

By magic?

Explain how that might happen.

 

Whenever the Fed sells any asset, it collects cash and decreases the outstanding money supply.

 

I'm not talking huge amounts. I only have about 30 ozts saved up. That's including about $30 FV in junk pre-64 u.s. money. I meant just selling the small amount I bought last time silver was around $26/27 on eBay.

 

This even older (not by much ) but right on cue...here's a neat phrase: "... precious metals and commodities to produce returns that can be put to work as a source of funds..."

http://www.forbes.com/sites/robertlenzner/2011/04/17/university-of-texas-endowment-holds-1-billion-gold-5-of-its-portfolio/

"Friday, as gold prices hit a new all-time high – $1486 an ounce($1500 is around the corner),the University of Texas Investment Management Co., revealed that 5% of its $19.9 billion endowment(it handles Texas A&M as well) was in actual bars of gold bullion in a New York bank vault owned by HSBC Holdings, the London based global banking institution. Not in any gold ETF or individual gold mining shares, or in gold futures;l Texas took delivery of 6,643 actual bars of bullion, or 664,300 ounces– a quite unusual transaction for a university."