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<p>[QUOTE="Cloudsweeper99, post: 1225779, member: 3011"]There is probably very little overlap between institutions that buy bonds and those that buy silver. And the next time interest rates move higher, it will probably be in connection with a resumption of a decline in the dollar. A lot of people won't want 8% taxable bonds in a currency losing value faster than that. In those circumstances, I don't think the expected move out of silver will take place. We'll have to wait and see. The only historical precident for this is the 1970s when silver prices rose sharply in an economy with rising and high interest rates. So expecting the opposite to happen might seem logical, but may not occur.</p><p><br /></p><p>What will eventually end the bull market in silver is either (1) an end to budget deficits or (2) a bubble in silver with a blow off top at prices undreamed of. The least likely outcome is for the price rise to fizzle out because individual investors world wide come to prefer 3% CD rates to $40 silver. Of course a third possibility is for there to be a massive deflationary depression with bond defaults, another and total collapse of real estate, and 30% unemployment. I guess that would hurt silver too if it happened.[/QUOTE]</p><p><br /></p>
[QUOTE="Cloudsweeper99, post: 1225779, member: 3011"]There is probably very little overlap between institutions that buy bonds and those that buy silver. And the next time interest rates move higher, it will probably be in connection with a resumption of a decline in the dollar. A lot of people won't want 8% taxable bonds in a currency losing value faster than that. In those circumstances, I don't think the expected move out of silver will take place. We'll have to wait and see. The only historical precident for this is the 1970s when silver prices rose sharply in an economy with rising and high interest rates. So expecting the opposite to happen might seem logical, but may not occur. What will eventually end the bull market in silver is either (1) an end to budget deficits or (2) a bubble in silver with a blow off top at prices undreamed of. The least likely outcome is for the price rise to fizzle out because individual investors world wide come to prefer 3% CD rates to $40 silver. Of course a third possibility is for there to be a massive deflationary depression with bond defaults, another and total collapse of real estate, and 30% unemployment. I guess that would hurt silver too if it happened.[/QUOTE]
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