What do you think will happen to Silver in the next few years??

I apologize to the group, as I got off into the political realm where the causes of silver price fluctuations are hazy as to amount and directness. I will try to be as political neutral as possible, and hope I didn't offend anyone badly

Jim

 

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The financial train wreck the Secretary addressed is inevitable regardless of whether the debt ceiling is raised or not. I don't believe for a second that our government has the political will to vote against raising the ceiling so we will have even greater pain when we are forced to face it by other means. My point with Geitner was to demonstrate his analysis of the impact of a default. With regard to Moody's, regardless of the reason for a downgrade it will make our government debt more burdensome and prompt the Fed to inact QE3, 4... as they continue to step in as the buyer of last resort. I agree that Americans will absolutely hate the change that's coming our way - we will be dragged to rehab kicking and screaming. I think community is important and good neighbors invaluable; good luck to you and yours.

 

No problem here Jim. Everyone is entitled to their opinion. One of the traggic realities of "this just cant happen to America" will be that people will refuse to believe it and that is the mistake that will catch people off guard. I do hope all the predictions are wrong but I see no harm in making plans to prepare for the worse. Good luck to you and all and I never really meant for this thread to get so loose so to speak. I just wanted to get some opinions to how people feel. I thank everyone for their honest input.

 

The one thing everyone should keep in mind is that the doom and gloom industry has been operating off and on since the 1970s. The internet has made the spread of these articles easier. It is very attractive to believe that you know something everyone else is ignoring, but the fact remains that economic collapse is a low probability event. Since nobody can predict what form it will take, it isn't really possible to prepare for it since the preparations you make could eventually become the very things that hurt you the most. The most likely outcome of all of this seems to be another long cycle of either inflation or deflation followed by an eventual recovery. It has happened many times before.

 

I think hearing that deflation/inflation is a 50/50 shot of either... why not prepare for both? put half your assets to inflation proof and half to deflation proof... at the very least if deflation were to double the value of your dollars you still have a profit from the inflation proofing ie gold/silver you bought up and if inflation hits instead and doubles the price of gold/silver then at least you got the 25% value in in dollars that once was 50% of your assets...

in either case you'd still have "125%" of what you started with... basically it's like betting on red and black and even and odd at the roulette table... unless your in the "game" to make out like a bandit I think this could be a good way of saving the "value" you've been trying to keep from being blown away in either case...

hope I make some sense to some out there...

 

If someone put half of their investment money in very long treasury bonds and the other half in gold, they could accomplish this, as you suggest. But it might be too stressful to stay with the program long enough to make it work.

 

Anyone else have any opinions? Thanks for everyones replies.

 

You have some interesting perspectives but your condescending writing style is annoying. If you have an opinion, state it, If you want to be pursuasive, back your opinion with a logical argument or fact. I do not agree that most people have missed the news that our country is in economic trouble. 2008 was a wakeup call resulting in widespread recognition and engagement and current headlines are peppered with sobering analysis. Our economic challenges are hardley arcane subject matter. I also disagree that economic collapse is a low probability event; there are some with a track record of success who feel it is a certainty. If you have a cause for optimism perhaps you could share your ideas. I do agree that we will enter an inflationary cycle. It will be painful and will be followed by a slow recovery. The pain is the reason for my investment in PM's.

 

All I can say is.....WOW. I just think this whole topic we have been discussing is HUGE. HUGE! I have been following right along all the way, and to tell you the truth, I have learned alot! Some? NO. ALOT. 4 pages of opinions. This should be classified under the heading "BEST OF COIN TALK". Great contributers, great thoughts and ideas. Just so much to digest here. Very informative. Thanks for posting this Zeplyn.

 

I too have found this to be very interesting reading of opinions. Thank you for the comment.

 

It isn't condescending to people who don't believe they know more than the Fed and investment professionals. There are a lot of articles on the internet about economic collapse and hyperinflation written by semi or untrained authors. They've been around a long time and do tremendous damage by frightening people into avoiding investment moves that could be the foundation of future prosperity for many folks. They are the ones that make me angry and I caution everyone to take what they write with a grain of salt. The debt is a huge but not insurmountable problem. I think there will be pain but things will work out in the long run.

 

So basically, you put your faith in the status quo. One wonders why you bother with a silver and gold forum as the status quo doesn't want Americans to use it for commerce as they once did. Yet here you are. You are also making a associative fallacy by equating what is posted here, with nutcases on the internet. This isn't a logical argument to make a point and I do agree with the party you were responding too

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In regards to silver, and the fact the price is being driven by the silver shorts, which you dismissed in defense of the bankers, the numbers are there as part of the public record. They are shorting far more silver, than there is silver to satisfy all the contracts. This is what naked shorting is.

In 2010, the US mint could not keep up with selling 34,000,000 ounces of physical silver Their own actions and statements confirm this. Right now, there is over 630,000,000 ounces shorted on the comex. Exactly what warehouse do you believe this silver is sitting in? These are naked shorts. The risk that any silver investor has right now is if either of the parties (longs vs shorts) bites the bullet and drops out. Price of silver will go back to where it was 8 months ago.

 

Of course your statement assumes one should trust all the Fed and investment professionals have to say. I do not. And really, most of the media is in my opinion, slanted too. Sorry. I just don't think we are told the truth.. We have rough roads ahead, in my opinion. (I hope that's not argumentative, it's just my opinion.)

Doubtiing Lucy

 

Hey Cloudsweeper, you were responding to me, not anyone else. So whether or not I think I know more that the Fed and investment professionals your condescension was directed toward me and it was patently condescending. Your retort was illogical but at least you did not deny the offense. Fatima did a good job of covering it but I also wonder why you even bother with PM’s. But enough about you lets talk about the Fed (this does tie in to Zep’s question about the price of silver). The Fed is in a very tight spot because for several decades we have run budget deficits that have annually contributed to our national debt (currently 14 trillion). As everyone knows much of our treasury debt is purchased by Japan and China. Since we cannot pay back our debt, the Feds unofficial policy is create a moderate amount of inflation (so that our dollars are worth less) so that we can pay back those dollars with cheaper ones. However our economy is very sensitive to investor confidence in the market and few things shake confidence like inflation. So the Fed must inflate it’s way out of this problem to have any hope of repaying the debt but it must also conceal the real inflation numbers from the front pages. The Fed made 4 significant changes to the calculation to inflation statistics right around 1980. They have removed 1) Food and 2) Fuel from the core numbers because they’re “too volatile” (don’t see why they don’t just use a 90 moving average or something) they started making a 3) Geometric adjustment and a 4) Hedonic adjustment. Geometric adjustment says that “if steak goes up 20%, then buy bologna - see there no inflation”. Hedonic adjustment says “Oh the price of computers went up by 20%, well its 50% faster and will enable greater productivity so hey no inflation there either”. The official inflation statistics indicate we had an average inflation rate of about 2% in 2010. When you add back in the 4 inflation adjustments (the new math), inflation averaged about 6% in 2010; that’s a staggering 200% increase over the official Core inflation numbers. So bottom line, Bernanke has little choice but to continue the failed policies of his predecessors or risk having the whole thing blow-up on his watch. Market forces will eventually force a stern correction and I believe we are at a tipping point. I also believe the future run-up in PM prices will not be responding to normal supply/demand cycles but to the inevitable correction we will experience in the value of our abused dollar.

 

I think that's pretty much what's going on over here in Europe. I'm currently in Italy and the people here just laugh when they read what the 'official' rate of inflation is. They all know that it's wrong. Likewise in France and the UK. Our colleagues from Brussels can't understand how every time they visit us, they see prices increasing faster than in Belgium, yet according to the official figures, it should be much cheaper!


Steve


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My response was directed toward nobody in particular. If it was I would have quoted someone. So if your conscience is guilty, it is your problem, not mine.

 

Not at all. Everyone should research this and think for themselves. But too often you will read articles implying that the Fed is incompetent and/or deceptive, followed by the author's wisdom. My caution is that 99% of the time the authors of the articles know far less about the currency and economy than the Fed or investment professionals. Nobody watches a surgeon at work and suggests improvements in his technique. But a lot of people think they understand what is going better than the Fed and US Treasury without any real basis for believing they can do so. This isn't to imply that there are no problems; but the problems may not be the ones you read on the internet. That's all.

 

Not at all. If I believed that nothing would change, there would be no point in investing. I find no problem believing that gold and silver are undervalued assets with a high problem of appreciating some more without believing all of the economic collapse and hyperinflation predictions on the internet. Silver is one of the few assets that people can purchase at the same price as 30 years ago. I've said here many times that I think we will have either inflation or deflation, but it isn't certain which it will be so it pays to stay flexible. And I have never implied that anyone here is a nutcase, but that everyone should be cautious when reading some of the nutcase articles on the internet. Regarding the silver shorts, I don't know whether the silver shorts are naked or not. I've read that JP Morgan is one of the largest shorts and presumably naked. But I've also read that the government of China is said to be one of their clients, and China is perhaps the largest holder of physical silver in the world. So it is possible that China is just basis trading their silver through JPM to earn an income stream on their metal holdings. I don't know that this is the case, but I also don't know that JPM is a naked short -- and neither does anyone else. And that is the point.

 

^What I have posted is public record. It's not rumor and speculation which is what you are using to defend your position by casting doubt on anything said that disagrees with you. Sensible investors work with facts and not tall tails posted on the internet. Sensible people understand the difference between the two.

 

OK, so you were called out as an elitist snob, then you admit it with a heavy dos of double negative double speak and now you've switched to the plausible deniability tack. Try this, next time you disagree with someone or with an idea, respectfully state your alternative and back it up. Avoid using a patronizing tone as a means of quelling discussion opposed to your world view. You will he happier; have more friends and as iron sharpens iron you may actually advance the body of knowledge related to PM's. Apologies to the group for the digression.