Silver collapsing again

[Johnnybags]

the unwinding continues. Boy that leverage can sure unwind fast. We are in a tsunami. People are raising funds anywhere they can. Cash is king for now. The great oil hoax is unraveling as well. Just in time for the election, per schedule. The central banks are desperate to create the grand illusion of fiat strength.

 

[NinjaPirate]

To look on the bright side of things. This is the PERFECT time to buy!!

 

[Archie]

The markets always swing like a pendulum the question is how high will the pendulum swing on the one side and how low it will sink the other side? I think the " King dollar" momentum will unwind just before the new year, Gold will be a steady 850-900 I think after Xmas and who knows how parabolic its momentum will take it after that. If the trend holds up with the swing then it will hit thosechighs again but for now its momentum is not very strong

 

[voytechs]

The paper silver is unwinding. Look at the physical exchanges though. Their over-spot fees are rising like crazy. The only thing you can get under a $1 over spot is silver-shot which no one seems to want. Everything else starts at $1.50 over up to $4 over. I wouldn't be surprized if it eventually reached $10/oz as supplies dwindle.

Market forces will always find a way.

 

[pacelli]

It won't last long in my view, after all the election is just around the corner.

 

[torchbearer]

The short market is pushing silver below the cost of digging it up out of the ground.
Supply is dwindling and prices are going down.
This is a perfect time to buy because when the supply actually runs out the price is going to sling shot 1000's of percentages.

 

[Johnnybags]

Take delivery of a futures contract

if you wish, its 12.00 bucks and change and delivery fee. Thats the price, paper or not. Buy off a merchant that is stuck with high priced silver, its more. Buy it and deliver off COMEX, it is 12.00 bucks. Bottom line is the commodity boom is over for now.

 

[voytechs]

Just look at what APMEX has in store in terms of bulions. Notta. There used to be a dozen items there like 100oz Mahony and Ernhart, etc... Its like that entire month. They just ran out of everything. When they do get some stock, it runs out sometimes within hours.

http://www.apmex.com/Category/754/Silver_Bars__Rounds_Brand_New_ONLY.aspx

 

[Archie]

I wonder how many people are pulling the trigger on Green monster box of ASE or Maples yummy yum yum just thinking of all that shiny silver glittering in the sun LOL Everyone should atleast buy 2-5 one oz coins if they have a few bucks. Sometimes when ya feel bad at buying siver at 18 bucks oz it don't fell so bad considering that's what you'd spend drinking 4 beers at a show

 

[Johnnybags]

For what its worth

The short market is pushing silver below the cost of digging it up out of the ground.
Supply is dwindling and prices are going down.
This is a perfect time to buy because when the supply actually runs out the price is going to sling shot 1000's of percentages.

I suspect all central banks are colluding to prop up fiat currencies. Heck, Torch you are correct that the cost of getting it out of the ground is getting closer to its price. This will leave mines out of business or idle, crimping supply eventually. But we are not near there yet, if the plebians continue to buy precious metals over fiat currencies(the banking system deposit scam) the governments will just sieze it or make it illegal to own accept for industry. One thing is now blatantly obvious. The US succeeded in sending its housing bubble crisis throughout the world making the other fiats just as hapless as the dollar. Foreign banking systems are in just as bad a shape or worse than ours(generally). Now with the collapse in oil full swing, the oil producing nations are also in a bind. We have a massive delevering of the worldwide economy and when that happens the guys with the biggest military is considered safest. Dollar basically has a reprieve for now, IMHO. Next year is reassessment time.

 

[entropy]

How about this scenario......the PM retailers bought on the high side and have now pulled their PM's out because they do not want to take a financial bath with how low the prices have fallen.

Frugality and deflation are now the story, commodity prices drop in deflation.

 

[Gideon]

How low will physical silver go?

I won't accept anything less than 20 FRNs for a one oz. Ag round, and yet no one even hesitates to throw down the $20.

A little (but very well-connected) birdy whispered the following in my ear today:

16 weeks for silver blanks from Sunshine Mint (premier Ag planchet producer for the U.S. Mint Silver Eagle).

When it comes to physical PMs, it appears that everyone wants to buy, and very few are able to sell.

So why is silver spot at $12.25 FRNs?

 

[JRuc33]

Have you guys ever even considered it might be overvalued? It's always the "cartel."

Things don't go up 30% every year forever.

 

[muh_roads]

Have you guys ever even considered it might be overvalued? It's always the "cartel."

Things don't go up 30% every year forever.

http://news.silverseek.com/TedButler/1220376924.php

 

[Gideon]

Let's find out if there really is a PM shortage...

Everybody buy 1 ounce of physical Au, and 50 ounces of physical Ag, right now, while it is cheap in relation to the fiat FRN.

If you can take immediate delivery of 1 troy oz. Ag rounds for anything less than $15 each, please notify me of the address so I can back up the truck.

 

[bucfish]

if you wish, its 12.00 bucks and change and delivery fee. Thats the price, paper or not. Buy off a merchant that is stuck with high priced silver, its more. Buy it and deliver off COMEX, it is 12.00 bucks. Bottom line is the commodity boom is over for now.

I strongly disagree, the commodity boom hasn't even begun. Patience my friend, do not be fooled by a this temporary slide. Over the long term it will go up way up!!!

 

[voytechs]

How about this scenario......the PM retailers bought on the high side and have now pulled their PM's out because they do not want to take a financial bath with how low the prices have fallen.

Frugality and deflation are now the story, commodity prices drop in deflation.

That's not how it works for exchanges which are also out. Exchanges when they get new product they hedge (go short in PM market for the same amount) to make sure they don't loose money if the value goes down. The same applies when the value goes up, they don't make any money either. So no matter what happens to the price of gold/silver they stay even. They make money on over the SPOT price they charge. That profit is always guaranteed with every sale and covers their cost to make the hedge (all calculated in.)

Think about it. If you had an exchange business without hedging, you could be wiped out very quickly. You'd basically be making bets with every purchase and sale. With hedging its all about the volume and they can't loose money. Actually they could if they woudn't be able to move/sell a product. Which hasn't been the case for many many years now. Its a big bull market.

 

[tmosley]

Have you guys ever even considered it might be overvalued? It's always the "cartel."

Things don't go up 30% every year forever.

A commodity is only overvalued when there are no buyers, but lots of sellers. If there are no sellers, and lots of buyers, the price should be higher. It's called supply and demand. If silver was really worth $12.50, there would be plenty of it at your local coin shops, but there is NONE. ANYWHERE. The price should be 2-3x as high as it is now AT LEAST, to pull the silver out of the safes.

 

[Bossobass]

There is a simple way to remove the endless complexity of these sorts of discussions.

The media (which is owned by you-know-who) continually muddies the waters of the economic situation with gobbledygook about the commodities market, the dollar index, interest rates, supply and demand, technology advances, productivity, war, political instability, consumer confidence, severe weather, hole in the ozone, etc.

It's all nonsense.

Rule #1: Inflation is purely a monetary phenomenon. Creation of dollars in excess of GNP (vs GDP, which is a fudged calculation) is inflation. Nothing else can cause inflation.

Rule # 2: There is only one rule.

Once you realize this, it's a simple matter to go back to the beginning to find the standard and do the math.

In 1913, the last year for real money in the US, the price of silver and gold and oil and housing will tell you everything you need to know about prices:

1913:
Ave house: $3,395.00
Gold: 20.67
Silver: 1.29
Oil: 2.63 (Pennsylvania light crude)

2008:
Ave house: $204,500.00 (recently dropped to 190,500.00 in the credit crunch)
Gold: 805.00
Silver: 14.00
Oil: 105.00

Gold today is 1913 X 40. Oil today is 1913 X 40. Housing today is 1913 X 60, but today's average house is 50% larger than the 1913 house, which, on a square foot basis, puts the price at, you guessed it: 1913 X 40.

This would mean that the 1913 dollar has been inflated to the point of being 1/40th of its original value, translated to mean that it's worth 2 1/2 cents.

This would also mean that silver is far undervalued. At 1913 X 40, silver should be $51.60 against the dollar.

Either way, the salient point here is that the dollar is now worth 2 1/2 cents. It literally has nowhere to go. IMHO, worrying about the price of gold or silver against a destroyed currency is a wasted endeavor.

BTW, median income has risen to 1913 X 52, but today's number is median 'household' income. Housewives didn't work in 1913, the true median income in 1913 is more of an educated guess and the income tax was 1%. When you make the adjustments it works out to 1913 X 40.

Conclusions: Dollar is shit. Stop gauging standards of value like gold and silver by their dollar value, or against a commodity, or by some chart or headline.

Just buy and hold. Just an opinion.

Bosso

 

[Shinerxx]

Gold today is 1913 X 40. Oil today is 1913 X 40. Housing today is 1913 X 60, but today's average house is 50% larger than the 1913 house, which, on a square foot basis, puts the price at, you guessed it: 1913 X 40.

This would mean that the 1913 dollar has been inflated to the point of being 1/40th of its original value, translated to mean that it's worth 2 1/2 cents.

This would also mean that silver is far undervalued. At 1913 X 40, silver should be $51.60 against the dollar.

I question if we can compare silver price in 2008 with silver price in 1913. It seems logical to conclude that gold, oil, and housing are used today in much the same way they were in 1913. Silver in 1913 had worldwide demand as currency which it does not have in 2008. Silver is also consumed by industry today. In order to scientifically compare the prices in 1913 and 2008 I argue you would need a constant in their method of use.

With that being said I also feel silver is undervalued but I'm unsure if you can accurately compare it to gold, oil, and housing.