Warning Fools! Silver Will Fall by 66%

Seraphim said:
I don't think the funny money markets can last that long without QE3 - other than that I'd say a pretty sound analysis.
Click to expand...

Don't forget, the Fed will still be rolling payments from QE1 and QE2 into fresh purchases of Treasury bonds via QE-Lite. This is especially relevant when it comes to the $1.25 trillion (face value, of course) in mortgage assets purchased during QE1. Rollovers of previous Treasury purchases will only affect the flow, not the stock, of Bernanke's Treasury assets, but rollover of mortgage debt will be used to buy more of Uncle Sam's "AAA" bonds, providing a boost to both stock and flow.

Even with that going on, however, I personally would guess that we'll get QE3 before 2011 is over. But a couple of factors could extend the "wait" into 2012. Bernanke's feet were held a bit closer to the fire for QE2, so he may want to achieve the psychological effect of storing his ammo until we're in a new calendar year. Ideally, he'd probably also like to see oil drop below $100/barrel (another important psychological barrier) before firing up the printing presses again. He could also try to outlast the rest of the world, and hold off until either China gets more aggressive in its fight against inflation, or Europe's debt crisis explodes once again and most of the EU falls back into recession. Either would choke off some demand for commodities, and the latter would provide a significant direct boost the dollar, allowing Ben to say, "See? There's obviously nothing to worry about. Time for another trillion."
 
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BTFD! There won't be any physical anywhere if this keeps up. What you're seeing here is "paper" silver crashing. Two diff markets. Paper silver will eventually goto ZERO.
 
Silver Plunges 12%, What's Going On?

Inquiring minds are watching silver futures get smacked this Sunday evening. Here are a couple of charts to consider.

silver%2B15%2Bminute.png


The monthly chart looks ominous. It seldom pays to chase spikes like that, regardless of fundamentals or perceived fundamentals.

Where to From Here?

I was not even going to comment on silver tonight because of my sale last Wednesday as noted in Taking Silver Profits - Swapping Silver for Gold.

What changed my mind was a post this evening by Zero Hedge: More On The Silver Dive: "Massive Sell Orders" Coupled With Bolivian Nationalization Halt Combine For Perfect Weak Hand Shakeout Storm

http://globaleconomicanalysis.blogspot.com/2011/05/silver-plunges-12-whats-going-on.html
 
Why People are Buying Silver Now!

(At $40-50/oz., it's better than all the alternatives!)
Silver Stock Report
by Jason Hommel, Feb 5th, 2011


In April, we had a record month in buying and selling silver and gold. Business volume increased 57% over our prior month's record.

Many customers are walking in, and saying, "I need silver." Not "I'd like to buy". Not "I want". But "I need."

Most of our customers mention that they are aware of the recent government budget battle and near shutdown of the government. People are aware that the government's budget is short by $1.6 trillion, which is $1600 billion dollars-- that they are printing, to meet the "need," and yet, the political parties were arguing over a mere $30 billion difference. (And yet, investment demand for silver stands at a paltry 250 million oz., at $50/oz, which is a mere $12.5 billion.) Our customers are aware that there is zero political will (neither among the politicians, nor among the population) to even remotely fight for something close to a balanced budget for nearly the next two years, until after the next election in the fall of 2012. They say it would be one thing, if the budget fight was whether to cut $500 billion to $700 billion from the budget, but it was nothing like that. They are aware that the current crop of politicians are so weak, and so ineffectual, even with the new tea party tax cutters in office, that inflation is guaranteed for the next two years or many more. People are aware that the entitlement mentality in America is now so strong, and since so many people are "on the dole" from the government, that they will likely continue to vote for more government spending for decades to come.

I'm 41. For the first time in my life, an older customer actually apologized to me. He apologized as a representative of the older generation, to me, as a member of the younger generation, because America has been destroyed on their watch, and they know that they made our lives worse by stealing our freedoms, and by increasing our tax burden. But he said he did not know what to do about it. And I said that buying silver is far more than enough. After all, if voting counts, and if writing letters counts a thousand times more than voting, then buying silver counts a thousand times more than writing letters!

More

http://silverstockreport.com/2011/why-people-are-buying-silver-now.html
 
We have seen a fairly big retracement in silver. I am still bullish until I see a close that is $ 3-4 below the high. So far, every cliff drop has been repeatedly beaten back.
 
Jay Tea said:
Don't forget, the Fed will still be rolling payments from QE1 and QE2 into fresh purchases of Treasury bonds via QE-Lite. This is especially relevant when it comes to the $1.25 trillion (face value, of course) in mortgage assets purchased during QE1. Rollovers of previous Treasury purchases will only affect the flow, not the stock, of Bernanke's Treasury assets, but rollover of mortgage debt will be used to buy more of Uncle Sam's "AAA" bonds, providing a boost to both stock and flow.

Even with that going on, however, I personally would guess that we'll get QE3 before 2011 is over. But a couple of factors could extend the "wait" into 2012. Bernanke's feet were held a bit closer to the fire for QE2, so he may want to achieve the psychological effect of storing his ammo until we're in a new calendar year. Ideally, he'd probably also like to see oil drop below $100/barrel (another important psychological barrier) before firing up the printing presses again. He could also try to outlast the rest of the world, and hold off until either China gets more aggressive in its fight against inflation, or Europe's debt crisis explodes once again and most of the EU falls back into recession. Either would choke off some demand for commodities, and the latter would provide a significant direct boost the dollar, allowing Ben to say, "See? There's obviously nothing to worry about. Time for another trillion."
Click to expand...

I am also in the camp that thinks that QE3 will be probably delayed until 2012.
 
I have 33$ pegged as the LOWEST it will go.

I am inclined to think the brutal drop will be met with rebellious support.

In USD, I think it will begin to hit A LOT of support at worst around 37$.

The long term fundemental bulls will stop the bleeding once they start seeing spot prices beginning with the number 3.

ctiger2 said:
Some are thinking $27-$33 range.
Click to expand...
 
I'm kind of convinced they're trying to push it to mid 30s for the summer... I don't mind too much. Most of my silver is from the mid 20s and ~10 oz from 35-40.

It's a buying opportunity. And hopefully it really is and they're not just trying to shake out some people.
 
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