Warning Fools! Silver Will Fall by 66%

[kah13176]

Since when has the true value of the metals been known? There has been so much manipulation in the prices for so many decades, no one knows the exact true price of the metals.

Good point, but then you could say that about any commodity. Perhaps wheat prices are still equilibrating after a negative supply shock caused by Australian floods, for example. Markets are complex and semi-chaotic, you never know.

 

[Travlyr]

As of yet, nothing justifies PM's being so high; it's not their true value in today's dollars.

How about Utah's move toward honest money? Also, many people around the world are beginning to understand that "Inflation is the increase in the money supply", and fiat inflation is theft. Silver's return to use as a monetary instrument is an important development.

 

[Dr.3D]

Good point, but then you could say that about any commodity. Perhaps wheat prices are still equilibrating after a negative supply shock caused by Australian floods, for example. Markets are complex and semi-chaotic, you never know.

Not necessarily. Wheat doesn't keep around like silver and gold. I'm pretty sure the Federal Reserve isn't worried about people checking the price of wheat to see how the dollar is doing.

There were vast stockpiles of silver for a long time, and then the government decided to liquidate those stockpiles and sold them into the market. That constant selling of those stockpiled metals drove down the price for decades. Couple that with the paper market, it is easy to see how the price of silver has been suppressed to make the dollar look better than it really is.

 

[Indy Vidual]

At some point, this statement, "Silver Falls by 66%", will be true;
How long will it take? 1,2,5, or 10 more years?

• The Bear market in Silver lasted over 20 years.
• What if the 66% drop happens (for example) after you sell your silver for $401/OZ?

 

[youngbuck]

I'm thinkin' that I'll sell my silver when it's no less than $100/oz.

 

[Dr.3D]

I'm thinkin' that I'll sell my silver when it's no less than $100/oz.

I'll start thinking about selling when I can buy one ounce of gold with ten ounces of silver. I'll just start thinking about it.

 

[efiniti]

Acknowledging that nothing drastic has changed in market fundamentals? ~$45. Believing this claim from a site called Fool.com from a guy named TMFBullnBear and selling your physical.. Priceless.

 

[hugolp]

Exactly. The author is accepting the view that this time isn't different. Most silver investors are buying silver because they think this time is different. Of course, "this time isn't different" crowd has a better track record seeing as 99.9999% of the time this time isn't different. However, maybe the silver bugs are right this time in that it is different, and they'll reap the rewards if they're right. So too will the silver shorts. This is like having a priest and atheist argue; each would argue a reality that they've created within their own belief. At the end of the day, neither will understand the other, since an assumption (acceptance of their own truth) was made at the most basic level of their thought process.

Also, I've started to come to the understanding that silver price could go up forever, simply because there are so many people who see it as the ultimate asset class. Ever seen Kitco's forum? LOL. It would be interesting to do a study on libertarians and metal holdings. If libertarians can send a politician many millions of dollars, one has to wonder how much gold and silver these same libertarians can buy. I'm almost convinced that a small minority of investors who are buying gold and silver like there is no tomorrow can control the buy-side of the equation, and push the price higher and higher and higher. There aren't many sellers in this group of investors, and should they continue to accumulate, the price of gold and silver could go up forever...err, at least until they start selling.

On a side note, anyone remember that JP Morgan story? The one where JP Morgan was allowing investors to open trading accounts denominated in gold? Has there been any recent news about it?

Not sure how popular the program actually was, but I have a feeling that JPM is making a mint writing calls on the holdings. Sure, you're looking at like $3 per month per ounce, or ~2% per year, but even at that rate cash flow is cash flow. They have to be loving the idea that gold is negative carry, seeing as they pay 0% interest on the gold and generate yield with it.

Gold and silver, when owned in more "financialized" instruments, is actually positive carry, but the yields are pretty low. However, when money is cheap, those who can borrow at low rates can buy gold and silver--or any commodity, for that matter--and generate a positive yield greater than their carry costs.

Why do you have to be such a radical?

Why are the only options you comtemplate "silver will go up forever" or "silver will collapse today or tomorrow"? We are in a moment of the cycle that is extremely bullish for commodities and this part of the cycle can go on for years, but it does not mean it will never end. What about the option: "the bull market for commodities will go on at least for two or three years more and the last part of the cycles tend to be the more parabollic ones"?

 

[scrosnoe]

Opportunities abound for Life and Liberty -- Keep Looking up folks!

If silver drops by 66%, I'll look at it as a great buying opportunity! Bring it on!!

Exactly -- buying opportunity!

It is difficult to make money in the metals market if you are a short term trader or an emotional trader because the peaks are often sharp and the troughs can be extended. But if you are consistent and buy on dips for the purpose of holding the asset you will be fine.

I must remind everyone here though that our real treasure is not in earthly treasures that can be stolen, but in the priceless idea of liberty. Where the spirit of the Lord is -- there is Liberty. We have what seems to be a dwindling opportunity to bless the next generation with what our forefathers gave us.

Let us be ever vigilant in our efforts to restore the respect for Life and Liberty in our land.

Let us ask the Lord God who made us to have mercy on us and guide us in the battle at hand to restore the republic. May we be a people that He would be pleased to bless once again.

Blessings,
Sandie

 

[Liberty Rebellion]

As an atheist, I agree with the above sentiment

 

[juvanya]

^^^ No doubt. Drop baby drop!

qft I still have some napkins to get rid of...

 

[nobody's_hero]

Aero = zero?

 

[bobbyw24]

Posted as a warning to BUY since Motley Fool is screaming sell

 

[vita3]

http://www.youtube.com/watch?v=m2XDsMU8a0M&NR=1

 

[misterx]

I hope so, I shorted the crap out of it last week.

 

[Jordan]

Why do you have to be such a radical?

Why are the only options you comtemplate "silver will go up forever" or "silver will collapse today or tomorrow"? We are in a moment of the cycle that is extremely bullish for commodities and this part of the cycle can go on for years, but it does not mean it will never end. What about the option: "the bull market for commodities will go on at least for two or three years more and the last part of the cycles tend to be the more parabollic ones"?

I'm a radical? Cool.

I actually don't see either view. All I see in the online world is that silver will go up forever because it is manipulated, or silver will crash because it is in a bubble. These are other people's views, not mine. I don't really care. In fact, I'm waiting for the next crash in equities so I can buy up like there's no tomorrow.

What about the option: "the bull market for commodities will go on at least for two or three years more and the last part of the cycles tend to be the more parabollic ones"?

That seems to be a minority view in the metals market, mostly because it is well-reasoned...at least when compared to other views.

 

[Godisnowhere]

The fool is the person who believes the US dollar is getting strong. 100 Trillion USD liability, printing gone wild. 1.5 Trillion deficit and Obama and the Republicans are will to continue on (just wait till Obama care kicks in). China stating they want to dump 2 trillion of their 3 trillion US treasuries. Increased deficits without buyers and more QE and more printing. Now who besides the fool would believe the US dollars is getting stronger? In the short run markets go up and down a bit. Silver may flucuate some as well. But better on silver's increase is based on the US dollar weakening. Please explain this futher to us Chartman? Charts without facts = wrong charts.

 

[Jay Tea]

I expect all commodities, including gold and silver, to fall a bit when QE2 ends in June. We could see silver at $40 and gold at $1,350. But I also expect that development to coincide with deteriorating economic statistics and a continued lack of willingness to do anything significant about our trillion-dollar deficits, prompting QE3 before this time next year and sending commodities into yet another new stratosphere.

 

[Seraphim]

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

I expect all commodities, including gold and silver, to fall a bit when QE2 ends in June. We could see silver at $40 and gold at $1,350. But I also expect that development to coincide with deteriorating economic statistics and a continued lack of willingness to do anything significant about our trillion-dollar deficits, prompting QE3 before this time next year and sending commodities into yet another new stratosphere.

 

[Michael P]

I expect all commodities, including gold and silver, to fall a bit when QE2 ends in June. We could see silver at $40 and gold at $1,350. But I also expect that development to coincide with deteriorating economic statistics and a continued lack of willingness to do anything significant about our trillion-dollar deficits, prompting QE3 before this time next year and sending commodities into yet another new stratosphere.

I agree with you except 40 and 1350 could be a little low. June could be an explosive month for gold and silver. If silver gets through its all time highs there isn't a lot of resistance in June. I could see silver taking out 60 and gold 1650 in June. There could be a lot of money to be made but it's a real gamble because like you said once we get into July all bets are off.