Warning Fools! Silver Will Fall by 66%

[bobbyw24]

$35.95. Hold on

 

[pmbug]

For the record, margin hikes affect short-interest too.

Apparently not so much (nice when the Fed gives you a blank checkbook to use). Open interest is rising.

 

[Brian4Liberty]

Okay not to sound smut, ...

Too late.

 

[Jordan]

Apparently not so much (nice when the Fed gives you a blank checkbook to use). Open interest is rising.

Silver producers are silver shorts in the futures market. It wouldn't surprise me to see rising open interest as miners look to lock some of their production in at current levels.

 

[bobbyw24]

Silver's Dip will be Brief!

(Silver prices are in an anti-bubble!)

Silver Stock Report

by Jason Hommel, May 5th, 2011 Grass Valley, CA

For more of my commentary and links, follow me on Facebook.
http://www.facebook.com/jason.hommel


Silver dipped below $36/oz. this morning, down about 8% from yesterday, and down about 27% from the high last week of about $49.50/ per troy ounce. (A Troy oz. is about 10% heavier than a the more common international avoirdupois ounce.)

Some people are saying "this is like 1980 all over again" and that silver will now crash. Nothing could be further than the truth.

The truth is that the amount of money they have printed up since 1980 is ten times higher, so if you adjust for inflation, the peak price from 1980 should be more like $500/oz. in today's dollars.

The next key difference is that in 1980, interest rates, the amount paid on bonds, rose to over 20% per year. Today, interest rates are close to zero. Interest rates make holding bonds more attractive.

http://silverstockreport.com/2011/dip.html

 

[bobbyw24]

Wow $34.31.

Keep on falling baby!

 

[Seraphim]

http://www.kitco.com/charts/popup/ag0030lnb.html

So far the low is 32.50$ and that saw a serious jump up almost right away.

Today gold went down 10$ from USD strength and down 1$ from supply/demand.

Silver? Up almost a dollar on supply/demand and about 25 cents given back from USD strength.

This is looking more like the trend prior to all the margin raises.

If margins aren't raised for a few weeks, silver will see a huge rebound back up. If that is the case my 33$ prediction was pretty spot on.

We will see.

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.

 

[Bruno]

Inflation hit a two and a half year high today as well.

 

[vita3]

Don't know what the number is every second.. but I love having silver in hand.

 

[swissaustrian]

I went long with options today, but hedged myself against downside risk:
http://www.ronpaulforums.com/showth...-commodities-VOLATILITY&p=3271426#post3271426

 

[Gaddafi Duck]

http://www.kitco.com/charts/popup/ag0030lnb.html

So far the low is 32.50$ and that saw a serious jump up almost right away.

Today gold went down 10$ from USD strength and down 1$ from supply/demand.

Silver? Up almost a dollar on supply/demand and about 25 cents given back from USD strength.

This is looking more like the trend prior to all the margin raises.

If margins aren't raised for a few weeks, silver will see a huge rebound back up. If that is the case my 33$ prediction was pretty spot on.

We will see.

I don't know when you've made that "prediction," but when silver was $47 a couple weeks ago, you said silver could drop to 40-42, but maybe even to $35. I remember you also saying you wouldn't be surprised if silver keeps going higher.

So now you've made another prediction that it could go as low as $33. Congratulations, after spouting off seven different answers, you were finally correct!

The only range in silver prices I have been able to get from you has been anywhere in the neighborhood of $33-50+. Whatta range!

I wouldn't break your arm patting yourself on the back..you can't determine any asset has "support" at any level given the amount of leverage people are playing with. I'm sure oil had a lot of support levels suggested by analysts when oil was $147/barrel on July 11, 2008. Then, a couple months later, oil dropped to $33/barrel having no problem breaking through "key support levels".

It's all speculation. Silver has shot up dramatically over the past year. If it was $20 not too long ago, it's not all that unquestionable to return to similar levels. Support levels mean nothing when investors hit margin calls and are forced to liquidate positions.

But I mean hey, you were right on with silver being in a $33-$50+ price range over a two week time horizon. Apart from the earth ending and/or the largest silver mine ever discovered and thus put into immediate production, you had an accurate range for less than half a month's time.

 

[Seraphim]

Read the timeline on the forums and match it up to reality. The thread topic was to pick the bottom price that would occur during the correction. All I did was answer the OP's question based on the information I had in real time.

I'm glad you took time to write such a lenghthy response with very little substance.

At least I contribute to the flow of information and reason on the boards to help people who are genuine in their interest. I also have a track record over the last year of calling short and intermediate moves on precious metals VERY accurately.

I'm not patting myself on the back. I'm adding to the conversation.

You're a douche. I'll give you that.

I don't know when you've made that "prediction," but when silver was $47 a couple weeks ago, you said silver could drop to 40-42, but maybe even to $35. I remember you also saying you wouldn't be surprised if silver keeps going higher.

So now you've made another prediction that it could go as low as $33. Congratulations, after spouting off seven different answers, you were finally correct!

The only range in silver prices I have been able to get from you has been anywhere in the neighborhood of $33-50+. Whatta range!

I wouldn't break your arm patting yourself on the back..you can't determine any asset has "support" at any level given the amount of leverage people are playing with. I'm sure oil had a lot of support levels suggested by analysts when oil was $147/barrel on July 11, 2008. Then, a couple months later, oil dropped to $33/barrel having no problem breaking through "key support levels".

It's all speculation. Silver has shot up dramatically over the past year. If it was $20 not too long ago, it's not all that unquestionable to return to similar levels. Support levels mean nothing when investors hit margin calls and are forced to liquidate positions.

But I mean hey, you were right on with silver being in a $33-$50+ price range over a two week time horizon. Apart from the earth ending and/or the largest silver mine ever discovered and thus put into immediate production, you had an accurate range for less than half a month's time.

 

[Dr.3D]

Somehow, I see a few more margin hikes in the future. If that happens, I suppose it could drop even farther.

 

[Travlyr]

Silver Eagles are still at $42 from APMEX. Hardly a crash.
Paper silver WILL eventually go to $0

 

[Gaddafi Duck]

Read the timeline on the forums and match it up to reality. The thread topic was to pick the bottom price that would occur during the correction. All I did was answer the OP's question based on the information I had in real time.

I'm glad you took time to write such a lenghthy response with very little substance.

At least I contribute to the flow of information and reason on the boards to help people who are genuine in their interest. I also have a track record over the last year of calling short and intermediate moves on precious metals VERY accurately.

I'm not patting myself on the back. I'm adding to the conversation.

You're a douche. I'll give you that.

lol..a legend in your own mind.

 

[Seraphim]

Don't let your fingers slip on those straws.

lol..a legend in your own mind.

 

[Gaddafi Duck]

Don't let your fingers slip on those straws.

Oh, no not at all. You've clearly demonstrated, with your track record, that you have immaculate short term projections on the price of silver. So much so your skills far surpass what billionaires like Jim Rogers or Warren Buffett are capable of. Not even Peter Schiff, even self-admittedly, can match what you have appeared to master.

Day trading/making short term projections isn't an art--it's gambling. All asset prices move in irrational directions on a daily basis--there is no fundamental reason for the varying in price of silver from minute to minute, or day to day.

Quit making yourself out to something you clearly aren't and nobody is. The very premise of Austrian Economics is the concept that no one person can hold the information of the masses at any given moment in time. It's why Central Banking fails--because no one person or group can understand or comprehend the information that goes into the market interest rates.

But clearly, you have demonstrated you know something about silver prices that no one, not even David Morgan, Peter Schiff, yah know..the people who actually have followed financial markets for years and actually have money, do.

Enjoy your random walks with the futures market and the numerous pricing points we should keep an eye out for. Every two dollar change in the silver price is a "watch point" according from your "projections". Of course if silver doesn't reverse on your pricing point, you round to the nearest projected integer.

 

[bobbyw24]

Robin Griffiths: Silver could eclipse $450, gold $12,000

With the gold price just shy of $1,500 and silver around the $35 level, Eric King of King World News has just interviewed Robin Griffiths of Cazenove, one of the top investment strategists in the world with 44 years’ experience. When asked if this time around silver will eclipse the 38 fold up-move which took place in the 70’s Griffiths replied, “Yes, I think getting to $50 was a slam dunk certainty, you test the old all-time high. We now have a consolidation for let’s call it two months and I think then we are going to go on up because the paper monies are still being printed.”

He said: “I’ve got it (silver) as a ten bagger from current levels. You don’t want to be wobbled out here because of a few champagne bubbles. You want to be able to stay with and add to your long-term holdings. Bulls (bull markets) are very successful at wobbling people out at the wrong time.”

http://www.investmentpostcards.com/2011/05/14/robin-griffiths-silver-could-eclipse-450-gold-12000/

 

[UK4Paul]

I've been watching "this silver thing" for a while now, and have spent the last couple of weeks reading tons of bullish and bearish articles and opinions, and here are my thoughts so far...

• Buying silver as a LONG TERM store of value makes sense. If you're looking for a "long term store of value", or if you're worried about the collapse of the dollar, then investing in physical silver makes perfect sense, but then it doesn't matter too much what the price of silver is on a day to day basis. In fact, you'd prefer prices to go LOWER, so you can "fill your boots".
• However, the dollar system doesn't seem on the verge of collapsing just yet. Let's face it, the US Government has proven that it is capable of kicking the can down the road pretty well. Based on the growth of the national debt, it seems much more likely that the REAL crisis point is 5-10 years away, when the INTEREST on the ever-increasing debt starts to get too much to handle.
• In the meantime, the illusion of relative normality will continue. So there won't necessarily be a mad rush by the masses into silver (yet). However, because the silver market is fairly small, maybe it doesn't need a "mad rush", but just enough people to come in and push prices up.
• It costs $5 - $15 to extract an ounce of silver. Different mines have different costs, but let's go with $15 (probably too high, but let's run with it). Clearly if price drops below $15, it becomes unprofitable to mine. (OK, I know miners can hedge, but sooner or later they need prices to be over $15.) On the other hand, if price goes to, say $100 for any reasonable length of time... it becomes massively profitable to extract, probably leading to massive expansion in exploration and mining, which would increase supply, forcing price back down again, until an equilibrium is reached between supply and demand.
• I'm not convinced by the "silver should be [$100-]$400!" arguments based on inflation-adjusted prices. By that argument, a radio should today cost thousands of dollars... but it doesn't, because it's cheaper to make each unit than, say, 40 years ago. Similarly, it's $15 (max) to extract an ounce of silver, in today's dollars. The only factors that are left are SUPPLY, DEMAND and SENTIMENT.
• On SUPPLY... in a TRUE silver shortage, price would go up quite a lot I'm sure, but at some point, mining will expand to take advantage of the premium price, bringing price lower again. Supply from mining has been increasing steadily since 2002.
• On DEMAND... the main demand for silver is for industrial application, which will probably increase over time, as the world becomes more industrialized. However, recessions probably dent demand, as was the case in 2009. Coins and metal demand will probably increase because of increased fears about the economy, hyperinflation etc.
• On SENTIMENT... this is really the speculative element, the constant mental battle between the "silver should be at $400" meme, and the "silver will crash 66%" meme, among many others... all of which are just IDEAS... sentiments. Silver is ultimately worth whatever somebody else will pay for it. A Van Gogh painting is worth millions because somebody will pay millions for it. If nobody on the planet rated Van Gogh, his paintings would be valued near zero.
• Looking at the past 20 years, the price of silver hovered around the $5 mark during the 1990's, and then past the $10 mark in 2006, fluctuated wildly around the $15 mark 2007-2009, and then shot past the $20 mark around August 2010. In other words, there's a lot of DOWNSIDE with this metal (not that I'm saying it would go down to $5 again).

I just wanted to put these out as "talking points" and "thinking points". I do think that the MAJOR reason gold and silver have exploded these past couple of years is because they are seen as SAFE HAVENS in a world of financial crises, money printing and exploding debt that can't be paid off.

And let's face it... nothing has changed in that regard, so I suspect the bull market in gold and silver will continue. (What else could serve as such a good safe haven?)

However, I think it's a LOT more complicated than saying, "Silver should REALLY be at $XYZ" based on prices 30-40 years ago. Prices don't work like that. On the other hand, silver MIGHT go to that price... but perhaps by that time, we'd be using a different currency anyway... so the DOLLAR price of silver would become irrelevant

I suppose this post sounds a bit bearish. To be honest, I don't know... and at the moment, I don't own any silver. If you're buying silver as a "long term store of value", great. However, some of what I've read in some silver articles online does have a tinge of Ponzi about it, i.e. if everyone piles in (and you can persuade your grandmother to invest), then prices can only ever go up, up and UP... because look!... the price should really be $xyz (oh, and you'll be bankrupting JP Morgan in the process )

 

[llepard]

This entire bull market is not about silver going up. It is about the dollar going to its intrinsic value: Zero. Based upon current trends and commitments we are too far gone. The dollar will be worthless, the only issue is when. See: Weimar Germany 1923. An ounce of silver was worth billions of marks.