Warning Fools! Silver Will Fall by 66%

[swissaustrian]

Open interest in futures is at record lows. The futures curve is still partially backwardated, indicating physical shortages. It´s unlikely that silver drops another 50 % from here. The dollar would have to strengthen a lot for that. The FED will not allow that. They need a cheap dollar.

 

[fj45lvr]

Yahooooo!!!!!


hope if falls so I can buy more

 

[seraphson]

Looks like the original post was pretty correct on the price direction for the price of silver. It was about $45 an ounce back then (end of April 2011- and according to the chart above was the peak price) and is around $30 an ounce now. Not a 65% decline but it has been going down.

Temporarily...Right? The word on the street is that silver will gain quite a bit of momentum in 2012. This is just another buying opportunity, right? What was all that talk about gold/silver prices being artificially maintained? I thought the true value of silver was much higher.

 

[Seraphim]

This.

It's been a while since I could really afford to add to my silver position. Now that I'm just weeks away from being able to make a significant (for me) purchase...well I hope it falls to 25$ !!

2 months ago when silver dropped to 26$ like a knife...it shot back up equally as fast - many didn't notice how far it fell it was so quick.

Bring on the knife like drop to 20$.

I for one will be searching far and wide for cash to immediately flip for some 20$ silver.

This time around, 16-22$ silver will be very much like 8-9$ silver in 2008. STRONG strategic buy point.

I`m not convinced it will even go that low. It might though.

Gasoline is getting cheaper as well.

Yahooooo!!!!!


hope if falls so I can buy more

 

[Steven Douglas]

Bring on the knife like drop to 20$.

...thus putting many silver mines out of business, keeping new silver production out of circulation.

I'd throw a massive party if it dropped to $1 and stayed there for the next five years. I've never bought paper silver, let alone on margin, in my life. It's not a "position" or an investment for me. I'm just stupidly, naively using it as a store of wealth. Money. I say wipe out that "wealth". Pop that bubble, baby, as I am not holding my breath for anything. I would LOVE to be wrong, and would gladly take one for the team. I will just continue to stock up on the worthless, volatile stuff, as I always have. Bring it, the lower the merrier!

 

[devil21]

QE3 rumblings are restarting so this drop will be short-lived. Deflation is what the Fed fears.

 

[Seraphim]

It wouldnt stay there for long. Doubt that puts a lot of mines out of business.

...thus putting many silver mines out of business, keeping new silver production out of circulation.

I'd throw a massive party if it dropped to $1 and stayed there for the next five years. I've never bought paper silver, let alone on margin, in my life. It's not a "position" or an investment for me. I'm just stupidly, naively using it as a store of wealth. Money. I say wipe out that "wealth". Pop that bubble, baby, as I am not holding my breath for anything. I would LOVE to be wrong, and would gladly take one for the team. I will just continue to stock up on the worthless, volatile stuff, as I always have. Bring it, the lower the merrier!

 

[Steven Douglas]

It wouldnt stay there for long. Doubt that puts a lot of mines out of business.

I was being facetious, taking it to ridiculous extremes for those silver/gold anti-bugs who, in their wildest and most bizarre fantasies, honestly believe the value of gold and silver is fictitious (if people would just see it this way, and everyone could finally agree - which they never will).

To all such, gold and silver are essentially no different than the intrinsically worthless fiat currencies they believe in and worship, which really are nothing more than fictitious value made real, rather than the reality: that they are only dilutions of real wealth, and real productivity, unlike gold and silver, which do have real floors, and are ultimately governed by intrinsic value and the underlying fundamentals.

 

[Brian4Liberty]

So where's the bottom going to be?

IMHO, worst case scenario (total crash) takes us down to a minimum of $20/oz. Barring a total crash scenario, and looking at a typical draw-back, maybe $30 will be the bottom?

What do the technical gurus think?

Wow, what a long thread... luckily my initial prediction (above, from 05-04-2011) is intact.

I've been buying under $30, had my finger on the trigger today but didn't pull. I am anticipating a near-term low (dollar cost averaging buy point) this week or next.

 

[swissaustrian]

Wow, what a long thread... luckily my initial prediction (above, from 05-04-2011) is intact.

I've been buying under $30, had my finger on the trigger today but didn't pull. I am anticipating a near-term low (dollar cost averaging buy point) this week or next.

12-28 is january options expiry. Usually the day before options expiry is a good time to buy:

 

[Steven Douglas]

I've been buying under $30, had my finger on the trigger today but didn't pull. I am anticipating a near-term low (dollar cost averaging buy point) this week or next.

I love the word trigger. Some are trigger-shy, while others are trigger-happy, usually as it applies to major buys and sells. I'm more of a trigger-pressure kind of guy. As silver goes down, I apply more pressure, as silver goes up, I apply less pressure. But I never sell, I never try to parlay. I never stop buying, and the trigger is always pulled. That decision was made in 2006, and has yet to fail me.

Screw the conventional wisdom of buying on dips and selling on peaks. That is gambling, trying to parlay - unnecessary when you have a sure thing. I accelerate on the downturns, and decelerate on the upswings, but my foot is on the accelerator only, and never once hits the brakes.

 

[heavenlyboy34]

...thus putting many silver mines out of business, keeping new silver production out of circulation.

I'd throw a massive party if it dropped to $1 and stayed there for the next five years. I've never bought paper silver, let alone on margin, in my life. It's not a "position" or an investment for me. I'm just stupidly, naively using it as a store of wealth. Money. I say wipe out that "wealth". Pop that bubble, baby, as I am not holding my breath for anything. I would LOVE to be wrong, and would gladly take one for the team. I will just continue to stock up on the worthless, volatile stuff, as I always have. Bring it, the lower the merrier!

+1

 

[Zippyjuan]

QE3 rumblings are restarting so this drop will be short-lived. Deflation is what the Fed fears.

The Fed has been giving no indications of starting any QE3 at this time. At their latest meeting (which was last week) the Fed said they would keep things as they are with no hints of any new actions.

 

[devil21]

The Fed has been giving no indications of starting any QE3 at this time. At their latest meeting (which was last week) the Fed said they would keep things as they are with no hints of any new actions.

That's nice. I never said the Fed itself mentioned QE3. I will however counter your statement because the Fed has mentioned in previous recent meetings that additional stimulus may be necessary, but that's not what I was talking about. The rumblings are in finance articles, blog posts, etc.

 

[Zippyjuan]

That's nice. I never said the Fed itself mentioned QE3. I will however counter your statement because the Fed has mentioned in previous recent meetings that additional stimulus may be necessary, but that's not what I was talking about. The rumblings are in finance articles, blog posts, etc.

"May add stimulus as necessary" or "monitoring the situation" has been part of their statement for years. The Fed always gives warnings well in advance of any moves they intend to make so that markets have a chance to plan for and react to them- and to not spook the markets. If they are going to offer more stimulus, they will let us know well ahead of time and since they are still saying no, that means that nothing will happen in the near future. Blogs are not the Fed and are free to speculate about whatever they want. It is just that- speculation.

Article from December 1st:
http://money.cnn.com/2011/12/01/news/economy/fed_bullard_qe3/index.htm

NEW YORK (CNNMoney) -- Investors clamoring for another round of Federal Reserve bond buying need to root for a blue Christmas. That's according to St. Louis Fed President James Bullard, a self-described inflation hawk and influential member of the central bank.

Bullard said at a Bloomberg hedge fund conference in New York Thursday that the Federal Reserve should get a read on the holiday season before making a decision on so-called third round of quantitative easing or QE3.

In other words, don't expect any quantitative easing in 2011.

The Fed OMC statement from last week:
http://www.federalreserve.gov/newsevents/press/monetary/20111213a.htm

 

[Steven Douglas]

"May add stimulus as necessary" or "monitoring the situation" has been part of their statement for years. The Fed always gives warnings well in advance of any moves they intend to make so that markets have a chance to plan for and react to them- and to not spook the markets. If they are going to offer more stimulus, they will let us know well ahead of time and since they are still saying no, that means that nothing will happen in the near future. Blogs are not the Fed and are free to speculate about whatever they want. It is just that- speculation.

Article from December 1st:
http://money.cnn.com/2011/12/01/news/economy/fed_bullard_qe3/index.htm


The Fed OMC statement from last week:
http://www.federalreserve.gov/newsevents/press/monetary/20111213a.htm

You do realize that you're quoting the Fed itself in both cases as a source, right? One is an article quoting the Fed as a source, the other is the Fed itself. Is there a de facto presumption of faith that the Fed is telling the truth?



Did the last Fed audit, not to mention the track record of the Fed, teach us nothing? I personally don't buy into the nice rounded integers that describe QE in terms of QE1, QE2, QE3, etc., as if they really were some kind of official discrete units. To me it's more like saying morning, afternoon and evening.

 

[Zippyjuan]

Can you show a time when the Fed began any quantative easing or made any other significant moves without announcing it first? I can't. They have always announced their intentions. Even if it is simply a tiny raising or lowering of interest rates they charge banks to borrow from them.

 

[Steven Douglas]

Can you show a time when the Fed began any quantative easing or made any other significant moves without announcing it first? I can't.

That's the point. I can't even show you a time when the Fed made any moves other than interest rate setting, regardless of whether it was preceded by an announcement.

If I could lob a slow floating invisible weather-balloon bomb in your direction, one that takes six months to actually reach you, and then "announced" that I'm doing it a few weeks before it arrives, would that count as "announcing it first" in your mind? Not too far fetched, coming from an entity which, which it says "inflation", means price inflation (the effect), not currency inflation (the cause).

Everything the Fed does behind closed doors has a delayed effect, while everything the Fed announces in public has some immediate effect.

Hey, you seem to trust them, taking them at their word. I have every reason in the world not to trust them, given what I see as treason in just the basics which are well known. Beyond that I need to see how far I can throw them first before I can trust them. So far, not so far.

 

[cubical]

nm

 

[cubical]

Can you show a time when the Fed began any quantative easing or made any other significant moves without announcing it first? I can't. They have always announced their intentions. Even if it is simply a tiny raising or lowering of interest rates they charge banks to borrow from them.

Without announcing anything M2 has risen 7% since the fed stopped QE2 only 6 months ago.