Tuesday, February 22, 2011
Silver, 1980, and why we shouldnt drive while looking in the rear view mirror
Okay, I want to open this up in the comments section to my viewers. Why are we looking at 1980 silver prices as an indication of where its supposed to go this time around? Were the fundamentals that similar? I think you will find, with the help of the audience comments below, that things may be a tad different this time...
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I'd say they use the 1980 price to guide the 2011 price by adjusting for inflation.
ReplyDeleteStill, i believe it will be tremendously undervalued just on the basis of actual physical supply once shit hits the fan.
NT
How high can price go?
ReplyDeleteDepends on how deep the lies are that they assholes have what they claim to have.
The deeper the lies, the higher the price will go.
And why would there be the need for so much market manipulation if the fiat system and banking cartel wasn't based on lies, credit, debt, and enslavement?
It will go above $1K, guaranteed.
As I see it, the lies about what's in the vaults and China's huge demand will propel silver far further than all these reports of shortages at dealers.
do we really know what that adjustment should be? Do we have a good grip on the 'real' outstanding reserve currency issues? If based on 'price' alone, I guess its just a mind game. I think we really have to look at the mechanics as to HOW it got to $50 and WHAT pushed it there and then look at it today.
ReplyDeleteMarch is going to Epic. The Comex has NEVER been in this position. Blythe knows that every time she dumps the price 10X more orders hits the floor. How can they get out of this one. SGS is right $50 is a good price However I'm going for $150 to make the ratio more sound. Bring it on you power hungry hore... Your not gonna shake this dog off.
ReplyDeleteI suppose if we look at all the debt obligations of US currency and divide by ounces of US owned (& citizens) we would have a good WAG.
ReplyDelete50 is a good number as it gives you a TA target- that said if you back the outstanding obligations with the "reported" gold the US "has" then put the silver gold ratio at 16/1 you will come up with an interesting price
ReplyDeletelove the silver bugs.
ReplyDeletelove that really no one sold at the high of 52 in 1980 and they were lucky to catch 30 physical for a day.
gold on the other hand was at 600 avg for how many months after the 850 top.
remember silver bugs, as silver rises sell for gold. you are viewing the system in the same old way still.
here is a great silver story....
FOFOA
"I have a feeling that the GSR might end up quite a bit lower, and perhaps lower than it's historical 16:1 ratio after it all shakes out."
Why do people buy silver? Well, some think it is the way to protest against "Old World Ways." Against past wealth accumulation! Others think it is a vote against the NWO! Others, in the past, have thought of it as the "easy money" alternative to gold. That group of silver-bugs advocated an official inflationary policy. Gold was hard money. Silver was easy money. The "poor mans gold." But mostly today, they buy it simply for the supposed "leverage" it offers against gold.
Well, what if... just "what if" it ends up at a GSR of 2,000:1 instead of 16:1? What kind of "leverage" was that? (The kind you'd prefer having some K-Y to prepare for?)
What if scarcity doesn't matter in a monetary metal? What if STABILITY is infinitely more important than scarcity? What if the "stocks to flow ratio" matters infinitely more than scarcity? What if the gold stock to flow ratio at today's prices is more than 175 times greater than silver?
What if silver's wonderful history as a monetarily important part of "bimetallism" ended more than a century ago? Can you show me a politician or central banker that has said anything about silver lately? Was there ever a "London Silver Pool?" How about a WAS/CBSA (Washington Agreement on Silver/Central Bank Silver Agreement)? When was the last "silver standard?"
If you want to know the truth, most of the heavy-handed silver advocates have themselves a healthy stash of gold. They would probably like to see the price of silver spike so that they could offload some of their oversized commitment. That's kind of where I'm at with silver too. I would love to see a price spike right now! Maybe $30? How about $50 even!!!! I would love that.
But while the gamble of that happening is enough to keep me from liquidating my silver completely all at once, it is not enough to get me to buy any new silver. I have "matured" since my last silver purchase (which was before I finished reading A/FOA for the first time). I'm now looking long term. I'm in for the sure thing, not the "leveraged gamble."
The $IMFS loves that silver is associated with gold! It "commoditizes" gold. It takes much attention away from "gold-the-wealth" and puts it on "precious metals."
But there are so many would-be gold bugs with no savings that want to participate in the gold revaluation that don't understand. And they still see the silver price rising with the gold they can't reach.
cont......
ReplyDeleteSo they are convinced that silver will outperform gold, and so don't touch the yellow wealth metal. They speculate! Exactly what the $IMFS wants them to do.
You want to use silver as a call option on gold? Go for it. But then you are an active trader. You must be alert and prepared to take a loss and live with regrets.
I know all the standard arguments for silver. So save your effort. I spent a year studying them while I was accumulating silver.
"There is less silver than gold." Makes it a worse monetary metal at this point. Less stability.
"Historic 16:1 ratio." Good luck with that one. Bimetallism was officially abandoned more than 100 years ago.
"More industrial demand for silver." Uh-huh. Yup, it's a commodity metal now, and susceptible to economic forces.
"TPTB don't have any to suppress the market." Uh-huh. Yup, and they don't have any reason to bother supporting a revaluation when the dollar collapses either. In fact, they have an incentive to do the opposite! To support a WIDENING of the GSR so that industry doesn't suffer.
"Gold's too expensive." Then you don't understand money.
"You get more silver than you get gold." Yeah, you get more iron scrap too.
Puh-leeeeze. Don't come hit me with these tired arguments. I will not respond. I probably left out a few too.
If you feel better buying silver than gold, then just go for it. It won't affect Freegold in the least. I won't hold it against you!! It will help it in fact. Just like dumping your dollars for wheat or oil will help speed the process. And if you are one of the few who know where I am, and you want some silver right at spot, any amount, send me an email if you are close enough to come get it. I do have silver for sale!
Sincerely,
FOFOA
Correct me if i am wrong here and thinking crazy... IF the U.S. has the gold they say they do.. Wouldnt the gold have to be valued at about $105,000 Dollars an ounce to cover all the debt they have incurred? Then using the historical 16:1 ratio of gold to silver... Does that not make silver valued at 6562.50 an ounce? I mean it sounds insane, but isnt it fundamentally correct and possible?
ReplyDeleteThe Silver price has been manipulated down for so long, 25+ years that the market is severely distorted. This would cause demand to increase over those years beyond what it would be with a normal market price. Hence above ground stocks of Silver have depleted. We literally go from the ground to production. I would think due to this long term price suppression and resulting high demand, we are looking at a fiat price well past $160.
ReplyDeleteI say we take this guy up on his call to sell. We have enough silver bugs here, lets make him put his silver where his negative big mouth is, eh?
ReplyDeleteWhy should I care what the paper price is for my physical metal? Paper metal is for banksters and their dupes, may they wise up quickly.
ReplyDeleteLast time around (70's-1980), there were a couple billionares trying to corner a growing market. This time around, a fiat currency is openly being printed by the Central Bernank. I use dLOLars when I have to, and Ag when I can.
The US was a much different country in 1980 than it is now. At that time we were a creditor nation, but that is certainly no longer the case. Silver in 1980 was propelled in large part by the Hunt Brothers who attempted to corner the market. It's much different this time. We are now seeing a much larger and diversified global demand for silver. The regime of fiat currencies is in it's death throws. Faith in paper fiat is rapidly wanning, and as this faith is lost velocity will increase beyond any of our imaginations. Silver, already in short supply, is going much higher than any of us probably believe.
ReplyDeletePuhhh-lease, how relevant is that 50$ that came about from the Hunt Bros. upward manipulation, THIRTY years ago ? All other arguments mentionned above (shortage, USD devaluation, current downward manipulation coming to an end, etc.) are of much greater interest.
ReplyDeleteBut most of all, if you want a good reason to hang on to that 50$/oz, listen to the wise and quiet Eric Sprott: Silver @ 50$ this Spring
Still better from Sprott: Silver is the investment of the *decade*
Chuck
I'm not well versed on the entire subject since I have only invested in the hard assets since the beginning of 2010. I first started hearing about it back in 1996-2001 on amateur radio and shortwave bands. I didn't think much of it and didn't bother to look into it. When I asked a family friend who worked for WFC he didn't say much about it and gave the usual recommendations of stocks, mutual funds, bonds, annuities, etc.
ReplyDeleteI was a money saver all my life and never joined the credit/loan lifestyle even though I had decent income and lived conservative in my means. But I watched bank savings rates go from 9% down to where they are today and I started realizing there was something wrong with that.
I decided to buy my first monster box in early 2010 and after coming across various YOUTUBE videos from various people like: SGTbull07, InflationUS, Mrsilvergoldsilver, VisionVictory, george4title, and all the other ones you can possible think of I soon loaded up fast on bullion and am happy I did.
Thanks to many of you mentioned above and many more that I haven't mentioned but would like to including Peter Schiff, Mike Maloney, James Turk, Jim Sinclair, Harvey Organ (who actually keeps in touch with me on Email), and many many others I would like to mention but cannot for space here on the forum.
I don't know much about this but I'm going for it full tilt! I have that type of personality. :-)
NT: It is a mistake to "inflation adjust" PM prices. They do this themselves already. While their prices may be subject to manipulation, for now it is still a real price because we can visit the local coin dealer and purchase all the physical we want near those prices. The silver futures backwardation condition pointed out by SGS implies that this may happen very soon (a bird in hand is worth 2 in the bush).
ReplyDeleteJT
Fofoa tells a tight story, but he severely underestimates the chaos that is coming. As systems break down people will fall back on historic systems, they won't be creating new ones.
ReplyDeleteA few differences between now and 1980 I haven't seen mentioned yet:
ReplyDelete* Nominal interest rates in 1980 were double digits, providing an attractive alternative savings vehicle. Today we have record low interest rates.
* Record wide yield curve for US debt, which is a forecast for higher interest rates and more inflation in the future. In 1980 the yield curve was inverted, meaning the bond market was forecasting interest rates were going to decline. Declining interest rates are good news to a holder of long term bonds.
* The volatility of precious metals was much higher in 1980 than it is presently. Volatility reflects uncertainty and deters money managers from deploying capital in investment vehicles that may miss their forecasts by a wide margin. Today it is treasuries and other sovereign bonds that are volatile and it is spooking investors.
I'm curious about anon who claims to have studied silver. I missed out on cheap gold and got in to silver after having studied what I thought to be sound fundamentals. Dear anon, what is your stance on gold. Would you find it appropriate to invest say 80% silver 20% gold assuming a 1000:1 ratio doesn't occur?
ReplyDeleteI will make one particular comment on why things are different now with gold and silver and that is simply THE MAJOR INFLUENCE OF COMPUTERS. And then add to the computers the complexity of all the other variables that go with it we have a very difficult to forecast economic behavior pattern. Like right now:
ReplyDeleteLook at the US DOLLAR go down and SILVER go down now. Figure that out!
I think it's accurate to say we have HIGH SPEED COMPUTER WARFARE AND MANIPULATION.
One other observation is that buying physical bullion is probably one of the only old fashioned ways of propelling this market where it belongs. You can actually do that with a computer too. :-) How about that?
the giants and CB's have already chosen the path as an exit plan for the current USD reserve system.
ReplyDeletedo you see silver on the asset side of a CB balance sheet? do you realize what the value of money is? only a fool would want to store excess wealth in silver over gold.
read this link for a quick understanding.
http://flowofvalue.blogspot.com/2010/11/gold-is-not-money_8311.html
I speak as a fool as one who stored wealth in silver and I look like a genius right now. If I would have stored wealth in gold it would not have gained in value and usury. So there is a need to be diversified given all these different circumstances. And these situations are subject to change at any given time.
ReplyDeletehold some currency, hold some miners, hold some silver & hold a large % of your net worth in gold.
ReplyDeleteAll in %'s you're comfortable with. In a worst case scenario, I would get rid of assets in the above mentioned order - keep in mind that when people the world over, especially those in the west, realize the paper is worthless and want the metal, gold/silver will be nowhere to be found or can be found at exorbitant prices. So to those who plan on playing the paper game & then buying the metals at some point, I think we'd all recommend you buy the physical first and then play the paper game and slowly but surely convert to metals at a rate you're comfortable with.
ALL DATA we have can't be trusted. I'm just going to believe that the smart economy of recent times, CHINA is buying the heck out of gold and silver. "Do what the chinese are doing since the tech crash... its buying the physical".
ReplyDeleteMy only concern now is confiscation and salting of silver/gold.
I don't think we can bust JPM/Comex. Defaulting on the entire 700M ounces of silver at $30 is chicken feed. $21,090,000,000. I do think they can take this "drama" as an excuse for more government / fed control of the system. Silver may be doing exactly what they want it to and it could truely be the double edged sword of our era.
I think you missed a zero on that $21,090,000,000
ReplyDeleteMaybe, check my math?
ReplyDelete$30 Spot average.
700 million ounces short.
20% Premium.
($30*700,000,000)*20% = $25,200,000,000.00
25billion, 250billion, all just a couple of strokes on bens keyboard.