Why is Silver going up?

Cameo CC

I just read an interesting article from Kitco about silver. Here is the link:
IS SILVER BEING MANIPULATED? - Doug Hornig

Mr. Hornig makes some good points. I wonder how the stockholders of companies like AIG or HSBC feel about this or why Eliot Spitzer, New York’s attorney general has not acted?

Warren Buffet believes silver will go to $17.00 an ounce. Watch out gold.

Todd

mercurynut

That was an intersting read. Thanks.

fishcooker

Any ideas on how the miners interact with these short positions?

If I was a miner, and it cost $4/oz to get my silver to market, I'd be selling at $8.

I'd probably sell some future production as well. Is that why these "shorts" are larger than warehouse inventory?

ddink

<< <i>I'd probably sell some future production as well. Is that why these "shorts" are larger than warehouse inventory? >>



No, shorts don't actually OWN any silver. They are permitted to sell silver they don't own in hopes that the price of silver will go down and then they can buy the silver at the lower prices, and make money.

Ted Butler is encouraging miners of silver to withold 25% of their inventory. Many have been barely breaking even over the last few years, and he says if they would only invest 10% of their cash in their own product, the payoffs would be huge. He sites a copper company that wasn't pleased with copper prices, kept 50% of their production in inventory that year, and sold it when the price went up. They made $200,000,000 profit by doing that. It's simple--buy low sell high--or in this case, just sell high. Remember, they are dealing with a very finite resource (one day their mines will run out), so Butler is asking "Why do you sell your wealth at such low prices?"

CameoCC: Warren Buffett is thought to have been pressured by the shorts to sell all his silver. Nobody is certain, but that's what Butler believes. Although he was indeed very much FOR the buying of silver, the shorts probably made him an offer he couldn't refuse.

razorface1027

: Why is Silver going up?

Cause GAS prices are?

ddink

In 2001 we entered a recession and the WTC was bombed.
In 2002 the recession was in full swing, we went to war with Afganistan.
In 2003 we went to war with Iraq. Around October of 2003 we technically came out of the recession (GDP grew), yet silver started going through the roof.

In short, I'm not sure why. You'd think silver would have risen in 2001 and 2002, not waited until almost 2004. Some are saying it's because China started buying all commodities in bulk, and that is what started the ball rolling.

Cameo CC

Dittos on all of the responses.

Todd

cladking

I suspect silver is going up because of a change in sentiment and was triggered by gold's run-up.

The metals hd fallen very far out of favor because there was money to be made in the stock markets
and in currencies. When the stock market began uncoiling in 1982 people just about forgot about
silver or gold and analyists and advisors quit recommending it. Concurrently it was easy for a handful
of market insiders to manipulate the price to their own benefit as they launched a long series of bull
traps. Sentiment reached a cyclical low about the same time the stock market was trying to recover
from the dot com debacle. Now net purchases by investors is increasing and the market makers are
looking for an exit. There's no certainty that silver will get through the resistence but the next several
days may be telling.