What happens if the price rises to $100 an ounce and they can't cover??
I kinda thought a lot of people invested in PMs to avoid getting screwed in these paper games.
Selling an ETF short is selling an item you don't have. The prospectus said the metal was on deposit and the buyer expects that the shares he bought represent real metal on deposit not some promise that some short seller would "buy" it back later, if he doesn't BK. >>
This is exactly why more and more people are buying physical metal.
If the shorter can't pay when the price goes up the holder of paper silver might be out the entire investment; profit, capital and all.
This buying of actual metal is causing a squeeze on supplies world wide. The market has always used this secondary metal to make up the short- fall from mining. Now it's tapping off this supply and eating into new pro- duction as well.
There's still far more paper silver in the world than real silver so as more investors awaken to the danger there will be more demand for metal and less supply.
Eventually the exchanges will have to come to live in the real world because real silver won't trade and real factories would have to shut down.
We could have a buying panic which would simply destroy the paper market. It would also take out the sellers and even a few buyers.
So if 1000 ounces are backing for 100 shares are borrowed and sold to 100 buyers 3 times over then 300 people think they have 10 ounces each when there is still only 1000 and not 3000 ounces in storage. Of course the shorters are expected to buy the shares they lend with paper dollars at some point but not actually come up with the silver.
What happens if the price rises to $100 an ounce and they can't cover??
Selling an ETF short is selling an item you don't have. The prospectus said the metal was on deposit and the buyer expects that the shares he bought represent real metal on deposit not some promise that some short seller would "buy" it back later, if he doesn't BK.
Instead, think of shorts as an accounting entry that has ABSOLUTELY no effect on the underlying commodity. EVERY person who holds a long position is FULLY covered up to their holdings by the PHYSICAL commodity. The number of shares SHORT has ZERO effect on the vaulted commodity.
If the price "goes to $100," the short can either buy to cover, OR he can default and his account balance will be ZERO. In either case, the metal in the vault is neither increased nor decreased; its quantity-count always stays the same.
Folks who want a basic course in short-selling can read their online brokerage TOS, or use wikipedia.
The fact is that absent shorts, the liquidity that is in any market would be substantially reduced. The idea of "selling something you borrowed" may not be easy to grasp, but it is how ALL markets in financial instruments work, how they have always worked, and how the will always work in the future.
Folks Who Bite Get Bitten. Folks Who Don't Bite Get Eaten.
So if 1000 ounces are backing for 100 shares are borrowed and sold to 100 buyers 3 times over then 300 people think they have 10 ounces each when there is still only 1000 and not 3000 ounces in storage. Of course the shorters are expected to buy the shares they lend with paper dollars at some point but not actually come up with the silver.
What happens if the price rises to $100 an ounce and they can't cover??
Selling an ETF short is selling an item you don't have. The prospectus said the metal was on deposit and the buyer expects that the shares he bought represent real metal on deposit not some promise that some short seller would "buy" it back later, if he doesn't BK.
Instead, think of shorts as an accounting entry that has ABSOLUTELY no effect on the underlying commodity. EVERY person who holds a long position is FULLY covered up to their holdings by the PHYSICAL commodity. The number of shares SHORT has ZERO effect on the vaulted commodity.
If the price "goes to $100," the short can either buy to cover, OR he can default and his account balance will be ZERO. In either case, the metal in the vault is neither increased nor decreased; its quantity-count always stays the same.
Folks who want a basic course in short-selling can read their online brokerage TOS, or use wikipedia.
The fact is that absent shorts, the liquidity that is in any market would be substantially reduced. The idea of "selling something you borrowed" may not be easy to grasp, but it is how ALL markets in financial instruments work, how they have always worked, and how the will always work in the future.
Folks Who Bite Get Bitten. Folks Who Don't Bite Get Eaten.
To think that the kite is going to be allowed to crash because its paper has failed, is dangerous thinking.
The dangerous thinking is in making the assumption that all is under control.
Somehow, some folks think "right will prevail" and they will somehow be allowed to benefit from it
By "right will prevail", I am guessing that you mean correctly-thinking precious metal holders. Nah, just being correct doesn't assure success when things are this screwed up and rigged six-ways-to-Sunday.
The mere argument that "it is much worse now," does not forecast the end. The unwinding of the paper-mess would deliver a world-wide depression that would last for MANY YEARS.
It's not a matter of unwinding anything, imo. It will never be unwound. None of the "perps" will ever have to pay a price. The debt will just "disappear" into the Treasury Dept. And on top of that, they are already talking about creating interest-free loan programs for people who can't afford their house payments. It won't stop until the whole system fails, and it just might at this rate.
The metals would benefit little in real terms. Holders of metals who ALSO had mortgage debt might benefit by paying-off their mortgages with cheaper dollars, but that is about it. Paper money would still be how the grocer kept score, and that money would be HARD to come by.
Here's where the real speculation begins. Metals might very well take a hit, or they might become elevated as the only acceptable money. If you've just lost everything you owned in paper, why would you accept more of it? If all of the markets collapse, then who really knows how monetary exchanges and which trading vehicles will re-assert themselves. No, it probably won't be much fun.
At the core of every metal-bug's hope/belief is the CRASHING of society by the final admission that its paper-money is "no good."
Not so! That's how every anti-precious stockbroker or banker would have you think, because it puts the impetus on hard money savers to prove that they are rational and prudent. The banking/brokerage cartel puts up a smoke screen by implying that precious metal investors are nut cases who are waiting for the "end of times". Doom & gloom - isn't that the old saw? Just a cheap shot to cover up massive fraud and a shell game. Nothing less.
The fact is that paper money is becoming "no good" more so every day. The loss of purchasing power via the over-issuance of fiat money is not a hard concept to understand. Deriding those who are lucid enough to make that simple observation solves nothing.
Let's consider a case of someone who has worked about 30 years and has some retirement savings. If this person has X dollars in retirement savings, and the dollar is declining - at some point, this guy is working every day for nothing.
His earnings from a full day's work don't even keep up with the losses in his savings from inflation. If he doesn't work, he loses his savings even faster. What type of servitude might one call that?
When the government publishes bogus inflation figures that don't consider the rising costs of fuel and transportation, that is fraud by the government.
Precious metals don't do anything other than to reflect the reality of what's going on in the country, and in the rest of the world. If that seems too pessimistic, then tell me a nice bedtime story and make it go away.
And you wonder why the metals are going up?
Q: Are You Printing Money? Bernanke: Not Literally
The ETFs SLV and GLD are FULLY secured by the precise amounts of the commodity that their outstanding shares represent.
The ETFs USO and UNG are FULLY secured by the precise number of futures-contracts that their outstanding shares represent.
ANY contention to the contrary is simply untrue.
ETFs are the convenient and smart way to trade commodities of all stripes. Physical gold and silver are good to hold in reasonable quantities, but holding huge quantities is not practical for most folks.
As to oil and corn and wheat and cattle, absent ETFs, ordinary folks would not be able to profit from them at all.
Folks Who Bite Get Bitten. Folks Who Don't Bite Get Eaten.
Sure it is. It depends on the actual instrument. You'll have to read the contract and the seller's responsibility.
You're right of course that if you buy contracts on the exchange, they'll merely default on the profit. The fact that defaults are rare does not change the fact that they can happen.
ETFs are the convenient and smart way to trade commodities of all stripes. Physical gold and silver are good to hold in reasonable quantities, but holding huge quantities is not practical for most folks.
The ETFs SLV and GLD are FULLY secured by the precise amounts of the commodity that their outstanding shares represent.
The ETFs USO and UNG are FULLY secured by the precise number of futures-contracts that their outstanding shares represent.
ANY contention to the contrary is simply untrue.
ETFs are the convenient and smart way to trade commodities of all stripes. Physical gold and silver are good to hold in reasonable quantities, but holding huge quantities is not practical for most folks.
As to oil and corn and wheat and cattle, absent ETFs, ordinary folks would not be able to profit from them at all. >>
I take it that you have read the prospectus for SLV. I've looked through it, and yes, it does seem rather straight forward. HOWEVER.... when you look up the Statement of Additional Information, etc., and start looking up the small print (some of this information is not easy to find.... I wonder why) then loopholes begin to appear. The fund is allowed to play games with the amount of silver.
Butler's article mentioned that shares of SLV..... were selling for LESS than the price of silver. I do not know if this is true or not (haven't looked it up)..... but if it is true, how do you explain this?
Each of us must make our own decisions in these perilous financial times...... I am trusting any kind of paper, less and less. And NO, I am NOT hoping for any end times, etc;., in the expectations that precious metals will soar. I am merely trying to PROTECT what I now have, and not be totally wiped out if defaults happen. Will gold and silver provide any assurance for me? Beats me, but I sure plan to hedge my bets....
The issuer of SLV says they will keep 10 ounces of silver for each share issued. That is what the buyer is buying. If a short seller "creates" a share as in a "naked short" then they are selling a share representing 10 ounces that doesn't exist. The value of the share is now based not on the value of the silver stored but is "derived" from the price of silver. It is a derivative.
If the share is borrowed from a holder and sold by the broker, usually without the owners knowledge then the broker "owes" the holder the share representing 10 ounces and the holder now has a "derivative" instead of the actual share.
I consider both of these to be fraudulent but that is how Wall Street gets rich..
Do I have to explain the risk of holding a derivative instead of the real item especially when you think you have stored silver for backing??
<< <i>were selling for LESS than the price of silver >>
Yes, 20 cents an ounce less as we speak. I thought you could actually take delivery too. Sounds like a little possible arbitrage with the spot market, wonder why its not happening??
If I recall, some of the loopholes that set off warning bells for me, concerned the custodians for SLV, or the entities that actually 'stored' the physical silver. Seems that information concerning them was very vague with their responsibilities, etc. For example.... they had to be given several days or more notice if anyone wanted to see the physical silver, as in an audit. Hmmm..... why the time delay?? Maybe.... just maybe...... they needed a little time just to make sure they had the silver there, or arrange to get it there????
For another eye opener..... check out who the custodians are. Again, if I recall, they were mostly the major banking corporations.... the same ones who are getting into trouble now. I believe that Bear Stearns was one. Just how much assurances do you place in their 'word' that they have this silver actually in storage, instead of just another paper IOU??
The issuer of SLV says they will keep 10 ounces of silver for each share issued. That is what the buyer is buying. If a short seller "creates" a share as in a "naked short" then they are selling a share representing 10 ounces that doesn't exist. The value of the share is now based not on the value of the silver stored but is "derived" from the price of silver. It is a derivative.
If the share is borrowed from a holder and sold by the broker, usually without the owners knowledge then the broker "owes" the holder the share representing 10 ounces and the holder now has a "derivative" instead of the actual share.
I consider both of these to be fraudulent but that is how Wall Street gets rich..
Do I have to explain the risk of holding a derivative instead of the real item especially when you think you have stored silver for backing??
And that's what the flap about "counterparty risk" is all about. Nobody knows who is holding the bag, but everybody knows that the bag is empty.
Q: Are You Printing Money? Bernanke: Not Literally
"The money power preys upon the nation in times of peace and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy. I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. Corporations have been enthroned, an era of corruption will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people, until the wealth is aggregated in a few hands, and the republic destroyed." - Abraham Lincoln, November 21, 1864, a letter to William F. Elkins
Tainted tomatoes still a mystery...read one headline on Google news. Are you kidding me, it's the tomatoes from Mexico but our FDA/AG-congloms are afraid of dime-ing Mexican tomatoes growing in human poop! Increasingly it's a detriment to be a citizen of this USA. What laws are left that actually protect us from tainted foods, toys, pet food, illegal-border-wars, socialist politicians, government schools....
I could go on but everyone here gets it.
It been a while since we've had an "American Revolution." Does it happen when gas hits $8, $9 or $10 a gallon. Or when oil, airline and what you drive, light bulbs are regulated. Or when we wake up and hear that all of our "pies" need to be more fairly distributed, or when our 401k's need to have a one-time charge to help out those who couldn't invest for the future.
Maybe it's when we hear Michelle say "let them eat cake."
<< <i>Tainted tomatoes still a mystery...read one headline on Google news. Are you kidding me, it's the tomatoes from Mexico but our FDA/AG-congloms are afraid of dime-ing Mexican tomatoes growing in human poop! Increasingly it's a detriment to be a citizen of this USA. What laws are left that actually protect us from tainted foods, toys, pet food, illegal-border-wars, socialist politicians, government schools....
I could go on but everyone here gets it.
It been a while since we've had an "American Revolution." Does it happen when gas hits $8, $9 or $10 a gallon. Or when oil, airline and what you drive, light bulbs are regulated. Or when we wake up and hear that all of our "pies" need to be more fairly distributed, or when our 401k's need to have a one-time charge to help out those who couldn't invest for the future.
Maybe it's when we hear Michelle say "let them eat cake."
Ren >>
It was a one time shot and never gonna happen again. In order for it to happen there would need to be at least a minimum of brains to recognize some of the things you just wrote as being detrimental to anything other than a football game on monday night.
With the few exceptions that seem to congregate in places like this, that awareness doesn't exist.
They showed last week that 84% of high school seniors couldn't pass a sophmore level reading test. Yet they'll grraduate of course. I think it's safe to say that the simililarities to Harrison Bergeron are getting closer and closer every day.
It been a while since we've had an "American Revolution." Does it happen when gas hits $8, $9 or $10 a gallon. Or when oil, airline and what you drive, light bulbs are regulated. Or when we wake up and hear that all of our "pies" need to be more fairly distributed, or when our 401k's need to have a one-time charge to help out those who couldn't invest for the future.
The American Revolution was caused by the tyranny of a foreign power, and I don't think the current situation rises to that level. We do need an American Awakening though, but I doubt that it will occur. The problem with the regulation and redistribution you talk about is that 50% of the population couldn't care less, and another 30% are in favor of it.
NOW, THEREFORE, BE IT RESOLVED BY THE HOUSE OF REPRESENTATIVES AND THE SENATE OF THE 2ND SESSION OF THE 51ST OKLAHOMA LEGISLATURE: THAT the State of Oklahoma hereby claims sovereignty under the Tenth Amendment to the Constitution of the United States over all powers not otherwise enumerated and granted to the federal government by the Constitution of the United States. THAT this serve as Notice and Demand to the federal government, as our agent, to cease and desist, effective immediately, mandates that are beyond the scope of these constitutionally delegated powers.
<< <i>LOL fc... if you took alll the conspiracy nuts out of the metals market , volume would dry up >>
Who exactly are these conspiracy "nuts" ? >>
mrearlygold, I really meant this as tongue and cheek, hence the winking smiley face..
It does however, imho, that much of the "metals bugs" mentalities are dominated by enormous mistrust of any "paper"assets, as highlighted by this misconception of SLV, as well as some "end of times" philosophy that seems to creep in, and of course overwheming condemnation of the Fed and virtually ANYTHING they do.
I had thought the SLV/ physical metal controversy had died down with the drop in the price of silver but it's now back....with wrong assumptions about shorting and not understanding a simple concept like trading at a discount to nav(slv). What I will never understand is, if this "lack off backing by the physical metal fear(slv), and the physical shortage issues are real, how could the market price of silver not go up?.. and markedley. Many on here may disdain paper markets but, no matter what people think, pricing in markets is not so inefficient as to wildly misprice an OPENLY traded commodity for any reasonable length of time.
<< <i>LOL fc... if you took alll the conspiracy nuts out of the metals market , volume would dry up >>
Who exactly are these conspiracy "nuts" ? >>
mrearlygold, I really meant this as tongue and cheek, hence the winking smiley face..
It does however, imho, that much of the "metals bugs" mentalities are dominated by enormous mistrust of any "paper"assets, as highlighted by this misconception of SLV, as well as some "end of times" philosophy that seems to creep in, and of course overwheming condemnation of the Fed and virtually ANYTHING they do.
I had thought the SLV/ physical metal controversy had died down with the drop in the price of silver but it's now back....with wrong assumptions about shorting and not understanding a simple concept like trading at a discount to nav(slv). What I will never understand is, if this "lack off backing by the physical metal fear(slv), and the physical shortage issues are real, how could the market price of silver not go up?.. and markedley. Many on here may disdain paper markets but, no matter what people think, pricing in markets is not so inefficient as to wildly misprice an OPENLY traded commodity for any reasonable length of time. >>
You do realize the the LME defaulted on nickel contracts last year. This caused real world pain for some manufacturers and investors.
Collectively the world is long silver far in excess to the amount of silver that is available above ground. This is fine just so long as the status quo is maintained. The problem is that as fundamentals change and the real world changes the status quo doesn't. People are waking up to this and are getting out of paper silver BEFORE there is a default. This is causing a reduction in the availability of scrap to the refineries which will impact supplies eventually. Scrap has long been the bridge to keep demand and supply in balance. This balance is apparently breaking down and early signs abound. In the event that prices surge some of the paper silver will be worthless. It depends on the contract and the op- inions of lawyers. Just because you have a piece of paper saying you own silver and you pay rent to store it doesn't mean you own any silver at all if the status quo is disrupted.
The real world doesn't give a hoot about the affairs of man or how things have always been done. The real world operates on the laws of nature or the whims of the Creator(s). The real world runs on numbers and it's impossible to only subtract from anything forever.
if this "lack off backing by the physical metal fear(slv), and the physical shortage issues are real, how could the market price of silver not go up?.. and markedley. Many on here may disdain paper markets but, no matter what people think, pricing in markets is not so inefficient as to wildly misprice an OPENLY traded commodity for any reasonable length of time.
The silver futures market is controlled by approximately 4 major firms that cover nearly 100% of the silver shorts. What other major market "trades" like that? Right now, those big 4 basically decide what happens in the silver market. Hence I feel the market pricing is silver is bogus.
I bought back into a position in SLV last Thursday, and I sold it today. It gratifies me that I could suck some more money out of that house of cards, before it goes "whooosh".
Q: Are You Printing Money? Bernanke: Not Literally
I bought back into a position in SLV last Thursday, and I sold it today. It gratifies me that I could suck some more money out of that house of cards, before it goes "whooosh".
I agree with you 100%
"Gold is money, and nothing else" (JP Morgan, 1912)
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
June 19 (Bloomberg) -- Gold prices may rise to $5,000 an ounce as investors seek to protect themselves against accelerating inflation, said Wyke at Schroder Investment Management Ltd., which oversees $277 billion of assets globally.
Wyke was speaking at a press conference in Hong Kong today to market the Schroder Alternative Solutions Gold and Metals Fund, the first commodity fund authorized for sale to individuals.
The limited amount of gold available, relative to the size of the global capital markets, means a small shift in investments may lead to significant price changes for the metal, Wyke said. Total gold above ground is worth about $4.8 trillion, compared with global stock and bond markets worth $135.2 trillion.
Is this in some textbook? I keep seeing the same thing almost verbatum as gold continues to rise for the last 4 years and my stock account is down about 15%. Maybe it's in some book somewhere and they just copy and paste when they need to drop a financial article on the editor for deadline.
June 19 (Bloomberg) -- Gold prices may rise to $5,000 an ounce as investors seek to protect themselves against accelerating inflation, said Wyke at Schroder Investment Management Ltd., which oversees $277 billion of assets globally.
Wyke was speaking at a press conference in Hong Kong today to market the Schroder Alternative Solutions Gold and Metals Fund, the first commodity fund authorized for sale to individuals.
The limited amount of gold available, relative to the size of the global capital markets, means a small shift in investments may lead to significant price changes for the metal, Wyke said. Total gold above ground is worth about $4.8 trillion, compared with global stock and bond markets worth $135.2 trillion. >>
I saw that too. I also saw a post on another website for $8,000 an ounce. Why not...go back a few years...let's say 2000 and look what has happened to Rhodium, Platinum and other exotics. I can remember houses costing $17,000 when my parents bought their first house in The States back in 1967. I remember them buying a condo years later for $40,000. Then when I was a fresh new Lieutenant in the Marines at El Toro, CA, one of my squadron mates bought a house for $135,000...and on and on. It really depends on what the current paradigm of thinking is. So why not think outrageous and go with 5k gold, 10k platinum 500 silver...in DOLLAR terms.
In light of the new rules no more political ramblings going forward...a reminder. I think some greater clarification is warranted. Coins are political, no?
Right....I'll get my gold analysis from some twidget named Paul LaMonica...a CNN.Money barker no less. Who butters his bread? Maybe he should check out where the charts currently stand before cutting off any more of his own nose. The stock guys have been essentially 100% wrong on gold for the past 7 years while the gold guys have got it. Here's one instance where how right someone has been for the past 30 years is pretty useless. I'm concerned about how the past 7 years has transpired and then logically how the next 5 years should play out. When the stock guys get the new long term trends right, give us all a jingle. But you do have to the give the stock guys credit for dumping this negative article in their just as gold is starting to move above $900 resistance. The anti-gold crowd is out of bullets and slinging words whenever they can. How many more times do we have to hear about the IMF selling "our" 400 tons of gold? I find it humorous that Mr. LaMonica says that counting on something so volatile as gold right now is a leap of faith. Rather he suggest relying on the "less volatile" and more predictable area of stock earnings and profits. Huh? What planet has he been on the past few years? What could possibly be harder to predict right now than where company earning's are headed short term or long term in this, the most unfriendly financial environment in decades? Gold is infinitely rock steady compared to bank or manufacturing/serivce/retail sector earnings. At least we know the long term trend for both gold and inflation is up. I have no doubts that the price of gold once over $1500 will shock us all as to how much it exceeds that level by. Markets do tend to go well past the point of sanity as demonstrated by 1999 Nasdaq and 2000 DOW. The gold bears have continually called peaks in the gold moves. And eventually the day comes when they are right and the price finally corrects.....of course after they have missed an entire move (ie Aug 2007). But they bang the drum on how great they were in calling "the" peak. They just conveniently leave out that they mis-called all the earlier false peaks along the way.
<< <i>LOL fc... if you took alll the conspiracy nuts out of the metals market , volume would dry up >>
Who exactly are these conspiracy "nuts" ? >>
mrearlygold, I really meant this as tongue and cheek, hence the winking smiley face..
It does however, imho, that much of the "metals bugs" mentalities are dominated by enormous mistrust of any "paper"assets, as highlighted by this misconception of SLV, as well as some "end of times" philosophy that seems to creep in, and of course overwheming condemnation of the Fed and virtually ANYTHING they do.
I had thought the SLV/ physical metal controversy had died down with the drop in the price of silver but it's now back....with wrong assumptions about shorting and not understanding a simple concept like trading at a discount to nav(slv). What I will never understand is, if this "lack off backing by the physical metal fear(slv), and the physical shortage issues are real, how could the market price of silver not go up?.. and markedley. Many on here may disdain paper markets but, no matter what people think, pricing in markets is not so inefficient as to wildly misprice an OPENLY traded commodity for any reasonable length of time. >>
I understand. We had a discussion around here about the federal reserve which can lead to little branches of other subjects. Not sure if that subject is now verbotten so I'll stop right there.
<< <i> I understand. We had a discussion around here about the federal reserve which can lead to little branches of other subjects. Not sure if that subject is now verbotten so I'll stop right there. >>
Good point, we don't want to get banned for discussing the Fed, (I don't think this is what Carol was talking about)although it is definitely a grey area in more ways than one
On a side note, and I'm not suggesting people do this, but if one WAS convinced that that SLV had issues, but was bullish on the physical silver, an easy hedge spread, would be to short SLV and buy the metal.
<< <i>The gold bears have been right far more than wrong. As have the stock bulls. >>
Back when gold was money it made a very poor investment. In the respect that it maintained its value it was good but it pays no dividends or interest and is always a risk to hold because of potential physical loss.
But currencies have always inflated. It's the nature of government to expand and as they do they tax and they debase the currencies. Every hard metal currency ever devised has failed. They've failed because there are interests which seek to extract wealth from money itself.
But the economy still goes on. It doesn't even need money to function. The py- ramids were all built without a single penny as money hadn't even been invent- ed yet. The economy is the aggregate total of the trade in goods and services of the people in a "closed" system. Whether exchange is accomplished through barter, gold, or scrip is of no importance to the functioning of it. Goods and food must be produced to twart starvation and they must be distributed to those with the need and the ability to "pay". Money merely allows us to more easily match these two; the producer and the consumer. If trading a wagon full of hay for a cow how do you take home your change if the trade isn't quite even?
The world hasn't changed much since agriculture began. Sure modern technology makes us less dependent on the rain and makes food production nearly transpar- ent to city dwellers but the fact remains we each have to eat. We each have to pro- duce to have something to trade for needed items. And we are still dependent on each other (the economy).
Those who think that gold bugs are claiming there's something different this time have too short a viewpoint. It is the very fact that everything is exactly the same which will drive the price of gold higher as currencies remain under pressure. Cur- rencies will remain under pressure because too much wealth has been extracted from the money. Mostly this is in the form of creating money to ward off the finan- cial distresses of the moment but a part of the cause of these problems was unex- pressed inflation made possible by high interest rates. The fragility of the system makes this "cure" for inflation impossible going forward.
There is an excess of consumption relative the costs of production. There is no real likelyhood of lowering the cost of production so that means the costs of consump- tion must soar. This will be accomplished through new inflation plus the pent up in- flation.
But nothing ever changes; you can't fool mother nature. She always gets the last word.
<< <i>The stock market is at critical support levels, if the levee breaks, it's toast. PPT needs to come in here with the big guns, pronto! >>
I remain much more concerned with bonds than the stock market.
The stock market should be able to take care of itself. Massive support will develop before it gets to 10,000. Even a worst case scenario should see nothing lower than 9400.
There is growing pressure for much higher stock prices. It might not release in the near future but it will be an explosive move in the longer term. It's almost certain to be over 40,000 within six years.
<< <i>The stock market is at critical support levels, if the levee breaks, it's toast. PPT needs to come in here with the big guns, pronto! >>
I remain much more concerned with bonds than the stock market.
The stock market should be able to take care of itself. Massive support will develop before it gets to 10,000. Even a worst case scenario should see nothing lower than 9400.
There is growing pressure for much higher stock prices. It might not release in the near future but it will be an explosive move in the longer term. It's almost certain to be over 40,000 within six years. >>
Indeed. 4.10% 10yr rates in the USA and 1% 10yr rates in Japan leave much room for disappointment.
For my recent birthday my wife bought me the HBO series, “John Adams”, what a great look into what our forefathers gave us, and what they sacrificed to give us true freedom from over powering government control.
Over the last 60 years as we Americans have become more socialistic relying on BIG government to solve our problems, and serve our daily needs, most never considered what we were giving up. Our over indulgence, and socialistic attitudes are not only destroying our real freedoms but in the end these two things will cost us our very country and bring us once again under foreign control.
This week it was reported that foreigners now own more property in the USA than Americans own in other countries!
After many years of the USA buying more stuff from other countries than it is selling to them, the USA really has no other way of paying for things other than with property. Foreign individuals, companies and governments who own dollars are finding the best place to spend them is right here in America. With the dollar being low the Euro being high and billons being spent for foreign oil and other products, property has become cheap for foreign interests. This country is slowly being sold to everyone but us.
<< <i>The gold bears have been right far more than wrong. As have the stock bulls. >>
You might want to qualify that statement, even a broken clock is right twice a day. For the last 8 years or so it looks like the stock bulls couldn't have been more wrong to me. Even if stocks go up it will be in response to an inflated money supply that makes it cost more money for other items to be purchased with the so-called "gains". In terms of puchasing power the DOW and NASDAQ have taken quite a tumble over the last 8 years. That puts quite a dent in anyone's 401K. Of course the "gains" are still taxable even though you really incurred a loss in purchasing power. The system's a total scam at this point in history.
This week it was reported that foreigners now own more property in the USA than Americans own in other countries!
I wouldnt be too concerned with this. The USA is the greatest country in the world and wealthy foreigners know that. It is a country, in more ways than one, with beauty beyond compare. The fall of communism has opened the world to a billion new consumers and capitalists. If your newly created business in Russia or Poland was reaping you millions of dollars in profits would you rather buy a vacation home in Siberia or Florida? Or have you ever been to the Baltic in Summer? Brrr!!
There are very few countries that offer the standards of living as the USA, so many Americans have no desire to look elsewhere.
Also keep in mind that there is a pool of only 300 million Americans vs 5 billion foreigners, so it is not too hard to believe that the number of foreign investors exceeds American investors.
Theodore Roosevelts Inagural Address (take a few minutes and read this...seriously.)
MY fellow-citizens, no people on earth have more cause to be thankful than ours, and this is said reverently, in no spirit of boastfulness in our own strength, but with gratitude to the Giver of Good who has blessed us with the conditions which have enabled us to achieve so large a measure of well-being and of happiness. To us as a people it has been granted to lay the foundations of our national life in a new continent. We are the heirs of the ages, and yet we have had to pay few of the penalties which in old countries are exacted by the dead hand of a bygone civilization. We have not been obliged to fight for our existence against any alien race; and yet our life has called for the vigor and effort without which the manlier and hardier virtues wither away. Under such conditions it would be our own fault if we failed; and the success which we have had in the past, the success which we confidently believe the future will bring, should cause in us no feeling of vainglory, but rather a deep and abiding realization of all which life has offered us; a full acknowledgment of the responsibility which is ours; and a fixed determination to show that under a free government a mighty people can thrive best, alike as regards the things of the body and the things of the soul. Much has been given us, and much will rightfully be expected from us. We have duties to others and duties to ourselves; and we can shirk neither. We have become a great nation, forced by the fact of its greatness into relations with the other nations of the earth, and we must behave as beseems a people with such responsibilities. Toward all other nations, large and small, our attitude must be one of cordial and sincere friendship. We must show not only in our words, but in our deeds, that we are earnestly desirous of securing their good will by acting toward them in a spirit of just and generous recognition of all their rights. But justice and generosity in a nation, as in an individual, count most when shown not by the weak but by the strong. While ever careful to refrain from wrongdoing others, we must be no less insistent that we are not wronged ourselves. We wish peace, but we wish the peace of justice, the peace of righteousness. We wish it because we think it is right and not because we are afraid. No weak nation that acts manfully and justly should ever have cause to fear us, and no strong power should ever be able to single us out as a subject for insolent aggression. Our relations with the other powers of the world are important; but still more important are our relations among ourselves. Such growth in wealth, in population, and in power as this nation has seen during the century and a quarter of its national life is inevitably accompanied by a like growth in the problems which are ever before every nation that rises to greatness. Power invariably means both responsibility and danger. Our forefathers faced certain perils which we have outgrown. We now face other perils, the very existence of which it was impossible that they should foresee. Modern life is both complex and intense, and the tremendous changes wrought by the extraordinary industrial development of the last half century are felt in every fiber of our social and political being. Never before have men tried so vast and formidable an experiment as that of administering the affairs of a continent under the forms of a Democratic republic. The conditions which have told for our marvelous material well-being, which have developed to a very high degree our energy, self-reliance, and individual initiative, have also brought the care and anxiety inseparable from the accumulation of great wealth in industrial centers. Upon the success of our experiment much depends, not only as regards our own welfare, but as regards the welfare of mankind. If we fail, the cause of free self-government throughout the world will rock to its foundations, and therefore our responsibility is heavy, to ourselves, to the world as it is to-day, and to the generations yet unborn. There is no good reason why we should fear the future, but there is every reason why we should face it seriously, neither hiding from ourselves the gravity of the problems before us nor fearing to approach these problems with the unbending, unflinching purpose to solve them aright. Yet, after all, though the problems are new, though the tasks set before us differ from the tasks set before our fathers who founded and preserved this Republic, the spirit in which these tasks must be undertaken and these problems faced, if our duty is to be well done, remains essentially unchanged. We know that self-government is difficult. We know that no people needs such high traits of character as that people which seeks to govern its affairs aright through the freely expressed will of the freemen who compose it. But we have faith that we shall not prove false to the memories of the men of the mighty past. They did their work, they left us the splendid heritage we now enjoy. We in our turn have an assured confidence that we shall be able to leave this heritage unwasted and enlarged to our children and our children's children. To do so we must show, not merely in great crises, but in the everyday affairs of life, the qualities of practical intelligence, of courage, of hardihood, and endurance, and above all the power of devotion to a lofty ideal, which made great the men who founded this Republic in the days of Washington, which made great the men who preserved this Republic in the days of Abraham Lincoln.
<< <i>The gold bears have been right far more than wrong. As have the stock bulls. >>
You might want to qualify that statement, even a broken clock is right twice a day. For the last 8 years or so it looks like the stock bulls couldn't have been more wrong to me. Even if stocks go up it will be in response to an inflated money supply that makes it cost more money for other items to be purchased with the so-called "gains". In terms of puchasing power the DOW and NASDAQ have taken quite a tumble over the last 8 years. That puts quite a dent in anyone's 401K. Of course the "gains" are still taxable even though you really incurred a loss in purchasing power. The system's a total scam at this point in history. >>
Comments
<< <i>
What happens if the price rises to $100 an ounce and they can't cover??
I kinda thought a lot of people invested in PMs to avoid getting screwed in these paper games.
Selling an ETF short is selling an item you don't have. The prospectus said the metal was on deposit and the buyer expects that the shares he bought represent real metal on deposit not some promise that some short seller would "buy" it back later, if he doesn't BK. >>
This is exactly why more and more people are buying physical metal.
If the shorter can't pay when the price goes up the holder of paper silver
might be out the entire investment; profit, capital and all.
This buying of actual metal is causing a squeeze on supplies world wide.
The market has always used this secondary metal to make up the short-
fall from mining. Now it's tapping off this supply and eating into new pro-
duction as well.
There's still far more paper silver in the world than real silver so as more
investors awaken to the danger there will be more demand for metal and
less supply.
Eventually the exchanges will have to come to live in the real world because
real silver won't trade and real factories would have to shut down.
We could have a buying panic which would simply destroy the paper market.
It would also take out the sellers and even a few buyers.
What happens if the price rises to $100 an ounce and they can't cover??
Selling an ETF short is selling an item you don't have. The prospectus said the metal was on deposit and the buyer expects that the shares he bought represent real metal on deposit not some promise that some short seller would "buy" it back later, if he doesn't BK.
///////////////////////////////////////////////////////////////////////////////////////////////////
No, that's not how it works.
Don't mix apples and oranges.
Instead, think of shorts as an accounting entry that has ABSOLUTELY no effect on the
underlying commodity. EVERY person who holds a long position is FULLY covered
up to their holdings by the PHYSICAL commodity. The number of shares SHORT has
ZERO effect on the vaulted commodity.
If the price "goes to $100," the short can either buy to cover, OR he can default and his
account balance will be ZERO. In either case, the metal in the vault is neither increased
nor decreased; its quantity-count always stays the same.
Folks who want a basic course in short-selling can read their online brokerage TOS,
or use wikipedia.
The fact is that absent shorts, the liquidity that is in any market would be substantially reduced.
The idea of "selling something you borrowed" may not be easy to grasp, but it is how ALL markets
in financial instruments work, how they have always worked, and how the will always work in the future.
What happens if the price rises to $100 an ounce and they can't cover??
Selling an ETF short is selling an item you don't have. The prospectus said the metal was on deposit and the buyer expects that the shares he bought represent real metal on deposit not some promise that some short seller would "buy" it back later, if he doesn't BK.
///////////////////////////////////////////////////////////////////////////////////////////////////
No, that's not how it works.
Don't mix apples and oranges.
Instead, think of shorts as an accounting entry that has ABSOLUTELY no effect on the
underlying commodity. EVERY person who holds a long position is FULLY covered
up to their holdings by the PHYSICAL commodity. The number of shares SHORT has
ZERO effect on the vaulted commodity.
If the price "goes to $100," the short can either buy to cover, OR he can default and his
account balance will be ZERO. In either case, the metal in the vault is neither increased
nor decreased; its quantity-count always stays the same.
Folks who want a basic course in short-selling can read their online brokerage TOS,
or use wikipedia.
The fact is that absent shorts, the liquidity that is in any market would be substantially reduced.
The idea of "selling something you borrowed" may not be easy to grasp, but it is how ALL markets
in financial instruments work, how they have always worked, and how the will always work in the future.
"If the shorter can't pay when the price goes up the holder of paper silver
might be out the entire investment; profit, capital and all.
/////////////////////////////////////////
Nope.
That is not how the system works.
The dangerous thinking is in making the assumption that all is under control.
Somehow, some folks think "right will prevail" and they will somehow be allowed to benefit from it
By "right will prevail", I am guessing that you mean correctly-thinking precious metal holders. Nah, just being correct doesn't assure success when things are this screwed up and rigged six-ways-to-Sunday.
The mere argument that "it is much worse now," does not forecast the end. The unwinding of the paper-mess would deliver a world-wide depression that would last for MANY YEARS.
It's not a matter of unwinding anything, imo. It will never be unwound. None of the "perps" will ever have to pay a price. The debt will just "disappear" into the Treasury Dept. And on top of that, they are already talking about creating interest-free loan programs for people who can't afford their house payments. It won't stop until the whole system fails, and it just might at this rate.
The metals would benefit little in real terms. Holders of metals who ALSO had mortgage debt might benefit by paying-off their mortgages with cheaper dollars, but that is about it. Paper money would still be how the grocer kept score, and that money would be HARD to come by.
Here's where the real speculation begins. Metals might very well take a hit, or they might become elevated as the only acceptable money. If you've just lost everything you owned in paper, why would you accept more of it? If all of the markets collapse, then who really knows how monetary exchanges and which trading vehicles will re-assert themselves. No, it probably won't be much fun.
At the core of every metal-bug's hope/belief is the CRASHING of society by the final admission that its paper-money is "no good."
Not so! That's how every anti-precious stockbroker or banker would have you think, because it puts the impetus on hard money savers to prove that they are rational and prudent. The banking/brokerage cartel puts up a smoke screen by implying that precious metal investors are nut cases who are waiting for the "end of times". Doom & gloom - isn't that the old saw? Just a cheap shot to cover up massive fraud and a shell game. Nothing less.
The fact is that paper money is becoming "no good" more so every day. The loss of purchasing power via the over-issuance of fiat money is not a hard concept to understand. Deriding those who are lucid enough to make that simple observation solves nothing.
Let's consider a case of someone who has worked about 30 years and has some retirement savings. If this person has X dollars in retirement savings, and the dollar is declining - at some point, this guy is working every day for nothing.
His earnings from a full day's work don't even keep up with the losses in his savings from inflation. If he doesn't work, he loses his savings even faster. What type of servitude might one call that?
When the government publishes bogus inflation figures that don't consider the rising costs of fuel and transportation, that is fraud by the government.
Precious metals don't do anything other than to reflect the reality of what's going on in the country, and in the rest of the world. If that seems too pessimistic, then tell me a nice bedtime story and make it go away.
And you wonder why the metals are going up?
I knew it would happen.
own. Eventually, the company sells more shares, then all the silver
actually available for purchase, even if they wished to purchase the
silver. I get it now, to possess something of nothing, is better then
possessing nothing of something. Why didn't I think of that.
Camelot
own. Eventually, the company sells more shares, then all the silver
actually available for purchase, even if they wished to purchase the
silver. I get it now, to possess something of nothing, is better then
possessing nothing of something. Why didn't I think of that
/////////////////////////////////////////////////////////////////////////////
The ETFs SLV and GLD are FULLY secured by the precise amounts
of the commodity that their outstanding shares represent.
The ETFs USO and UNG are FULLY secured by the precise number of
futures-contracts that their outstanding shares represent.
ANY contention to the contrary is simply untrue.
ETFs are the convenient and smart way to trade commodities of
all stripes. Physical gold and silver are good to hold in reasonable
quantities, but holding huge quantities is not practical for most folks.
As to oil and corn and wheat and cattle, absent ETFs, ordinary folks
would not be able to profit from them at all.
<< <i>
/////////////////////////////////////////
Nope.
That is not how the system works. >>
Sure it is. It depends on the actual instrument. You'll have to read the contract and the seller's responsibility.
You're right of course that if you buy contracts on the exchange, they'll merely default on the profit. The fact that defaults are rare does not change the fact that they can happen.
<< <i>
ETFs are the convenient and smart way to trade commodities of
all stripes. Physical gold and silver are good to hold in reasonable
quantities, but holding huge quantities is not practical for most folks.
. >>
Only rich people can't hold physical silver.
Maybe that's why it's called the poor man's gold.
<< <i>Lets see, the company sells shares in silver, that it does not actually
own. Eventually, the company sells more shares, then all the silver
actually available for purchase, even if they wished to purchase the
silver. I get it now, to possess something of nothing, is better then
possessing nothing of something. Why didn't I think of that
/////////////////////////////////////////////////////////////////////////////
The ETFs SLV and GLD are FULLY secured by the precise amounts
of the commodity that their outstanding shares represent.
The ETFs USO and UNG are FULLY secured by the precise number of
futures-contracts that their outstanding shares represent.
ANY contention to the contrary is simply untrue.
ETFs are the convenient and smart way to trade commodities of
all stripes. Physical gold and silver are good to hold in reasonable
quantities, but holding huge quantities is not practical for most folks.
As to oil and corn and wheat and cattle, absent ETFs, ordinary folks
would not be able to profit from them at all. >>
I take it that you have read the prospectus for SLV. I've looked through it, and yes, it does seem rather straight forward. HOWEVER.... when you look up the Statement of Additional Information, etc., and start looking up the small print (some of this information is not easy to find.... I wonder why) then loopholes begin to appear. The fund is allowed to play games with the amount of silver.
Butler's article mentioned that shares of SLV..... were selling for LESS than the price of silver. I do not know if this is true or not (haven't looked it up)..... but if it is true, how do you explain this?
Each of us must make our own decisions in these perilous financial times...... I am trusting any kind of paper, less and less. And NO, I am NOT hoping for any end times, etc;., in the expectations that precious metals will soar. I am merely trying to PROTECT what I now have, and not be totally wiped out if defaults happen. Will gold and silver provide any assurance for me? Beats me, but I sure plan to hedge my bets....
<< <i>Nope.
That is not how the system works. >>
The issuer of SLV says they will keep 10 ounces of silver for each share issued. That is what the buyer is buying. If a short seller "creates" a share as in a "naked short" then they are selling a share representing 10 ounces that doesn't exist. The value of the share is now based not on the value of the silver stored but is "derived" from the price of silver. It is a derivative.
If the share is borrowed from a holder and sold by the broker, usually without the owners knowledge then the broker "owes" the holder the share representing 10 ounces and the holder now has a "derivative" instead of the actual share.
I consider both of these to be fraudulent but that is how Wall Street gets rich..
Do I have to explain the risk of holding a derivative instead of the real item especially when you think you have stored silver for backing??
<< <i>were selling for LESS than the price of silver >>
Yes, 20 cents an ounce less as we speak. I thought you could actually take delivery too. Sounds like a little possible arbitrage with the spot market, wonder why its not happening??
For another eye opener..... check out who the custodians are. Again, if I recall, they were mostly the major banking corporations.... the same ones who are getting into trouble now. I believe that Bear Stearns was one. Just how much assurances do you place in their 'word' that they have this silver actually in storage, instead of just another paper IOU??
If the share is borrowed from a holder and sold by the broker, usually without the owners knowledge then the broker "owes" the holder the share representing 10 ounces and the holder now has a "derivative" instead of the actual share.
I consider both of these to be fraudulent but that is how Wall Street gets rich..
Do I have to explain the risk of holding a derivative instead of the real item especially when you think you have stored silver for backing??
And that's what the flap about "counterparty risk" is all about. Nobody knows who is holding the bag, but everybody knows that the bag is empty.
I knew it would happen.
"The money power preys upon the nation in times of peace and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy. I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. Corporations have been enthroned, an era of corruption will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people, until the wealth is aggregated in a few hands, and the republic destroyed." - Abraham Lincoln, November 21, 1864, a letter to William F. Elkins
I could go on but everyone here gets it.
It been a while since we've had an "American Revolution." Does it happen when gas hits $8, $9 or $10 a gallon. Or when oil, airline and what you drive, light bulbs are regulated. Or when we wake up and hear that all of our "pies" need to be more fairly distributed, or when our 401k's need to have a one-time charge to help out those who couldn't invest for the future.
Maybe it's when we hear Michelle say "let them eat cake."
Ren
<< <i>Tainted tomatoes still a mystery...read one headline on Google news. Are you kidding me, it's the tomatoes from Mexico but our FDA/AG-congloms are afraid of dime-ing Mexican tomatoes growing in human poop! Increasingly it's a detriment to be a citizen of this USA. What laws are left that actually protect us from tainted foods, toys, pet food, illegal-border-wars, socialist politicians, government schools....
I could go on but everyone here gets it.
It been a while since we've had an "American Revolution." Does it happen when gas hits $8, $9 or $10 a gallon. Or when oil, airline and what you drive, light bulbs are regulated. Or when we wake up and hear that all of our "pies" need to be more fairly distributed, or when our 401k's need to have a one-time charge to help out those who couldn't invest for the future.
Maybe it's when we hear Michelle say "let them eat cake."
Ren >>
It was a one time shot and never gonna happen again. In order for it to happen there would need to be at least a minimum of brains to recognize some of the things you just wrote as being detrimental to anything other than a football game on monday night.
With the few exceptions that seem to congregate in places like this, that awareness doesn't exist.
They showed last week that 84% of high school seniors couldn't pass a sophmore level reading test. Yet they'll grraduate of course. I think it's safe to say that the simililarities to Harrison Bergeron are getting closer and closer every day.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Ren
The American Revolution was caused by the tyranny of a foreign power, and I don't think the current situation rises to that level. We do need an American Awakening though, but I doubt that it will occur. The problem with the regulation and redistribution you talk about is that 50% of the population couldn't care less, and another 30% are in favor of it.
Well, that sends a chill up my spine. Do I remember that name from a short story that I read about 45 years ago?
I knew it would happen.
Oklahoma declares sovereignty
NOW, THEREFORE, BE IT RESOLVED BY THE HOUSE OF REPRESENTATIVES
AND THE SENATE OF THE 2ND SESSION OF THE 51ST OKLAHOMA LEGISLATURE:
THAT the State of Oklahoma hereby claims sovereignty under the
Tenth Amendment to the Constitution of the United States over all
powers not otherwise enumerated and granted to the federal
government by the Constitution of the United States.
THAT this serve as Notice and Demand to the federal government,
as our agent, to cease and desist, effective immediately, mandates
that are beyond the scope of these constitutionally delegated
powers.
<< <i>
<< <i>LOL fc... if you took alll the conspiracy nuts out of the metals market , volume would dry up
Who exactly are these conspiracy "nuts" ? >>
mrearlygold, I really meant this as tongue and cheek, hence the winking smiley face..
It does however, imho, that much of the "metals bugs" mentalities are dominated by enormous mistrust of any "paper"assets, as highlighted by this misconception of SLV, as well as some "end of times" philosophy that seems to creep in, and of course overwheming condemnation of the Fed and virtually ANYTHING they do.
I had thought the SLV/ physical metal controversy had died down with the drop in the price of silver but it's now back....with wrong assumptions about shorting and not understanding a simple concept like trading at a discount to nav(slv). What I will never understand is, if this "lack off backing by the physical metal fear(slv), and the physical shortage issues are real, how could the market price of silver not go up?.. and markedley. Many on here may disdain paper markets but, no matter what people think, pricing in markets is not so inefficient as to wildly misprice an OPENLY traded commodity for any reasonable length of time.
Scientists Find Microbes That Eat Garbage, Excrete Crude Oil
<< <i>
<< <i>
<< <i>LOL fc... if you took alll the conspiracy nuts out of the metals market , volume would dry up
Who exactly are these conspiracy "nuts" ? >>
mrearlygold, I really meant this as tongue and cheek, hence the winking smiley face..
It does however, imho, that much of the "metals bugs" mentalities are dominated by enormous mistrust of any "paper"assets, as highlighted by this misconception of SLV, as well as some "end of times" philosophy that seems to creep in, and of course overwheming condemnation of the Fed and virtually ANYTHING they do.
I had thought the SLV/ physical metal controversy had died down with the drop in the price of silver but it's now back....with wrong assumptions about shorting and not understanding a simple concept like trading at a discount to nav(slv). What I will never understand is, if this "lack off backing by the physical metal fear(slv), and the physical shortage issues are real, how could the market price of silver not go up?.. and markedley. Many on here may disdain paper markets but, no matter what people think, pricing in markets is not so inefficient as to wildly misprice an OPENLY traded commodity for any reasonable length of time. >>
You do realize the the LME defaulted on nickel contracts last year. This caused real world
pain for some manufacturers and investors.
Collectively the world is long silver far in excess to the amount of silver that is available
above ground. This is fine just so long as the status quo is maintained. The problem is
that as fundamentals change and the real world changes the status quo doesn't. People
are waking up to this and are getting out of paper silver BEFORE there is a default. This
is causing a reduction in the availability of scrap to the refineries which will impact supplies
eventually. Scrap has long been the bridge to keep demand and supply in balance. This
balance is apparently breaking down and early signs abound. In the event that prices
surge some of the paper silver will be worthless. It depends on the contract and the op-
inions of lawyers. Just because you have a piece of paper saying you own silver and you
pay rent to store it doesn't mean you own any silver at all if the status quo is disrupted.
The real world doesn't give a hoot about the affairs of man or how things have always been
done. The real world operates on the laws of nature or the whims of the Creator(s). The
real world runs on numbers and it's impossible to only subtract from anything forever.
The silver futures market is controlled by approximately 4 major firms that cover nearly 100% of the silver shorts. What other major market "trades" like that? Right now, those big 4 basically decide what happens in the silver market. Hence I feel the market pricing is silver is bogus.
roadrunner
Silver Shorts Reported
I wonder how many SLV shares's are being sold to buy 10 ounce silver bars?
I knew it would happen.
I agree with you 100%
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
June 19 (Bloomberg) -- Gold prices may rise to $5,000 an ounce as investors seek to protect themselves against accelerating inflation, said Wyke at Schroder Investment Management Ltd., which oversees $277 billion of assets globally.
Wyke was speaking at a press conference in Hong Kong today to market the Schroder Alternative Solutions Gold and Metals Fund, the first commodity fund authorized for sale to individuals.
The limited amount of gold available, relative to the size of the global capital markets, means a small shift in investments may lead to significant price changes for the metal, Wyke said. Total gold above ground is worth about $4.8 trillion, compared with global stock and bond markets worth $135.2 trillion.
I keep seeing the same thing almost verbatum as gold continues to rise for the last 4 years and my stock account is down about 15%. Maybe it's in some book somewhere and they just copy and paste when they need to drop a financial article on the editor for deadline.
<< <i>Some interesting tid bits:
June 19 (Bloomberg) -- Gold prices may rise to $5,000 an ounce as investors seek to protect themselves against accelerating inflation, said Wyke at Schroder Investment Management Ltd., which oversees $277 billion of assets globally.
Wyke was speaking at a press conference in Hong Kong today to market the Schroder Alternative Solutions Gold and Metals Fund, the first commodity fund authorized for sale to individuals.
The limited amount of gold available, relative to the size of the global capital markets, means a small shift in investments may lead to significant price changes for the metal, Wyke said. Total gold above ground is worth about $4.8 trillion, compared with global stock and bond markets worth $135.2 trillion. >>
I saw that too. I also saw a post on another website for $8,000 an ounce. Why not...go back a few years...let's say 2000 and look what has happened to Rhodium, Platinum and other exotics. I can remember houses costing $17,000 when my parents bought their first house in The States back in 1967. I remember them buying a condo years later for $40,000. Then when I was a fresh new Lieutenant in the Marines at El Toro, CA, one of my squadron mates bought a house for $135,000...and on and on. It really depends on what the current paradigm of thinking is. So why not think outrageous and go with 5k gold, 10k platinum 500 silver...in DOLLAR terms.
In light of the new rules no more political ramblings going forward...a reminder. I think some greater clarification is warranted. Coins are political, no?
Ren
Gold's next move....now underway
Note that Degraaf shows several other related markets already rising for a week or more. Gold seems willing to follow along.
Gold....you can't eat it And good thing too or you would have missed out on the 20-25% ave. yearly gains over the past 7 years.
1928-1933 rhetoric eerily similar to today's
roadrunner
<< <i>
<< <i>
<< <i>LOL fc... if you took alll the conspiracy nuts out of the metals market , volume would dry up
Who exactly are these conspiracy "nuts" ? >>
mrearlygold, I really meant this as tongue and cheek, hence the winking smiley face..
It does however, imho, that much of the "metals bugs" mentalities are dominated by enormous mistrust of any "paper"assets, as highlighted by this misconception of SLV, as well as some "end of times" philosophy that seems to creep in, and of course overwheming condemnation of the Fed and virtually ANYTHING they do.
I had thought the SLV/ physical metal controversy had died down with the drop in the price of silver but it's now back....with wrong assumptions about shorting and not understanding a simple concept like trading at a discount to nav(slv). What I will never understand is, if this "lack off backing by the physical metal fear(slv), and the physical shortage issues are real, how could the market price of silver not go up?.. and markedley. Many on here may disdain paper markets but, no matter what people think, pricing in markets is not so inefficient as to wildly misprice an OPENLY traded commodity for any reasonable length of time. >>
I understand. We had a discussion around here about the federal reserve which can lead to little branches of other subjects. Not sure if that subject is now verbotten so I'll stop right there.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>Harrison Bergeron
Well, that sends a chill up my spine. Do I remember that name from a short story that I read about 45 years ago? >>
Not that long ago. It's available on amazon:
Harrison Bergeron (1995)
Starring: Sean Astin, Miranda de Pencier Director: Bruce Pittman Rating
HARRISON BERGERON
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>
I understand. We had a discussion around here about the federal reserve which can lead to little branches of other subjects. Not sure if that subject is now verbotten so I'll stop right there. >>
Good point, we don't want to get banned for discussing the Fed, (I don't think this is what Carol was talking about)although it is definitely a grey area in more ways than one
On a side note, and I'm not suggesting people do this, but if one WAS convinced that that SLV had issues, but was bullish on the physical silver, an easy hedge spread, would be to short SLV and buy the metal.
<< <i>FWIW...lol we had just better hope we never see those levels for the price of an ounce of gold >>
I would not like to live in a world where those prices are realized...I may not have a choice though.
Ren
<< <i>The gold bears have been right far more than wrong. As have the stock bulls. >>
Back when gold was money it made a very poor investment. In the respect
that it maintained its value it was good but it pays no dividends or interest
and is always a risk to hold because of potential physical loss.
But currencies have always inflated. It's the nature of government to expand
and as they do they tax and they debase the currencies. Every hard metal
currency ever devised has failed. They've failed because there are interests
which seek to extract wealth from money itself.
But the economy still goes on. It doesn't even need money to function. The py-
ramids were all built without a single penny as money hadn't even been invent-
ed yet. The economy is the aggregate total of the trade in goods and services
of the people in a "closed" system. Whether exchange is accomplished through
barter, gold, or scrip is of no importance to the functioning of it. Goods and food
must be produced to twart starvation and they must be distributed to those with
the need and the ability to "pay". Money merely allows us to more easily match
these two; the producer and the consumer. If trading a wagon full of hay for a
cow how do you take home your change if the trade isn't quite even?
The world hasn't changed much since agriculture began. Sure modern technology
makes us less dependent on the rain and makes food production nearly transpar-
ent to city dwellers but the fact remains we each have to eat. We each have to pro-
duce to have something to trade for needed items. And we are still dependent on
each other (the economy).
Those who think that gold bugs are claiming there's something different this time
have too short a viewpoint. It is the very fact that everything is exactly the same
which will drive the price of gold higher as currencies remain under pressure. Cur-
rencies will remain under pressure because too much wealth has been extracted
from the money. Mostly this is in the form of creating money to ward off the finan-
cial distresses of the moment but a part of the cause of these problems was unex-
pressed inflation made possible by high interest rates. The fragility of the system
makes this "cure" for inflation impossible going forward.
There is an excess of consumption relative the costs of production. There is no real
likelyhood of lowering the cost of production so that means the costs of consump-
tion must soar. This will be accomplished through new inflation plus the pent up in-
flation.
But nothing ever changes; you can't fool mother nature. She always gets the last
word.
<< <i>The stock market is at critical support levels, if the levee breaks, it's toast. PPT needs to come in here with the big guns, pronto! >>
It would be much better if they didnt.
Knowledge is the enemy of fear
<< <i>
<< <i>The stock market is at critical support levels, if the levee breaks, it's toast. PPT needs to come in here with the big guns, pronto! >>
It would be much better if they didnt.
lol, I think somebody is short the market.
<< <i>The stock market is at critical support levels, if the levee breaks, it's toast. PPT needs to come in here with the big guns, pronto! >>
I remain much more concerned with bonds than the stock market.
The stock market should be able to take care of itself. Massive support will develop
before it gets to 10,000. Even a worst case scenario should see nothing lower than
9400.
There is growing pressure for much higher stock prices. It might not release in the
near future but it will be an explosive move in the longer term. It's almost certain to
be over 40,000 within six years.
<< <i>
<< <i>The stock market is at critical support levels, if the levee breaks, it's toast. PPT needs to come in here with the big guns, pronto! >>
I remain much more concerned with bonds than the stock market.
The stock market should be able to take care of itself. Massive support will develop
before it gets to 10,000. Even a worst case scenario should see nothing lower than
9400.
There is growing pressure for much higher stock prices. It might not release in the
near future but it will be an explosive move in the longer term. It's almost certain to
be over 40,000 within six years. >>
Indeed. 4.10% 10yr rates in the USA and 1% 10yr rates in Japan leave much room for disappointment.
Knowledge is the enemy of fear
Over the last 60 years as we Americans have become more socialistic relying on BIG government to solve our problems, and serve our daily needs, most never considered what we were giving up. Our over indulgence, and socialistic attitudes are not only destroying our real freedoms but in the end these two things will cost us our very country and bring us once again under foreign control.
This week it was reported that foreigners now own more property in the USA than Americans own in other countries!
After many years of the USA buying more stuff from other countries than it is selling to them, the USA really has no other way of paying for things other than with property. Foreign individuals, companies and governments who own dollars are finding the best place to spend them is right here in America. With the dollar being low the Euro being high and billons being spent for foreign oil and other products, property has become cheap for foreign interests. This country is slowly being sold to everyone but us.
<< <i>The gold bears have been right far more than wrong. As have the stock bulls. >>
You might want to qualify that statement, even a broken clock is right twice a day.
For the last 8 years or so it looks like the stock bulls couldn't have been more wrong to me. Even if stocks go up it will be in response to an inflated money supply that makes it cost more money for other items to be purchased with the so-called "gains". In terms of puchasing power the DOW and NASDAQ have taken quite a tumble over the last 8 years. That puts quite a dent in anyone's 401K. Of course the "gains" are still taxable even though you really incurred a loss in purchasing power. The system's a total scam at this point in history.
I wouldnt be too concerned with this. The USA is the greatest country in the world and wealthy foreigners know that. It is a country, in more ways than one, with beauty beyond compare. The fall of communism has opened the world to a billion new consumers and capitalists. If your newly created business in Russia or Poland was reaping you millions of dollars in profits would you rather buy a vacation home in Siberia or Florida? Or have you ever been to the Baltic in Summer? Brrr!!
There are very few countries that offer the standards of living as the USA, so many Americans have no desire to look elsewhere.
Also keep in mind that there is a pool of only 300 million Americans vs 5 billion foreigners, so it is not too hard to believe that the number of foreign investors exceeds American investors.
Knowledge is the enemy of fear
MY fellow-citizens, no people on earth have more cause to be thankful than ours, and this is said reverently, in no spirit of boastfulness in our own strength, but with gratitude to the Giver of Good who has blessed us with the conditions which have enabled us to achieve so large a measure of well-being and of happiness. To us as a people it has been granted to lay the foundations of our national life in a new continent. We are the heirs of the ages, and yet we have had to pay few of the penalties which in old countries are exacted by the dead hand of a bygone civilization. We have not been obliged to fight for our existence against any alien race; and yet our life has called for the vigor and effort without which the manlier and hardier virtues wither away. Under such conditions it would be our own fault if we failed; and the success which we have had in the past, the success which we confidently believe the future will bring, should cause in us no feeling of vainglory, but rather a deep and abiding realization of all which life has offered us; a full acknowledgment of the responsibility which is ours; and a fixed determination to show that under a free government a mighty people can thrive best, alike as regards the things of the body and the things of the soul.
Much has been given us, and much will rightfully be expected from us. We have duties to others and duties to ourselves; and we can shirk neither. We have become a great nation, forced by the fact of its greatness into relations with the other nations of the earth, and we must behave as beseems a people with such responsibilities. Toward all other nations, large and small, our attitude must be one of cordial and sincere friendship. We must show not only in our words, but in our deeds, that we are earnestly desirous of securing their good will by acting toward them in a spirit of just and generous recognition of all their rights. But justice and generosity in a nation, as in an individual, count most when shown not by the weak but by the strong. While ever careful to refrain from wrongdoing others, we must be no less insistent that we are not wronged ourselves. We wish peace, but we wish the peace of justice, the peace of righteousness. We wish it because we think it is right and not because we are afraid. No weak nation that acts manfully and justly should ever have cause to fear us, and no strong power should ever be able to single us out as a subject for insolent aggression.
Our relations with the other powers of the world are important; but still more important are our relations among ourselves. Such growth in wealth, in population, and in power as this nation has seen during the century and a quarter of its national life is inevitably accompanied by a like growth in the problems which are ever before every nation that rises to greatness. Power invariably means both responsibility and danger. Our forefathers faced certain perils which we have outgrown. We now face other perils, the very existence of which it was impossible that they should foresee. Modern life is both complex and intense, and the tremendous changes wrought by the extraordinary industrial development of the last half century are felt in every fiber of our social and political being. Never before have men tried so vast and formidable an experiment as that of administering the affairs of a continent under the forms of a Democratic republic. The conditions which have told for our marvelous material well-being, which have developed to a very high degree our energy, self-reliance, and individual initiative, have also brought the care and anxiety inseparable from the accumulation of great wealth in industrial centers. Upon the success of our experiment much depends, not only as regards our own welfare, but as regards the welfare of mankind. If we fail, the cause of free self-government throughout the world will rock to its foundations, and therefore our responsibility is heavy, to ourselves, to the world as it is to-day, and to the generations yet unborn. There is no good reason why we should fear the future, but there is every reason why we should face it seriously, neither hiding from ourselves the gravity of the problems before us nor fearing to approach these problems with the unbending, unflinching purpose to solve them aright.
Yet, after all, though the problems are new, though the tasks set before us differ from the tasks set before our fathers who founded and preserved this Republic, the spirit in which these tasks must be undertaken and these problems faced, if our duty is to be well done, remains essentially unchanged. We know that self-government is difficult. We know that no people needs such high traits of character as that people which seeks to govern its affairs aright through the freely expressed will of the freemen who compose it. But we have faith that we shall not prove false to the memories of the men of the mighty past. They did their work, they left us the splendid heritage we now enjoy. We in our turn have an assured confidence that we shall be able to leave this heritage unwasted and enlarged to our children and our children's children. To do so we must show, not merely in great crises, but in the everyday affairs of life, the qualities of practical intelligence, of courage, of hardihood, and endurance, and above all the power of devotion to a lofty ideal, which made great the men who founded this Republic in the days of Washington, which made great the men who preserved this Republic in the days of Abraham Lincoln.
<< <i>
<< <i>The gold bears have been right far more than wrong. As have the stock bulls. >>
You might want to qualify that statement, even a broken clock is right twice a day.
For the last 8 years or so it looks like the stock bulls couldn't have been more wrong to me. Even if stocks go up it will be in response to an inflated money supply that makes it cost more money for other items to be purchased with the so-called "gains". In terms of puchasing power the DOW and NASDAQ have taken quite a tumble over the last 8 years. That puts quite a dent in anyone's 401K. Of course the "gains" are still taxable even though you really incurred a loss in purchasing power. The system's a total scam at this point in history. >>
I couldn't have said it better.
The Fireman...