Either This Is the Greatest Silver- and Gold-Buying Opportunity of All Time, or the End of a Bull Ma
ebaytrader
Posts: 3,312 ✭✭✭
Either This Is the Greatest Silver- and Gold-Buying Opportunity of All Time, or the End of a Bull Market
By Franklin Sanders
Goldprice.org
Friday, August 15, 2008
http://goldprice.org/silver-and-gold-prices/
Twenty-eight years of brokering silver and gold have not prepared me for what I met this morning.One of my wholesalers said he was not selling anything, only buying, until further notice.Another refused to give any prices until he adjusted his spreads.
Another was spreading one-ounce gold coins, normally at $7-$8, at $25. Another said he was making no sales for immediate delivery or deferred payment, only sales for 30 days' delivery paid at once.
Premiums were high: Austrian 100 Coronas, 4.7 percent; Sovereigns, 5.2 percent; Krugerrands, 6.8 percent; American Eagles, 8.2 percent (but none for immediate delivery); and Mexican 50 pesos, 4.5 percent. Ninety-percent silver was at $9,783 a bag, a whopping 6.7 percent premium. Silver American Eagles for 6-8 week delivery, a 23.7 percent premium. But "premium" is only one way of looking at things, dividing the item's price by the spot silver price. Another way to view it is that physical prices have de-coupled from paper prices. The paper prices -- futures, ETFs, etc. -- no longer rule the market.
Physical prices are declaring their independence from paper pricing as those holding physical gold and silver refuse to sell it at prevailing paper prices. I have been expecting this to happen toward the top of the bull market, catalyzed by some paper purveyor's failure, but now? What can it mean? At the very least, the public is nourishing a gigantic hunger for silver and gold in their hands, and no place else. By now all the leveraged silver and gold longs have been forced out, just as all the dollar shorts have been chastened, bruised, and beaten away. Either this is the greatest silver and gold buying opportunity of all time, or the end of a bull market.
But it is NOT the end of a bull market. Time alone argues that. A bull market runs 10-20 years, and this one has run only seven, since 2001. Those who think silver and gold have fallen into the "bursting of the commodity bubble" completely misunderstand what drives them in the first place. For silver and gold are not commodities; they are money.
When investors pile into silver and gold, it's not any commodity bubble forcing them there but monetary demand. They aren't buying metals because they think that all the Indian ladies are going to be wearing two nose rings instead of one this season, or that the American bourgeoisie will suddenly begin stockpiling sterling silver forks again.
They are buying metals because -- listen to this, get it straight once and forever -- they distrust fiat central bank currencies (or if you prefer, national currencies). The dollar is trash, the yen is trash, the euro is trash; all are equally insolvent, equally unbacked by anything expect a politician's or central banker's promise, which is not nearly as good as that of any madam at any bordello anywhere.
The dollar is rising? So why? Did it become better, acquire more gold backing, solve its chronic balance of payments deficit last night? Come on.Did the euro get worse overnight? The yen? How much worse could it get? You are seeing competitive devaluations, all very much worked out collegially in advance by central bankers. Fundamentally meaningless. What is NOT meaningless is that the great alternative currencies, silver and gold, have long been advancing against ALL national currencies. All markets swing like pendulums, too far one way, then too far the other. Silver and gold prices became overbought -- a lot of people short dollars were long silver and gold.
The dollar rallied and oil and commodities fell, sucking down silver and gold money.
Look at the numbers. Even with gold down to $787.50 today, that's only a 21.5 percent correction, while always more volatile silver is down 37.4 percent. Friends, these are normal, not outlandish corrections. Sober up. Out with the worst of it: If the silver price is correcting its entire rise from November 2001 at $4.025, a 38.2 percent correction would carry to $14.253; a 50 percent correction to $12.30 (nearly seen today); a 61.8 percent correction to $10.35.
Assuming that the gold price is correcting the move from $255.1 in February 2001 to $1,003.2 last March, 38.2 percent correction carries it to $717.43, 50 percent to $629.15, 61.8 percent to $540.87. Carefully mark that these are not my projections, only what is possible at those commonly seen correction percentages. On the other hand, if silver and gold prices are correcting the 2006 to 2008 moves, then gold hit its 50 percent correction level today at $782.60, and silver finished its correction today to the 75 percent level.
Crazy, am I? Five years into a bull market in 1987 the Dow plunged more than 30 percent in just four days. Was the bull dead? Hardly, since it rose more than 10 times in the next 12 years.
Bottom line: Silver and gold remain in a powerful bull market with another seven or more years to run. The bull market is handing you a gift: Buy. The bottom was probably seen today, but recovery will take a while. The dollar rally may carry to 82 but will peter out in three months at most, probably sooner. Stocks may reach 12,500 but will come down hard thereafter.
On this day in 1971 President Nixon announced a 90-day freeze on wages, prices, and rents, and formally reneged, welshed, and repudiated any promise to pay gold for U.S. dollars, even to foreigners. Nixon broke the dollar's -- and the world's -- last link with monetary morality and set the whole world afloat on a sea of paper money and floating exchange rates. Tricky Dick did some bad things, but of all he did, this did the most damage.
By Franklin Sanders
Goldprice.org
Friday, August 15, 2008
http://goldprice.org/silver-and-gold-prices/
Twenty-eight years of brokering silver and gold have not prepared me for what I met this morning.One of my wholesalers said he was not selling anything, only buying, until further notice.Another refused to give any prices until he adjusted his spreads.
Another was spreading one-ounce gold coins, normally at $7-$8, at $25. Another said he was making no sales for immediate delivery or deferred payment, only sales for 30 days' delivery paid at once.
Premiums were high: Austrian 100 Coronas, 4.7 percent; Sovereigns, 5.2 percent; Krugerrands, 6.8 percent; American Eagles, 8.2 percent (but none for immediate delivery); and Mexican 50 pesos, 4.5 percent. Ninety-percent silver was at $9,783 a bag, a whopping 6.7 percent premium. Silver American Eagles for 6-8 week delivery, a 23.7 percent premium. But "premium" is only one way of looking at things, dividing the item's price by the spot silver price. Another way to view it is that physical prices have de-coupled from paper prices. The paper prices -- futures, ETFs, etc. -- no longer rule the market.
Physical prices are declaring their independence from paper pricing as those holding physical gold and silver refuse to sell it at prevailing paper prices. I have been expecting this to happen toward the top of the bull market, catalyzed by some paper purveyor's failure, but now? What can it mean? At the very least, the public is nourishing a gigantic hunger for silver and gold in their hands, and no place else. By now all the leveraged silver and gold longs have been forced out, just as all the dollar shorts have been chastened, bruised, and beaten away. Either this is the greatest silver and gold buying opportunity of all time, or the end of a bull market.
But it is NOT the end of a bull market. Time alone argues that. A bull market runs 10-20 years, and this one has run only seven, since 2001. Those who think silver and gold have fallen into the "bursting of the commodity bubble" completely misunderstand what drives them in the first place. For silver and gold are not commodities; they are money.
When investors pile into silver and gold, it's not any commodity bubble forcing them there but monetary demand. They aren't buying metals because they think that all the Indian ladies are going to be wearing two nose rings instead of one this season, or that the American bourgeoisie will suddenly begin stockpiling sterling silver forks again.
They are buying metals because -- listen to this, get it straight once and forever -- they distrust fiat central bank currencies (or if you prefer, national currencies). The dollar is trash, the yen is trash, the euro is trash; all are equally insolvent, equally unbacked by anything expect a politician's or central banker's promise, which is not nearly as good as that of any madam at any bordello anywhere.
The dollar is rising? So why? Did it become better, acquire more gold backing, solve its chronic balance of payments deficit last night? Come on.Did the euro get worse overnight? The yen? How much worse could it get? You are seeing competitive devaluations, all very much worked out collegially in advance by central bankers. Fundamentally meaningless. What is NOT meaningless is that the great alternative currencies, silver and gold, have long been advancing against ALL national currencies. All markets swing like pendulums, too far one way, then too far the other. Silver and gold prices became overbought -- a lot of people short dollars were long silver and gold.
The dollar rallied and oil and commodities fell, sucking down silver and gold money.
Look at the numbers. Even with gold down to $787.50 today, that's only a 21.5 percent correction, while always more volatile silver is down 37.4 percent. Friends, these are normal, not outlandish corrections. Sober up. Out with the worst of it: If the silver price is correcting its entire rise from November 2001 at $4.025, a 38.2 percent correction would carry to $14.253; a 50 percent correction to $12.30 (nearly seen today); a 61.8 percent correction to $10.35.
Assuming that the gold price is correcting the move from $255.1 in February 2001 to $1,003.2 last March, 38.2 percent correction carries it to $717.43, 50 percent to $629.15, 61.8 percent to $540.87. Carefully mark that these are not my projections, only what is possible at those commonly seen correction percentages. On the other hand, if silver and gold prices are correcting the 2006 to 2008 moves, then gold hit its 50 percent correction level today at $782.60, and silver finished its correction today to the 75 percent level.
Crazy, am I? Five years into a bull market in 1987 the Dow plunged more than 30 percent in just four days. Was the bull dead? Hardly, since it rose more than 10 times in the next 12 years.
Bottom line: Silver and gold remain in a powerful bull market with another seven or more years to run. The bull market is handing you a gift: Buy. The bottom was probably seen today, but recovery will take a while. The dollar rally may carry to 82 but will peter out in three months at most, probably sooner. Stocks may reach 12,500 but will come down hard thereafter.
On this day in 1971 President Nixon announced a 90-day freeze on wages, prices, and rents, and formally reneged, welshed, and repudiated any promise to pay gold for U.S. dollars, even to foreigners. Nixon broke the dollar's -- and the world's -- last link with monetary morality and set the whole world afloat on a sea of paper money and floating exchange rates. Tricky Dick did some bad things, but of all he did, this did the most damage.
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Comments
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That's where ALL the gurus lose me.
I am not a smart man, but I know what money is. S&G ain't "money."
roadrunner
<< <i>"...I am not a smart man, but I know what money is. S&G ain't "money." >>
I agree. For want of a better definition, let's try, "money is evidence of value given in a trade for which value is not received in return".
Example 1: I work for you on your farm for 1 week in exchange for room and board. Value for value trade. We don't need money to do this deal.
Example 2: I work on your farm for 1 week, but I can't stand your snoring nor your cooking, so I want to pick up my bread and board elsewhere. Value given, but no value received. What to do? Well, how about you give me some evidence that I've given you value and I take that down to the next guy - who agreed to honor it - and he gives me room and board in exchange for the evidence of value you gave me. He can later tender that evidence back to you to buy products from your farm when the harvest comes in.
We can use anything to evidence value: seashells, knots on a rope, paper, metal, mineral, electrons in a digital computer, so long as everyone is honest.
Add dishonesty, we need to select something that is difficult for someone to replicate easier than it would be for that nefarious person to just work on your farm - delete seashells, knots on a rope and add anti-counterfit measures to the rest.
Add inflation, Another farmer wants my labor and offers more in trade for 1 weeks labor (demand pull). You need to pass that cost on to customers in the price of your goods (cost push).
Doesn't matter what you use as evidence of trade, nor do we even need a fed to have money and inflation.
History of the US Constitution Coin Set
Doesn't matter what you use as evidence of trade, nor do we even need a fed to have money and inflation.
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Price-Inflation is about market forces that do NOT need the Fed to exist.
Monetary-Inflation is about creating "fiat-paper;" the Fed's job.
Absent PI, MI can go on indefinitely. THAT is why the deflationary cycle
is now being unleashed on US. Many of the "hard-assets" that we have
thought of as "storehouses" are going to be further devlaued.
Houses, land, machinery, PMs, all kinds of good stuff will soon be "on sale"
and available for purchase CHEAP by folks who have "MONEY."
Folks who think PMs will save them when "America becomes Zimbabwe," are better
off buying GUNS and AMMO than hoarding PMs.
Guns and ammo will get you through times of no PMs, much better than PMs
will get you through times of no guns and ammo.
<< <i>Don't feel bad. The majority of people today think that paper fiat notes are money as well. I wonder if those in Zimbabwe felt similarly about fiat currency 10 years ago?
roadrunner >>
I agree. In fact I just became a multi billionaire today!! Woo hoo!!
I ordered some Zimbabwe notes through the mail and now I am worth One Hundred and Eighty Billion Dollars!!
I am going to frame them so if anyone questions my financial genius I can just take a swig of my beer and point to my billions of dollars. That'll shut em up!
Just bought more silver today BTW...
<< <i>Price-Inflation is about market forces that do NOT need the Fed to exist. >>
There can be no inflation without a fiat currency. Period.
Personally, I hope silver goes to a buck.
Why?
Because that would mean that our gov't has righted all of its wrongs.
<< <i>gov't has righted all of its wrongs >>
<<Monetary-Inflation is about creating "fiat-paper;" the Fed's job.>>
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There can be no inflation without a fiat currency. Period.
..............................................
Uhhhhhhh..........
Price-Inflation can simply be a function of MY GREED/NEED as a seller/producer of goods/services.
Monetary-Inflation - an increase in the supply of paper money - can ONLY be caused by the Fed.
Different animals.
Someone must be smoking something. The only reason the US inflationary cycle was delayed for basically a decade or two was due to cheap labor and materials overseas. Nothing goes on forever. And in this case those cheap Asian prices are going up and finally being reflected right here in our prices. Houses, land, auto's, appliances, computers, and machinery will all deflate, but not the needed commodities to live, build and store wealth (PM's, agri-products, water, energy, etc.). Enjoy the respite in PM's because it won't last. Monetary inflation leads to price inflation, not the other way around. No monetary inflation means no general price inflation.
I think if you polled the people of Zimbabwe, they'd take the gold over some guns and ammo. Eventually you become dead or in jail with the guns and ammo.
It's always nice to see storm888 around during metal downturns. He's not around much when metals are moving up.
roadrunner
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Personal attacks and misreporting. Is that what you are good at?
I have quite a few "bullish posts" in the BIG thread.
There is a time to be bullish/bearish. IF you ever learn how to tell
the difference, your status as a bagholder will vanish and you will
be in a much better mood.
<< <i><< Price-Inflation is about market forces that do NOT need the Fed to exist. >>
<<Monetary-Inflation is about creating "fiat-paper;" the Fed's job.>>
////////////////////////////////////////////////////////////////////////////////////////////
There can be no inflation without a fiat currency. Period.
..............................................
Uhhhhhhh..........
Price-Inflation can simply be a function of MY GREED/NEED as a seller/producer of goods/services.
Monetary-Inflation - an increase in the supply of paper money - can ONLY be caused by the Fed.
Different animals. >>
Price inflation is a manifestation of monetary inflation.
Same animal. Your just just looking at it from the wrong end.
I have quite a few "bullish posts" in the BIG thread.
There is a time to be bullish/bearish. IF you ever learn how to tell
the difference, your status as a bagholder will vanish and you will
be in a much better mood.
Factoid, gold bears like yourself, 2nd republic, and others usually only start showing up after a major pull back...with the obligatory "I told you so's." No need for that, John Nadler already makes his career at Kitco once every year or so doing that. Your absence during the bulk of the market period speaks volumes of your intent.
Maybe if you contributed more consistently it wouldn't seem like you only hear for the bad times and to kind of rub it in. It's so easy to predict the past isn't it? A lot of people have posted to the "big thread," but your posts seem to ring far more loudly on downturns.
No doubt I've been bullish on gold and silver for the long term since 2004. If watching gold triple since time makes me an inaccurate reporter of what I saw, so be it. I still am bullish at $785 gold....current regulatory charades not withstanding.
Please feel free to post some of your bullish threads from late 2005 or mid-2007 when the market was taking off again. Maybe I just missed your guidance as you recommended getting back on the gold bull at those times. Since I was a longer term "do-nothing" I was already on board during all those moves. I've sold some things at time but never more than a smaller fraction. I'll still be on board at $1500 as well. I post during good times and bad times....when I was right and when I was wrong.
I will continue to be a growing "bag holder" but it does continue to get more painful adding safe deposit boxes. Bag-holding ain't so bad. Beats paper. My mood is fine except for the money I am forced to keep in stale 401K accounts. But I do take exception to the Nadlers of the world and this forum who add nothing to the conversation except to rub it in after the fact while they offer little but wrong advice during the up-moves to proclaim every interim-top as the "end." After 4 years here I'm used to it. And expect another 4 years of it to follow.
roadrunner
I would come home after work and manually keep track of how each position did. I couldn't believe it. In one day, I made more than my whole year's salary was for my day job. I had a few days like that.
My broker's name was Terry Zeigler. He got me out of the market a little over the $700/oz. mark, if I recall correctly. I had ridden it up from $350/oz. in several highly-leveraged positions, on margin.
It's fine if you never have to face a margin call, and I never did - the market was that strong in one direction. After I started getting in, I felt that the profits I had already made would protect me if things turned around. If I had seen a drop like the one in recent weeks, I don't think that I'd have made it out unscathed.
This market is being manipulated, which makes it all the more unpredictable. If you don't consider the fundamentals, and think that you can beat the market playing with short positions on margin because you are a hot-shot, super-skilled, trigger-happy trader like none before..........then you have my condolences in advance.
I knew it would happen.
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I've been MUCH more "bullish" than bearish since the 1980s.
The BIG thread is far too cumbersome to search for my "bullish posts,"
by any method I know how to employ. If you know how to isolate posts,
please post instructions here and I will find some "bullish" posts.
As to the "I told you so" nonsense, that is not coming from me. I guessed
right....you have no exit-strategy so you will ALWAYS guess wrong. That
is not my fault.
I have posted my trades. At the latest tops, I posted exactly what and
when I had dumped. I posted when I went SHORT. And, I will post when
I cover.
I will continue to SHORT SLV on ANY strength. I can hold my position as
long as ANY LONG can hold theirs. Eventually, SHORTS always win. This
is especially true when the GOVERNMENT is on the side of the SHORTS
trying crush the metals.
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NONE of my positions are margined in a way that cannot be fully funded immediately.
EVEN on this new board I have cautioned against using borrowed
money to gamble on these speculative metals in either direction.
That's too bad since gold did very little but eat up trading fees from 1982 to 2001. But I will certainly pay more attention to your trades from here because someone who is always right by their own admission usually gets it very wrong at some point and gets totally busted by their own over-confidence.
Interesting to "know" that shorts "always win" and that our financial system is now guided and controlled by the shorts...though I'm not sure how a bankrupted govt and its insolvent banking system can "win" in any environment. As long as the shorts keep that hat pulled tightly over the sheeple's eyes, I guess they can continue the charade for a while. But eventually the big bag of derivatives has to be dumped out on to the table and gone through. In that respect, this time is far different than any other in our history. Another 20 years of deception and manipulation in the financial markets? I hope not.
roadrunner
member of CUPMF bagholders local 42
card carrying?
I knew it would happen.
I keep getting the strange feeling that dollardude is back among us.
roadrunner
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Hard to eat many "trading fees," when it lives in bank boxes.
.........
"This time is different," is the common refrain of your union members.
Amazing.
denial
roadrunner
<< <i> A bull market runs 10-20 years, and this one has run only seven, since 2001. >>
Just because other bull markets last 10-20 years, it does not mean this one will.
That said, who knows how this will shake out in the short term and longer term.
All that counts is that the shorts cover after every one of us little bag holders has sold out.
We must always think of the Battle of Waterloo + Nathan R + English Bonds, or perhaps the Bears Stern WAY OUT of the money PUT buyers moving in 5 days before the collapse.
I think this is the set-up that's going on, IMHO.
I'm keeping the powder dry this time..... when everyone expects a bounce, time to get even more short.
<< <i>Either This Is the Greatest Silver- and Gold-Buying Opportunity of All Time, or the End of a Bull Market >>
Or neither?
GOLD.....
Supply, demand, oil prices, interest rates, US $'s strength, the fear factor, market manipulation, budget deficits, etc...
Unfortunately all of these are intertwined.
How much of the recent correction do you think is due to the lessening of fear?
Will the US and World economy remain stable or strengthen? If you believe the Chinese and Indian populations will continue to buy vast amounts of gold then you better hope the US and World economies remain strong. Because without US $'s flowing out of this country they won't have the resources to continue to buy jewelry.
Will interest rates go up eventually?
Can the U.S. Government get its budget in balance or at least get its deficits under control?
Are the worlds banks and major investment houses getting their issues under control?
Is there good value in Gold compared to other investment vehicles?
Who wants to control Gold prices?
Will oil prices continue to decline?
Just a few things to consider.
SILVER.....
I've always thought silver was the better buy.
I don't understand why silver and gold seem to follow each other so closely.
I feel demand outpaces supply. I'd buy, but it's probably not a bottom.
I remember that outfit.
<< <i>
<< <i>Don't feel bad. The majority of people today think that paper fiat notes are money as well. I wonder if those in Zimbabwe felt similarly about fiat currency 10 years ago?
roadrunner >>
I agree. In fact I just became a multi billionaire today!! Woo hoo!!
I ordered some Zimbabwe notes through the mail and now I am worth One Hundred and Eighty Billion Dollars!!
I am going to frame them so if anyone questions my financial genius I can just take a swig of my beer and point to my billions of dollars. That'll shut em up!
Just bought more silver today BTW... >>
This released on Fox news....Now you are just a millionaire....
Zimbabwe to remove 'zeros' from currency
Sunday, July 27, 2008
By ANGUS SHAW, Associated Press Writer