So...QE3 has been announced...where does silver go from here?
DRJTC
Posts: 54
Now that QE3 has been announced...where will silver close at year-end?
What are the relevant factors now? (specific events)
$34.63 right now as I write this.
What are the relevant factors now? (specific events)
$34.63 right now as I write this.
0
Comments
An interview with Bill Gross was quite interesting, I'll post it here.
Interview with Bill Gross - http://www.bloomberg.com/video/gross-gold-a-better-investment-than-bonds-stocks-67gICY2RTwy3MytiYpX8jg.html
Gold can't be reproduced. It can certainly be taken out of the ground at an increasing rate, but there's a limited amount of gold and there has been an unlimited amount of paper money over the past 20 years to 30 years and now … central banks are at their leisure in terms of basically printing money. And so, gold is a fixed commodity. It has a considerable store of value that paper money has not. It is certainly dependent upon the price and it's hard to know whether current levels for gold are the appropriate price, but, when a central bank starts writing checks and printing money in the trillions of dollars, it is best to have something that's tangible and cannot be reproduced, such as gold.…
You know, I am not a gold bug. I am just suggesting that gold is a real asset and will be advantaged if the Federal Reserve or the ECB central banks start to write checks in the trillions. So what my objective is, I am not sure. I just think it will be higher than it is today and certainly a better investment than a bond or stock, which will probably return only 3% to 4% over the next 5 to 10 years.
BST Transactions (as the seller): Collectall, GRANDAM, epcjimi1, wondercoin, jmski52, wheathoarder, jay1187, jdsueu, grote15, airplanenut, bigole
Go Gold!!
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I also predict that within the next 30 days, the CME will raise margin buying requirements substantially at least once.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
CME never raises by just one increment at a time ............ they'll pile it on
Have fun everyone!
<< <i>If the $40B/monthly dumps continue into next spring? We'll see $50 by April. >>
Why? What does the purchase of Mortgage Backed Securities have to do with the price of silver?
Knowledge is the enemy of fear
<< <i>
<< <i>If the $40B/monthly dumps continue into next spring? We'll see $50 by April. >>
Why? What does the purchase of Mortgage Backed Securities have to do with the price of silver? >>
Same thing FED purchase of TBonds has to do with price of metals - more new fiat currency to expedite dollar destruction. It's not what the FED is buying, it is what they are buying it with.
Looking at today's dollar chart, guess what time the FED announced their planned purchase of MBS's:
Guess what time the silver (and gold) buyers showed up:
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>My target on the dollar has been .78. Now I have to figure out what to do next when it gets there. It's taken a little longer then I expected and I have been almost lulled to sleep. I still have Aussie, Swiss, Krona, Yen and NZ trades against it.
MJ >>
Friday will be the test.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The more qualities observed in a coin, the more desirable that coin becomes!
My Jefferson Nickel Collection
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Ex-FED governer Kevin Warsh stated on CNBC this morning "there is a reason 'exit' is a four-letter word." Translation: there can now be no end to FED stimulus. Yesterday's FED action only confirms this. Japan's "lost decade" will become the US's "lost century."
The long term outlook for precious metals as a store of value became a whole lot longer yesterday. I fear this will motivate eventual action to discourage or penalize PM holdings.
I agree with Peter Schiff's recent advice: "brace for inflation."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Box of 20
<< <i>The $40 Billion amounts to about $200 per person in the U.S. At least that's what Becky on Sqwauk said this morning. I figure it to be $114 per person with a 350 million population. Guess if you multiply that for 12 months it comes to $1368 for each person in the U.S. Not bad. >>
That's only figuring each person's cut of the new money being printed/borrowed not any future interest it grows into. What's worse is it's devaluation affect on the existing money which really isn't an an issue until "new money" makes it to the street. My favorite analogy is "guess what happens to prices realized if you walk into an auction and give every bidder twice the money they walked in with?"
The bad thing about the FED's actions is not necessarily the immediate affect - it's the long term results. Like the former FED governor said "exit is a four letter word."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>The $40 Billion amounts to about $200 per person in the U.S. At least that's what Becky on Sqwauk said this morning. I figure it to be $114 per person with a 350 million population. Guess if you multiply that for 12 months it comes to $1368 for each person in the U.S. Not bad. >>
It's a wash...will be eaten up by higher (QE3) gas prices.
Alright, let's examine that analogy. The answer is NOT, "Everyone bids twice as much for the same coins and all the coin prices double including prices for the same coins outside the auction room", because that wouldn't account for all those people at the auction who decide to bid the same price limits but buy twice as many coins, or who decide to bid the same prices on the same coins and use the extra money for a car or a vacation, or who decide that they'll save the extra money for the next auction or spend it later some other way.
Liberty: Parent of Science & Industry
<< <i>
<< <i> Like the former FED governor said "exit is a four letter word." >>
Could you explain this a bit further. Maybe my brain is fried from work today, but im not following
BST Transactions (as the seller): Collectall, GRANDAM, epcjimi1, wondercoin, jmski52, wheathoarder, jay1187, jdsueu, grote15, airplanenut, bigole
<< <i> My favorite analogy is "guess what happens to prices realized if you walk into an auction and give every bidder twice the money they walked in with?"
Alright, let's examine that analogy. The answer is NOT, "Everyone bids twice as much for the same coins and all the coin prices double including prices for the same coins outside the auction room", because that wouldn't account for all those people at the auction who decide to bid the same price limits but buy twice as many coins, or who decide to bid the same prices on the same coins and use the extra money for a car or a vacation, or who decide that they'll save the extra money for the next auction or spend it later some other way. >>
here's the catch: Just as with QE, everyone at the auction knows the supply of money has increased. Their same price limits won't get them coins because they will be outbid by the now wealthier other bidders. The auction is a microeconomic example of a small economy (the auction room) undergoing an increase in the money supply. With QE money supply increases, you can't leave the "room" and shop elsewhere cheaper, the inflation affect is also outside the "room." If you disagree, next time you're at the gas station refuse to pay the $3.85 because gas was cheaper ten years ago. Then try the same thing at the grocery store.
In an economy the prices buyers are willing to pay will increase as available money increases. This is why price inflation occurs successfully in an environment where the money supply is increased. Once all the newly created FED money gets into the hands of the consumer don't think you won't be paying more for the things you need. You always have the option of not buying the things you want, but if you have kids that won't last long.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i> Like the former FED governor said "exit is a four letter word." >>
<< <i>Could you explain this a bit further. Maybe my brain is fried from work today, but im not following >>
I believe he is saying that the FED cannot undo (exit) the direction it has taken. Notice how they just announced zero percent interest rates will be extended further?
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
There is also a "what if" that could become interesting regarding silver. If enough demand for physical silver materializes, it might uncover an actual physical shortage. If that happens, silver could start to log some impressive up days. Of course, that theory has been around for awhile now. Nobody seems to know the real facts surrounding silver. Fun stuff.
I knew it would happen.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The FED has released the Kraken.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>
<< <i>
<< <i>If the $40B/monthly dumps continue into next spring? We'll see $50 by April. >>
Why? What does the purchase of Mortgage Backed Securities have to do with the price of silver? >>
Same thing FED purchase of TBonds has to do with price of metals - more new fiat currency to expedite dollar destruction. It's not what the FED is buying, it is what they are buying it with.
>>
Thanks for your response derry, but I was looking for VanHalens answer.
Knowledge is the enemy of fear
"The Fed's plan - although they deny it - is to induce an inflationary environment."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Understanding The Liquidity Trap
"The Fed's plan - although they deny it - is to induce an inflationary environment." >>
They can try all they want. Hopefully they succeed.
Knowledge is the enemy of fear
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
In this environment, making huge gains isn't nearly as important as how you manage your assets. Even if you think that you have nice profits, don't transact unless you HAVE TO.
The rising stock market is due mostly to Fed policy. Same for metals. When tax rates go up in an environment that has rising asset prices, every transaction results in a nice tax bill, but the proceeds won't even buy back what you just sold.
If you think that you can overcome a 50% differential between the sale of one asset vs. the purchase of another asset, then by all means - have at it. It's a mirage. It's true that for every seller of a winning stock position, there is a buyer who thinks that he's getting into something good. The problem is with the government playing the tax middleman and goading everyone on to churn their assets, with higher asset prices that don't reflect actual production or efficiency gains.
Don't get me wrong. Stock ownership is a real asset, just like physical precious metals are real assets. The main problem is that valuations are contingent upon tax policy and rising asset numbers, so be very careful how you manage your money.
I knew it would happen.
I found this the other day , if anyone wants to wade through it. Its a transcript of a senate finance committee hearing from 1933. I found it interesting because the langauge was very clear and to the point , unlike the dog and pony shows that we see on CSPAN now. The senators ask some pointed questions instead of grandstanding and preening their feathers for the TV cameras.
4 years after the crash of 1929 they are bouncing big ideas around, while here in 2012 we wait 5 years and we get QE to infinity
PDF from the ST louis fed archives
<< <i>Money changing hands creates jobs and creates more tax revenue.
In this environment, making huge gains isn't nearly as important as how you manage your assets. Even if you think that you have nice profits, don't transact unless you HAVE TO.
The rising stock market is due mostly to Fed policy. Same for metals. When tax rates go up in an environment that has rising asset prices, every transaction results in a nice tax bill, but the proceeds won't even buy back what you just sold.
If you think that you can overcome a 50% differential between the sale of one asset vs. the purchase of another asset, then by all means - have at it. It's a mirage. It's true that for every seller of a winning stock position, there is a buyer who thinks that he's getting into something good. The problem is with the government playing the tax middleman and goading everyone on to churn their assets, with higher asset prices that don't reflect actual production or efficiency gains.
Don't get me wrong. Stock ownership is a real asset, just like physical precious metals are real assets. The main problem is that valuations are contingent upon tax policy and rising asset numbers, so be very careful how you manage your money. >>
I'm referring to the new money getting to the hands of the consumer, not the investor, and I'm not referring to increasing tax rates. Consumers who consume create jobs with their spending and each dollar that transfers to another individual gets taxed again as income. Tax revenue can be increased by stimulating the turnover of dollars (something our policy makers should be focusing on).
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey