No, the point is nobody really knows, period, all we can do is gather as much info as we can and then still realize its no info at all... Pick one's points and play it out, the market will dictate to us, not us to the market...
Maybe some of the new mining capacity that was commissioned in 2010 and 2011 is coming on line, and supply is increasing.. what are they gonna do, mothball all the equipment and "unhire" all the workers now that the PM prices are back down? No, they're going to keep producing, because that's the way to amortize the losses over years instead of taking a write-off now.
Maybe I'm wrong, but they probably will unhire most of the workers and maintain a skeleton crew to produce a nominal amount of silver. Why would they deplete their deposits and run up their labor and production costs if they are already generating losses? They can amortize the equipment as long as they are in business, but they won't stay in business by running up their losses.
It's not like they're GM or AIG. Most miners aren't politically-connected like banks and don't have large blocks of union voters.
Q: Are You Printing Money? Bernanke: Not Literally
that is a good point. However much silver production is A byproduct of other mining, for example copper aluminum, iron, and lead. Those miners have also ramped up production and produced silver that the market will need to absorb. Good thing there is still relatively high demand for ultra modern NCLT bullion coins as well as other privately- made novelty items. What happens when collectors have their fill and more new stackers can't be recruited fast enough?
Demand for "real" silver remains high. Unfortunately (for now), imaginary silver sets the price.
"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
Silver that comes out of copper , lead , zinc , and gold mines will come out regardless of demand. Demand for the primary ore will determine if those mines get worked.
The copper price dropped 3.5% last week after a weaker than expected gauge on manufacturing activity in China together with a probe into the use of metals in trade finance deals
Ah yes, and it is widely speculated that the Chinese demand for gold, is not to "preserve wealth", but rather to use as collateral to secure US dollar denominated loans.
A fine gentleman happened into the shop and purchased a silver round. Then he said he was putting it in his pitcher of drinking water for the health of it. Sounds like a bright future to me
The difference being that silver is still a monetary metal. Iron and copper can crash all they want, and in the end we have indications of deflation, maybe serious deflation.
Once that becomes apparent, as business activity declines do you think that tax revenues will be in serious jeopardy unless gov.com gets serious with more QE? Like, lots more QE. Of course, if they actually do that you can count on the crisis morphing into a full blown monetary crisis.
They might be out of bullets, but who knows what is really on the plate for the next round? I don't. As suggested previously, look to the fringe countries for a glimpse at the future. Hopefully the future doesn't come at warp speed, but I wouldn't bet that it won't.
Q: Are You Printing Money? Bernanke: Not Literally
Silver is not a monetary metal, it may have been in the past, but in the current and future reality it isn't, it's a commodity just like copper... There is but zero recognition on any central banks asset sheet, or by any other monetary union...now or in the near future... Past history sounds good, feels good, may be factually correct, etc, etc, etc..., but of course is meaningless in regards to price...
Silver qualifies as a monetary metal when individuals still buy it and sell it as a hedge against poor government monetary policies. At least, that's what I would contend.
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>Silver is not a monetary metal, it may have been in the past, but in the current and future reality it isn't, it's a commodity just like copper... There is but zero recognition on any central banks asset sheet, or by any other monetary union...now or in the near future... Past history sounds good, feels good, may be factually correct, etc, etc, etc..., but of course is meaningless in regards to price... >>
Only "brainwashed" conspiracy advocates believe it's still a monetary metal. Just another asset, which will have its ups & downs.
"Bongo drive 1984 Lincoln that looks like old coin dug from ground."
<< <i>Silver is not a monetary metal, it may have been in the past, but in the current and future reality it isn't, it's a commodity just like copper... There is but zero recognition on any central banks asset sheet, or by any other monetary union...now or in the near future... Past history sounds good, feels good, may be factually correct, etc, etc, etc..., but of course is meaningless in regards to price... >>
Only "brainwashed" conspiracy advocates believe it's still a monetary metal. Just another asset, which will have its ups & downs. >>
There's brainwashing going on to be sure. The hope is that the huddled masses stay put and keep their eyes closed.
<< <i>Silver is not a monetary metal, it may have been in the past, but in the current and future reality it isn't, it's a commodity just like copper... There is but zero recognition on any central banks asset sheet, or by any other monetary union...now or in the near future... Past history sounds good, feels good, may be factually correct, etc, etc, etc..., but of course is meaningless in regards to price... >>
Future Reality? Never say never.
"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>this portends a possible death swan for silver... death swan >>
Forgot this??? >>
If anything, I would think that silver and gold are heavily rehypothecated. Could be anywhere up to 100 "owners" for every ounce out there. I don't quite see that being the case for copper or other base metals. Copper futures contracts at 25,000 lbs each are a little unwieldy. Not many people taking possession on copper contracts compared to silver (5,000 oz) and gold (100 oz.). If gold and silver contracts including derivatives were forced to all unwind, I would expect rising physical PM prices. It would appear that the PTB have no intention of allowing to that happen. While lots of copper was used over the past decade to build many new Chinese cities, I doubt that's the case for silver and gold.
Based on 15 year charts copper looks like it sits much higher on the cliff than silver. Silver is now 30 % of it's 2011 high while copper is 53%. Silver has reached 2006-2010 support as well as its 12 year uptrend line. Copper would have to fall to $1.85-$2.00 to reach that same uptrend line. If there's a "swan song" coming for copper, I don't see why silver would have to duplicate much of that dive.
Known worldwide copper resources are estimated at nearly 5.8 trillion pounds of which only about 0.7 trillion pounds (12%) have been mined throughout history... and nearly all of that is still in circulation, because copper's recycling rate is higher than that of any other engineering metal.
Gold is not considered a "monetary" metal by the majority of people. Yet there it sits on the balance sheets of the world's central banks....31,000 tonnes worth....10 years worth of world mining production. Those guys apparently think it is a monetary metal. Compare households across the US and see how much copper and silver they hold. I suspect not much copper (purely industrial metal) and a fair amount of silver (being held for "monetary" or investment purposes). If govt and financial entities think of gold and/or silver as "monetary," then they are. And if the citizens think of any PMs as "monetary" then they are. It doesn't matter if the govt doesn't decree it so. As the Greeks if any of the metals are "monetary," especially with banks closed.
rr....not sure about your math...lets see: silver high almost $50 in 2011...now at around $15, does not equate to a 30% drop in my basic math calculation. ( more like a 70% drop)
"Bongo drive 1984 Lincoln that looks like old coin dug from ground."
rr....not sure about your math...lets see: silver high almost $50 in 2011...now at around $15, does not equate to a 30% drop in my basic math calculation. ( more like a 70% drop) >>
or "30% of it's 2011 high."
"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
rr....not sure about your math...lets see: silver high almost $50 in 2011...now at around $15, does not equate to a 30% drop in my basic math calculation. ( more like a 70% drop) >>
Both my math and english look good to me. Nowhere did I say "drop." 30% of $50 = $15.. I took the "old math" back in the 1960's and 1970's. Maybe today's kids say it differently.
But for those who must see things in "drop" mode: Silver has dropped 70% while copper has dropped only 47%. Q.E.D.
<< <i>Silver qualifies as a monetary metal when individuals still buy it and sell it as a hedge against poor government monetary policies. At least, that's what I would contend. >>
And therein lies the destruction of the individual's capital, cause because one buys n sells as a hedge against poor govt monetary policies, the underlying silver knows nothing about that...
Also, to make I guess, more clearer,
I never said anything about gold regarding being viewd as money/currency, why??? Because obviously it is , and thus my point regarding recognition by central banks and monetary unions...
<< Silver qualifies as a monetary metal when individuals still buy it and sell it as a hedge against poor government monetary policies. At least, that's what I would contend. >>
And therein lies the destruction of the individual's capital, cause because one buys n sells as a hedge against poor govt monetary policies, the underlying silver knows nothing about that...
The silver money contingent has been long gone...
Like buyin front n back loaded mutual,funds...
Therein lies the destruction of the individual's capital only if the price goes down, but not necessarily because one buys n sells as a hedge against poor govt monetary policies. That the govt policies might affect silver prices is yet another *independent* variable, in my opinion.
The money aspect of silver isn't gone, imo as long as it can be exchanged for cash in private or coin shop transactions. Gov.com can always implement controls on the trading of cash, silver, gold, cigarettes, marijuana, alcohol - and stocks as well. That being the case, silver still comes closer to having the attributes of money than most of the other things listed although any and all of them could go underground if gov.com makes life difficult with heavy-handed regulations for whatever reason. With gov.com the reason is usually arbitrary, except that the objective is always more revenue.
Silver does have front end and back end loads, but it can also carry a premium depending on demand and and depending on the particular reasons why the demand might become strong.
All of this makes it imperative to keep good records for tax purposes. Always. Always offset those gains with an accompanying loss when liquidating. Always.
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>Regarding silver: All of this makes it imperative to keep good records for tax purposes. Always. Always offset those gains with an accompanying loss when liquidating. Always. >>
Lol, good one, ... Always, always, never make any money....always...
Having rolled up significant gains over the years, this allows me to prune whatever I no longer need and to pick out a few losers to balance it out. I don't have to hold onto a loser because I can sell just enough to go neutral and still generate whatever capital I need.
But I realize that ya'll never have a loser, so you may disregard this tactic.
Pay those taxes regularly, boyz.
Q: Are You Printing Money? Bernanke: Not Literally
Have had plenty of losses on stocks and especially options, those derivatives tend to have a pesky decay of time premium that is rarely taken into account in discussions of the $TRILLS and QUADRILLS of derivatives out there They EXPIRE
But I've never realized a loss on the sale of a piece of metal or real estate. Cars, furniture, appliances, they all depreciate. Gold and silver endure, why sell for less than price paid? Just keep on stackin' instead, they have always advised
Gold and silver endure, why sell for less than price paid?
To raise capital and offset gains. Pretty simple when you boil it all down. Works especially well when you have a current stream of income and aren't pressured to sell. The best part is that you get to keep all the really great stuff, in multiples.
It would be pretty ridiculous to buy at the top of the market and then hold it for 30 years, like the example ALWAYS given in these kinds of threads when the precious metals bashers show up.
But there's always someone willing to try buying high and selling low, i.e. - the rawteam1 method: Always, always, never make any money....always...
Q: Are You Printing Money? Bernanke: Not Literally
<< <i>Have had plenty of losses on stocks and especially options, those derivatives tend to have a pesky decay of time premium that is rarely taken into account in discussions of the $TRILLS and QUADRILLS of derivatives out there They EXPIRE >>
Approx half of otc derivatives have a 1 year or less maturity. But they tend to be renewed or rolled over into new ones the vast majority of the time. Unlike Baley's stock mark option derivatives or futures contracts, the otc derivatives that the Big Banks hold are valued at what the bank thinks they will be worth at maturity. Baley's options get valued every day by the market (ie marked to market....not marked to wishes and rainbows). Baley's options are fully transparent to the market. The otc bank derivatives are no such thing. And if Baley loses, his options expire worthless. No such luck for the banks as they have the FED, USTreasury, and US Taxpayers back stopping their losses.
The sum of the major TBTF banks have essentially the same derivative's positioning as they had back in 2008. They certainly don't EXPIRE or go away. $900 TRILL in world-wide interest rate derivatives is the boat anchor keeping interest rates at low levels all these years. If they went away tomorrow the SHTF. Most of the these banks make $BILLIONS per year trading them (+$7.7 BILL last quarter). They aren't about to give them up either. It's all about the skim. But their biggest effect is to help determine market direction by placing huge leveraged bets.
<< <i>The bailed out banks have repaid the government with interest. >>
It is estimated that the losses from the 2008-2010 financial crisis is in the -$12 TRILL to -$22 TRILL range. Show me where the 5-6 TBTF US banks paid that amount back. Imagine if you caused $22 TRILL in economic damage, were given a $500 BILL loan to help you through rough times, and then were cheered by your countrymen when you paid the loan back. Simply incredible!
The big banks did pay back the US govt on the amount of money that was "officially" given to them. What about the unofficial amounts? The TARP didn't come close to covering all the losses out there. The FED gave out $TRILLIONs to hundreds of separate "entities" around the world, including foreign banks. Who paid all that back? The answer is .... no one. The FED did that to hush things up and maintain the financial system status quo. We covered all this stuff in great detail in 2008-2011. It's a little late to rewrite history. TARP payouts are in the $450+ BILL range to over 800 participants (authorized to $700 BILL). That doesn't come close to covering the carnage. The MBS failures alone totaled in $3-$7 TRILL range. Figure credit default swap failures at $7-$15 TRILL. Lehman was a small fry compared to the big banks and had claims on it of > $1 TRILL.
The TARP didn't come close to covering all the losses out there. The FED gave out $TRILLIONs to hundreds of separate "entities" around the world, including foreign banks. Who paid all that back?
And FASB changed their "standards" so that all the bad paper still on banks' balance sheets never has to be written down. It's no wonder they could pay back tarp with their "conventional" earnings. No one has ever been held accountable. Great stuff.
Q: Are You Printing Money? Bernanke: Not Literally
It is estimated that the losses from the 2008-2010 financial crisis is in the -$10 TRILL to -$20 TRILL range
It is estimated that those 20$TRILL losses from the peak in 2007-8 to the bottoms in 2009-12 were part of the $40TRILLS in Gains from the bottoms in 2001-2003 to the peak in 2007.
And now, it's "BACK" (on paper) with the stock markets near all time highs and the housing market making new highs in growth areas (even as stagnant areas and properties and stocks continue to decline in value, as they should)
Just as in CHinA, they've just "Lost" in the past month or two, some (but not all, yet) of the Trills that they "Gained" in the prior 18 or 36 months.
They Never "HAD" the Money! it was Paper gains until it's realized.
All of this is so esoteric, and yes, it's been gone over, and it still amazes both camps that the other side can see the same data and draw such different meanings and conclusions about the world.
<< <i>Can't help but notice that the articles are dated 2011. Has anything changed in the world since then? >>
That was the end of the 2006-2011 financial crisis era. I would think that articles summing up that period in real time would still be worthy today...or in 2021. Do you think that books written on the Civil War back in 1865-1867 are worth anything? Or would only something written years later in the 1870's be more accurate because things "had changed in the world by then?" In the end, there are still $12-$22 TRILL in losses from the financial crisis. And that hasn't changed since then. BSC, Lehman, WaMu, Countrywide, and others are gone/absorbed...that hasn't changed either.
The financial crisis of 2006-2011 has had little impact in the period of 2012-2015. There were enough payouts and palm greasing in that earlier era to keep things under the surface for now. The next financial crisis will highlight the issues leftover from 2008-2011. The banks are still lobbying the Dodd-Frank bill to completely gut it. They probably won't have a final approved version that is fully implemented until AFTER the next financial crisis begins.
There is no such thing as "real" or "unreal" losses....just losses.
The large US corporations and TBTF banks that took the TARP/TALF and other loans claimed to have paid them back on paper. But what about the hundreds of other entities, especially foreign corporations and banks? No one that I can see is claiming those guys paid back loans.
Even worse, the $700 billion in TARP loans ended up being dwarfed by more than $7.7 trillion in secret emergency lending that the Fed awarded to Wall Street – loans that were only disclosed to the public after Congress forced an extraordinary one-time audit of the Federal Reserve. The extent of this "secret bailout" didn't come out until November 2011, when Bloomberg Markets, which went to court to win the right to publish the data, detailed how the country's biggest firms secretly received trillions in near-free money throughout the crisis. ....nothing to see here....lol.
I like the part where Taibbi notes that a large % of small businesses that took the TARP loans, "paid them back" by using another cheaper loan facility offered by the govt. What's not to like?
All the big banks have paid back their TARP loans, while more than 300 smaller firms are still struggling to repay their bailout debts. ....this is as of Jan 2013....long after the big boyz claimed to have paid their loans back.
So what did we the taxpayers get for the bailouts being paid back by the TBTF banks....and maybe even some minimal interest income tossed in?
So what exactly did the bailout accomplish? It built a banking system that discriminates against community banks, makes Too Big to Fail banks even Too Bigger to Fail, increases risk, discourages sound business lending and punishes savings by making it even easier and more profitable to chase high-yield investments than to compete for small depositors. The bailout has also made lying on behalf of our biggest and most corrupt banks the official policy of the United States government. And if any one of those banks fails, it will cause another financial crisis, meaning we're essentially wedded to that policy for the rest of eternity – or at least until the markets call our bluff, which could happen any minute now. Other than that, the bailout was a smashing success.[/L]
This amount dwarfs the TARP. Interesting that on Dec 5th 2008 alone, the FED doled out $1.2 TRILL in money to the failing banks.....in one single day. And we're supposed to believe that TARP (approx $500 BILL) was the extent of the lending over a 2-3 year period? That seems ludicrous. The $7.7 TRILL would at least seem to be in line with what might have been needed to pay off (some of the) winning MBS and CDS derivative's bets. Derivative's don't care about "peak loan value." If you're carrying $50 TRILL in otc derivative's then your potential risk is $50 TRILL if all counter-parties fail. Lehman had a 90% failure rate on its derivatives/investments. Had they been the size of a TBTF bank.....their losses would have been in the $30-$60 TRILL range.
$160 billion: Amount in TARP funds the big six received..........Amount the big six borrowed from the Fed was as much as $460 BILL, as calculated by Bloomberg and measured by peak daily debt. We know TARP was paid back, but what about the "other" loans at sweetheart interest rates (ie free money)?
It bears repeating as long as there are those out there trying to revise history claiming that because the Big Banks paid back TARP funds, that all was well. Apparently people DID NOT GET IT years ago. It's illogical to think that $TRILLIONS weren't paid out by the FED to keep the lid on things. Looks to me like the last accounting shows a $95 BILL loss for TARP. Paste in link due to "bad" word.
Why would I look through the "balance sheets" of a TBTF bank when it is dwarfed by the risk of opaque and unregulated OTC derivatives that the bank decides what they are worth each quarter? I prefer to go by the news articles linked above (Bloomberg, etc.) to let each reader decide if things were really paid back and how much moolah was doled out. The whole problem here is derivatives, their risk, and what they're really worth when a crisis hits. We learned that much in 2008-2009. Verifying balance sheets? EBITDA? You gotta be kidding me? These guys have the FASB under their thumbs. And the thing is, the information wasn't released in a timely manner following the 2008 crisis. It wasn't until late in 2011 that the massive scope of the lending was brought out due to FOIA inquiries. The FED and Co. fought furiously to keep that stuff under wraps. It's 6 years after the fact and we still don't have a final accounting of all the financial crisis lending programs. The banks are counting on people losing interest and revisionist historians. In a couple of more years the Bank CEO's and former Treasury Sectretaries and FED Chairs will probably be getting medals from the govt for their patriotic service in 2008-2009.
<< <i>No one is suggesting "all is well". But all things considered, we're not suffering any devastating consequences because of it and the $100 billion in losses, or whatever the number may be, is a pittance compared to what the $1 trillion+ that the wars have cost us. No one said the government is good at fiscal management. Complain about the $18 trillion in the national debt. Complain about the significant problems with impending Medicare funding. Complain about the artificially low rates that may very well cause another financial crisis. But complaining about a $100 billion of losses from YEARS AGO when the world was on the precipice of a disastrous meltdown and was forced to implementing emergency measures does not seem all that worthwhile to complain about. As for being lied to by the Fed, or the government not being totally transparent is something that has gone on since probably caveman days. >>
The $100 BILL is a pittance. Heck, JPM added $3.8 TRILL in commodity derivatives last quarter....the supposed FMV of those derivs in approx $100 BILL. The real economic cost of the 2008 crisis was estimated at $12-$22 TRILL....that's not a pittance. And that was the opening act of a crisis that is still brewing. What will round 2 cost us? The wars have generated hundreds of $BILL in profits to those who benefit by waging war. They really don't care about the $TRILL the US Taxpayers have spent. Sure, the govt is technically broke by all those entitlements. That's one of the reasons the banks have resorted to $1.1 QUAD in otc derivatives. They will still make money on paper as long as the debt-money system avoids collapse. What I'm concerned about are the $900 TRILL in interest rate derivatives that were not stressed at all in 2008. No TARP program can fix a crisis in interest rates when/if the bond market goes "pop." Medicare, SS, and other entitlements that give the govt control over the people will muddle on through for years to come.
My reason for bringing this old stuff back up was the same old erroneous argument that the "banks paid all their loans back with interest.....the people made money." That's about the most ludicrous summary of the financial crisis one could possibly come up with. Did you even read the Taibbi article above on the fallout of TARP & Co. There are plenty of facts and truths in that reporting.
Comments
Demand to ponder
Pick one's points and play it out, the market will dictate to us, not us to the market...
Maybe I'm wrong, but they probably will unhire most of the workers and maintain a skeleton crew to produce a nominal amount of silver. Why would they deplete their deposits and run up their labor and production costs if they are already generating losses? They can amortize the equipment as long as they are in business, but they won't stay in business by running up their losses.
It's not like they're GM or AIG. Most miners aren't politically-connected like banks and don't have large blocks of union voters.
I knew it would happen.
the market will need to absorb. Good thing there is still relatively high demand for ultra modern NCLT bullion coins as well as other privately- made novelty items. What happens when collectors have their fill and more new stackers can't be recruited fast enough?
Liberty: Parent of Science & Industry
"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
Silver that comes out of copper , lead , zinc , and gold mines will come out regardless of demand. Demand for the primary ore will determine if those mines get worked.
death swan
Ah yes, and it is widely speculated that the Chinese demand for gold, is not to "preserve wealth", but rather to use as collateral to secure US dollar denominated loans.
Knowledge is the enemy of fear
I wonder if it works in vermouth
To update. Silver better hold 18 otherwise its 14 by end of year.
Knowledge is the enemy of fear
I knew it would happen.
<< <i>this portends a possible death swan for silver...
death swan >>
Forgot this???
Loves me some shiny!
The difference being that silver is still a monetary metal. Iron and copper can crash all they want, and in the end we have indications of deflation, maybe serious deflation.
Once that becomes apparent, as business activity declines do you think that tax revenues will be in serious jeopardy unless gov.com gets serious with more QE? Like, lots more QE. Of course, if they actually do that you can count on the crisis morphing into a full blown monetary crisis.
They might be out of bullets, but who knows what is really on the plate for the next round? I don't. As suggested previously, look to the fringe countries for a glimpse at the future. Hopefully the future doesn't come at warp speed, but I wouldn't bet that it won't.
I knew it would happen.
but in the current and future reality it isn't, it's a commodity just like copper...
There is but zero recognition on any central banks asset sheet, or by any other monetary union...now or in the near future...
Past history sounds good, feels good, may be factually correct, etc, etc, etc..., but of course is meaningless in regards to price...
I knew it would happen.
<< <i>Silver is not a monetary metal, it may have been in the past,
but in the current and future reality it isn't, it's a commodity just like copper...
There is but zero recognition on any central banks asset sheet, or by any other monetary union...now or in the near future...
Past history sounds good, feels good, may be factually correct, etc, etc, etc..., but of course is meaningless in regards to price... >>
Only "brainwashed" conspiracy advocates believe it's still a monetary metal. Just another asset, which will have its ups & downs.
<< <i>
<< <i>Silver is not a monetary metal, it may have been in the past,
but in the current and future reality it isn't, it's a commodity just like copper...
There is but zero recognition on any central banks asset sheet, or by any other monetary union...now or in the near future...
Past history sounds good, feels good, may be factually correct, etc, etc, etc..., but of course is meaningless in regards to price... >>
Only "brainwashed" conspiracy advocates believe it's still a monetary metal. Just another asset, which will have its ups & downs. >>
There's brainwashing going on to be sure. The hope is that the huddled masses stay put and keep their eyes closed.
<< <i>Silver is not a monetary metal, it may have been in the past,
but in the current and future reality it isn't, it's a commodity just like copper...
There is but zero recognition on any central banks asset sheet, or by any other monetary union...now or in the near future...
Past history sounds good, feels good, may be factually correct, etc, etc, etc..., but of course is meaningless in regards to price... >>
Future Reality? Never say never.
"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>this portends a possible death swan for silver...
death swan >>
Forgot this??? >>
If anything, I would think that silver and gold are heavily rehypothecated. Could be anywhere up to 100 "owners" for every ounce out there. I don't quite see that being the case for copper or other base metals. Copper futures contracts at 25,000 lbs each are a little unwieldy. Not many people taking possession on copper contracts compared to silver (5,000 oz) and gold (100 oz.). If gold and silver contracts including derivatives were forced to all unwind, I would expect rising physical PM prices. It would appear that the PTB have no intention of allowing to that happen. While lots of copper was used over the past decade to build many new Chinese cities, I doubt that's the case for silver and gold.
Based on 15 year charts copper looks like it sits much higher on the cliff than silver. Silver is now 30 % of it's 2011 high while copper is 53%. Silver has reached 2006-2010 support as well as its 12 year uptrend line. Copper would have to fall to $1.85-$2.00 to reach that same uptrend line. If there's a "swan song" coming for copper, I don't see why silver would have to duplicate much of that dive.
Copper chart
Known worldwide copper resources are estimated at nearly 5.8 trillion pounds of which only about 0.7 trillion pounds (12%) have been mined throughout history... and nearly all of that is still in circulation, because copper's recycling rate is higher than that of any other engineering metal.
Gold is not considered a "monetary" metal by the majority of people. Yet there it sits on the balance sheets of the world's central banks....31,000 tonnes worth....10 years worth of world mining production. Those guys apparently think it is a monetary metal. Compare households across the US and see how much copper and silver they hold. I suspect not much copper (purely industrial metal) and a fair amount of silver (being held for "monetary" or investment purposes). If govt and financial entities think of gold and/or silver as "monetary," then they are. And if the citizens think of any PMs as "monetary" then they are. It doesn't matter if the govt doesn't decree it so. As the Greeks if any of the metals are "monetary," especially with banks closed.
<< <i>As the Greeks if any of the metals are "monetary," especially with banks closed >>
This would have been a great question for Mark to ask around last week.
<< <i> Silver is now 30 % of it's 2011 high >>
rr....not sure about your math...lets see: silver high almost $50 in 2011...now at around $15, does not equate to a 30% drop in my basic math calculation. ( more like a 70% drop)
<< <i>
<< <i> Silver is now 30 % of it's 2011 high >>
rr....not sure about your math...lets see: silver high almost $50 in 2011...now at around $15, does not equate to a 30% drop in my basic math calculation. ( more like a 70% drop) >>
or "30% of it's 2011 high."
"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> Silver is now 30 % of it's 2011 high >>
rr....not sure about your math...lets see: silver high almost $50 in 2011...now at around $15, does not equate to a 30% drop in my basic math calculation. ( more like a 70% drop) >>
Both my math and english look good to me. Nowhere did I say "drop." 30% of $50 = $15.. I took the "old math" back in the 1960's and 1970's. Maybe today's kids say it differently.
But for those who must see things in "drop" mode: Silver has dropped 70% while copper has dropped only 47%. Q.E.D.
<< <i>Silver qualifies as a monetary metal when individuals still buy it and sell it as a hedge against poor government monetary policies. At least, that's what I would contend. >>
And therein lies the destruction of the individual's capital, cause because one buys n sells as a hedge against poor govt monetary policies, the underlying silver knows nothing about that...
Also, to make I guess, more clearer,
I never said anything about gold regarding being viewd as money/currency, why??? Because obviously it is , and thus my point regarding recognition by central banks and monetary unions...
The silver money contingent has been long gone...
<< <i>getting excited about $300 SAE rolls again! >>
Wholesale premiums are now $3 / oz + with the mint raising theirs. It will be expensive to own us mint products.
<< Silver qualifies as a monetary metal when individuals still buy it and sell it as a hedge against poor government monetary policies. At least, that's what I would contend. >>
And therein lies the destruction of the individual's capital, cause because one buys n sells as a hedge against poor govt monetary policies, the underlying silver knows nothing about that...
The silver money contingent has been long gone...
Like buyin front n back loaded mutual,funds...
Therein lies the destruction of the individual's capital only if the price goes down, but not necessarily because one buys n sells as a hedge against poor govt monetary policies. That the govt policies might affect silver prices is yet another *independent* variable, in my opinion.
The money aspect of silver isn't gone, imo as long as it can be exchanged for cash in private or coin shop transactions. Gov.com can always implement controls on the trading of cash, silver, gold, cigarettes, marijuana, alcohol - and stocks as well. That being the case, silver still comes closer to having the attributes of money than most of the other things listed although any and all of them could go underground if gov.com makes life difficult with heavy-handed regulations for whatever reason. With gov.com the reason is usually arbitrary, except that the objective is always more revenue.
Silver does have front end and back end loads, but it can also carry a premium depending on demand and and depending on the particular reasons why the demand might become strong.
All of this makes it imperative to keep good records for tax purposes. Always. Always offset those gains with an accompanying loss when liquidating. Always.
I knew it would happen.
<< <i>Regarding silver:
All of this makes it imperative to keep good records for tax purposes. Always. Always offset those gains with an accompanying loss when liquidating. Always. >>
Lol, good one, ... Always, always, never make any money....always...
Must be doing it wrong- not enough losses. Will try to lose more by buying more metals and thereby do better
Liberty: Parent of Science & Industry
But I realize that ya'll never have a loser, so you may disregard this tactic.
Pay those taxes regularly, boyz.
I knew it would happen.
They EXPIRE
But I've never realized a loss on the sale of a piece of metal or real estate. Cars, furniture, appliances, they all depreciate. Gold and silver endure, why sell for less than price paid?
Just keep on stackin' instead, they have always advised
Liberty: Parent of Science & Industry
To raise capital and offset gains. Pretty simple when you boil it all down. Works especially well when you have a current stream of income and aren't pressured to sell. The best part is that you get to keep all the really great stuff, in multiples.
It would be pretty ridiculous to buy at the top of the market and then hold it for 30 years, like the example ALWAYS given in these kinds of threads when the precious metals bashers show up.
But there's always someone willing to try buying high and selling low, i.e. - the rawteam1 method: Always, always, never make any money....always...
I knew it would happen.
<< <i>Have had plenty of losses on stocks and especially options, those derivatives tend to have a pesky decay of time premium that is rarely taken into account in discussions of the $TRILLS and QUADRILLS of derivatives out there
They EXPIRE >>
Approx half of otc derivatives have a 1 year or less maturity. But they tend to be renewed or rolled over into new ones the vast majority of the time. Unlike Baley's stock mark option derivatives or futures contracts, the otc derivatives that the Big Banks hold are valued at what the bank thinks they will be worth at maturity. Baley's options get valued every day by the market (ie marked to market....not marked to wishes and rainbows). Baley's options are fully transparent to the market. The otc bank derivatives are no such thing. And if Baley loses, his options expire worthless. No such luck for the banks as they have the FED, USTreasury, and US Taxpayers back stopping their losses.
The sum of the major TBTF banks have essentially the same derivative's positioning as they had back in 2008. They certainly don't EXPIRE or go away. $900 TRILL in world-wide interest rate derivatives is the boat anchor keeping interest rates at low levels all these years. If they went away tomorrow the SHTF. Most of the these banks make $BILLIONS per year trading them (+$7.7 BILL last quarter). They aren't about to give them up either. It's all about the skim. But their biggest effect is to help determine market direction by placing huge leveraged bets.
Liberty: Parent of Science & Industry
<< <i>The bailed out banks have repaid the government with interest. >>
It is estimated that the losses from the 2008-2010 financial crisis is in the -$12 TRILL to -$22 TRILL range. Show me where the 5-6 TBTF US banks paid that amount back. Imagine if you caused $22 TRILL in economic damage, were given a $500 BILL loan to help you through rough times, and then were cheered by your countrymen when you paid the loan back. Simply incredible!
The big banks did pay back the US govt on the amount of money that was "officially" given to them. What about the unofficial amounts? The TARP didn't come close to covering all the losses out there. The FED gave out $TRILLIONs to hundreds of separate "entities" around the world, including foreign banks. Who paid all that back? The answer is .... no one. The FED did that to hush things up and maintain the financial system status quo. We covered all this stuff in great detail in 2008-2011. It's a little late to rewrite history. TARP payouts are in the $450+ BILL range to over 800 participants (authorized to $700 BILL). That doesn't come close to covering the carnage. The MBS failures alone totaled in $3-$7 TRILL range. Figure credit default swap failures at $7-$15 TRILL. Lehman was a small fry compared to the big banks and had claims on it of > $1 TRILL.
Cost of financial crisis
And FASB changed their "standards" so that all the bad paper still on banks' balance sheets never has to be written down. It's no wonder they could pay back tarp with their "conventional" earnings. No one has ever been held accountable. Great stuff.
I knew it would happen.
It is estimated that those 20$TRILL losses from the peak in 2007-8 to the bottoms in 2009-12 were part of the $40TRILLS in Gains from the bottoms in 2001-2003 to the peak in 2007.
And now, it's "BACK" (on paper) with the stock markets near all time highs and the housing market making new highs in growth areas (even as stagnant areas and properties and stocks continue to decline in value, as they should)
Just as in CHinA, they've just "Lost" in the past month or two, some (but not all, yet) of the Trills that they "Gained" in the prior 18 or 36 months.
They Never "HAD" the Money! it was Paper gains until it's realized.
All of this is so esoteric, and yes, it's been gone over, and it still amazes both camps that the other side can see the same data and draw such different meanings and conclusions about the world.
Liberty: Parent of Science & Industry
Another view of how much was lent out
Liberty: Parent of Science & Industry
<< <i>
<< <i>getting excited about $300 SAE rolls again! >>
Wholesale premiums are now $3 / oz + with the mint raising theirs. It will be expensive to own us mint products. >>
Has or is the mint raising the premium on ASEs?
<< <i>Always offset those gains with an accompanying loss when liquidating. Always.
Must be doing it wrong- not enough losses. Will try to lose more by buying more metals and thereby do better >>
He didn't say that they had to be real losses. LOL.
<< <i>Can't help but notice that the articles are dated 2011. Has anything changed in the world since then? >>
That was the end of the 2006-2011 financial crisis era. I would think that articles summing up that period in real time would still be worthy today...or in 2021. Do you think that books written on the Civil War back in 1865-1867 are worth anything? Or would only something written years later in the 1870's be more accurate because things "had changed in the world by then?" In the end, there are still $12-$22 TRILL in losses from the financial crisis. And that hasn't changed since then. BSC, Lehman, WaMu, Countrywide, and others are gone/absorbed...that hasn't changed either.
The financial crisis of 2006-2011 has had little impact in the period of 2012-2015. There were enough payouts and palm greasing in that earlier era to keep things under the surface for now. The next financial crisis will highlight the issues leftover from 2008-2011. The banks are still lobbying the Dodd-Frank bill to completely gut it. They probably won't have a final approved version that is fully implemented until AFTER the next financial crisis begins.
There is no such thing as "real" or "unreal" losses....just losses.
Even worse, the $700 billion in TARP loans ended up being dwarfed by more than $7.7 trillion in secret emergency lending that the Fed awarded to Wall Street – loans that were only disclosed to the public after Congress forced an extraordinary one-time audit of the Federal Reserve. The extent of this "secret bailout" didn't come out until November 2011, when Bloomberg Markets, which went to court to win the right to publish the data, detailed how the country's biggest firms secretly received trillions in near-free money throughout the crisis. ....nothing to see here....lol.
The TARP in a nutshell. Very little here appears to be a good deal for the US taxpayers......some of the deferred taxes, pay raises, compensation, bank stock purchases on insider trading info, and other freebies the bankers got essentially wiped out the paying back of the loans.
I like the part where Taibbi notes that a large % of small businesses that took the TARP loans, "paid them back" by using another cheaper loan facility offered by the govt. What's not to like?
All the big banks have paid back their TARP loans, while more than 300 smaller firms are still struggling to repay their bailout debts. ....this is as of Jan 2013....long after the big boyz claimed to have paid their loans back.
So what did we the taxpayers get for the bailouts being paid back by the TBTF banks....and maybe even some minimal interest income tossed in?
So what exactly did the bailout accomplish? It built a banking system that discriminates against community banks, makes Too Big to Fail banks even Too Bigger to Fail, increases risk, discourages sound business lending and punishes savings by making it even easier and more profitable to chase high-yield investments than to compete for small depositors. The bailout has also made lying on behalf of our biggest and most corrupt banks the official policy of the United States government. And if any one of those banks fails, it will cause another financial crisis, meaning we're essentially wedded to that policy for the rest of eternity – or at least until the markets call our bluff, which could happen any minute now. Other than that, the bailout was a smashing success.[/L]
This amount dwarfs the TARP. Interesting that on Dec 5th 2008 alone, the FED doled out $1.2 TRILL in money to the failing banks.....in one single day. And we're supposed to believe that TARP (approx $500 BILL) was the extent of the lending over a 2-3 year period? That seems ludicrous. The $7.7 TRILL would at least seem to be in line with what might have been needed to pay off (some of the) winning MBS and CDS derivative's bets. Derivative's don't care about "peak loan value." If you're carrying $50 TRILL in otc derivative's then your potential risk is $50 TRILL if all counter-parties fail. Lehman had a 90% failure rate on its derivatives/investments. Had they been the size of a TBTF bank.....their losses would have been in the $30-$60 TRILL range.
$160 billion: Amount in TARP funds the big six received..........Amount the big six borrowed from the Fed was as much as $460 BILL, as calculated by Bloomberg and measured by peak daily debt. We know TARP was paid back, but what about the "other" loans at sweetheart interest rates (ie free money)?
http://www.market....watch.com/story/losses-mounting-in-bank-bailouts-2013-02-12
Why would I look through the "balance sheets" of a TBTF bank when it is dwarfed by the risk of opaque and unregulated OTC derivatives that the bank decides what they are worth each quarter? I prefer to go by the news articles linked above (Bloomberg, etc.) to let each reader decide if things were really paid back and how much moolah was doled out. The whole problem here is derivatives, their risk, and what they're really worth when a crisis hits. We learned that much in 2008-2009. Verifying balance sheets? EBITDA? You gotta be kidding me? These guys have the FASB under their thumbs. And the thing is, the information wasn't released in a timely manner following the 2008 crisis. It wasn't until late in 2011 that the massive scope of the lending was brought out due to FOIA inquiries. The FED and Co. fought furiously to keep that stuff under wraps. It's 6 years after the fact and we still don't have a final accounting of all the financial crisis lending programs. The banks are counting on people losing interest and revisionist historians. In a couple of more years the Bank CEO's and former Treasury Sectretaries and FED Chairs will probably be getting medals from the govt for their patriotic service in 2008-2009.
<< <i>No one is suggesting "all is well". But all things considered, we're not suffering any devastating consequences because of it and the $100 billion in losses, or whatever the number may be, is a pittance compared to what the $1 trillion+ that the wars have cost us. No one said the government is good at fiscal management. Complain about the $18 trillion in the national debt. Complain about the significant problems with impending Medicare funding. Complain about the artificially low rates that may very well cause another financial crisis. But complaining about a $100 billion of losses from YEARS AGO when the world was on the precipice of a disastrous meltdown and was forced to implementing emergency measures does not seem all that worthwhile to complain about. As for being lied to by the Fed, or the government not being totally transparent is something that has gone on since probably caveman days. >>
The $100 BILL is a pittance. Heck, JPM added $3.8 TRILL in commodity derivatives last quarter....the supposed FMV of those derivs in approx $100 BILL. The real economic cost of the 2008 crisis was estimated at $12-$22 TRILL....that's not a pittance. And that was the opening act of a crisis that is still brewing. What will round 2 cost us? The wars have generated hundreds of $BILL in profits to those who benefit by waging war. They really don't care about the $TRILL the US Taxpayers have spent. Sure, the govt is technically broke by all those entitlements. That's one of the reasons the banks have resorted to $1.1 QUAD in otc derivatives. They will still make money on paper as long as the debt-money system avoids collapse. What I'm concerned about are the $900 TRILL in interest rate derivatives that were not stressed at all in 2008. No TARP program can fix a crisis in interest rates when/if the bond market goes "pop." Medicare, SS, and other entitlements that give the govt control over the people will muddle on through for years to come.
My reason for bringing this old stuff back up was the same old erroneous argument that the "banks paid all their loans back with interest.....the people made money." That's about the most ludicrous summary of the financial crisis one could possibly come up with. Did you even read the Taibbi article above on the fallout of TARP & Co. There are plenty of facts and truths in that reporting.