Just why can't silver hold a gain?
291fifth
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291fifth
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Up to now we have been discussing gold, the situation with silver is far more serious. First is the fact that silver has been manipulated for a much longer time than old. Second silver was removed as a reserve, and government stocks have been almost totally depleted. Third silver has also succumbed to leasing, in the same way as gold. But worst of all is the paper short positions on the COMEX markets. Silver at this time in the Wall Street Journal shows future option market of about 800 million ounces. For over 10 years open positions for silver have exceeded total world annual mine production and including total world inventory. To my knowledge there is no parallel of such an action by any commodity in the recorded history of commodities markets. To re-cap there is now more silver speculation than the combined inventories and mainlining annual production. There is only one comment I can make on that, ridiculous!
http://www.kriegbooks.com/money_fraud.html
link
Now if Silver Jewelry ever caught on big - doubtful, who likes the black tarnish- maybe there would be stability.
What is Silver used for anyway?
I'm pretty sure that silver plays a medical roll as well, but other than those three. . .I don't know.
166 BHDs & 154 Die Varieties & Die States...
Bust Half Nut Club #180
Festivus Yes! Bagels No!
Even greater volatility may be in the works but it will occur at higher levels. Ultimately reality
will win. Silver prices will again at some point oscillate between undervalued and overvalued.
It seems very improbable that this is the case at the current time.
Lower highs and lower lows. Well, now, that can't continue forever....
I expect a decisive movement within the next month. The *hopeful* are buying today.
Furthermore, the Chinese have become huge producers of Silver. Their labor pool is inexpensive, and they probably don't worry too much about OSHA or pollution. This has a significant impact, on moderating Silver prices.
<< <i>Ever since digital photography stated pushing out the old film cameras I've thought of Silver as just another underdemanded metal. I believe the movements in Silver are purely speculative in nature and therefore there is no stability.
Now if Silver Jewelry ever caught on big - doubtful, who likes the black tarnish- maybe there would be stability.
What is Silver used for anyway? >>
<< <i>Yeah, it's amazing. Silver supposedly is all gone, above ground reserves all mined and sold...a crazy situation of more being sold than exists, secret banks hoarding silver in south america, big chance to make a lot of money...if you listen to the hype. There are so many people out there holding $8 silver that are just begging for some of that to be true. If you go to kitco, you can buy all the 1000 oz lots of silver you want at $7.14 an oz, pretty darn rare indeed. Silver is so hyped, so manipulated, and so available that it is good sport to watch every body yell when it goes up 10 cents and panic when it drops the same amount. >>
Let's say you own a coin dealership. You purchase five 1893-S PCGS XF45 Morgan dollars. You sell fifty 1893-S XF45 Morgan dollars on eBay--forty-five more than you actually own. What's going to happen when the fifty buyers come knocking on your door, demanding delivery of their purchase?
Let's say you own a major bank. You purchase 100,000 ounces of silver. You sell 1,000,000 ounces of silver, total, to ten customers (each customer purchases 100,000 ounces of silver). What's going to happen when those ten buyers come knocking on your door, demanding delivery of your purchase? SIMPLE, you, say. Just buy 900,000 ounces on COMEX, then request a delivery date. Only problem is the person you bought that silver from actually only owns 900,000 ounces of silver, but has sold 9,000,000 ounces to various customers. He cannot fill your order and regrets to inform you that he is declaring bankruptcy (which means you will ultimately recover about 10% of your money, less attorney's fees, since his assets--1,000,000 ounces of silver--can only cover 10% of his obligations). Now that you've lost the purchase price of the 900,000 ounces of silver, and still don't have enough silver to cover YOUR OWN obligations. What do you do?
One of the greatest financial crimes of our time is that the federal government has allowed the COMEX Ponzi scheme to go unchecked.
Tbig
old silver
new silver
There's a new Silver in town. The old silver has fallen out of favor and will never come back, although many hope that it will. Some go as far as trying to spread the gospel of old silver, saying it was once great and there's no reason why it can't be great again.
But new silver is younger, trimmer, full of possibilities, and eager to do some important things for those who want to dance with the new generation.
It seems to cost more to party with the new Silver, but in the end old silver is seen as just a waste of time at any bargain price. New Silver weighs far less per dollar unit than old silver - think of the storage advantages. New Silver is on the new wave of emerging technologies - clean energy - medical research & perhaps more. It keeps a much cleaner appearance - never needing a bath in harsh cleaners like old silver. Best of all the booming economy in China has welcomed new Silver with open arms.
New Silver sound good to you yet? Ready to forget the old sleepy head silver?
Now if we can just come up with a better new name than "New Silver". Calling something new silver just sounds like old silver with a bunch of hype attached to it.
HEY - Let's call it
PLATINUM
<< <i>Where would you pick up 100,000 ozs of silver?? you would need a forklift and a huge safe storage area that is secure. I would bet most folks buy the paper on it and leave it stored at whatever facility it is housed in. This may be why it is oversold. >>
Bingo! I'm sure most people here are familiar with the concept of how banks first began. People would deposit their gold at a goldsmith's shop, rather than carrying it with them everywhere they went. You deposit an ounce of gold with a reputable, secure goldsmith, and you get a receipt for one ounce of gold. Rather than going back to the goldsmith every time a person wanted to complete a transaction, the receipts were exchanged for goods and services. Want to buy a new suit? Just give me a receipt for an ounce of gold. If I ever need the gold I'll go get it from the goldsmith, or else I'll just sell exchange the receipt for other goods.
Eventually goldsmiths got smart and realized that once gold was deposited, receipts were exchanged freely and frequently, but very few people ever cashed in the receipt for the actual gold. The goldsmith's reputation ensured that the gold would be there if they ever wanted it, and paper notes were so much more convenient to carry around, so why not just exchange the receipts? Goldsmiths started issuing receipts for gold they did NOT hold, so that one goldsmith might have notes for 1000 ounces of gold circulating, when he only has 200 ounces available. But that's fine, since everyone just assumes that if they did need the gold, it would be there. I mean, the goldsmith is a trustworthy fellow, right?
Same thing with silver today. You want to invest in silver? Well naturally you want to pay close to spot price, right? Why worry about those pesky (and pricey) shipping fees? Why spend all that money buying a safe to house the silver? Just leave it with us, and we promise we'll have it right here for you if you ever need to take physical delivery of it! Of course, nowhere does it say that the people you are buying from only actually own enough silver to cover 1-2% of their paper contracts.
It amuses me to no end that people buy paper silver as a hedge against government-issued paper FRNs.
EDITed to add: So being oversold by an obscene amount, if the fit ever hits the shan and people start demanding delivery, what do you think will happen to the price?
So, why can't silver hold a gain? Are the posters in this thread the only people "in" on the secret information?
People are so brainwashed that they believe no matter what, there's no way silver will ever be worth anything. After all, look at its historic track record! Don't look at how many ounces are sold short, don't look at how many of the short sellers could not cover their short if their life depended on it, don't look at the ratio of paper silver to actual silver metal, don't look at the silver production shortfall (more is consumed than produced annually). Don't look at any of the facts.
Use rhetoric to discredit silver, not facts! Say things like:
"What is Silver used for anyway?" --> Don't do any research to find out, just post and disappear.
"Yeah, it's amazing. Silver supposedly is all gone, above ground reserves all mined and sold...a crazy situation of more being sold than exists, secret banks hoarding silver in south america, big chance to make a lot of money...if you listen to the hype." --> Don't access public domain records and don't do any research to see if what pro-silver people say is true. Just laugh at them and disappear.
"Silver was priced at about $1.00 per ounce, up until the middle 1960's. Adjusted for inflation, and improvements in mining technology, the price seems reasonable at the $6-$8 level." --> This is the most effective approach of all: it's never been worth anything in the past, so despite the annual silver deficit and wild manipulation of the market, we'll just assume it'll never be worth anything.
"FullStrike hit the nail on the head, over 30% of silvers useage was used in film developing, and lets face it even Liberals have digital cameras now." --> Please cite the exact percentage reduction in silver usage since, say, 1995. Apparently other uses of silver have been found, since we STILL, even with digital photography, use more silver every year than we produce.
"Furthermore, the Chinese have become huge producers of Silver. " --> Should anecdotal evidence be construed as fact? Please post a reliable source to back this up.
P.S. Nothing personal against any of the quoted people. We just disagree on this one thing.
Not disappeared, I can bury you in research and I don't find holding $8 silver laughable. I'm not being disrespectful, just responding to your assertion.
Please read this thread: "GOLD AND SILVER WORLD NEWS, ECONOMIC PREDICTIONS", it is an active thread with some very astute posters and gives considerable time to silver and gold as you might gather from the thread title.
Then: Do a search on
"silver+economic+geology" (add maps to the search if you want to have a lot more fun) and you will see that silver is mined in a mixture of many other more valuable metals (gold included) and the silver is relatively useless because it is so cheap and that's why not much in mined/recovered in the U.S. you will also see that there are huge silver reserves below ground in a belt that runs from Alaska to Peru that is too expensive to mine because silver is too cheap and then there is northern europe (Russia) and the far east known reserves. Of course there are a number of other dimensions to the equation but this link is a good start on availability of silver and the economics of recovering it.
Try "china+silver+mining"and you will see that they have a very aggressive start-up mining program in China and an intense love for and a long historic relationship with silver in their society and they fully intend to produce some silver. Go ahead and read some of the articles because they are very interesting, particularly in light of the economic revolution that is occuring in China right now.
Try "kitco" (historic charts 1985 to present) and you will see that silver has been mostly flat for the last 15 years though it has been up to almost $11 and down to about $3.75 it started '85 at about $6.50 and is now worth almost a dollar more. So here's a 20 year investment that returned less than 14%...If an investment should double by the rule of 8's and since we have some inflation and some loss of international value in the US Dollar, I'd say you probably didn't make much money with silver over the last 20 years unless you were a real player with a finger on the daily pulse and caught the low and hit the peak. Some people play silver and I'm sure it's a fun game, especially if it's not your money.
There is plenty of information on silver and there are a number of other searches I can recommend. With the modern net search engines, there is a phenomenal amount of information on silver so no one has to rely on newsletters and hype anymore, they can check things out themselves. Mamma.com is a great search engine.
I just want to caution people to do their own research and make their own educated prognostications, I'm not saying silver is worthless as an investment. It is kind of like a quote from the grocery business that I like..."You don't make your money when you sell your product, you make your money when your buy your product."
There was some hesitation in responding to your assertions but it seemed sensible to at least show you my side of the story. Enjoy the search topics. No disrespect intended.
Go ahead and try to buy 1,000....1,000 oz lots (million ounces). See how far you get. The supply is not there. As was stated already, the silver contracts are so out of whack on the comex that it would take years to start making any real dent in the supply. New mines take 3-5 yrs or more to get off the ground. Little infrastructure work was done in the mining industry in the 1990's and many mines were closed for good. It takes years to recover that lost capacity.
First off, all of us baby boomers remember the Hunt Brothers cornering of the market in 79-80, which drove the price to $50, In many minds, thats where silver is headed. In reality, Silver was priced at about $1.00 per ounce, up until the middle 1960's. Adjusted for inflation, and improvements in mining technology, the price seems reasonable at the $6-$8 level.
With the same logic gold started off at about $40/oz in the early 1970's. It was driven to $875/oz by various mechanisms in the late 1970's. Had gold been allowed to float to it's true value in the 40's, 50's and 60's (post Bretton Woods), gold would have sought a much higher starting price. It was artificially fixed. It's "honest" price may have been something closer to $100-200 to account for any inflation that occurred from the 1930's to 1971 when the gold standard was removed. The French and others were taking our gold at the depressed price through the late 1960's and we finally got sick of it.
Why couldn't they be satisfied with FRN's that cost us nothing to print?
Furthermore, the Chinese have become huge producers of Silver. Their labor pool is inexpensive, and they probably don't worry too much about OSHA or pollution. This has a significant impact, on moderating Silver prices.
There are only about a dozen major producers of silver out there at the moment. And some of the firms in the top 13 produce silver as a by product. There are very few substantial "silver-only" mines. If the so-called great deposits cost too much to mine, then what price silver will it take to make it feasible? $25/oz. $50/oz? And with a 5 year mine startup time, the mine will never come to fruition before the price of silver goes exponential and peaks. More than likely it would never come on line. Didn't happen in 1980 why now? All the supposed silver underground won't be able to move the market for 5 years or more....so what good is it? There are also articles about huge deposits of oil in Mexico, and as many or more reports stating that the wells are on the decline. Aren't potential silver supplies a non-factor for at least several years? A market cycle can occur in the time frame. World gold supplies currently increase about 2.5% per year. It would seem very odd to me that silver could be increased at 10-50% per year at the "flip of a switch." Currently silver supplies not increasing, but decreasing.
But that's fine, since everyone just assumes that if they did need the gold, it would be there. I mean, the goldsmith is a trustworthy fellow, right?
Sure, and bankers today are of the same ilk. They take your $1000 deposit and leave $10 of it on the books. The other $990 is sent out for "investment" (mortgages, hedges, loans, etc.) I think I'd leave my money with the goldsmith (lol).
So, why can't silver hold a gain? Are the posters in this thread the only people "in" on the secret information?
Paper contract manipulation on the comex and a very accomodative
FED for the moment. PM's won't appreciably change with out some other new impetus. As long as housing and stocks continue to let it ride, price of silver can be easily manipulated by the traders.
Not disappeared, I can bury you in research and I don't find holding $8 silver laughable. I'm not being disrespectful, just responding to your assertion.
The economic conditions today are probably far worse than in 1980. Less overall available silver too. The Hunts did corner the silver market and were close to crashing banks and major trading houses. The govt didn't like that (it was perfectly legal but it was the comex that was crooked...not the Hunts). The same situation exists today, only probably accentuated. No great silver supplies showed up in 1979-1981. The game was over in less than 2 years.
roadrunner
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>I am reading silver is finding new uses as an anti-bacterial agent in treating wounds in the medical field. There could be some real promise there. In health food stores, collodial silver is being recommended for health benefits. >>
For gods sake, do NOT take collodial silver. It can cause a HORRIBLE disease called AGRYRIA. google that word. freakin scary. collodial silver has never been proven to be a better anti bacterial than normal antibiotics.