romans holiday

Whether or not silver does sell off doesn't really affect me that much as I swapped most my silver for mostly gold... so I won't really rue the day. The only difference in my strategy to others is I perceive silver to be riskier than gold. I'm actually quite bullish silver, but more bullish gold. I think there may be some confusion here. I'm NOT looking to re-establish a core position in silver [my core bullion is in gold]. Because I think the dollar could do the unthinkable, I will look to trade silver against dollar in order to accumulate dollars. This is a hedge and a quite unorthodox approach, and reflects my views on deflation. Gold 50% Silver 10% Dollars 40% Just PM holding, or your liquid holding [no cash?]?

? I sold my silver only six months ago. If you are going to bother with my views about silver, try also to bother to get the facts right. You obviously have a difficulty with understanding the various motives someone might have for holding gold, holding silver, and holding US dollars. And again, the difference between a core position which entails the least risk, and a peripheral/ speculative/ trading position which entails more. Not to mention hedging. My decision on silver made perfect sense, given the logic of my position, and continues to do so. How can I say it was "wrong". Rather, it just doesn't make sense to you because you buy into a logic which consists of the single idea of hyper-inflation. It is quite irrelevant in an over-all scheme of things [strategy... investment is like war..didn't you know?] if my momentary paper prices would've been slightly higher if I'd stayed in silver. What you miss is the factor of risk which I see hanging over the market. Silver is still looking vulnerable against deleveraging and a dollar spike. You obviously disagree with that, but that's besides the point here. The point is my position on silver is completely logical given the views I have. Given my view of the fundamentals there was [and still is] every reason for me to reduce my exposure to silver..... that logic still holds now as it did then. As you say time will tell. Taking into account the volatility of silver on that chart [where silver regularly dips back to gold] and the likelihood of another dip after this recent spike, I think the best you can say is that gold and silver have performed equally well over that time period. It may be the case that silver will continue to equally perform with gold [gold is dragging it up imo], but then there is no disadvantage involved with swapping silver for gold. No, I haven't realised the mistake..... I continue to have much more peace of mind bunkered down in gold as a double dip continues to threaten. I will only buy silver at 16 odd if we see a market crash... it may even go lower. The funds I'll use for this will include dollar funds I raised when I sold silver at 17.90. Is it so difficult to get 17.90 into your head? I've mentioned it a few times now. My core position in silver was mostly swapped for gold when the ratio was in the high 60s. This was NOT a trade but a retreat to a less risky core position [the dollar price at this time was 16 but irrelevant because I did not sell for dollars]. This involved a change of view where I didn't think silver would be a "leverage" on gold [a view many commentators are starting to express... the advice being offered now is buy gold first then silver]. I know think gold will drag silver up... though silver would be a lot more vulnerable to the downside. I also think the ratio may continue up for a while. You seem to pick your moments to debate silver... when silver spikes. The rest of the time, when silver is flat, you go quiet.

Ignorance takes many different forms. One such form is the attempt through either philosophy or science to reduce human nature to something more basic... something less human...more explanatory and predictable. Arrogance is often combined with ignorance here. The method always involves the idea of substance [the underlying reality]. Why this should be so probably reflects the way language works; there is always a subject to which predicates belong.... this is then projected into metaphyics... or physics [the most modern philosophy recognizes this as a "language game"]. So with the idea of substance we had monists, pantheists, dualists, physicalists, nihilists..... The point is that it makes perfect sense to just say a person is irreducibly a person [or anything is just what it is]... because any attempt to find the "reality" behind the appearances is in reality a fiction. A person remains "unknowable".. and not an object of knowledge... to be manipulated at will. As far back as Francis Bacon it had been suspected scientific knowledge was more about power [power can also be "subjective/ ideal" insofar as a form of "knowledge" dominates our imagination/ culture. Knowledge can create just as much awe in a population as a royal scepter ever could]. As for science, it is just about the mathematization of appearances... and then creating useful pragmatic "as if" working hypotheses that are also inherently fictional. This gains us an ambiguous power over the environment. Less ambiguous is the nature of the power when it pretends to "see through" ourselves. A good healthy skepticism may enable you to laugh at the pretensions of science, of whatever form, as an antidote to dogma. Freedom consists primarily in freedom of the mind.

I suggest from henceforth all posters should place in their signatures in percentage terms what investments/ currencies they hold. This would avoid a lot of confusion and misinterpretations. Such a simple break-down speaks volumes. Me: 50% gold 10% silver 40% dollars.

There are no certainties, but there are educated guesses. Prediction would be a better word to use than projection [which has a more negative connotation, where we project our desires/ wishes/ prejudices onto the world]. If one is going to be an investor, this presupposes that you can make rational predictions - from observance of trends or fundamental analysis - on how specific asset classes are likely to perform in the future. Predictions are often based on theory, which also provides a feed back loop; if the theory is wrong so too will the predictions be... hence the rational investor will adapt their theory/ predictions to the real world. Of course there is no certainty here, as there isn't with any prediction. The difference between the investor and the gambler is the use of reason and method.

Still a bit too early to say imo [look at the massive run up in May that went nowhere]. Silver has shown a tendency to spike then quickly lose its gains. If it can stay above 19 for a few weeks...... Silver has worked well for you thus far. I assume you also have a core holding in gold. I sold silver for gold at around the 60 ratio [that ended up being a good "trade" though it was more about reducing risk in my core holding]. A smaller tradable holding of silver was then sold for dollars at 17.90, which I'm still happy with given the context of that trade as posted above [2891]. As this year has progressed, silver has not really gone anywhere, yet neither has it tanked. Believe it or not I'm actually quite bullish on silver [you'd have to be if you were bullish on gold right?] but may appear overly bearish at times in order to make some obvious points; that I think silver is not quite gold [pretty good nevertheless], and is very volatile.... especially in this environment. I think it would take a good hit to gold to see silver come down to 16 odd now. This may take another round of deleveraging... not sure why Davies thinks silver would hold up... maybe he thinks gold will also hold up. And I think it may come down to how gold performs.... has it become monetized enough to remain free of deleveraging. If so, then silver should hold up well on the coat-tails of gold. I'm a bit wary of fundamental supply/ demand arguments as they can be trumped by the dynamic of deleveraging. Even so, if silver were to take a hit, it would no doubt bounce back again. Which is why I'm still interested in it. I'm not really quite sure where the fundamental disagreement is over silver. I mean, I think silver will perform well against most currencies and assets [even if it underperforms gold]. I think it's more a case of different ways to skin a cat.

Neither does the trend on the ratio look that great.

When I changed my mind on silver, and no longer saw it as simply a "leverage" on gold, I swapped an overweight core position in silver to gold. Involved here was a change of strategy and a reduction of perceived risk. The price at that time was $16, but this is irrelevant as I was buying gold with silver. I think the gold/ silverratio was somewhere in the low 60s. Once again, it was not about maximizing the trade on the ratio, but reducing risk by going to gold. A core position should be the least risky one. Another smaller silver position that I did hold onto, in order to trade on the "periphery", was sold at 17.90 six odd months ago, and this time for dollars. This trade aims at accumulating dollars [not silver] as a hedge against a very large core bullion holding in gold [over 50%]. Because of this, I will be more conservative in my trade... hence the trade out at 17.90. Silver has in the course of these past six months remained volatile to both the up and down side, and hasn't really gone anywhere. This latest move up in silver looks like just another momentary spike.... and I still half expect it to come down to 16 odd. That said, it could break either way, I'm not dogmatic about it and consider both currencies good to hold.... for the meantime. This trade is also a hedge against deleveraging and a double dip should we see it. If you are going to take issue with someone's investment/ trading decisions, I think you need to consider the context, rationale, and strategy within which those decisions were made... instead of just taking arbitrary numbers out of context.

That's right. Friedman, who's dominated for decades, assumed people would be rational. People would be rational and not irrationally labour under the old form of money illusion. And then this "rational expectation" was equated with inflation expectation. The trouble is it is only investor's that have been schooled in monetarism that have inflation expectation today. Monetarism and Money Illusion: http://www.greenenergyinvestors.com/index....st&p=176193 ? People are simply people, and not reducible to something else [everything is what it is and not another thing]. Reducing a person to something else is dehumanizing. Philosophy/ science is the attempt to find a truer reality behind appearances. The reality turned out that this was always more about power [an ambiguous power] over the environment and populations than it was about some noble quest for truth. As you said, what a web we weave.

The point is money illusion can cut both ways. Money illusion is the tendency to equate units with money/ purchasing power. In an inflationary period, the danger is to equate money with the numerator.... the individual units. In a deflationary period, the danger is to equate money with the denominator... the total amount of units [money supply figures]. This is the mistake inflationists are making today [due primarily to the ideological dominance of monetary theory, where "rational expectation" - which actually can be either inflation or deflation expectation - has been reduced to just inflation expectation]. They are looking at the increase in base money and then assuming this automatically depreciates the currency [against assets]. Not necessarily so. If you're interested in reading my reasons for this: http://www.greenenergyinvestors.com/index....st&p=176193 This has been discussed before. I don't think things are so black and white. http://www.greenenergyinvestors.com/index....st&p=180196 http://www.greenenergyinvestors.com/index....st&p=179966 I think the Dow will go to 5000 over the next few years, and property prices will continue to fall.

http://www.greenenergyinvestors.com/index....st&p=176763

If you're really interested, I've posted my views here, which are neither conventionally "inflationist" or "deflationist". It looks at the old idea of money illusion, which can make local CPI figures illusory... but hey, the inflationists always knew that. http://www.greenenergyinvestors.com/index....t=0&start=0 <a href="http://www.greenenergyinvestors.com/index....t=0&start=0" target="_blank">http://www.greenenergyinvestors.com/index....t=0&start=0 </a>

Nope, perfectly happy I swapped most my silver for gold. Gold's price has proved to be a lot "stickier" to the upside than silver. Don't see how you can argue with this if you looked at the charts The fun hasn't even started yet. The price of silver has shown to be a lot more vulnerable when markets start cratering. Once again look at the longer term charts. Try not to focus too much on momentary nominal figures, and arbitrary time frames, and look at the bigger picture instead [by the time you'd worked out your calculations and posted, the silver price was already back below $19 ]. By having a decent position in US dollars one can take advantage of deleveraging when it occurs. Because of a deflationary dynamic, the dollar will strengthen when markets tank. That will be the time to buy silver. In the short/ medium term, dollars are worth holding for trade.

Sure, could do. But this doesn't concern me much as my core bullion holding is in gold. Even if silver did spike to a new level, it would most probably stay volatile and dip back to where it currently spikes.

Consider that faith in computation is what lead to the financial mess we are in today. First we had the economists assuming people were rational calculators. Then we had the quants and mathematic experts claiming to be able to manage risk by reducing it to mathematic formulae. Finally, traditional regulatory concerns were swept aside and seen as quaint "fluffy thinking" which stood in the way of progress and prosperity. The primary error was not so much that the computations were wrong, but that people came to believe in the very idea that everything could be reduced to [and controlled by] computation. People are not computers. You have to ask yourself - is today's so-called rationality about truth/ reality or power.

Well, I predicted silver would underperform gold which it has. I also thought it would remain volatile and wouldn't really go anywhere to the upside for a while, and that the price is vulnerable to a the double dip, which is still threatening. This is all still relevant to silver, and looking at the chart $16 is very feasible on a sell-off According to some, silver was supposed to explode to the upside at any time over the last few years... but the reason it hasn't is due to market manipulation. It makes just as much sense by that logic to say that silver won't explode to the upside beause of market manipulation. Silver should do well in the end, even if it has to be dragged up by gold, which will do better. It would probably only get down to $16 if gold sold off a bit.

We'll see.... but if you extrapolate the current trend it only gets to 1300 odd by January. You would have to see some special fireworks to get to 1650.... but then there are better than even odds at the moment of double dip deleveraging... just to keep things interesting.

It looks less likely, but not impossible. More likely now, given the passage of time, is the 1000 handle. But I've always advocated buying into gold if one didn't already have a decent holding because there are no certainties. It is for those already hugely overweight in gold that it makes/ made sense to keep some powder dry..... for a double dip. Is it so difficult to keep this distinction in mind? [neither has gold gone parabolic towards the 1650 that Jim Sinclair and his accolades were certain of for January next year] Gold has done exactly as I though it would; steadily strengthen as a currency in a deflationary environment. Deleveraging is a risk... then as now, but that risk diminishes over time as gold is increasingly monetized. edit

I don't think it's outside the realms of possibility for silver to visit $16... at which point I'd be backing up the truck.

Gold may seem expensive, but it looks as good a time as any to average in. Makes a lot of sense when you consider that all you're doing is swapping a weakening currency for a strengthening one.

"Post-modern" irrationalism is just one book-end of modern rationalism. There is plenty of philosophy preceding/ overlapping modernity at the other end. To name a couple; Kant and Burke. Thinkers of this calibre went to great lengths [in very different ways] to keep a balance between the authority of analytical reason and that of other instincts by juxtaposing practical reason to pure reason. They also recognised a philosophic scepticism, which was unfortunately a little too subtle for the enlightened enthusiasm that followed. Perhaps we should start a philosophy thread. There is this one... buried in the fringe section. http://www.greenenergyinvestors.com/index....t=0&start=0 What most don't get today [especially modern economists], with their rationalist analysis of money, is that money is not about pure reason at all but rather about practical reason. Money performs a practical function, therefore should be looked at practically. Thus, concrete experience and behavior are more significant than the rationally perceived abstract "fundamentals".

Checkout goldprice.org http://goldprice.org/gold-silver-ratio.html Click on "Live Gold Price". You can then choose from "Instruments"... and overlay gold silver prices etc.

I think there is plenty of irrationalism [and unreason, which is maybe a less loaded word] to be found in western thought... just that the Anglo-Saxon stuff has been, unfortunately, so dominant. Here's my argument for personal free will: rationality presupposes it. I mean, it would be absurd otherwise to ask someone to judge whether something was true or false. Bringing this back to gold, the reason it is doing so well has to do with human instincts/ behavior that lie beyond pure rational analysis. So much for rationalism.

Yes, different strokes for different folks. I'm not a gold-bug hyper-inflationist, but a gold-bull deflationist. This puts quite a different perspective on currencies, and their relation to bullion.

This is just silly. Completely misses the points of context and strategy. Not to mention the cherry picking of price..... just yesterday silver was at 17.90. Here's a decent long term perspective. Silver was quick out of the blocks pre-2008 but since then hasn't really gone anywhere. Gold, on the other hand, has. I own some silver [and yes, they are even physical kilo bars!]. I just consider gold more core than silver in this environment, where the price of gold is a lot "stickier" and doesn't give up its gains as easily as silver. If we do see another crash in commodities, I'll be topping up on silver.... as I think gold will "pull her up". I don't think silver is a leverage on gold, though it should still perform relatively well. Gold/ silver ratio still not that great... in the mid-60s. Good time to swap a bit of that silver for gold.