Perishabull Posted November 11, 2009 Report Share Posted November 11, 2009 you're assuming that 'price' will be dictated by credit too much; should you not also ask at what price do holders of physical stock what to sell at? think India, China, S.E. Asia As far as I'm aware everyone views the price of silver being the one that is generated daily in the Comex marketplace. The Comex marketplace allows me as a buyer to control many times the amount of silver I could otherwise afford by extending credit to me. If they reduced my credit (by increasing margin requirements) I would be forced to either cut my position accordingly or put up more capital in order to continue to fund my position. Now, lets say the margin requirements are set to double in December. The question you then have to ask yourself is who has the most capital behind them that means they can continue to fund their positions? Is it the large traders and small speculators or the commercials? I don't know the answer to that question but if I had to choose I would pick the commercials. If I had my net worth in precious metals at the moment I would not be feeling secure based on this potential problem. This could be a black swan for precious metals Link to comment Share on other sites More sharing options...
HPCsoYESTERDAY Posted November 11, 2009 Report Share Posted November 11, 2009 As far as I'm aware everyone views the price of silver being the one that is generated daily in the Comex marketplace. The Comex marketplace allows me as a buyer to control many times the amount of silver I could otherwise afford by extending credit to me. If they reduced their credit (by increasing margin requirements) I would be forced to either cut my position accordingly or put up more capital in order to continue to fund my position. Now, lets say the margin requirements are set to double in December. The question you then have to ask yourself is who has the most capital behind them that means they can continue to fund their positions? Is it the large traders and small speculators or the commercials? I don't know the answer to that question but if I had to choose I would pick the commercials. If I had my net worth in precious metals at the moment I would not be feeling secure based on this potential problem. Due you think that many Indian agricultural families look up the price on the comex when they trade in physical silver? (and not paper) Link to comment Share on other sites More sharing options...
Perishabull Posted November 11, 2009 Report Share Posted November 11, 2009 Due you think that many Indian agricultural families look up the price on the comex when they trade in physical silver? (and not paper) Is that who you are planning on selling your silver to? Or are you planning on selling it to someone in the western world? AFAIK the western world bases the price of silver on the Comex price. Link to comment Share on other sites More sharing options...
HPCsoYESTERDAY Posted November 11, 2009 Report Share Posted November 11, 2009 this kwn interview with Rick Rule may be of interest to some http://www.kingworldnews.com/kingworldnews..._Rick_Rule.html He mentions the widespread use of silver in India and how 'we' with a Western-Centric view need to see how other cultures use silver Link to comment Share on other sites More sharing options...
Pixel8r Posted November 11, 2009 Report Share Posted November 11, 2009 Is it the large traders and small speculators or the commercials? I don't know the answer to that question but if I had to choose I would pick the commercials. If I had my net worth in precious metals at the moment I would not be feeling secure based on this potential problem. It would probably reduce all sides equally, the commercial would have to reduce by the largest amount as they have the largest position. The CFTC are talking about imposing position limits in december anyway, not margin requirements. Position limits would reduce the commercials ability to control the price. BTW I haven't meet anyone yet who has their net worth in precious metals, I agree that would be taking a very large risk. Saying that I do know plenty that have their net worth in a fiat currency, which is also a great risk IMO. Link to comment Share on other sites More sharing options...
HPCsoYESTERDAY Posted November 11, 2009 Report Share Posted November 11, 2009 this kwn interview with Rick Rule may be of interest to some http://www.kingworldnews.com/kingworldnews..._Rick_Rule.html He mentions the widespread use of silver in India and how 'we' with a Western-Centric view need to see how other cultures use silver he also mentions about the difficulty in understanding price with unknown supply/demand issues Link to comment Share on other sites More sharing options...
Perishabull Posted November 11, 2009 Report Share Posted November 11, 2009 It would probably reduce all sides equally, the commercial would have to reduce by the largest amount as they have the largest position. The CFTC are talking about imposing position limits in december anyway, not margin requirements. Position limits would reduce the commercials ability to control the price. BTW I haven't meet anyone yet who has their net worth in precious metals, I agree that would be taking a very large risk. Saying that I do know plenty that have their net worth in a fiat currency, which is also a great risk IMO. Fair enough but what I am saying is that if margin requirements are increased sufficiently (to limit speculation) then it is the large traders and small speculators that will struggle to fund positions, not the commercials. It's difficult to see why the CFTC would impose position limits that would favour the large traders and small speculators when that would be fiscally detrimental to the US (Driving foreign capital away from treasuries and into PMs) It would be a massive own goal Link to comment Share on other sites More sharing options...
Happy Nihilist Posted November 12, 2009 Report Share Posted November 12, 2009 Analyst Yamada Says Silver May Be Poised to `Break Out' LINK Link to comment Share on other sites More sharing options...
Jake Posted November 12, 2009 Report Share Posted November 12, 2009 As far as i know platinum was at almost 1500 usd per onze today. I would guess platinum keeps its price today because it is a way of preserving wealth and it is an industrial metal The first point i made earlier is to ask why should silver have some particular mystique that is more special than other industrial metals? Presumably the availability of silver is such that it can be priced around 100 times lower than platinum? Gold is not the king of the metals in our current industrial era. The second point i made was that gold will be king if industrialisation collapses and we return to widespread war and chaos As an industrial metal largely, Platinum will be hit hard IMO. It is already well above its inflation adjusted highs and silver and gold are nowhere near theirs. As far as catalytic converters are concerned silver will do the job just as well, should it be relied upon. Industrialisation will collapse IMO, in fact it is collapsing/has been collapsing for a few years now. Gold will always, in our lifetimes at least, be king of metals. It is simply 'like no other'. Think about history and trying to usurp a few thousand years of tradition for a second. Platinum is...well simply platinum. No double eagles/gothic crowns there. IMO Platinum has had it in the next commodity downturn. Just look at last time. Price was rewound 5 years in a couple of months (and presented a juicy buying opportunity for me). I sincerely we do not return to war and chaos. But that is where we are leaning in the future. In fact it could be sooner than we all think. Iraq and Afghanistan (our boys home draped in flags and minutes silences). An unstable development in Iran. Fireworks in Pakistan. Nervous India. Loose canon Russia. And Israel looking down the barrel of it all. Ummm. Not a pretty picture. Throw in oil and declining (if true) stock piles and a dependency cultured West and the future looks far from rosy to me. Talking of roses...that English Rose has no thorns? Surely an error of design? Nice coin though. Does anyone have one yet to report back on? Peace to all. No offence AK, I just think you are wrong on G and S. Link to comment Share on other sites More sharing options...
aliveandkicking Posted November 12, 2009 Report Share Posted November 12, 2009 As an industrial metal largely, Platinum will be hit hard IMO. It is already well above its inflation adjusted highs and silver and gold are nowhere near theirs. As far as catalytic converters are concerned silver will do the job just as well, should it be relied upon. Industrialisation will collapse IMO, in fact it is collapsing/has been collapsing for a few years now. Gold will always, in our lifetimes at least, be king of metals. It is simply 'like no other'. Think about history and trying to usurp a few thousand years of tradition for a second. Platinum is...well simply platinum. No double eagles/gothic crowns there. IMO Platinum has had it in the next commodity downturn. Just look at last time. Price was rewound 5 years in a couple of months (and presented a juicy buying opportunity for me). I sincerely we do not return to war and chaos. But that is where we are leaning in the future. In fact it could be sooner than we all think. Iraq and Afghanistan (our boys home draped in flags and minutes silences). An unstable development in Iran. Fireworks in Pakistan. Nervous India. Loose canon Russia. And Israel looking down the barrel of it all. Ummm. Not a pretty picture. Throw in oil and declining (if true) stock piles and a dependency cultured West and the future looks far from rosy to me. Talking of roses...that English Rose has no thorns? Surely an error of design? Nice coin though. Does anyone have one yet to report back on? Peace to all. No offence AK, I just think you are wrong on G and S. Your response to me seems to have been generated by your strong beliefs about world economical collapse. Such a collapse will amost certainly lead to war and chaos. The world is not so different to when i was in my twenties back in the 1970's. At the time the world seemed a very scary place but my boss pointed out to me that it was no different to any other time he could remember. Because most people including yourself do not want war and chaos then most people tend to work towards economical solutions that enable a reasonable peace to be maintained. China and America are for example long term allies where America support china in ww2 with lend lease in the same way it supported the UK with lend lease. The main pacific so called allied powers of the day were the ABCD powers versus the so called Axis powers. When Russia changed sides it too got lend lease assistance. Russians are surprisingly artistic and romantic if chaotic and have reasons to distrust the west as does iran but Russia today is embracing western methodology because they want what the west has got or at least less of the unpleasant parts of the chaotic parts they presently live with. For example they need to introduce rule of law rather than what they have at the moment which is something different related to respect of power - no matter how ugly it is. Hyperinflationism seems to be aligned with anarchism which is the belief all powers other than the individual is tyranny I am inclined to believe your attitude towards me was to be tyranical in the hope that you and the others could achieve your objectives for world distruction so that your belief system can be satisfied that only the individual is important Most people are operating in a group world type environment of cooperation or working towards that as on objective Link to comment Share on other sites More sharing options...
Jake Posted November 12, 2009 Report Share Posted November 12, 2009 I am inclined to believe your attitude towards me was to be tyranical in the hope that you and the others could achieve your objectives for world distruction so that your belief system can be satisfied that only the individual is important Most people are operating in a group world type environment of cooperation or working towards that as on objective You what? Link to comment Share on other sites More sharing options...
G0ldfinger Posted November 14, 2009 Report Share Posted November 14, 2009 My point was that the world is different and we do value things differently today than when there was a gold standard. ... For sure it is valueable. But it still has to compete with other valueable materials and there seem far more of them today than in former times. So, your argument is that there were less metals known under the gold standard, and that is why gold today has less value? Are you certain that your thinking has a sound basis? Also, could you please explain in what way 'we' value things differently than 38 years ago? Link to comment Share on other sites More sharing options...
G0ldfinger Posted November 14, 2009 Report Share Posted November 14, 2009 P.s. This is not my work, but done by a colleague. Much nicer than some NHS crowns that I have seen. Link to comment Share on other sites More sharing options...
G0ldfinger Posted November 14, 2009 Report Share Posted November 14, 2009 Gold is not the king of the metals in our current industrial era. The second point i made was that gold will be king if industrialisation collapses and we return to widespread war and chaos Those who think that they are 'anti-gold bugs' and 'anti-nutters' are just nuts to assume that only war or chaos can lead to more adequate gold prices. Link to comment Share on other sites More sharing options...
G0ldfinger Posted November 14, 2009 Report Share Posted November 14, 2009 did you short silver back in mid-june when the price was around $13? He got a kicking, but is obviously still alive. Link to comment Share on other sites More sharing options...
G0ldfinger Posted November 14, 2009 Report Share Posted November 14, 2009 No. Still waiting for that 9 to buy That's just nuts. At $90/oz you possibly really shouldn't buy silver anymore. Better by now at a cheap $17. Or did you even mean you wanted to wait for $900? I don't think it is impossible, but we'd be very hyper then. Anyway, don't wait for a 9, not even if it is just in 19. Better buy yesterday. Link to comment Share on other sites More sharing options...
G0ldfinger Posted November 14, 2009 Report Share Posted November 14, 2009 If margin requirements are increased (ie the credit available is reduced) what mechanism would cause the price to increase? The answer is that the reason for this could be the reason for which margin is increased. Those who reduce risk my reducing marging for the loans the make would possibly also seek safety in gold. Link to comment Share on other sites More sharing options...
aliveandkicking Posted November 14, 2009 Report Share Posted November 14, 2009 So, your argument is that there were less metals known under the gold standard, and that is why gold today has less value? Are you certain that your thinking has a sound basis? Also, could you please explain in what way 'we' value things differently than 38 years ago? It seems the modus operandi of the moderators on this board that when a person does not agree with the moderators investment decisions it is assumed the person cannot think or does not think or cannot think soundly Those who think that they are 'anti-gold bugs' and 'anti-nutters' are just nuts to assume that only war or chaos can lead to more adequate gold prices. I imagine you know i was not saying that. But if it makes you feel better than you are welcome to believe i am nuts. I try to be helpful. But if you are interested in why i think what i think then I refer you to Jim Rogers comment that the supply demand dynamics of gold are different to other commodities that he thinks are likely to give better returns but for sure the man must be holding gold also. Marc Faber made the comment about a year ago that his very wealthy clients dont hold more than about 5% of their net worth in gold. So the question then is what else is seen to be a good investment? I think you are able to understand why platinum is more highly priced than gold. Platinum was i think up over 40 yesterday. I think you are yourself holding platinum? But if industrialisation collapses will people value platinum? It is for these reasons that we do tend to value things differently today. Man cannot live comfortably with gold in the safe, he has to buy things with it. Gold will likely peak when people buy things with their profits. But what about platinum? What about uranium if peak oil is a reality that will influence our lives in the near future? My point about other metals such as platinum is related to the way such metals are used to create the modern life we are living which is more complex than the simpler times of yesteryear. Such days could however return if we get economic collapse back to simpler times. I am not wanting to really consider that kind of thing at my age with a newborn baby and so forth. Others can worry about it they want. On the topic of margin i think you are mixing things up? A broker can offer margin because you place a deposit with him that covers his exposure and punters tend to place bets that cancel to reduce his exposure. that kind of margin is different to the way a bank levers its profits by borrowing short and lending long so that with 4 dollars of own money say, it borrows 96 and lends 96 to profit on 96 of interest received that it sets, while paying 96 of interest out that it sets, so that it has margin on 96 dollars. In times of unpredictability the broker can increase the margin requirements so customer exposures are reduced so that his own exposures are reduced. i would say the authorities will know when it suits them to make margin changes that will hurt the side they want to hurt. For example if they tighten bank lending regulations on amount of leverage then that will be deflationary and favour a fall in the gold price so a margin change after that event might force people running losses to take the losses via margin calls rather than trade out. Who knows if they really want to hurt people to their advantage maybe we will see a 9 in the price of silver. Not a risk i am prepared to personally take as buyer now. On the other hand if we see 9 it might be safe to buy. But one way or another i am sure you know about everything i have said. each of us looks at the same thing and connects the dots as we think is best for us. Link to comment Share on other sites More sharing options...
Pixel8r Posted November 14, 2009 Report Share Posted November 14, 2009 Tightness in the physical gold market is now making it's way to the silver market as well. I expect silver to be catching up with gold very soon. Ted Butler on King World News talks about the situation building. http://kingworldnews.com/kingworldnews/Bro...als_Market.html Got Silver? Link to comment Share on other sites More sharing options...
G0ldfinger Posted November 14, 2009 Report Share Posted November 14, 2009 http://gold.approximity.com/gold-silver_watch.html Link to comment Share on other sites More sharing options...
InternationalRockSuperstar Posted November 14, 2009 Report Share Posted November 14, 2009 ... Hyperinflation... seems to be aligned with anarchism... hyper-inflation is a symptom of state failure. Link to comment Share on other sites More sharing options...
Pixel8r Posted November 16, 2009 Report Share Posted November 16, 2009 Silver appears to be breaking the pattern of the last couple of weeks today, hopefully this is the end of it. Gold + 0.83% Silver +2.30% G:S Ratio = 63.17 Link to comment Share on other sites More sharing options...
dietcolaaddict Posted November 16, 2009 Report Share Posted November 16, 2009 Silver appears to be breaking the pattern of the last couple of weeks today, hopefully this is the end of it. Gold + 0.83% Silver +2.30% G:S Ratio = 63.17 You may be right Pixel8r, the big test comes at $18 though - we will see then if silver follows gold in an upwards direction Link to comment Share on other sites More sharing options...
FWIW Posted November 16, 2009 Report Share Posted November 16, 2009 You may be right Pixel8r, the big test comes at $18 though - we will see then if silver follows gold in an upwards direction I am looking for a close of 18.05 for silver, and then things will get exciting. Link to comment Share on other sites More sharing options...
FWIW Posted November 16, 2009 Report Share Posted November 16, 2009 Silver appears to be breaking the pattern of the last couple of weeks today, hopefully this is the end of it. Gold + 0.83% Silver +2.30% G:S Ratio = 63.17 You may like this Sir: http://www.citywire.co.uk/personal/-/news/...p;ViewFull=True Quote On the whole the price of gold and silver tend to move in the same direction. If gold is up then silver is up and the same for when one or the other is down. But, rather like the FTSE and the Dow Jones, which often move in tandem, the ratio between the two can change from one extreme to the other. It is these extremes that allow investors to make the call that one asset is overpriced and the other is underpriced. If an investor holds the overpriced asset then they will look to sell it and buy the undervalued asset. The gold/silver ratio is used to identify possible extreme moves, which maybe a good time to sell holdings in one and use the proceeds to switch into the other. It’s easy to calculate by simply dividing the price of gold by the price of silver. At the time of writing the ratio stands at 64.12 and has bounced off a one year low of 58.41 recorded in the middle of September. The extremes in the ratio over the last thirty-five years have been 14.9 in 1980 and 99.8 in 1991. Since 1991, there has been a low of around 40 (1998), a run up to around 80 (2003), a dip back down to 43 (2006) and only last year the ratio hit a peak of around 84 before falling back to its current level. So, it looks like there’s a bit of a trend developing and from where we currently stand is the trend set to continue to test the low forties again? This would entail silver strengthening more than gold, but that goes against what’s been happening over the month as we’ve seen gold race ahead, bursting through to new record highs whilst silver has been slightly left dusting itself off. The arguments for gold to continue tracking higher at a greater pace than silver are compelling. Production in gold has been falling since 2000 and Central Banks have become net buyers of gold. For example, the Reserve Bank of India just recently bought half of the gold sold by the International Monetary Fund and the Central Bank of China, who hold vast reserves in US Treasuries, are purchasing gold to diversify their assets and not be wholly reliant on their US Treasury reserves which are depreciating by the day as the US dollar falls. Link to comment Share on other sites More sharing options...
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