SILVER

[dopamine]

Do you need someone to tell you what to do, or do you need to do fundamental research on your own?

 

My research (and I do a lot of it) makes it much easier for me to make decisions. For instance I think that all that retail price deflation talk is utter bu11cr@p, and that oil will soon reverse its trend because of supply problems. The PM market is manipulated unlike any other market in the world. And manipulation never works out for long. Why can't I find any silver coins below $17-$18?? It's a joke.

 

The 'new contrariness' seems to be related to an increased acceptance of arguments for impending deflation. My own position is that I feel confused about the implications of the interventions of CBs on systemic confidence in fiat. This is mainly because my previous view (that CB intervention of the kind we've seen is inflationary) has been shaken by the recent drop in PMs. I suspect quite a few people are in this position at the moment.

 

As for all the comments that we'll be OK in the long term with PMs - if deflation is on its way, it'll be around for longer than my investment time horizon, so I'll be down on all my PM investments at the time when I might want to swap some of them back into fiat (3-5 years probably).

 

 

[Bobsta]

Do you need someone to tell you what to do, or do you need to do fundamental research on your own?

That's a very valid point GF!

I try to do as much research as I can but often I find I can't see the wood for the trees. There's simply so much info out there, it's impossible for me to do my day job, have a home life and get round to reading and digesting everything that I need to try to work out what's going on right now.

I guess that's why I enjoy GEI (and previously enjoyed HPC) because effectively you become part of a whole team of researchers, all reporting back concentrated, condensed, relevant findings. That's also why I welcome the contrarian views on the various PM threads.

 

I fully appreciate that there's a core of posters who contribute far more to the community than I ever do - and I'm very thankful to them.

 

What I want to be sure of is that as a team we're all not blindly following the wrong path. As I think we all agree, double-checking our logic on a daily and weekly basis is important. The recent CWR podcasts resulted in Dominic questioning/alterning his views on inflation/deflation - and that's healthy. What I want to be sure is that I understand (or at least get some pointers on where to go read up myself) why views are changing, and indeed if they are changing.

 

The recent posts on this thread made me suddenly think "Hold on a sec, has there been a significant change in the community's view on Silver that I've missed?" and so I asked the question.

 

Just to clarify, I talk of "the community" but I appreciate we're not running some kinda kibbutz here - it just seemed the easiest way to phrase my point

 

My research (and I do a lot of it) makes it much easier for me to make decisions. For instance I think that all that retail price deflation talk is utter bu11cr@p, and that oil will soon reverse its trend because of supply problems. The PM market is manipulated unlike any other market in the world. And manipulation never works out for long. Why can't I find any silver coins below $17-$18?? It's a joke.

I appreciate that, and FWIW it's clear that you do shed-loads of research - and I think you always make your views clear GF.

 

I'm of a similar view and right now would say I'm more confident in Oil rising up from a low of ~$90 than I am of Silver. But since I have no Oil holdings (apart from half a tank of heating oil in my garden) that's not really helping me protect my wealth. I need to firm up my opinions on Silver. Fast. Friday shocked me.

 

I'll summarise:

- Appreciate all the research from everyone

- Try to do my own too

- Wondering if there's generally been a shift in expectations for Silver, these past weeks

 

EDITed to include:

As for all the comments that we'll be OK in the long term with PMs - if deflation is on its way, it'll be around for longer than my investment time horizon, so I'll be down on all my PM investments at the time when I might want to swap some of them back into fiat (3-5 years probably).

DITTO! I will be looking to potentially buy a house in 2.5-4yrs (depending on how this all pans out). I have personal circumstances that mean whether or not that's an optimal time to buy, it is something I may need to do. I appreciate HPs are falling and previously wasn't confident at leaving cash in index-linked savings accounts. But honestly, I'd argue that a significant concensus on GEI (and research linked to those views) seems to point to that now being a credible option. Does GBP have further (down) to go? Probably. So transfer it all to EUR and stick it in German gov't bonds (as per cgnao's advice)? ... Maybe, but what if EUR is the next currency to fall off the cliff?

 

Rock < > Hard-place

 

[wednesday2]

Below £10? I check Ebay from time to time and make a watchlist of silver/gold coins to see what they go for. The cheapest Britannia or Maple in my last list was this one for £15.79 (including postage):

http://cgi.ebay.co.uk/ws/eBayISAPI.dll?Vie...em=250288180983

 

If you click on sellers' feedback you can see what else they've sold lately and at what price. This seller sold another Maple for £18.98 (with postage) on Friday. I've not kept records but I think this is roughly what coins were going for when silver was closer to £9.50/ounce. Royal Mint hasn't changed its price on Britannias since at least February I think, and at £16.95 delivered I would think this should be a lid on the price, especially considering the increased risk at Ebay. It doesn't seem to work that way though. People either don't know about it, can't be bothered waiting or don't want the government to know what they're doing ;-)

 

A quote from the ebay auction page above: "Have you tried to get one of these from a dealer recently?? Sold out ??? Not a surprise!!!!!! 1 oz of .9999 solid silver. Every investor knows that in tough times Silver is the right choice to protect your wealth. $100 dollar silver is predicted."

So why sell then?

 

There seems to be a premium over in the UK. Silver Maples in the US are going for about $18 (£10.21) a piece. Interesting, because this is about what we paid end of July, right before this shortage thing began. While the paper market has been tanking, physical prices haven't changed much.

 

[azazel]

One ounce 999 silver coins for less than £10 including 17.5% VAT.

 

http://coininvestdirect.com/main.php?a=11&id=238

[nicejim]

There seems to be a premium over in the UK. Silver Maples in the US are going for about $18 (£10.21) a piece. Interesting, because this is about what we paid end of July, right before this shortage thing began. While the paper market has been tanking, physical prices haven't changed much.

Being ripped off in the UK is something we all get used to, and it's not just because of the VAT on silver. The price of physical remaining at close to peak levels is the same story both sides of the pond it seems.

[dopamine]

That's a very valid point GF!

I try

 

DITTO! I will be looking to potentially buy a house in 2.5-4yrs (depending on how this all pans out). I have personal circumstances that mean whether or not that's an optimal time to buy, it is something I may need to do. I appreciate HPs are falling and previously wasn't confident at leaving cash in index-linked savings accounts. But honestly, I'd argue that a significant concensus on GEI (and research linked to those views) seems to point to that now being a credible option. Does GBP have further (down) to go? Probably. So transfer it all to EUR and stick it in German gov't bonds (as per cgnao's advice)? ... Maybe, but what if EUR is the next currency to fall off the cliff?

 

Rock < > Hard-place

Bobsta are you my clone? I was like a nodding dog reading your post.

 

Rock and hard place, Scylla and Charybdis, it's a nightmare isn't it? My reticence has cost me dear over the last year - particularly re: moving some cash from GBP to other currencies- something that I had on my to do list for a long time, as well as buying into a managed currency fund, which I found difficult to access. The only action I did take - adding significantly to my existing PM investments after I STR - has cost me money. Right now I too have the same concerns about EUR, and as for trading into the dollar - I'm not sectionable enough to take that kind of risk. Like you I admire the complexity and depth of the research that GF and Dr B undertake but like you I don't have the time to digest or learn about the concepts underpinning it that would make me feel like I really understand what's going on.

 

I'm increasingly worrying that I'll just need to forget about appreciation of my PMs over the next few years and stay in GBP in high interest deposits - but that prospect doesn't help me sleep at night either. I suppose it's about tolerating anxiety, which I can cope with when I'm doing a foolish trade, but not with my life savings. It's all opened my eyes to the extent to which the system is stacked against the small individual investor. And don't talk aout silver

[Gatesy]

As for all the comments that we'll be OK in the long term with PMs - if deflation is on its way, it'll be around for longer than my investment time horizon, so I'll be down on all my PM investments at the time when I might want to swap some of them back into fiat (3-5 years probably).

 

That's a very good point. I also have seen a significant welling of opinion on here towards accepting deflation in the medium term, but their seems to be a lot of hope/expectation (form a holding PM perspective) that inflation will be back with a vengeance to wipe it out. That obviously wasn't Japan's experience but I'm sure someone can tell me why this is different this time (inflation in the dollar as global currency no doubt). I've also seen numerous statements that deflation is far harder to deal with than inflation and thus is likely to stick around when it arrives.

[Johan van der Smut]

Bobsta are you my clone? I was like a nodding dog reading your post.

 

I'm with Bobsta and dopamine. I feel like a gambler who's suddenly on a losing streak and all but ready to cut his losses so he can sit on the sidelines for a while - more fool me for believing what arguably was hype. My less charitable side entertains the notion that ramping has been replaced by backpedalling in the past couple of weeks. Although I'm relatively sanguine about losing money, I don't know if I'm coming or going as far as inflation/deflation goes, and neither, it seems, do the experts. It all reminds me of William Goldman's axiom in his book Adventures in the Screen Trade, re: predicting which feature films are going to be successful. "Nobody knows anything."

 

(But some people, I'll grant you, have better track records than others.)

[G0ldfinger]

... $100 dollar silver is predicted.[/b]"

So why sell then?

Pssssshhh!!! I NEED people to sell this stuff to me.

[Mr Pipples]

I'm with Bobsta and dopamine. I feel like a gambler who's suddenly on a losing streak and all but ready to cut his losses so he can sit on the sidelines for a while - more fool me for believing what arguably was hype. My less charitable side entertains the notion that ramping has been replaced by backpedalling in the past couple of weeks. Although I'm relatively sanguine about losing money, I don't know if I'm coming or going as far as inflation/deflation goes, and neither, it seems, do the experts. It all reminds me of William Goldman's axiom in his book Adventures in the Screen Trade, re: predicting which feature films are going to be successful. "Nobody knows anything."

 

(But some people, I'll grant you, have better track records than others.)

 

Yep, I'm nodding too... Particularly with regard to silver.

[nixy]

Yes. I will buy more. I could not buy this week for technical reasons, so it will be next week.

 

The price of silver was north of $40 in 1980. Silver is a depleting resource. And the Fed is printing $19bn a day.

 

It's a no-brainer.

 

My word, $19bn a day?! That does seem an awful lot. How long can they keep that up?

 

 

 

 

 

 

 

[Johan van der Smut]

I should add that I still find the supercycle theory compelling, and that I respect the Bubbs, Schiffs, Bonners, Puplavas and Sinclairs of this world much more than the property cheerleaders who've been proved so woefully wrong.

 

But what if they're mistaken now? The doubts are getting to me and making me wonder if I'm not cut out for this lark.

 

It's a while since I read it, but James Ferguson's advice in Moneyweek to take profits from commodities before they go into the doldrums for a couple of years seems more prescient than ever.

 

Ah well, you learn from your mistakes.

[Compounded]

I should add that I still find the supercycle theory compelling, and that I respect the Bubbs, Schiffs, Bonners, Puplavas and Sinclairs of this world much more than the property cheerleaders who've been proved so woefully wrong.

 

But what if they're mistaken now? The doubts are getting to me and making me wonder if I'm not cut out for this lark.

 

It's a while since I read it, but James Ferguson's advice in Moneyweek to take profits from commodities before they go into the doldrums for a couple of years seems more prescient than ever.

 

Ah well, you learn from your mistakes.

 

What will you put those profits in?

[Johan van der Smut]

What will you put those profits in?

 

They're not profits any more. I'm in negative profit.

 

I'd put the money in a bank and take a breather, probably. Be liquid while the markets crash and crash (perhaps - "pennies in the pound" and all that) or the inflation/deflation picture becomes a little clearer.

 

I'm largely in ETFs anyway, which everyone on here seems to have a downer on.

[notanewmember]

I m feelin OK in silver ETFS. If it goes down 50%, Ill have to write them off, average down and leave it in there for the next boom in 20 years time. Pfft!

[tl8177]

What will you put those profits in?

 

Well, very simply viewing all this, it does seem very suspect that the dolla is about to smash up through its long down trend resistance, gold is about to break down completely/collapse, silver is hemorrhaging, just as the mother of all bailouts is about to happen. Why did the dollars fortune really change last month, was it really because of some guy in a Chinese swimming pool? I mean, gold shot up with the news of bears failure. I don't see what good news make people buy dolla. why dollar not swiss franc? Sorry might be too simple for you guys here

 

 

Also, it was reported here:

http://www.bloomberg.com/apps/news?pid=206...fer=commodities

that the silver drop was its industrial component. do people here really think oil and other basics will fall more in price? there are too many dollars and not enough oil . 19 billion of them more tomorrow. All just seems such a setup?

All I can say is, in the supermarket, meat and vegetable and milk prices are rocketing, absolutely rocketing. I would be very pleased to see these prices fall no matter how that happens..

[G0ldfinger]

My word, $19bn a day?! That does seem an awful lot. How long can they keep that up?

As long as they have electricity for their computers.

[Johan van der Smut]

Well, very simply viewing all this, it does seem very suspect that the dolla is about to smash up through its long down trend resistance, gold is about to break down completely/collapse, silver is hemorrhaging, just as the mother of all bailouts is about to happen.

 

Yeah, well, there is that.

 

I'm sympathetic to the idea that if everyone is running to one side of the ship, you should be running to the other.

 

That, as Peter Schiff put it in one of his recent radio shows, by switching tactics and following the herd you're saying: "Everyone else was jumping off a cliff. Did you expect me to just stand there and do nothing?"

 

But sometimes herds can be right. For a while. Buying property in the early 2000s, for instance.

[skinny]

Not a lot of intellectual input to add

 

Just....

 

1. I am terrified - but that is usually a decent contrarian signal [cos all other silver holders are equally terrified & a lot will have sold]

 

2. i know a lot of what ted butler says is hard to prove, but think he said recently that a couple of major silver miners [Hecla, Cour de Lane ?] made a loss in Q2, and he reckoned the marginal cost of production was around $17.

So prices less than this are unsustainable LT, as it will result in lower production.

 

3. David Morgan rebutes "world reccession = lower industrial demand = lower prices" with....

"world reccession = lower industrial demand = true = less base metal mining = lower silver mined [byproduct of base metals]prices = lower industrial demand - balanced by lowe production"

 

4. Bob Hoye has called this very well so far [as has Tim Wood]

Think [he is hard to nail down] he is saying Silver may bottom [temporarily] with DOW late Oct NOv.... would appreciate Cuthbert's take on this

[ziknik]

One ounce 999 silver coins for less than £10 including 17.5% VAT.

 

http://coininvestdirect.com/main.php?a=11&id=238

 

Under £10 pounds! I’m buying!

[qwerty]

Here is what happened to silver/gold in the last reccession 2001/2003

 

Why the poor performance from silver?

 

 

 

 

 

etals.png]

[Pixel8r]

I think all this kind of talk signals the bottom in the silver price must be in soon.

 

Jim Puplava has recently bought a ton of silver and Eric King has bought three! That would be not very financially sensible if you are all correct.

 

Dichotomy in W. European Gold and Silver Prices

 

A lot of 100 one oz. silver Maple Leafs were sold for €1,267 or $18.25/oz Tuesday evening. This is a markup of 40% to the current spot price of $13.10. It appears that there is a seller's strike as there are hardly any sizable silver lots on offer.

 

 

 

[wrongmove]

Under £10 pounds! I’m buying!

 

£8.47 + Vat for one troy ounce of 99.9% pure in coin form.

 

They are buying at £7.87 (as long as you haven't covered them in dents!)

 

 

What is the real evidence for this shortage conspiracy?

 

The obvious conclusion is that dealers are reluctant to buy physical in a market tanking quite as dramatically as this. They are professional dealers, not starry eyed idealists. By the time they have spent time and energy recasting, their premium is gone and more.

 

We will see when the price stabilise or starts to rise. I have a suspicion this conspiracy theory will vaporise at this point, but we shall see.

 

 

 

[ziknik]

A dealer make his money from dealing in coins. Not by sitting around waiting for the prices to go up and down.

 

I’ve spoken to Chards a few times. They have people queuing for coins but they can’t get them in fast enough (logistical problems). A huge delivery arrived (at Chards) 2 weeks ago but they wouldn’t sell any to me because they’d had other people waiting weeks. I’d been waiting too; I’d just not thought to pay in advance .

 

I waited 6 weeks (or something like that) for coins from the Royal Mint. Why on Earth would Royal Mint delay deliveries if they weren’t short of coins?

[wrongmove]

A dealer make his money from dealing in coins. Not by sitting around waiting for the prices to go up and down.

 

But a dealer who avoids buying into a crash, makes more than a dealer who does not. Since July the falls have been precipitous. I can't believe many seasoned dealers were in any hurry to catch that knife.

 

How many developers are buying land at the moment? Well, they make money by dealing in property, but they also know when it is actually more profitable to shift what you have asap and then to just sit on your arse until market conditions improve.

 

 

 

I’ve spoken to Chards a few times. They have people queuing for coins but they can’t get them in fast enough (logistical problems). A huge delivery arrived (at Chards) 2 weeks ago but they wouldn’t sell any to me because they’d had other people waiting weeks. I’d been waiting too; I’d just not thought to pay in advance .

 

I waited 6 weeks (or something like that) for coins from the Royal Mint. Why on Earth would Royal Mint delay deliveries if they weren’t short of coins?

 

I'm not saying there isn't a shortage (although it does seem that some is available at sensible prices in relation to spot), just that it seems obvious to me why there will be shortage when what they are selling has dropped about 40% in such a short time.

 

 

 

All conjecture on my part, but I see no compelling reason not to trust Occam's razor here.