Silver: OH This Is Going To Be Good...

If you change your window it starts making a lot more sense. Lets go back to when this whole mess started. Back in the summer of 2008, silver was $18 per oz. When the economy crashed it lost 1/2 its value falling to about $9 per oz. The following two years it rebounded back to $18 per oz. Then prices got really crazy going from $18 per oz to $45 per oz in less than a year. In less than one year silver increased 250%. Is that realistic?

Compare that to the S&P 500 Index. Back in the summer of 2008 the S&P 500 was at 1300. It dropped all the way down to 700 when the market crashed. In two years it was only back up to 1100. In fact even now the S&P 500 is not back to its pre-crash valuation. Contrary to what some people think, stocks are real and tangible assets. GE is a real company that makes real products and sells them for real profits. When you own GE stock you own a part of that company.

The strengthening of the dollar also makes sense. While the US has a lot of debt but we are still in a better position than other developed countries. Our debt is 100% of GDP but that is still lower than many other developed countries (Japan is highest at 220%) We also have the second lowest tax rate among developed countries. (Japan has the lowest) The US has the means to pay our debt. In recent history we have had a higher debt than we do now and successfully paid it down.

I'm watching the valuation of the dollar vs the euro intensely. My wife and I have a European motorcycle tour in May that is billed in Euros. We paid a 10% deposit at booking but we have until March to pay the balance. When we booked the tour it took 1.45 dollars to buy a euro.

1. Silver Chart has been fairly flatline for a while.. consolidating.. to get it moving again the price has to spike up or down. I'm seeing a dip in price now then a steady move up.

2. End of year is traditionally a time when Hedges/Fund Mgs dump their stinker stocks. I always expect some December fanfare and price jumps.

Welcome to commodities. Lots of commodities have violent swings in price especially recently. Corn is an excellent example

You know you people really should hang around us farmers a little more. The commodities market have ruled our business for ever and ever. You all see a large swing and your heart skips a few beats and your ready to crawl under a rock. It makes me wonder how I have been able to feed my family all of these years.

Everything I do or have has a market price. Buy or sell cattle and it is a commodity market one day I'm making money and the next day it doesn't cover the money I spent to raise the animals. I grow a lot of corn this year and it is soy beans that goes up while corn sinks fast.

If you get my point those of us that deal in these markets do survive and yes most manufacturing are affected by the commodities market. Just think of all those using metals.

Heck coin dealers have been doing it for a long time too.

If I have learned one thing don't try to out think the markets. And stop reading those darn charts, over 30 years experience and I will tell you they are as good as the TV weatherman. The few times they get something right they look like a genius. But they forget that they were more wrong than ever right.

Good times are when beef prices reach $1.25 bad times are when they are at 60 cents. This can all take place in less than a year. So silver going from $40 to $27 is no big deal in my life. I have been there done that and still found a way to make money.

Really? I must've missed that. I thought that a $15T debt was a recent thing and not something that had ever happened before.

Barry G, man that is tough hang in there, lol....

You may have to sleep on the couch for the early part of winter, but I bet she is gonna swing her attitude about silver about 180 degrees come late spring. I could be wrong, and silver may tank, and you will be on out to sleep in the dog house, jk, lol....

Hang in there, in six months I have a feeling that 100 bag of Peace dollars is gonna look like a real smart buy, lol....

After World War II the US Federal debt was 120% of GDP. By 1980 we had paid that down to about 30% of GDP.

This is the primary reason I don't buy into the idea that the silver market has nowhere to go but up. I still believe that silver is an industrial metal and long term the price of silver will be dictated by industrial use. The recent silver bull market has been driven fear of that big debt number, the recession, and people's frustration with the poor performance of the stock market. Once the economy starts growing again silver prices will drop back to their historical norm. We have seen time and time again that people love a bubble: tech stocks, housing, oil, etc. When prices start diverging from reality that is a clear sign of a bubble. For silver that clear break happened in 2010. That is my take on things at least.

I'm pretty new here but I have noticed two basic schools of thought here in the PM forum. There are those that are interested in making money on the movement of PM's and treat silver and gold as commodities. Then there are those that are stocking up on PM's to prepare for the collapse of the national or world financial system and the return to the common use of PM's as money. For the first group timing is everything, when to buy and when to sell. The second group doesn't seem to ever plan to sell and could very well get caught holding the bag when the PM boom goes bust.