First Page
Previous Page
Posted 04/23/2024 11:15 pm
With silver just like gold you need to be careful and assess where you really sit.
For example, are you someone that follows the market day in day out? If so you might be able to range trade it successfully.
However, if you rarely look at it, you really should never chase a big move higher.
The best time to buy silver and gold is when absolutely no one wants it... a number of people have made sensible comments such as buying below 20 due to the average really not being that high.
Silver even more than gold is subject to some extreme moves because it IS used industrially and that means that sometimes even when it is far above where it should be, those that need it industrially MUST still buy it and can keep the market artificially high.
This happened in early 2011 and so many even professional traders got squeezed out of shorts. It made a LOT of sense to sell silver at around 40 dollars, but believe me when it got there people who went short were sometimes destroyed in hours... I was even lifted at some completely ridiculous prints on the OTC toy (the machines we used to trade between banks) when stuff really became nasty because some people just HAD to get out.
What is true with silver is once it is on its way down from a very nasty move higher it will take a LONG time to bottom out - much longer than you expect.
Having said all that, we are now in a period of very high inflationary pressure simply due to the money supply that has gone into the system. If you want to adjust the price of silver with the money supply just take the ratio to the number of trillions in money supply and it will give you some idea of where the "fair" inflation adjusted price of silver is. e.g. today M2 is just under 21 trillion. In 2011 when silver went over 50 M2 was just 9 trillion so 50 dollars THEN was like 117 dollars an ounce today adjusting for the increase in money supply.
Now back in 1980 when the Hunt's cornered the silver market it hit just under 50 dollars ... at that time M2 was 1.5 trillion which would make the price 530 + dollars per oz adjusted for money supply. It shows just how out of whack the market went at that time.
Overall this means that whilst current prices are probably not a good entry point, it is worth noting that we probably won't see say 15 dollars an ounce maybe ever again - never say never but money supply increases have been so high that its very difficult to see that happening.
For example, are you someone that follows the market day in day out? If so you might be able to range trade it successfully.
However, if you rarely look at it, you really should never chase a big move higher.
The best time to buy silver and gold is when absolutely no one wants it... a number of people have made sensible comments such as buying below 20 due to the average really not being that high.
Silver even more than gold is subject to some extreme moves because it IS used industrially and that means that sometimes even when it is far above where it should be, those that need it industrially MUST still buy it and can keep the market artificially high.
This happened in early 2011 and so many even professional traders got squeezed out of shorts. It made a LOT of sense to sell silver at around 40 dollars, but believe me when it got there people who went short were sometimes destroyed in hours... I was even lifted at some completely ridiculous prints on the OTC toy (the machines we used to trade between banks) when stuff really became nasty because some people just HAD to get out.
What is true with silver is once it is on its way down from a very nasty move higher it will take a LONG time to bottom out - much longer than you expect.
Having said all that, we are now in a period of very high inflationary pressure simply due to the money supply that has gone into the system. If you want to adjust the price of silver with the money supply just take the ratio to the number of trillions in money supply and it will give you some idea of where the "fair" inflation adjusted price of silver is. e.g. today M2 is just under 21 trillion. In 2011 when silver went over 50 M2 was just 9 trillion so 50 dollars THEN was like 117 dollars an ounce today adjusting for the increase in money supply.
Now back in 1980 when the Hunt's cornered the silver market it hit just under 50 dollars ... at that time M2 was 1.5 trillion which would make the price 530 + dollars per oz adjusted for money supply. It shows just how out of whack the market went at that time.
Overall this means that whilst current prices are probably not a good entry point, it is worth noting that we probably won't see say 15 dollars an ounce maybe ever again - never say never but money supply increases have been so high that its very difficult to see that happening.
