Omg.....the Asian

You're right, since there is always an equal amount of buying and selling, on casual examination, it doesn't make sense that prices should ever change. There's a big California dealer who has a daily wrap-up on his site, where he mentions why prices went up or down. He also talks about store traffic, and whether people are buying or selling. Often, he'll say that buyers outnumber sellers 2 to 1, yet the price is dropping! How can this be?

First, you have to recognize that it's all a game, and the score is kept in money. There are little players and big players, like penny ante poker and guys who'll bet $100,000 on a hand.

For instance, we watched a Clewless Gnubee™ at a show debate whether he wanted to buy one silver round for $9, or get 3/$25. He finally decided to go for the big bucks and handed over two twenties with the comment "money just seems to disappear", while we politely nodded in agreement. It was hard to keep from laughing with him in earshot, since she had just seen me pay $4400 cash for a few items on my want list.

On the other end of the scale, a dealer friend of mine asked a secretary to stop on her lunch hour with a $93,000 check, and he'd return the wire she sent. An odd request, until he pointed out that she accidentally wired $93 million. Not only did this company have $93 million in their account, but it didn't strike anyone as unusual that they'd have a purchase that size!

To most of us, a single contract of gold, about $150,000, is a huge amount. If the dealer in CA had a couple sellers like that in a day, it might be obvious that selling outpaced buying in his microeconomic outlook. I've read more than one account recently where buyers have paid cash for a TON of gold--24,000 ounces. You could have two hundred sellers each selling 100 ounces, and their combined sales wouldn't even come close to that single purchase.

As you can see, micro- and macro-economics can be doing completely opposite things. The big players win or lose based on how well they anticipate what the market will do (or increasingly, whether their computer program outmaneuvers the other guys). The little guy places his bet and rides the wave.

So back to equal buyers and sellers, prices change according to the volume of each. As silver went up over the last year or so, fewer people had silver to sell (once they sold, they were out), and those who still had it had to be offered higher prices. After it hit $50, people figured it was a good time to take their profit, and the more who sold, the lower the price they could get, because the buyers had what they needed.

If you were paying attention, there were dozens of posts on ccf, all saying the same thing: When/if silver hits $50, I'm going to dump all mine, sell everything but my core collection, expect the big traders to sell, get rid of stuff I think I can replace for less money, etc.

So why is anyone surprised that there is at least a short-term adjustment, and since the long-term picture hasn't changed, why is anyone surprised that sellers who might have sold at $50 don't want to take $35? The little guy is still buying for the long haul, and he wants hard metal, not paper, and they can only make so many coins and rounds at a time.

After the market, all the "experts" tell you why commodities, or oil, or stocks, or bonds, went up or down. They speak with authority, is if it was obvious why the price changed as it did.

Ask yourself a simple question. If it's so obvious why any given price changed, why didn't you make a few million by buying or selling, since we all knew (for example) that xyz co was likely to declare a $abc dividend or quarterly profit?

Because they don't know a bit more than you do. Mutual funds don't do better than throwing darts, and spend billions on experts trading to do it.

Hopefully Silver will shoot up to 700,000 per Gram :)