Opinion: Interesting Conditions In The Small Silver Market

Term I don't like is resistance. Like there is this big wall that comes down and prevents movement.

The next term is support. What did someone all a sudden put a safety net under it.

Silver is what I call in flux at any given date ready to move violently or not at all.

The flux state right now is uncertainty. Generally I believe the silver market might continue in the current price range with a swing of up or down by $2.00 well thoguh November.

As a small investor it makes me cautious which mean I am not buying large amounts of silver. In no way am I selling any. I like to look for bargains or low premium sells at this point in time. I got lucky and made today at the very low. There still is a fair deal for Maples at APMEX for those that want to buy it fast and easy.

If I could call the market or come up with better information to give me a better future outlook I would love it. The one year price of silver is still up plus $10.

What I can't call is how long this up trend is going to last or where it is going to go. Silver simple is setting new history with what I call the long spike due to the amount of time it has held high.

Once upon a time I would have said, "Since we are so deep in debt as a Nation, and we've printed so many fiat dollars, it is only a matter of time until silver is $$$$$$$.$$ an ounce."

However, I now have so little faith in the Feds to report honest inflation figures and allow the free market to work that I truly believe they will continue to somehow manipulate the market to the downside in the hope that it will give the appearance of a financial recovery. It is almost like the term "Fake it until you make it."

Or this whole thing could blow up in their collective faces and we will see silver rise to it's honest, unmolested free market value.

We will see...

Exactly so, Merlin. The fact that they are not doing anything differently means that their same actions will achieve the same results. The Fed and the US government both see the inflating balloon of the 2003-2007 economy as the ideal to which they seek to return. The fact that what was happening then led directly to where we are today seems to be escaping them. What we really need is a strong and vibrant economy that is based on the efficient production of desirable goods and services and not more hot air pumped into the balloon by inflation.



Yes, banks are hoarding their cash now and so are many other businesses. A lot of this "excess" cash has also been invested in US government debt paper, which is another way for people to lose money. A 2% US Treasury bond purchased in an environment of more than 2% annual inflation is a guaranteed money loser. It may not lose as much to inflation as money in the bank will but a loss is still a loss. OTOH, if the US debt market collapses because no one wants these debt instruments any more, then that will lead to some huge losses in investments that many people believe are absolutely secure... when they are not.

It WILL be!

At some point, people will stop the knee-jerk jump into US Treasuries as a safe haven investment. That point could be reached when the economy starts to turn around and provide better payment for loaned money. In some ways, it is already here with well established big blue chip companies paying 3-5% dividends (double the rate of a US 10-yr T-bond) AND additional money to investors via rising stock prices.

Remember that the ONLY way the US Treasury can make the interest payments on the US national debt is to sell more bonds... selling bonds is borrowing money and a system that MUST have new money coming in to pay prior investors is called a Ponzi scheme. Neither the government nor the Fed will call it that, of course, but that is exactly what it truly is. Most people with money to invest will avoid such schemes once they recognize them for what they are.

It is not beyond the realm of possibility that the fiat money system will suffer a severe depression or complete collapse at some point in the not too distant future. One cannot simply create trillions of dollars worth of brand new fiat money out of thin air without a financial / economic backlash. No one knows for sure what form such a backlash would take because it hasn't happened on a global scale before. The business relationships among the banks around the world are complex and often invisible to most of us. They are real, nonetheless, and can have horrific consequences for most of us if they go bad.

Right now, there are more than US $600 trillion worth of derivatives hanging over the world economy. When these things blow up, they tend to do so in a sudden and spectacular manner... ala AIG and Lehman Bros. This $600T is about 12 times the annual world output of all goods and services on this planet, so it is not a small number. Additionally, a lot of the derivatives are financially related to other derivatives. Once these dominoes start falling, where will it lead? If any single event could trigger a worldwide financial collapse, surely this is it.

But we WERE taught to believe the bogus numbers put out by the government and the Fed on inflation and unemployment.