Silver This Fall

After the elections I think the financial dung will hit the fan. These artificially low metals prices can't last for ever.

Silver will continue to drop for the rest of the year, negating all gains the market made for 2011.

Sideways in a fairly narrow trading range looks like a little better odds to me than rising or falling much. This is an echo of the stock market. It seems to be holding its breath, waiting for some clarity out of Europe, the US election, Tax-Mageddon in January, etc. Once these issues have been sorted out, we may see silver rising into the high $30s to low $40s.

What we do know for sure is that: 1) the known silver mines are playing out and producing less silver per ton of ore dug and processed; 2) because of (1), the cost of producing silver is rising, especially in terms of diesel fuel which is also rising in price; and 3) silver in many applications is consumed in small amounts and dispersed such that it is not practical to recycle it. Because of these things, the longer term price of silver should have considerable upward pressure on it.

All signs point to down after black Friday....

Maybe more sideways movement. Someone seems to enjoy the profits from this 27 to 28 to 27 to 28 ride, lol....

Speaking of the election... what say y'all about the effect on PM prices due to who wins? Seems to me that we have radically different visions of America from the two camps that will very likely affect business, the markets, and the economy. While we do not know what the next 4 years holds in store for us, we do know what the past 4 years have been like. Has it been good enough that we want 4 more just like them?

I fully believe the rise in PMs after the last election was due to financial policies passed by the Legislative Branch before the Obama presidency started (remember that Obama the senator voted to pass the very changes he has bashed the former admin for imposing!), and the fact that people in the know realized Mr. Obama would continue to implement the same history- proven economic suicide policies. Research shows the state of the economy in the past cannot be attributed solely to the president in office. If a person takes the time to study the past economic conditions, graphing its highs and lows against which party controlled the majorities in the Legislative Branch, there is a definite pattern. The problematic economy always has come at times when the current mindset has been implemented.

I believe PM markets will fluctuate with a general feeling of personal security. There are things about both people making the run for office that I do not like. However, I know I personally will feel a lot more secure, and am thinking those who are aware will also, if we do not have a person sitting in there who has a hired a self-proclaimed, active communist (Van Jones) for one of his personal advisers. Look into it - this is fact. If enough people actually are aware of this truth (like we should be), then there will be a psychological sigh of relief and possibly an easing of the doom and gloom mindset. Hence the PMs might settle if the current admin is not retained.

I also think another factor causing the feeling of insecurity (hence PMs rising) back 4 years ago was b/c one party had the majority in both Houses and has their man sitting in the office of president. Hence a rubber stamp system resulted that pushed the historically-proven failed policies. So of course PMs rose.

If a turnover and rubber stamp policy goes the other way, I think it is hard to really make a legit guess. I think enough people would feel relief, the economy would get better (if the new admin would implement time-proven strategies. The economy would have to follow historic patterns and improve - unless manipulated otherwise.

But People are funny things to try to predict. Even if things did get better, maybe modern people, like those who went through the Great Depression, will remain penny pinchers and PM's would not go up. Or, maybe they would decide that since when the current economic terror struck, that PM's retained their value, then the recently re-employed-getting-paycheck-again people might start investing in PMs to make sure they do not lose so much again?

It was a lot easier to predict 4 years ago! It was a given that PMs had to rise - and they did.

Interesting comments, Earle. I appreciate you taking the time to post them.

My thoughts are... and they can be strange at times... that we have 2 possible scenarios available to us.

#1: Obama wins in November and there is a huge sell off in the US stock market
with rapidly rising PM prices. This initial shock wears off after a few
months, however, and 6-8 months down the road we are back about where we
are now.

#2: Romney wins in November and there is a huge relief rally in the US stock
market with rapidly rising stock prices and falling PM prices. Again, this
lasts for a few months before sliding back to about where we are now.

In either case, we see a lot of turbulence caused by the election results but it is temporary and does not last for more than about 8 months before returning to where were are now. I don't think that this is especially predictable at the moment and it could easily go either way. Perhaps the short version of this is that we will see a lot of temporary volatility that doesn't really change the future much at all. I would really like to be wrong about this but don't think that I am.