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 Replies: 28 / Views: 3,552 |
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Pillar of the Community
United States
5843 Posts |
I know that markets are tricky, complicated things and that there are lots of factors that determine when and to what extend prices rise and fall. And ever since I started stacking a couple of years ago I have heard plenty of explanations for why gold and silver have risen dramatically over the past decade, including the increasing amount of debt the U.S. has, the state of the global economy, the relative scarcity of silver and it's multiple industrial uses, etc. And in the face of the current downtrend, there are those who maintain that it's only a temporary dip since the underlying factors driving the prices up in the first place haven't actually changed.
Here's what I'm wondering, though... Is it possible that the primary (if not sole) reason that PMs have risen over the 6 or 7 years is simply because large investment companies made a decision to invest in them? If large investment companies started buying hundreds of millions of dollars of gold and silver (whether physical metal or paper metal), wouldn't that have driven up the price all by itself with no other contributing factors required? And if these same companies have now decided to sell off their gold and silver and get out of the market, wouldn't that explain why prices have suddenly dropped?
Now, granted, the reasons why these companies started buying large quantities of PMs in the first place may very well be all the factors that I mentioned earlier, so maybe those things did have an indirect effect on prices.
Anyway, this is all just speculation on my part. Has anybody heard of anything like this before? Are their big investment companies that started buying large quantities of PMs back in 2006-2008? And have some or all of them started dumping their shares lately?
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Pillar of the Community
United Kingdom
616 Posts |
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Pillar of the Community
United Kingdom
548 Posts |
The gold market is one of the most complex and opaque in the world. It's impossible to know what's really going on. Cyprus was talking about selling some of their gold but that's only worth a few hundred million dollars. Is that enough to trigger the biggest fall in price for 30 years?
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New Member
United States
9 Posts |
Perhaps, just perhaps people are realizing gold has outlived it's usefulness. Like when tractors became affordable, farmers got rid of their horses.
I thought that video was one of the best netural discussions I've seen. There's been WAY too much rhetoric on this issue lately.
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Pillar of the Community
United Kingdom
616 Posts |
I periodically have the recurring thought that anything exchanged for goods and services besides in barter is a form of "fiat currency" be it dollars, gold or Bitcoins. And Fiat currencies are driven by confidence and demands for products and services priced in those currencies. Gold is strangely both the currency and the product. At least it seems Silver has siginificant industrial uses.
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Pillar of the Community
 United States
5843 Posts |
Quote:
You might find this article interesting. Interesting and a bit depressing, to be honest. I allowed myself to be convinced that the gradual rise in PM prices over several years was a clear indication that we weren't just in a "bubble" that could collapse at any time, but now I'm not so sure. I'm in it for the long haul and have zero plans to sell anything anytime soon. But I'm giving serious thoughts to backing off any future purchases unless and until prices have another dramatic drop. Of course, I'll be kicking myself for holding off if prices eventually shoot up to $2000 the way so many were predicting... |
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Pillar of the Community
United States
2168 Posts |
I hsve always held on to PMs as a safety net Can never be zero and even if they decreae to face, that would mean the rest of our economy is super and the dollar is the best! That's how I went into buying any PMs. The PMs I had since a child (at face) were always looked at like that.
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Pillar of the Community
United States
1200 Posts |
As the Alex Karras character Mongo said in "Blazing Saddles"... "Mongo not know. Mongo just pawn in game of life."
Your theory does however sound logical, which in the PM market is probably a major warning sign. It makes me wonder where "true PM spot values" (if there
could ever be such a thing) will end up settling.
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Pillar of the Community
United States
3670 Posts |
Farmers may have switched to tractors primarily, but horses are still used in many areas where vehicles can't go. Hog hunters they use horses and ATVS to get it done, via horses can go in thick brush and up steep mountains....
Just as horses are still needed, gold will always have the bling factor. That ain't gonna change. There is a totally different feeling one has while holding a gold bar verses a chunk of lead. That ain't gonna change ever.....
Edited by Silverhawk74
04/17/2013 3:46 pm
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Pillar of the Community
United States
2168 Posts |
nice comparison! Yes, look how horses are needed in the war in the mountain areas! gold and silver as well!
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Valued Member
United States
329 Posts |
Look at whats up today! and I'm not talking about gold.
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Pillar of the Community
United States
2168 Posts |
silver? Pretty even from what I just saw
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Valued Member
United States
329 Posts |
BYE
Edited by wjl
04/17/2013 11:57 am
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Pillar of the Community
United States
1200 Posts |
This thread is NOT about equities or bond sales. DON'T go hijacking this thread off into the ozone.
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Valued Member
United States
329 Posts |
The two are inextricably linked. I'm sorry if that confuses people but thats actually a good thing.
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Pillar of the Community
Canada
2019 Posts |
Speaking of tractor and horses , My father told me that back in the 30s when farmers where switching from horses to tractors around here that most people that used horses had a bit of money in their pockets most of the time but when they bought tractors and the plows,extra equipment to go along with them , fuel/oil repairs that they were always in debt to the "banks" farm board or what have you , so while production increased most farmers wealth didn't. Ya they might make more money but owed more money....
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Replies: 28 / Views: 3,552 |
Posted 04/17/2013 09:11 am
