Quote:
for silver to hit 150 an ounce our country will be in dire straights and we will have allot more to worry about than selling silver. - Bryan1315
I'm thinking that if the p00 hits the fan big-time, having silver and being able to sell it or trade it to buy food and fuel might very well be THE big thing in our lives at that point. Consider the alternative... a horrible financial catastrophe of some kind and NO way to buy much of anything because all that a person has is a bunch of fiat paper dollars that are in very low demand.
Also, I understand that today's silver prices are due to silver fundamentals and that the early 1980s price spike was due to a lot of things, including the Hunt brothers trying to corner the silver market, but... adjusted for inflation, that $50 price would be more like $125-130 today... and that is not so very far below the $150 mark suggested by Silverhawk.
As to prices... I thought that $500 gold was ridiculous at the time, having seen it around $250 in 2001. Then it became $1000 gold and now $1500 gold. Can anyone say with a straight face that we definitely will not see $2000 or more gold? I can't. If the gold:silver price ratio does decline to its historical value of 16:1 and we have $2000 gold, what does that make silver? Hint: $125!
Before rejecting even higher prices for PMs in the next several years, we need to look at what it was that pushed them to their current price levels. Inflation via over-printing of the US dollar plus rapidly increasing demand from Asia and other parts of the world. The supply of silver is currently tight, which means that consumption and production are in rough equality. What happens if a major silver producer goes out of production because of a flooded mine, political problems, labor problems, equipment failure, mine explosion or collapse, or military action? Answer: silver prices would literally explode upwards. That may or may not last for very long but it could definitely happen under this scenario.
Finally, all of the signs that I see in the silver market indicate that we are in a multi-year bull market. We may well see some sell-offs and a lot of price volatility along this path. But the trend in silver prices will be higher for some time to come. Yes, I could be wrong about this but I would rather have a bucket of silver on the chance that this is right than not have it on the even slimmer chance that it is not. My alternative is pretty much to hold dollars or dollar denominated assets of various kinds. Anyone feeling really cheery about the US dollar about now? How about over the next 5-10 years? Still no cheer? Can't say that I blame you!
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Posted 04/22/2011 2:39 pm
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