Why The Silver Market Has Gone Nuts

Interesting article, thanks for posting. Seems non-committal, like many others; just no good answers, no one can really say what's going to happen. I like the conspiracy theory myself!

LOL, Jack! I'm not much of a conspiracy theory guy. It just seems to me that WAY too much credibility is placed on those who would carry out such things. Human nature being what it is, someone ALWAYS blabs, so keeping a secret is about the most difficult thing there is. And no real conspiracy can survive the light of day and public scrutiny for very long.

If we want to really know why silver is moving up in price so quickly, all we need do is look long and hard at the fundamentals... production and demand, geo-political problems, falling US dollar, etc. Add to that, the silver ETFs are hoarding a HUGE amount of silver in various vaults around the world. That silver is just sitting there, collecting dust, and is unavailable for any other use. Removing that much of anything from the free market always pushes prices higher. Large volumes of silver sold into the market to take profits will push the price down for a while but it should soon stabilize, recover, and then move even higher because the fundamentals of supply and demand have not changed.

I agree, TenSense. I wonder just how much of that kind of comment is derision and how much is pure envy? Anyone who has owned silver or gold that they bought 2-3 years or more ago doesn't really care what others think of their massively successful investment. As they say, "The best revenge is living well".

If we want to really know why silver is moving up in price so quickly, all we need do is look long and hard at the fundamentals... production and demand, geo-political problems, falling US dollar, etc. Add to that, the silver ETFs are hoarding a HUGE amount of silver in various vaults around the world. That silver is just sitting there, collecting dust, and is unavailable for any other use. Removing that much of anything from the free market always pushes prices higher. Large volumes of silver sold into the market to take profits will push the price down for a while but it should soon stabilize, recover, and then move even higher because the fundamentals of supply and demand have not changed.

ED_B,
Could not agree with you more. I think the fundamental reasons
have been some of the most overlooked reasons for the current
position of precious.
Here are just a few of my thoughts

The incredible race around the globe to gather gold and silver by countries
and their population. Along with some rather large institutions
While the race to the bottom in the values in fiat currency is still taking place.

A large portion of the planet is in the midst of revolt at one level or another
Major in the Middle East, still at the heavy protest stage in Europe, and the
beginning of the protest stages in the U.S.
Those in power are still laying gas on the ground (Reasons for Revolt) in Europe an the U.S.
all it is going to take is a spark. Tunisia started with one person and one act of
revolt to set the whole Country on fire followed closely by the rest of the Middle East.

The gathering storm to replace the U.S. Dollar as the Default Currency of the world.

Legislation in more than one State here in the United States to make Gold and Silver
legal tender for debt, passing and being signed into law.

The growing separation between the price between Paper Silver and Physical Silver

Thanks, Stewart. Your comments are spot on as far as I can see. All of these things are affecting the prices of PMs but especially silver, as it is the one that is lowest in cost and affordable by more people than any other. And they ARE buying in quantity too!

If we follow the current currency crisis of confidence, we will come to its logical conclusion and that is with the government beating the fiat drum as hard as they can and the American people ignoring them en masse and converting their fiat currency into PMs as quickly as they can.

The Fed is creating inflation at a substantial rate. They are pretending that they are not and that the rising prices of commodities are somehow not their fault. Anyone with an IQ above room temperature is very well aware that printing trillions of dollars in new currency while its primary backing (US productivity) is not increasing only leads to an excessive number of dollars chasing the same or fewer goods and services. How can this not be inflationary? Answer: It can't. Inflation MUST be produced when the growth rate in the money supply exceeds the growth rate of the economy.

Next, look at the Fed's record of timing their short-term interest rate increases and decreases such that the economy benefits from their stewardship. It is absolutely abysmal. They have not had a successful interference with the US economy since the Carter era when Paul Volcker was the Fed Chairman. He set interest rates so high that inflation was crushed out of the economy, paving the way for Reagan to come in and have 19 year uber bull market. That took a lot of guts on Volcker's part because it was politically very unpopular but the end result was worth it for the nation. I don't see that kind of guts anywhere in politics today and certainly not at the Fed.