Silver Is Crashing! Oooh, The Humanity

I don't know who could have ever thought it would stay down when absolutely nothing has changed, the debt is still there and isn't going anywhere until allot changes. Anytime something big happens it will drop a little just as when something bad happens it will raise but if nothing else has changed you can bet (whether it be good or bad) it will still keep the trend it was in before this dramatic thing happened

I jumped back in! I know a buy opportunity when I see one!

The silver market is an interesting study in value. While gold was moving up by 40-50% in a couple of years, silver went up 400% in the same amount of time.

One would think that most commodities would show some price increases due to the falling US dollar, the HUGE US debt, state and federal unfunded liabilities, etc. What we have seen in the past couple of years seems to be out of line for the magnitude of the root causes for PM price increases, though.

Perhaps we are nearing that time when people lose so much confidence in the government that there comes a disconnect between PM prices and the causes of their rising? There is a LOT of fear out there and having some PMs available makes for a lot of financial comfort.

The Indians have traditionally loved gold and often wear their life savings as necklaces, rings, and bracelets. The Chinese are a little late to this party but they seem to be embracing PMs as well... and their government is officially endorsing it. This is a HUGE deal in an autocratic system. They are basically telling their people not to store their savings in US dollars. I have great respect for the Chinese people. They KNOW something is going wrong with the US dollar and do not want to participate in whatever the end result is likely to be.

There is a GREAT hunger out there for some medium of real and lasting value. Many people are now coming to the thought that fiat currencies are NOT where this is to be found. We all have some cash money and use it pretty much daily because our civilization is based on currency as a medium of exchange. That's fine for our daily routine business. But when we want to store value in something for an extended period of time, a rapidly inflating fiat currency is definitely NOT it!



Personally, I really enjoyed that touch in your comment!

The Chinese ARE recommending that their people own precious metals. This is a fact.

China has a HUGE dollar and US Treasury glut on their hands and they want to diversify out of that single largest holding. They are also becoming reluctant to add to their US Treasury position. It has not escaped their attention that bond king Bill Gross has dumped the US Treasury allocation from his giant PIMCO bond fund. They will begin doing the same shortly. Obviously, they will not sell all US bonds at once because that would damage their investment via depressing bond prices before they could unload them all. I expect them to ramp down their US treasury buying considerably and to sell a good part of their holdings over the shortest time period that they think is workable.

Like a lot of us on here, the Chinese and other nations have discovered that holding your long-term wealth in US dollars is not an especially good financial move. Something that does not inflate and lose value on a routine basis would be much better. Right now, that is PMs and other commodities plus their means of production. They don't just want wheat, they want wheat farms. They do not just want oil, they want their own oil wells. They do not just want gold or silver but the mines that produce them. They know that such holdings are vital to a strong and modern economy and they are using their dollar and US Treasury bond glut to buy some of these things or to pay for oil, gas, and metals exploration.

The Chinese are a very patient people. They will not act precipitously but they WILL act and in their own best national interest. We can count on this.

Additionally, China is working with a number of other countries to work up the idea of a new world reserve currency that is not the US dollar. They are getting some interest in this, particularly from resource rich creditor nations that are tired of investing in US dollars and Treasuries only to watch them decline in value over time. If successful, everything the US buys would immediately increase in price because dollars would be less desirable than whatever is the new world reserve currency.

Finally, it is no secret that the US credit rating of AAA is over-rated and in serious jeopardy of being reduced. When it is reduced, both the US dollar and Treasury bonds, bills, and notes will decline in price almost immediately. The Chinese are not fools. They are WELL aware of all this plus a lot more and are doing all that they can to get out from under what they see as a falling weight.

Buy-Buy -Buy you snooze you lose!

I hope silver stabilizes around $40. These crazy swings are not good for my blood pressure!

I'm pretty certain, but I could be wrong, but isn't the largest buyer of US securities the Federal Reserve?

At any rate, our dollar is probably doomed. The Chinese, Mexicans, Russians and every other country it seems sees the writing on the wall. Heck, even a good number of Americans are awake and paying attention and have therefore put some paper dollars into cold, hard silver and gold!

I'm gonna predict another small drop for silver when the COMEX marginal rate increase hits (Monday, isn't it?). But they can raise the rate to 100% if they'd like...they can't stop this train!

When the Communist Chinese confront the US on its economic policies (which is going to happen this week), you know our government has messed up!

Protect yourselves and your families; buy gold and silver.