(Somewhere in NY...) Blythe Masters comes across a figure dozing behind a Bloomberg terminal and yells "Roberts! What are you doing... you're supposed to be SHORTING THE SILVER MARKET!"
They have been testing the USD Index as well, several times at 74.3, it feels like it's gonna sit comfortably at 74.2s soon... And look at the world markets guys, I have green arrows showing all over, everyone is up by 1-3%, and USD Index is down by almost 1%...Also interesting that Dow and Nasdaq are up 1.4-2% too...What you make of this, I believe this is just another confirmation of what all the experts are saying out there, everyone including the big money in the US will let the USD tank big big big time, and the world markets keep hedging dollar by buying more and more gold...The end of capitalism for the US, they will have to reset as the UK had to reset, and have to convert to a welfare state - yea that's a laugh... But this is a country where companies called 'foreclosure tours' mushroom when people loose their houses, this is a country where 'undercover boss' type of tv shows appear when people loose their jobs...I dont think the solutions they will find will have much dignity..I really do not know how US will ever handle the upcoming shitstorm, other than them shitting on their own people, letting them drown...A very very very sad country...
look at the dollar! This is it! What do you call a dip? $3 is not a dip to me. This sucker is gone! Hyperinflation is here and there is no end in sight.
1. There's a world of difference between hyperinflation and high inflation 2. External factors such as oil at say $200 a barrel will dampen world economic activity and thus dampen inflation 3. The industrial might of the US remains. It is several times bigger than the next country in terms of economic power. There is NO challenger to the industrial capacity of the US. 4. It is not in the interest of Asians like China,Japan etc to try to tank the USD. The USD will be under FOREX pressure and there will be inflationary pressures in the US. But the reality is the US has been weakened somewhat but its not going to go terminal (eg soviet union) anytime soon.
I would say we are getting closer to biflation then anything else. Biflation = http://en.wikipedia.org/wiki/Biflation
Some might look at high oil as a symptom of inflation, rather than a dampener. When oil is high it affects the price of many processes, including food production and raw material imports. This would probably tend to push many prices up even further.
so the only difference between inflation and biflation is that the cost of high-end goods reduce in a deperate bid to uphold sales? I'm guessing a biflation period couldn't last long though. Not that these high end goods are generally much more expensive to make - just have higher premiums that they would reduce in a period of "biflation".
The industrial might of Justin Beiber and Lady Gaga! Where else in the world can you get fantastic music such as that!? The US has been mostly manufacturing nothing but intellectual property, patents and lawsuits. Fun times ahead for them.
There was a big drop and then back up again. From USD 45.40 down to 44.20 and then back up to 45.20. All in the space of 3 hours. I wonder what is to be made of that. Maybe someone is going to be very disappointed with their raid. Try and buy in that dip!!
I can;t believe we got to this price level already, I thought we would be around $45 in the fall. This little silver market is very interesting indeed.
Biflation sounds similar to what Germany experienced in the early 1920s. Although I am not sure what is the distinction between biflation and hyperinflation. With the advent of the internet, we now have a worldwide marketplace and the deflationary effects will be more muted.
The question remains: What will happen if the POS and the Dollar Index converge? That would be a death cross IMHO and would signal the end of the major bull run, of course, inversely the dollar would then start soaring. Nothing fundamental has changed about the silver market apart from the speculative fever. I read stories about shortages, but if I go back to 2008 I saw stories about peak oil and how oil was going to rage to $200+ a barrel. I suppose it could hit $50/oz within a couple of weeks, but at this stage I'd be selling out of the silver, buying oversold USD, waiting for the correction to get to a healthy level (say 20%) then buy back in with relatively overvalued USD. I have a feeling the bull still might have some steam in him before he runs out of breath for this run-up. It isn't much different to the oil run-up in 2008, so I am still waiting for prices to come down to earth before buying again. I'm convinced this is not the BIG run-up that Marc Faber was talking about. Certainly a big run up in nominal terms, but the USD hasn't weakened as much as it did in 2008. If the USD was at 2008 levels I'd suggest silver would be overbought and the USD oversold. If the USD index and silver hit 65 at the same time, all bets are off, and we will likely see silver do an "Oil 2008 crash" thing and fall off a cliff. I honestly can't see how this bull could possibly double up again. While it is technically possible, it isn't fundamentally. Silver is up because of the RISK ON trade, and once the speculators turn the table on the one-sided trade we should expect a big drop. They did this to oil in 2008 in spite of the fact that peak oil articles were doing the rounds ad nauseum. I guess the speculators needed someone to offload their commodity trades on to. Up past a certain point those who bought at the height of the fever were inevitably crushed. While I would like to buy more Ag now, and considering it's past performance, my crystal ball is a bit cloudy and I wonder if it may be a dangerous proposition to go long on Ag right now. I just don't want to get up in the storm when the poo poo hits the fan. I think going long USD makes more sense no, at least in the intermediate (12-24 months) term. Let's just say though, that if silver goes back down to $10/oz during the next deflationary leg (which I'm assured will be the big one), I won't be hesitating for a second to take advantage of the bargains.
Buy oversold USD and wait and than sell for silver in the future. that is a double loser imo. The USD Bear is larger than SILVER Bull. So buying the $ to later buy silver with it is just wrong. you are buying a strong Bear and postponing purchases of a medium strong Bull.
Benjamind are you forgetting to take into account the massive printing of fiat currency taking place all over the world? Also the inevitable decoupling of the physical price from the spot price which will likely hold physical silver up no matter how low spot goes? And of course the possibility that the stories about large scale price suppression and low physical stockpiles may be true? It ain't normal times now, we are heading into a worldwide financial storm, and PM's are becoming a default store of value as currency collapses. Not disagreeing with your analysis, but there is unprecedented goings on in the world now, and more factors to take into account.
