We buy gold and silver as a way to protect ourselves from the TEOMSAWKI (The End Of The Monetary System As We Know It) to come. We live in a literal financial house of cards. It is all paper. That house of cards has been in the process of collapsing since 2008. Astute market participants realize this and are buying bullion, one of the only financial assets with no counterparty risk, as a way to protect themselves from the coming storm. Silver has more than doubled since Ben Bernanke began his high level terrorist attacks against the US dollar with "Quantitative Easing II," announced in August of last year. Silver jumped from $18 to nearly $50. The rise in gold and silver was likely making Bernanke feel a bit uncomfortable about his "there is no inflation" story and a phone call was likely put into the COMEX. Five margin increases in rapid succession later, and the COMEX had increased initial margin requirements by a substantial 84%. Therefore, anyone who had purchased silver futures using leverage was forced to pony up a lot more cash to maintain the position...or sell out. Since many participants lacked the necessary cash, they were forced to immediately sell their silver futures. The result was a drop in silver futures prices from near $49 to below $34 in a matter of days. This volatile rise and fall in silver has most of the world saying that silver was in a bubble and now that bubble has popped. Those who say this don't know what a bubble is. If you look at the silver price in US dollar terms, its recent spike does look quite parabolic, or bubble-like. However, in the context of a longer-term timeframe, silver's recent run-up doesn't seem bubble-like at all. Check out the chart below, which details the price increase of various items since 1980. Can you spot which one of these items is in a bubble? Hint: It is not silver! In nominal dollar terms, silver's recent rally looks parabolic and unsustainable. But when compared to other assets over the last thirty years, silver has been in a very long bear market and has done relatively nothing compared to any other assets. And compared to the growth in US Federal Government debt, silver has underperformed by a factor of five. One bubble is about to pop... and it isn't silver. Jeff "The Dollar Vigilante" Berwick For Daily Reckoning Australia
I don't think Bernanke gives a toss about the price of silver. The increase in debt is an obvious concern for all - but it will cause an increase in prices of all real assets - not just silver. I can't see him getting all his advisors together and saying "We need to bring down the price of silver because it's wrecking the reputation of the US $". This quote though: "In nominal dollar terms, silver's recent rally looks parabolic and unsustainable. But when compared to other assets over the last thirty years, silver has been in a very long bear market and has done relatively nothing compared to any other assets." at the end of your post I think speaks volumes. It is this very reason (silver doing nothing for 30 years - then "POP") that made the run up to $50 unsustainable. Nothing runs like that without a sudden U turn. It did go short term parabolic and needed to correct. It seems to have now done this and shows real potential to maintain a steady sustainable increase. Don't forget the price is still up around 100% over the last 12 months. That's a good increase in itself. I'll be happy if it doesn't hurry itself back up above $40 for the next few months to a year (although I doubt this is going to happen - I can see at least 1 more boom and bust this year). Let's build a good base so we can have sustainable growth. malachii
I think you're dead wrong there. Fiat prices of both gold and silver act as a magnifying glass highlighting the real inflation that central bankers create through their fraudulent creation of currency out of thin air. This is one of the main reaons that central bankers hate gold and silver - it shows them up for the thieving scamsters that they are...
I think you misunderstand the meaning of that part. To be clear - people who bought at $48 have no reason whatsoever to feel bad because the subsequent drop of 30% was a mere blip on the radar and silver will once again continue its massive appreciation in value. Those who reckon they can find better investments than silver - good luck to them. We can compare gains a few years down the track ...
I'm passionate about silver and i love this blog... Many wont appreciate my posts, but there are some who think i contribute something worthwhile. Feel free to critisize ... i've got thick skin
What can we say? The Mans an animal... Seriously, Good post...I do enjoy your perspective as with many members input...perhaps the forum need to chip in for a new keyboard?
I kinda like YKY's input, but remember one thing(!): "...just because you are a character, doesn't mean you have character!" =]
I could not disagree more with this manipulation style bashing, supported only by opinions and links to media articles. There has been no correlation to other asset classes throughout stages in history to show THIS HAS happened before, i dont think the author has read business cycles and depressions, to show that margin changes do come up with volatile assets, and will happen again, in the face of all the crying and hokus pokus theories. I see immaturity coupled with a confirmation bias and nothing else.
That graph has historical data interpreted into it, you don't have to be the next financial god to understand that US debt is unsustainable and has increased exponentially when compared to other goods/services/etc. Business cycles and depressions have nothing to do with US debt exceeding 1500% and also has nothing to do with Silver suddenly dropping 40% in a week. There is confirmation bias, but it's in your posts. You see what you want to see in YKY and other Silver bull's posts. Hypocritical behavior at it's finest?
Dumb criminals get caught and thrown into prison; smart criminals work as politicians and bankers + 100
immaturity is when you refuse to accept the facts .There is many seasoned people in the big end of town in all parts of the world that will disagree with you yet you are in your mid twenties & you know more? you cant be serious.You cant even accept that raising margins is controlling the market open your mind a bit
When the price of trees goes from $10 to $20 and margin was $1, it effectively has halved the margin at $20, do the maths and then come back to me with your margin theory. You guys want other opinions, accept mine. I never said i know more, im just saying that this specific author and the information he has presented is noithing more than opinion, and to prove what he is saying he needs that factual evidence. And stop with the margin crap, its rediculous, it was always going to happen, it applies to short position anyway. Im not hypocritical fishball, you guys just cant tolerate anything but going to the moon talk. If your going to make derogatory comments about me, speculate on my nature just pm me because it has no place here. Make logical and factual arguements, because these threads still are, just rediculous.
You really have no idea & refuse to accept facts. You can have your opinion but we dont have to accept it. Trees? what? hahahaha we need a ROFL smiley :lol:
You didn't even answer anything in my post you hypocrite BigBen of course we don't care much for your opinions. You post random bulls**t and fill in a few technical terms and think you know what you're talking about that's how I see your opinions. The US debt now is much higher in nominal terms than it ever was and this is fact. There is no bulls**t, no media opinion, no hype. It's the truth. Also please learn how to spell ridiculous, it's just ridiculous how you can't spell such a simple word yet open your mouth to talk about financial derivatives.
Do you understand when the price of something doubles, the original margin has halved? No need to be silly about it mate.
