I've been pondering the emotional swings of silver market participants this week and after reading the "stella is out" thread I think I've come to the conclusion that the worries many have been experiencing is a good thing. It seems like "To Da Moon" was in every post at Kitco only a week or two ago and even though Kitco psychology is a case-study in histrionics you could feel the same fear at SS as well -- I too have been nervous during the drama of the recent price run. I consider the significant fear exhibited these days as a natural and positive market dynamic. Fear helps to temper the irrational exuberence naturally experienced by early adopters and front runners of a major capital shift -- it buys the market time to digest what is happening -- it helps to maintain some sense of order in an otherwise insane environment. Let's face it, 20bucks to 50bucks is pretty dramatic. We are experiencing the dynamic of significant world capital realignment. I look around the entire market and the other available investment classes and I cannot find anywhere to safely store my wealth. I truly believe that this silver run is less the result of a bunch of agressive speculators trying to make a profit and instead driven by lots and lots of people like myself who are trying to simply protect retirement funds that are being destroyed in other more traditional investment classes. "Big money" undoubtedly faces the same issues as my micro personal scenario -- pension funds, sovereign funds, even billionaire playboys seem to be less concerned with making fantastic gains and more concerned with just keeping their capital from being destroyed! The world is awash in scared capital looking for a home and there are few alternatives. Remember, markets are driven by FEAR and GREED. In the absence of any reliable "GREED trade", money has to migrate to whatever safe haven can be found. Market volitility is usually the result of an adjustment in capital flows and undoubtedly silver's price drama is a reflection of this while also being magnified due to the markets relatively small size. Until the prospects of new reasonably safe investment classes open up as an alternative home for all the money sloshing around the system I think we are faced with the prospect of the PM markets continuing to be bid up. At the same time, in the absence of reasonable safe haven alternative the PMs are likely supported by a relatively solid rising floor. Perhaps I am blind and missing out, but I simply do not see any alternative to storing my wealth in gold/silver right now REGARDLESS of it's price. The measurement in USD, CDN, AUD, EUR or whatever for price is irrelevant, I just can't let my capital go net-negative. Here in Canada, real-estate never popped and is brutally overpriced, the world stock markets are begging to massively correct, interest rate baseds products are net-negative after inflation and the economy is a complete dog to start or aquire any form of small business (plus, unlike stella, I am too lazy and not bright enough to find or develop a successful business). Someone please tell me where in the world I am to put my wealth if I convert my PM to fiat. It MUST go somewhere. The fact that I can't reasonable leave at this point in time offers me some comfort in that, guess what, a large portion of my fellow market participants can't/won't either. Looking forward, I expect that it will be a long time before the other main asset classes become to look attractive and SAFE again while the whole world tries to figure out how to fix some serious global issues. Grab a pint, pull up a comfy chair here at silver stackers and be sure to tip the waiter (GoldPelican)...we might be here for a while
Well it certainly seems as though Canada and Australia have much more in common besides having the Queen as the head of state! Dont worry mate - the Real Estate bubble will most certainly pop in Canada as well, just like it will in Australia. In fact the rotten market is already in decline here...
"but I simply do not see any alternative to storing my wealth in gold/silver right now " Please. Silver fell 11% Gold fell .5% Don't put gold and silver in the same boat. Silver is volatile and dangerous,gold is not. However , if you hang on,maybe it will come back.
