Good point. Although, a 20% increase in demand of a relatively inelastic commodity will result in a greater than 20% inrease in price.
I can't see much how our dear friend silver will become cheaper than $32. Stopping creating dollars doesn't remove existing dollars. The amount dollars tripled since 2008, silver was then abit above $10 so I think its price should at least be $32 now. If they stop creating dollars it will just stay there (or at $35-36, that seems also an 'I refuse to sell!' level. Now we can think abit further. If they stop creating dollars, what will hold the banking system up then? Barely weeks ago Fannie Mae still needed 9 figures dollar support. And the creation of fiatmoney didn't fully propagate yet throughout the economy, only to speculation products. Wait till prices rise further. Even more people will have trouble paying off their monthly part of debt. A decision to stop creating dollars can only lead to massive bankruptcies. That would be a real correction and make it possible for prices (including silver) to drop back again. But we would maintain our buying power since both price sides of the trade drop. Actually, I don't believe a penny that they will stop creating dollars. State and the bankers digging their own grave? Hell no. They rather drive the economy to hell than doing something about themselves. We will see open fascism much sooner than a real economical correction.
Agree - but like to add a Fiat monetary system MUST keep expanding by its very design or implode...there's no real choice... I see $30 resistance like the old $20 level - it's not going back down there...if it does it will be a vertical line down and straight back up...cats out of the bag...silver is a tiny market in comparison and the players are lining up to take there seats...
IF QE2 does end then I think we will see once and for all if the USD is really seen as the go to flight currency. Traditionally the "cash is king" mantra has held true. When things turn bad the big players liquidate into US Fiat. But they don't just do it for select things generally. Everything tends to get sold off PM's included. So if QE2 does end and the players take the traditional route then both Gold and Silver should take a shellacking along with every other speculation out there. This could be what Bernanke uses to justify QE3 and what pushes the Republicans into allowing a generous debt ceiling increase. I can see the headlines now: "Stock Market Sell Off Shows that Recovery is Still Fragile-Fed Chairman". The shortly followed by "Bernanke announces QE3-Original Stimulus Not Enough". IMHO The US is at a cross roads right now. If they were to take the Austerity route now it would be bloody painful and make them very unpopular. Spending cuts would have to be massive including the gov't but it would be achievable long term. If they take the other route they are doomed to default and an ever cycle of money printing until it all implodes on them. I think they will take option 2 as no polly in the US has the guts to tell the millions of leaches that the tap is being turned off and that has even far worse consequences. Just kick the can down the road. So I have built up about 10% of what my stack size goal is and am hoping that QE2 ends for a short period as mentioned above. When PM take the flogging it will be jump in with both feet time and complete the Oz goal and watch the USD implode over the coming years, with the nock on affect to everyone else. If QE3 starts with a smooth transition and is large then I made my bed and I have to sleep in it but at least I have some exposure. It will be interesting to watch this happen in the coming years, some key events in my mind will be keen to watch out for: 1. Commodities (especially oil) stop being priced in USD. 2. A free float of the Renminbi (Yuan) or even a significant upward valuation. 3. China turns it's economic growth inward instead of concentrating on export growth (will be related to point 2), this will have to happen at some point to stop inflation. 4. Major holders in USD and US Bonds start converting them for PM's. I think these things could happen very fast if the printing is big enough. Just my thoughts Cheers Chris
Here are a few things on my mind atm.. 2012 is an election year so austerity measures are very unlikely because the current government would get the blame. I think that we will see the affects of QE2 ending before it actually ends and then possibly get worse after it ends for real. I have no idea who will buy US T-bonds when the Fed stops buying them, so they way I see it is they really have no choice but to keep buying them. The debt ceiling issue is also concerning because there was talk of raising it by 50% which is insane so i think its safe to say that at one stage it will be raised but it really doesn't matter because they will keep inflating the money supply regardless which is what there doing now with that scum sucking slime ball Tim Geithner basically saying they will "cook the books" until they reach their August deadline. The other thing I was just thinking of was the idea of silvers industrial use increasing compared to mining production, I just cant see it happening especially when were headed towards another GFC like event (IMO a currency crisis) this makes me think about if the shortage is a real shortage and not just a collective cornering of the silver market by the public this time round. The way investment demand is growing there will be a shortage but it will be because so many people are buying silver and not because of increasing industrial use I think. I have a fair bit of silver and for my and everyone else's sake here I hope we go back to a gold standard reserve currency in the future which would make me feel alot better about life in general. I also saw a news article on RT news about a possible reason for the invasion of Libya saying that Gaddaffi wanted to sell his oil only for gold and not US dollars, much like Saddam Hussein in 2000 wanting to sell oil in euros instead of US dollars... makes alot of sense to me that America would be trying to protect their reserve currency status. Comments?
http://www.bloomberg.com/news/2011-...ya-vote-that-its-sponsor-says-would-pass.html People are asking that exact same question too, what the hell is USA doing in Libya? Conspiracy theories aside, it's really pointless for US to fight everywhere since it's so expensive.
Definitely expect silver below $30 aud. Down to $25 You have to look at the larger view. Everything is against expansion , commodities. Silver has a large industry application. Industry slows,silver will decline in value.
Hi, I always believed from day one that the invasion of Iraq was because Saddam threatened to price oil in Euros - if Gaddaffi wanted to sell oil for gold then I am sure that is the reason for the invasion . Any hint of an arabic nation wanting to sell oil in any other currency may trigger immediate action before it could spread to other arabic nations - just think about it - the USA is the biggest consumer of oil and all it has to do is print US dollars to buy it - if it can't do that its economy will collapse overnight!
I thought Fed chairmen have 12 year terms and selected by the President? Could be his last days based on next year's election
You guys seen this? Ron Paul - Gold Is Money 06/01/11 http://www.youtube.com/watch?feature=player_embedded&v=_eExucI3IWs US treasury has no gold. They didn't have physical Gold ever since 1934.
I've seen Ron Paul in action (no, not in that way ), however I have not come across this clip before. Interesting, since I'd expect the fed to have physical reserves tucked away (perhaps in secret).
jnkmbx... check this video out... I'm sure I would know who I lent money to, especially if it was $9T! I reckon the Feds just have reserves on the computer screen.... http://www.youtube.com/watch?v=GYNVNhB-m0o
heh heh, I've seen that one before. I liked the uploaders comments about Alan Grayson being a parasitic scum bag, it added some flavour to the already rich stew. When it comes to fait, it's practically all numbers on a database. The paper gold the fed say they hold would be no different. If I think they've got physical holdings stashed away it's because I'd believe they are in on the USD collapse. By not promoting gold, they ensure the people think of it as some kinda stock rather than real value.
