My first gut feeling.

Discussion in 'General Precious Metals Discussion' started by Dusty, Sep 16, 2011.

  1. Philski

    Philski Member

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    a stockbroker once told me the best time to be in any market, to make serious money - is when its fluctuating.

    Everything is for sale if i can make a margin/profit regardless of how small. I buy to sell and sell to buy. I guess at the end of the day that's me, and i guess its okay to say hey exponential growth we are rich, however, the upside if the price of silver goes to say $100/ Oz, there is a down side too. Consumer products like mobile phones, computers, jewellery, solders aerospace, cutlery, coinage and to a lesser extent photography - x rays etc will also cost everyone more. They are mostly want purchases not need purchases, but will nether the less impact everyone. trading in a zone of say 35-39 or 10% profit every sale or 10% more silver next buy is more important to me than holding on for the big payday and it keeps everything ticking over and is way more profitable over time and it keeps inflationary pressure down.

    You can still make a profit on a down cycle with good timing imo. And i look forward to buying lots of silver when it becomes "almost" affordable.

    Phillip
     
  2. Earthjade

    Earthjade Member

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    What you are seeing now is the free market.
    Crony capitalism, bank bailouts, money printing - all of this is the logical and natural progression of the free markets.
    Freedom to LOOT. Looting...ring a bell?
    That's the highest evolved form of the free market.

    If you want to throw back to a "mythical free market" (that never really existed), then that would require (at the very least) someone to make sure businessmen didn't collude together for their own gain at the expense of the pricing mechanism.
    But that would mean supression of the freedom of association.
    Contradiction - you need to oppress freedoms to have a free market.
    And you still have the problem of production lag times causing resource misallocation in the system, but that's another story.

    Anyway, back to the point about the prices falling off a cliff today, I don't believe it is just "paper manipulation", if at all.
    I say this for a few reasons:

    * People follow the herd. When everything drops, it seems counter-intuitive to buy. Therefore, those that have gold and silver are selling (mainly ETFs) along with the equities.
    * Gold and silver are inverse to the fiat currency. US dollar getting stronger means gold getting weaker and vice-versa. We all agree on that principle. Also, oil has dropped which lessens the threat of inflation.
    * Some people have no choice but to be selling their gold to be covering their losses in equities.

    Having said all this, I don't think silver is going back to $25. I think it will hit a floor somehere in the 30s. Boy, I hope so.
    I mean, what has honestly changed since last week? EU moving closer to the cliff is about all...

    Let's look at some pseudo-logic:

    1) Operation Twist, no QE3. US dollar gets stronger
    2) Equity markets tank <---- WE ARE HERE
    3) Credit dries up further, institutions pull their heads in. Inter-bank lending drops further.
    4) Precarious EU banks on the brink get copius bailouts from ECB. Greece probably defaults.
    5) Equity markets tank further. Increased flight to US treasuries.
    6) Credit crunch intensifies, everyone realises we are in a recession and the threat of deflation looms.
    7) US Fed has no choice but to pump liquidity into the system.
    8) Nice to see you again, gold and silver!

    ^ Something to that effect.

    Also, everyone out there - it's only COMEX gold and silver that is falling.
    You know, the stuff that isn't worth the paper its printed on? (or something to that effect).
    The basic principle of gold vs silver seems to be this:

    In times of panic, the drop in the silver price will always outmatch the drop in gold's.
    In times of market upswings, silver always outperforms gold's rise.
     
  3. CriticalSilver

    CriticalSilver New Member Silver Stacker

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    I think you will get little sympathy for you big government, over-regulated approach to market economics here.

    It is the regulation and control over the markets within which the corruptions and the potential for corruption exists. Looting is not an expression of free markets but of controlled and manipulated markets.

    AUSPM is spot on (as usual) with his "pretend and extend" hypothesis (borrowed from James Sinclair @ http://www.jsmineset.com ) on government action.
     
  4. Guest

    Guest Guest

    Those are absolutely NOT free market forces in effect.

    You are (appreciably) jaded and cynical about the current state of the 'manipulated' market and assume (sarcastically) that this is normal.

    It is not.

    The nature of the market operates in well established, generally predictable, but unfailing cycles.

    We are simply in a distorted wealth market cycle right now and to assume the 'free market' has reign would be misguided. But don't assume that because we've had such a long period of 'extend and pretend' as fiscal government policy the world over and things haven't completely broken down yet that it won't.

    It will.

    The fiat game has only gone on as long as it has because of the rampant, unchecked market manipulation on a scale humanity has never witnessed before, but there comes a time when it reaches a critical mass and no amount of bail outs, extentions or printing will 'fix' the underlying issues.

    I wouldn't say have faith in the free market to overwhelm the manipulators in the long term (as my ideology doesn't extend to faith), but rather look at the market history and the numbers which work towards the inevitable situation. It's fairly easy to become misguided and not trust your instincts when you're faced with bailout after bailout without reproach, but the fact remains that the markets operate like a coiled spring and the further you push this way from the median, the sharper it will eventually push back and in this situation we have never seen the spring extended as far as it has now.

    The only real question you have to ask yourself now is what steps you can take to rationally protect your interests in the event of a break down of the system.

    I'm not talking about a mad max situation where we're all eating dogfood, but rather another GFC style event where the paper markets literally implode.

    As society (and the middle class) continue to come under increased strain and sovereign nations face default, there will simply be no option in the long run but for the markets to rebalance.

    You have to realise the way the cycles have operated and the position the wider markets are in right now, especially concerned the massive blizzard of fiat based debt out there and the fact the entire global economy is in the process of socialising them.

    We are nearing the threshold where it's the Governments of the world who will need a bailout and I can tell you now, once sovereign nations start defaulting on debt, you will see a rebalance in the markets and fiscal policy that will make your head spin.
     
  5. Dusty

    Dusty Active Member Silver Stacker

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    My gut is talking to me and he asked me to pass on this message, don't panic if you don't have fiat to buy as from next week the price of silver will take a turn and slowly climb wounded from the trenches and ever so slowly climb towards the $40s and than have a rest and lick it's wounds be for it moves on.

    But Gold will come from the trenches have a slow look around than charge for trench $2000.

    Once gold makes alittle more ground over $2000 silver will come fast with cover support.

    And don't worry I asked my gut why it's talking to me in army talk and it just ignored but he got abit stroppy and we had a argument,
    Man there's some weirdos out they :)
     
  6. Guest

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    It's always good to trust your gut and listen to your heart.
     
  7. Midnight Man

    Midnight Man Member Silver Stacker

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    Nice call Dusty :) I know it was a "gut feel" - but there's a lesson in there, if you're open to it ;-)

    (Trust your gut feelings, I do, they're more often right than wrong, as long as you don't try and "force" them).
     
  8. 940palmtx

    940palmtx New Member

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    here, here! indeed a nice call
     

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