gold won't be money (in the form of currency) either. the central planners didnt went through all the effort to make people accept fiat to just return like that. On some day in the past, two central planners met eachother. A US one and a USSR one. The USSR ruble (and all the rest with it) was closing in on its end, and the Gossbank guy asked the Fed guy what to do. The Fed guy told him to return to a real gold standard, because that would be the only way to convince people to accept the ruble again. The Gossbank guy then asked, if a gold standard is so good, why did you people in western countries abandon it? The answer of the Fed guy was very remarkable in its implications: he said that the western currencies had a history of gold backing, and that this history made them accepting the fiatcurrencies. This implied the openly admission that the western central planners knew that they were cheating their populations, but that history allowed them to get away with it. Let's now warp to decades later, today. A situation with the former two world blocks united to a cooperating single world block, with as capital goal spreading their inflation over the world in an evenly fashion, along bail outs / currency swaps across borders and oceans. Look at all the regulation they added over the decades. All geared towards wiping out differences between their fiatcrap and blocking/limiting. Look at what the Fed does with treasuries. People don't want to borrow govt their savings, which would normally drive up the fee the govt has to pay in order to still find willing people, and the Fed uses new dollars to replace the lending, and hold down the fee for those that still hold treasuries, which thus suffer the risk without a compensation/reward. Why would central planners then give gold any other role than just making it more expensive when speculators want to swap their fiat for it, and making it then cheaper when speculators want to swap it back to fiat to then buy what they really wanted? So actually, gold is the lap dog of silver, without the central planning holding off tenthousands tonnes, the gold/silver price ratio would be driven towards the real ratio's CLZ gave. But things are like they are, until the central planners dumped the rest of their gold stocks. About that rhodium argument, industrial usage isn't the price trend driver for gold / silver. Obviously not. Otherwise we should have seen industrial demand more than doubling and halving in recent years. The sole difference between gold and silvers storage of value / monetary usage is based on which side of the crisis owns which metal. Like it is now, the parasiting side dominantly owns the gold, while the producing side dominantly owns the silver. Unless you want to argue that central banks / central planning govt institutions, don't own 30000 tonnes gold, 20000 down from where they came from 60 years ago. And not just in the beginning. Between 1989 and 2005 they sold 6960 tonnes on the market. They pushed down the gold (and silver) price trends for decades. And they clearly anticipated the speculation due to their fiatcurrencies printing/devaluation and brought the CBGA's into existence as to inflict the speculators that wanna buy exactly then a higher price and thus less ounces. Suppress the price when few want to buy, drive it up more/faster when alot want to buy. So stacking gold as longterm savings? Heh. It may be a good idea for the buy now sell within X month club, if they manage to get out ahead of the next central planners entities reversal. Drawback of silver is the amount less informed / easy believers of all the bogus vested-interest origining stories around. But that's solvable. Solving central planners crap is harder, due to their monopoly on violence.
...'positions can undo each other'...if the large shorts are either pulled from the market or a long equals each short. The previous contract positions were crazy. How did they all just undo each other? Simple, another long from fairy land settled the short from the same source. Proof! All undone. The point was there wasn't enough supply to back in physical. JPM holds large holdings of junior miners like CCU and AYN. Why do you suppose? There doing a last run of getting out of paper and back into physical. Like it or not, there isn't that much Ag left. Consumption for industry and production accounts for any surplus mined. With the long correction, mining has reduced. Were heading into a interesting phase. All I suggest is get a physical Ag position.
Lets talk a bit gold first. (This is for pirocco) Gold is a huge and misunderstoodmarket. Most investors see it as a 'simple' asset classand assume broadly that, outside of futures andoptions, the market is 1:1 backed by physical metal.Nothing could be further from the truth. The ETFmarket is nominally backed 1:1, but in terms of dailyvolumes represents a meagre 1-2% overall. The restis split between the COMEX futures market and theOTC 'loco London' currency pair market, where banksand investors cross vast amounts of money againstGold, generally without allocated metal backing. If theLBMA want to come out from behind the curtain andtalk about true bullion inventories versus tradedvolumes then I would happily assess that data, but forthe time being they prefer to remain convenientlyopaque. The best information we have is from TheReserve Bank of India, an LBMA member, who statethat the OTC market and futures and options are 92xgreater than the underlying physical market. The ratioexpressed in my adapted 'Daily Volumes in Context'chart pretty much confirms the best-guess RBIleverage ratio. Considering that the Bank of Englandis worried about Barclays' leverage ratio (having risento the giddy heights of 40:1 again with the need for aminimum of 8bn in fresh capital asap) I find itextraordinary that investors do not notice that the Goldprice is presently defined by a market which operatesusing around a 90:1 leverage ratio. What would happen if for example half of those who owns paper gold in paper would - do delivery/change paper to physical - tomorrow? Would there be physical gold for all of them for todays price?
Of course not. There would be the same naked short with price of Au skyrocketing. Dont get me wrong. Those holding Au are going to be well 'rewarded' as with Ag.My own opinion is there is better gains in Ag compared to Au. Gold will move first with the masses flooding in. Thats the final role call for the Ag train.I see the GSR reduce from 60:1 to maybe 25:1 for the following phase. Thats why I see it the better return. The desk of cards can't hold up forever in either metal. Something will break. You are either in precious metals or will be fighting to get in with the rest
Silver has been money more than gold historically. --jim rogers I am not saying that Silver will be the next money, but fact is that if you base on history it is more probable that next money will be silver than gold. What is permabull? I believe that we are in secular bull market in gold which started in 2001 and where corrections are normal.
If you base on history it is extreamly probable that it will be if we get in trouble with our FIAT-currencies. I suggest to read what is Gershams law.
Silver is marketed and bought because its more affordable than gold and you get more for your money I bet most of those fancy 1oz coins that get bought will end up melted in a few years time once the buzz wears off In the UK its easy to avoid silver - gov takes 20% VAT. Gold all the way!
Exactly what happened in 1980 when the Hunt brothers stood for delivery The banks that stood to lose big controlled the exchange So they changed the rules, effectively shut the market down and the Hunts went broke You forget that the paper market is just paper contracts bound by rules Those rules can be changed at will by those in power
If either are to become the next money then they need an above ground stockpile to aid stability through the first generation of use. Gold wins because of the continued central bank holdings whilst silver's stockpile was lost a few decades ago. Saying that however, monetisation adds substantial value which will potentially drive the GSR down given monetisation of gold will probably only drive it to 4-5 times current price at most but silver could eventually go to 5-10+ times current.
There's a long history of chattel slavery in the US but that doesn't mean that chattel slavery will ever come back. Same with silver as money. there may be a history but seashells were used as money also. The point is, the past is no guarantee of the future....just because something used to be widely accepted means nothing necessarily for the future. The fiat currency system has worked very well for the policy pushers. There's no good reason for them to want to push a silver or gold backed currency...even if the current dollar disintegrates. It will only be replaced by the policy pushers by the next fiat currency....whether that is another type of note or digital currency. Gold and silver will remain valuable assets in our lifetime but they will never gain the status of a currency....not in the US. .
What is permabull? I believe that we are in secular bull market in gold which started in 2001 and where corrections are normal. If you have read history and you understand Gershams law - I find it stupid to say never.
Yes you are right - lets see how they are going to deal with this: http://www.lbma.org.uk/pages/index.cfm?page_id=55&show=2013
Do you really think that they will give you as a gold owner a chance to buy back the properties they stole over the decades along their inflation? If we get in trouble with our FIAT currencies then the central planners will just force a new, likely world one, FIAT currency and make sure you're the losing side in the process. If you base on history it is extremely probable that it won't be. Even the last so called 'gold standard' was a bogus one: the fiatcurrency was only redeemable by govts and its institutions instead of the population/everyone that earnt/owned FIAT. The sole reason central banks have gold is to control its price: suppress its price trend when people want to sell it (outside crises), increase its price when people want to buy it (inside crises). And on top of that, they perform even inside crises targeted sales, as the IMF proved with its 191 tonnes purchase in 2008 and sales in 2010. Some 7 billion dollars from people that bought gold due to crisis/money creation in the period between. And the IMF wasn't even interested in those dollars, they used it to aid poor govts in africa. Why would a central planning institution need FIAT anyway, it's them producing the FIAT. All they care was to get rid of the purchasing power, a kind of sterilisation. Because, for every dollar they manage to chew out peoples pockets, they can create a new one that won't have price inflationary effects. And btw, it's Gresham, and govts make their own laws.
And another btw, it's not gold or silver or any product that will undo purchasing power losses / beat the central planning thieves, it's your trading behaviour. Just ask all those that bought silver the easiest way: at any price. $50 versus $20 silver is a $30 loss on every ounce and the same loss as a 60% bank account confiscation or a decade accumulated purchasing power losses due to general inflation.
Sorry mistake - I meant that I think more probable GSR is between above ground and ground ratio = 1:6 to 1:4. 6:1 = is the estimated ratio of economic gold to silver in the ground (USGS) 5:1 = is the estimated physical ratio of all silverware, silver/gold jewelry and other stocks above ground (according to CPM Group) And this is fact that, I am not saying it will, but can make silver even more valuable than gold: 1:3 = is the physical ratio of gold and silver coins/bullion (more gold than silver)
Why giving partial stories? https://en.wikipedia.org/wiki/Silver_Thursday https://en.wikipedia.org/wiki/Hunt_brothers The Hunt brothers borrowed heavily to purchase silver and did so with high leverage. Some took advantage of that, and were f. And another interesting aspect is this: did the Hunts really corner the market? At the peak, they had 200 Moz silver, 1/5 of a current worlds annual supply and 1/2 of the supply in 1980, and that included their futures market positions, so future contracts that didn't need the silver on the contract creation moment, only months later, IF they would ask delivery. https://www.silverinstitute.org/site/silver-price/silver-price-history/1979-1980/ See, the Hunts didnt cause the price increase on their own. They weren't 'cornering' the market. In reality, there was a broad worldwide rush on silver, the Hunts being just a part of it, not the entirety (corner). Government stocks were then much bigger. Investors sold masses junk coins in the price prak. And they didnt cause the price drop on their own too. It weren't the Exchange runners that ended the Hunts story, it were (other) temporary buyers / sellers, that were faster than the Hunts. The rest (extreme price volatility / Exchange rules changes) was just consequence. And this is an ever returning fake story, upto present day, 33 years after the Hunt story. They still blame bullion banks / Exchange runners for price drops. While actually, the real reason is just their own temporary buying and subsequent selling. They play the market along futures, they claim that every price increase is the real market (while actually its them buying back in) and they claim that every price decrease is manipulation by the exchange (while actually its them getting out fast). The Hunt story is not different. It's just haha.
