Some silver mining companies have hedged part of their output so that they can sell their output at specific prices, even if the price falls, such as at $18 for Coeur Mining. http://www.coeur.com/home#.VB-f8hYgiQ4
That's it scare em in to selling and buy it all now LOL. 16 and back up to 20 before ya know it. man I been watching ebay all wknd folks still paying 20-22 all day.
Yes they seem to be iterations of the same 'print more' formula which attempt to mitigate the obvious pitfalls of free money to uncontrolled too big to fail banks. It's somewhere in here or part two I think. [youtube]http://www.youtube.com/watch?v=Pt0LseQ0Vvo[/youtube]
In any case, most silver is by product of mines producing other metals. The cost of production is just that of transforming "raw" silver into .999 silver bars. So even when silver is at $1/oz it will still be produced.
And if this is true, then I'm glad I bought all those kooks. Because my belief in your scenario above, kooks (and other semi numi coins) will hold their value nicely, and will go up, since they are limited mintage, and folks new to the market (hopefully will increase - lol), will want to complete sets of the kooks, lunars, etc...not them I'm looking to sell in 10, but perhaps in 20. LOL.
At the 2 previous gold / copper mines I have work at the cost of silver production was SFA. The gold concentrate had to be processed anyway and silver was a reclaimed out of this process, silver was reclaimed out of the copper electro winning, also. When the prices of either gold or copper spiked recovery rates of them would sometimes be sacrificed to increase total production, silver would end up the tailings the dams along with percentage of gold and or copper concentrate. Not sure how a " silver" mine would be travelling with the lower prices.
^^^^ just proves you are full of hot air and no substance - let SS take note. Pathetic response speakers volumes as do your trade numbers. I will move on to a real discussion elsewhere.
A hedge also gives away any profits due to eventual price increases. So the hedge has to be throttled. If that throttling is chosen badly then the hedge hurts instead of protects. Something that seems to be ignored alot. And the hedge taking itself also drives the price. Your 'if price falls' is already post mortem then. Somebody has to pay the compensating dollars to make the hedge work. If they refuse, then the hedge fails. The bigger the amount positions per price dollar, the fewer are willing to pay. The last uptrend (since start juni, 3 months ago) showed the biggest figures seen so far. That alone already rings the alarm to not buy. And instead, bottom price $1 lower, about 70 Moz must have been sold more in the uptrend, that moved the hedge 242 Moz up. A hedge is a price-compensating stream dollars. It's not some 'single shot'. The price of their output is always "specific", just like any contract wherein a price is agreed. If the price-compensating stream dollars dries up sooner than expected, then the hedge failed in a degree, and the lower price at expiration is undone only partly. It's all a matter of whether or not speculators are smarter than paying the bloated prices that the existence of the hedge brought.
LOL 10 years ok.. so 10 years of no income/minus income for miners.. so if silver is that cheap in 10 years.. silver wont even exist.. because people will start whipping their asses with silver paper...
I am amazed that people keep talking about the cost of mining silver being 10, 15, 20, whatever an ounce. Really people don't realise that more often than not silver is a byproduct of other mined ore, and therefore the price of extraction is simply completely irrelevant? Is it stupidity? Or is it that they so desperately hope that the price of silver won't drop, so they keep repeating themselves the same misinformation, and at the end perhaps they even believe it?
I have argued that silver denominated in AUD won't drop more than another 25% or so. Rather, a weakening silver price will be coincident with a stronger USD, increased US interest rates and a painful slump in the resources sector (for Australia) so the AUD exchange rate will worsen considerably. USD $10 to $15 silver, no problem. AUD $15 silver, your dreaming.
source: http://www.silverminesltd.com.au/about.aspx You know its expensive to mine in Australia when you have to move to America! The price is too low when its not viable to explore and mine proven reserves.
