When it is obvious that the market have turned and all paper peddlers want their metal, you will find none. So don't count on accumulating into the future ! Even Bron who has in the past indicated no metal shortage has raised concerns: "The Perth Mint [9]'s Bron Suchecki has written an interested blog post regarding the real risk of gold coin shortages and rationing happening again" http://www.zerohedge.com/contributed/2014-01-13/gold-coin-and-bar-shortages-likely-lead-rationing
Big difference in a temporary shortage due to limited availability of blanks and a shortage due to insufficient gold supply. The first one makes the dealers money on temporarily higher premiums and the second makes investors/stackers money. Bron was talking about a temporary shortage blank supply issue.
That is good so if you are right you should have no problems loading up when you believe we are at the bottom and when there are no or very few coins coming from the mints. If you are wrong which I am certain of, you will get nothing. When you realize the entire available physical silver supply today can be bought by 1 person and gold just a few, I will bet every time on you getting nothing if you decide to wait and time the bottom. Just my feeling of this current situation.
Short term who knows? But I don't like how things are progressing. I wanted to enter at a much lower price, but my proprietary signals are showing some warning signs. I am strongly thinking of making my first long position in a number of years, especially as I am financing it with AU$. Thinking of a 1,000 ounce initial position organised through an offshore swiss bank account (I do not have any US based bank accounts won't trust them). If I am too early well at this level it wont cause any real harm. So yeah jjrici might be turning the corner
thatguy, I originally got into the metals because I thought they would be the "safe haven" as the stock market fell. So from 2007 to 2011 it surprised me to watch the metals move with stocks. When silver topped is when the disconnect between the metals and stocks started. So for the last almost 3 years stocks have been rising while silver has been falling. I don't see how the relationship of 2007-2011 could start up again at this point because that would mean silver would continue to fall lower (likely?), while stocks start falling from their highs. Many would argue that US stocks are in bubble territory and since they have been pushed up, while the metals have been pushed down, it's likely we'll have a reverse situation here real soon. With stocks falling at such lofty levels then that money is going to find its way into metals because people in stocks will see how far the metals have been pushed down. What I like about buying silver right now, atleast according to the line I drew, is that the first 4 times that silver bumped into that line it was at a fairly sharp angle of rise and after rising atleast $3 after its recent bottom. However on this recent touch of the line, silver is meandering sideways, just slightly up, as if its not trying to reach up and touch the line so it can proceed back down again. About $20 and meandering sideways, along with very close to a downsloping resistance line, I think sets up a good launch point. Its baffling how all the QE could not push the metals higher and higher, but all that money has gone into stocks. With stocks potentially topping out, all that money can now find its way into metals, and heck of alot of money it is too. Of course I can't possibly know whats going to happen at this point, but I'm a metals bull and I'm very excited.
In a crisis, they dump everything, to get their money on a bank account, the so called most safe / least risk. Keep in mind that silvers falling price trend started at near $50, which is 10 times the price of a decade ago. It's now $20, still 4 times the price of a decade ago. And look at all the 'investment' stock bought since 2008. All the record Mint sales, the big ETF stocks that didn't exist prior 2008. If there was serious general price inflation, the situation would be different, but there isn't, and that means that every silver price uptrend is profit in terms of purchasing power, and as proved, they don't let it go, they grab it. $20 is almost the peak price of 2008. The bottom price of 2008 was $9. That's just 5 years ago. I can't imagine that when the recordhigh stock market is dumped down / crashes, that silvers price will rise. They will simply dump it too. I wouldn't be surprised to see $15 visit. I'm not stating for a long time, that I don't know, but the chance on visiting it, appears high to me. Look at the couple decades between 1980 and 2000. Alot stuff / general prices went up alot. Silver just hanged all the time. And why? Because the 1970>1980 big 'investment' stocks were sold. It's possible that we will see an uptrend before the stock market crashes, but then it will go down with it, and maybe deeper. Look at the Comex position, a good reflection of what happens in the silver market. The position continues to increase at a chosen price (now $20): 14/01/2014 24809 $20.05 On 23 juli 2013, about the same price, the position was less than half the current: 23/07/2013 10113 $20.31 That means that since 23 juli 2013, 14696x5000=73.48 Moz silver was sold by former 'investors'. And be sure that when we have a next big crash, the futures market / Comex side will dump most of their positions again, and then the price will finally reflect that 73.48 Moz (and who knows more till then?) less investment. At the moment, the increased position is 'hiding' those sales. Then not anymore. At least, above is all my opinion, based on the market data I have available. It made me decide to wait to purchase a next chunk silver, hoping for $17 and maybe lower, I'll decide based on the future trend of the Comex position, and other elements. One thing is sure: the QE wasn't what was claimed it was. Excess Reserves aren't spent money. My biggest error, february 2011, buying alot silver at $32, was due to this faulty information. The only price inflationary part of QE is the intrest rate the Fed pays the banks, which is just a small fraction of the whole sum. So we shouldn't be baffled anymore by the lack of QE impact. The amount circulating dollars in the US is just 40% more than in 2008. Not 300% more as the monetary base seems to suggest.
Pirocco, So the comex positions have risen alot with no corresponding rise in price, yet when those psotions are dumped the price will definately fall? Also I don't think the QE money has been put into excess reserves for the most part. Where did the stock market get its fuel to run to new highs? If alot of money starts rapidly coming out of stocks, why wouldnt silver be viewed as a safe buy at $20 when it has shown potential to reach $50?
If the Comex total net position rises while price stays, then that means that others (stackers, ETF shares, whatever else than futures contracts) sold silver. Basically those on the future market replaced others in the price, and since futures contracts never to never end in delivery, but cancelled instead, then that means that the spot price level became less 'buy and hold'. And when those positions then get cancelled, those Comex-external sales finally reveal themselves in the spot price. Just... logic. A and NOT A exclude eachother. Where did it get its 'fuel' in 2006-2008, ahead of QE? It's not like that 'new high' is % that much more. In 2008 silver showed 'potential' to reach $21, nevertheless, when the crisis happened and everybody dumped, silver was dumped with the rest, to $9. What you name as 'potential' was actually people making errors and others taking advantage of it. People learn. Hard lessons stick. Your $50 lasted a couple days. The average of the same year was $35. $50 'potential'? A couple highdays of stupidity isn't exactly 'potential' haha.
Konsole...you are focusing on relationships that are never permanent and therefore completely unreliable.....stocks up, gold down...u.s. dollar up, gold down....sometimes they invert for a period such that a sucker can lose a lot of money.Gold can rise with stockmarkets as easy as it can fall...likewise with the u.s. dollar. Forget about QE's affect on gold price....forget about Dow/gold ratios................all crap...............so many experts have been touting this shit for years and they have been left naked. It worked for a while but they are too dumb and close minded to see that they and their followers have been skinned. Nothing is written in stone.
The weather is also not written in stone, yet, predictions based on various elements/relations have a sufficient degree of usefullness to make it worth it. And the key towards that 'sufficient' is looking at alot things, as to recognize what is relevant and in which degree. It's not about 1 focus. It's about an amount focuses. The question then is where does the usage of the word 'focus' stop?
Excess reserves are held by the Primary Dealers. The Fed buys Treasuries from the Primary Dealers. The Primary Dealers buy the Treasuries from the US Government. The US Government uses the proceeds to make purchases (Government Deficit). Hence, the value of the Excess Reserves has already been spent once.
That's not a NET result. It didn't add to the amount circulating dollars. That's why the new dollars stayed as Excess Reserves. Otherwise they would have disappeared from that balance, and only appear on the narrowest money supply: the monetary base. And that was/is the goal of the Fed. The very reason that the Fed PAYS the Primary Dealers (the positive intrest rate on Excess Reserves, made possible by a law change in 2008) to NOT lend it NET out.
I believe you are missing a step in your understanding of the link between the Primary Dealers, the Fed and the Treasury. The Treasury creates the Bond as it needs $ to spend on its deficit budget. The Treasury then sells this Bond on the market. The market (Primary Dealers and the Public) buy the Bond and give the Treasury $. The Treasury then spends this $ on its aforementioned deficit and the Primary Dealer or the Public hold the Bond. The Fed buys said Bond from the Primary Dealer. The Fed then credits the Primary Dealers account with $ and pays a small amount of interest on it (so as not to flood the market with said $ for a second time). These $'s with which the Fed purchased the Bond are held as Excess Reserves (at the Primary Dealers Discretion). The Bond is held by the Fed. So yes, the Excess Reserves have not yet been spent (lent-out) by the Primary Dealers (they may at some point in the future), but the same system that created these dollars allowed the Treasury to spend the same amount on its' budget deficit. The Primary Dealers know that the Fed will purchase the Bonds they buy if they fall in price (increase in yield), so more bonds are purchased on the market than would otherwise have been the case. The Fed takes some of these Bonds off the Primary Dealers (AKA pays above market price). Those same Primary Dealers may choose to re-purchase Bonds off the Treasury to replace them in their holdings. So I agree with you that that which is in Excess Reserves can still be spent (lent-out) by the Primary Dealers (creating what we originally expected to occur with QE) but that is not to say that the only inflationary effect of QE is the 1.25% (or whatever the Fed pays on Excess Reserves) interest paid on said Excess Reserves.
Further to this, there are many institutions which are mandated to hold a % of their portfolio's in Treasury Bonds. With the Fed buying said Bonds, those institutions still need to purchase what they would have otherwise bought (minus any elasticity in demand). In other words, that which is held in Excess Reserves represents that which has been purchased by the Fed and spent by the US Government as part of its budget deficit above and beyond what the Market would otherwise have purchased. Hence that same $ value that is sitting in Excess Reserves has already been spent on goods and services by the US Government (yet not lent out by the Primary Dealers).
