When the real crash comes..........

G

glam

Member
So we had a Silver market crash, which seems to have initiated a fall in a lot of other commodities. Gold, Oil etc. Who would have thought silver had such weight and could lead oil down?

Anyway, like many I was expecting a silver crash as some stage, but I didn't expect it until the stock market took it's next big dive, or when oil got back over it's historical highs $150 or thereabouts. I still think oil will retouch the $150 mark or higher before a repeat of 2008 happens.

Sure our silver 'correction' has had a bit of an effect on some other commodities, but I can't help thinking there is a more serious and broader stock market and commodities crash around the corner.

So will silver storm back to retest or pass the $50 high before the next big correction or will it be a bit more shy this time, and get taken down big time during the next SM selloff.
 
Is silver really pulling other commodities down? not sure that it is that simple.
 
If the stock market and commodities (inc. gold,silver) both tank, where are people putting their investments? Does this imply a simultaneous strengthening of the USD and US bonds?
 
Commodity sell off has raised the risk sensitivity of all investors and Ag is way out there on the risk scale - this share market volatility has sent the hot money in PM's (in particular silver) running for cover - gsr back at 40 tells it all.

Fundamentals of Ag solid as ever - within a month we'll be back at $AUD40 and then hopefully a more restrained and sustainable run up to $50 and beyond.
 
rbaggio said:
If the stock market and commodities (inc. gold,silver) both tank, where are people putting their investments? Does this imply a simultaneous strengthening of the USD and US bonds?
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Pretty much, (if history is any indicator). Put in the most simplest terms, commodities rise cause there is to much money chasing it, then as they start to rise further leverage gets put behind it even more as people speculate trying to make a quick buck. stocks rise etc.

Then you get a massive de-leverage through rate rises or a certain part of the financial system going sour like sub-prime (where the AAA's were found to be really not AAA's) and the market comes down. Rate rises equals scarcity in dollar as people need to pay back their debts and in simple economic terms supply and demand, there is a demand for the dollar to pay back the debts, so the dollar rises in value as everyone is scavenging for it.

When people leverage they borrow money into existence and its on a balance book, when we get rate rises that money its reeled back in and since the size of debt is larger then the size of the actual money supply (notes coins, actual CURRENCY) it will be in demand as people pay need to pay back their debts, basically FIAT will be IN DEMAND ! (now thats a thought)
 
I've had a couple low ball offers... :D well i think they are low ball..if you wanna wait 4-6 weeks and line up for 2 hrs..be my guest :P
 
unfunkable said:
at $40AUD my $1250 pamps are gonna look cheap...may as well save yourself the 4-6 wait and buy now :D
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Luv ya work funk - and you are probably right. Trouble is I'm an accountant and we're known to be tight! :D
 
rbaggio said:
If the stock market and commodities (inc. gold,silver) both tank, where are people putting their investments? Does this imply a simultaneous strengthening of the USD and US bonds?
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USD Index rallied from 73 all the way up to 74 and has sat there all day long.

I think the flight to safety is not playing well for the USD this time around.

And this from jsmineset.com

Asian trio to study dollar alternative: report
May 4, 2011, 7:59 a.m. EDT
By Chris Oliver, MarketWatch

HONG KONG (MarketWatch) Officials from China, Japan and South Korea agreed on Wednesday to study a proposal to use their own currencies for regional trade settlement instead of the U.S. dollar, according to a Dow Jones Newswires report

More: http://www.marketwatch.com/story/asian-trio-to-study-dollar-alternative-report-2011-05-04
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