Silver price discussion and analysis

[DB008]

Re: SILVER

Tothemax, you also not looking as to what happened recently on the COMEX with MARGIN requirements to silver futures contracts.

This, IMO, had a lot to do with the pullback, but l'm sure you'll disagree....

COMEX Increases Silver Margin Requirements for Third Time in Past Week

On Tuesday, May 3rd, the COMEX raised margin requirements for trading silver futures contracts. This was the third increase in the past week.
The new margin requirement per contract was increased from $14,513 to $16,200 for initial margin and from $10,750 to $12,000 for maintenance margin. Hedgers in silver futures pay maintenance margin as initial margin while traders are required to post the higher initial margin amounts.

 

[DB008]

Re: SILVER

This guy is a total douchebag/wanker. His explanation on Silver and Margin requirements....

Margin requirements explained!

 

[explod]

Re: SILVER

Tothemax, you also not looking as to what happened recently on the COMEX with MARGIN requirements to silver futures contracts.

This, IMO, had a lot to do with the pullback, but l'm sure you'll disagree....

They in fact increased the margins a total of five times over the fortnight, the current now from memory only is about US$22

All about squeezing the small players out of the game. These blokes are making Maddock look like a saint.

However the physical buyers are winning the battle and currently the difference between what you can buy physical at, around US$40 and the paper price, around US$35 will continue to blow out and this paper system will soon collapse from my rough reading of it al.

Interesting times.

 

[tothemax6]

Re: SILVER

No one can and that is one of the main points I have tried over the years to make. One merely follows what seems to be happening. It seems to me with money printing now almost out of control that its value (and we are seeing it with the US$) is dropping. Where that will all really end know one knows and is of course why tothmax you throw your arms in the air. We live in very uncertain times.

I agree with you, but unfortunately its not that simple. We live in Australia - we don't print money here. If I lived in the UK or the US, I wouldn't have any cash savings - it would all be metal. If Australia one day starts printing, my savings account will be closed. If I feel more comfortable with the prices of gold and silver, given the economic climate (eyes on China), I will probably be more bullish. At the moment I cannot guess the direction like I could 6 months ago.

You really need to go look again and harder! WRONG! Think about what really determines reserve status.
Also... why is it, do you think, that China has an inflation problem?

The currency peg is not the only thing that is causing inflation. Up until recently, when they got scared by the inflation, the policy of the party was that banks should 'go forth and lend'. Credit expansion is as much a cause of inflation as increases in the monetary base.
Really 'reserve' status is bullsh-t. Reserves used to mean one thing and one thing only - gold. The origin of foreign nations holding USD in their central banks was that following the Breton Woods agreement, the US promised to redeem (for foreign central banks) 35 'dollars' for an ounce of gold. The dollar was 'as good as gold', and foreign central banks held USD reserves, and pegged their currencies to the USD. Following 1971, the US defaulted on its obligation, but the foreign central banks still had their piles of USD. So here we are.

This guy is a total douchebag/wanker. His explanation on Silver and Margin requirements....

Ugh, how did you find this guy?

Tothemax, you also not looking as to what happened recently on the COMEX with MARGIN requirements to silver futures contracts.
This, IMO, had a lot to do with the pullback, but l'm sure you'll disagree....

If an increase in margin requirements can push the value of something from $50 to $33 in a very short time, then there was something wrong to begin with. After all, if there is all this inflation causing money and credit floating around - surely the silver speculators could meet their deposit requirements?

 

[DB008]

Re: SILVER

MUST WATCH: The SILVER Perspective



My my, how a few months makes a difference.

I'm still long on Silver. I was up 60% a few weeks ago, now just 17%, LOL.

 

[damien275x]

I have about 1000oz now. I've put a year of savings into it. I'm 21 now, so even if this baby crashes I don't have much to lose. It seems like a smarter call to make than going and getting a loan on an overvalued home at the moment. My reasons for holding a position - I like the fundamentals. I like the long-term trend. At present it looks like everything is in place for prices to continue to rise. The upside is huge, and I can live with the downside, although as Silver has industrial uses also I can't see it ever being worth $0. (You can't say that about paper currency) The potential upside to me is a lot greater than the downside.

One thing you need to be able to do is tune out noise. Seems like there are a lot of idiots in suits on the TV yapping away - these people have been wrong about everything for decades, I don't know why people would listen to them? I have hunted down plenty of Youtube channels, Internet radio stations, and blogs and I subscribe to them for real news and economic forecasts. These are people who have a very good, solid proven track record in predicting future trends in the market.

I don't even batter an eyelid with the wild fluctuations, I've been down $4000 and then up $8000 within weeks!! It's a wild ride, but I don't plan to spend this wealth for another 5-7 years so why bother stressing?

 

[TabJockey]

Re: SILVER

I have about 1000oz now. I've put a year of savings into it. I'm 21 now, so even if this baby crashes I don't have much to lose. It seems like a smarter call to make than going and getting a loan on an overvalued home at the moment. My reasons for holding a position - I like the fundamentals. I like the long-term trend. At present it looks like everything is in place for prices to continue to rise. The upside is huge, and I can live with the downside, although as Silver has industrial uses also I can't see it ever being worth $0. (You can't say that about paper currency) The potential upside to me is a lot greater than the downside.

One thing you need to be able to do is tune out noise. Seems like there are a lot of idiots in suits on the TV yapping away - these people have been wrong about everything for decades, I don't know why people would listen to them? I have hunted down plenty of Youtube channels, Internet radio stations, and blogs and I subscribe to them for real news and economic forecasts. These are people who have a very good, solid proven track record in predicting future trends in the market.

I don't even batter an eyelid with the wild fluctuations, I've been down $4000 and then up $8000 within weeks!! It's a wild ride, but I don't plan to spend this wealth for another 5-7 years so why bother stressing?

I reckon your mental to put all of your money into a speculative market. In 20 years you will look back and laugh (hopefully not cry) at how ****ing naive you where when you where 21 to go and stack all your money into a single volatile precious metal. Its not going to 0 but you would be surprised just how abundant silver is.

The best thing to do is stop listening to "idiots in suits" on any medium, and do in depth research yourself.

If you get into supply and demand for silver over the long term, current stock piles, current reserves and resources and capital invested in silver mining it paints a real picture that you can evaluate yourself.

Often people talk about future technologies that will drive silver demand. Actually run the numbers, how much silver does product x require? and how many units would be manufactured in a year?

If you want to gamble just goto the casino ffs.

 

[explod]

Re: SILVER

Tabjockey, your post above is a lot of bollocks. Since 2001 silver has been in a strong uptrend that is very much intact. Paper money, inprticular the US$ has been in a down trend, (still intact) for the same period. And do not talk Aussie to me, silver is in the same uptrend against that too.

I will seek out the links later in the day, but there is in fact less silver than gold and that is why there is so much whoo har, it is an unbelievably good investment and will continue to be a wonderful hedge againts the debasement of currencies and underlying inflation. Of course whilst the JPmorgans et. al. are fully set themselves it will be rubbished in the pres to put people off. There is less than .05% of investing people people in the know on this market.

Perth mint for example are at pains to try and make out they have plenty but orders now have stretched out to months to be filled, and someone representing them will pop up soon to say otherwise I expect. The paper price against the physical online sales prices are out of whack by up to 25%, just check ebay 1 kilo bars.

Sure it is not a good idea to have all eggs in one basket. I hold bars of different sizes, silver coins, silver stocks and some cash (for opportunities). My Grandson who is the same age as the subject under discussion has been accumulating silver coins since the silver price was $8 and he just loves counting the profits as they grow, turning into a right scrooge, has some Dutch in him which helps too of course. He brought some more a few weeks ago when silver hit its peak but he is not worried as he knows the full story now.

cheers explod

 

[TabJockey]

Re: SILVER

Explod, I know you are very anti fiat, pro physical, so I will clarify my previous post:


I contend that:

> Silver is a volatile, speculative market. Silver has been in an up trend for a long time, yes, but its volatility has been high in recent months, years and decades.

> Its crazy to put all your eggs in one basket. Even if you consider it money you can afford to lose, putting it all in one trade is more akin to gambling than investing.

> Its a good idea to know the fundamentals of what you are investing in. The best traders and investors do their own work, understand their own positions and back their own research. Documentaries on you tube are not a solid ground for any large investment.

Although you can tell by my tone that my own personal research has led me to question the sustainability of high silver prices into the future, I am not putting this forward as an opinion to Damien to follow, I am suggesting that his risk management and fundamental research needs work.

(This does not constitute financial advice, merely my opinion on investment research and risk management).

Also to clarify my comment on the abundance of Silver, I speak from a geological point of view.

Stocks of gold above ground are greater than silver stocks, there are many reasons for this most of which stem from the fact that Gold is worth so much more than silver.

But geologically, silver is found as a by product with so many base metals. Silver deposits are often easier to mine than gold. The average silver cash cost to mine is currently less than $5 an ounce, and there is allot of it out there in the earth's crust.

This is the point of view I have formed from my own research. Geological abundance does not have a short, or even medium term correlation to market prices.

 

[damien275x]

Re: SILVER

I reckon your mental to put all of your money into a speculative market. In 20 years you will look back and laugh (hopefully not cry) at how ****ing naive you where when you where 21 to go and stack all your money into a single volatile precious metal. Its not going to 0 but you would be surprised just how abundant silver is.

The best thing to do is stop listening to "idiots in suits" on any medium, and do in depth research yourself.

If you get into supply and demand for silver over the long term, current stock piles, current reserves and resources and capital invested in silver mining it paints a real picture that you can evaluate yourself.

Often people talk about future technologies that will drive silver demand. Actually run the numbers, how much silver does product x require? and how many units would be manufactured in a year?

If you want to gamble just goto the casino ffs.

I do my own reading and research and come to my own conclusions. Fact that most people think it's a bad idea is probably a good thing. The herd is usually wrong. The 25k original investment is worth about $40k but I don't care - I dont want that money now. I want it in 2015. Even if it hits $0 by then, I'll have saved up and be doing just fine. 25k is nothing, all it buys is 1 car or 1 brick of a home.

 

[Bullion Money]

Re: SILVER

I do my own reading and research and come to my own conclusions. Fact that most people think it's a bad idea is probably a good thing. The herd is usually wrong. The 25k original investment is worth about $40k but I don't care - I dont want that money now. I want it in 2015. Even if it hits $0 by then, I'll have saved up and be doing just fine. 25k is nothing, all it buys is 1 car or 1 brick of a home.

Nice stack you got there. Obviously im very pro PMs but its always good to diversify a little.

At least even in PMs, Some silver some gold some cash to buy in massive dips.
PMs is in a Bull market and in my view its a pretty sound investment to risk ratio over the longer term.

Obviously a biased view though...

 

[Bron Suchecki]

Re: SILVER

Perth mint for example are at pains to try and make out they have plenty but orders now have stretched out to months to be filled, and someone representing them will pop up soon to say otherwise I expect. The paper price against the physical online sales prices are out of whack by up to 25%, just check ebay 1 kilo bars.

Here I am, popping up. Just this week we shipped in 20 tonnes (643,015oz) of 1000oz silver bars (with more coming). We are selling that physical at the "paper" price. It is laughable to think that the prices on ebay represent the "real" price, or that the volume of oz sold on ebay have any effect on worldwide silver prices.

Yes, we are in the middle of production improvements which has curtailed our ability to melt those 1000oz bars into retail sizes, but that is not a good indicator to rely on as to the real supply/demand balance.

 

[tothemax6]

Re: SILVER

I reckon your mental to put all of your money into a speculative market. In 20 years you will look back and laugh (hopefully not cry) at how ****ing naive you where when you where 21 to go and stack all your money into a single volatile precious metal. Its not going to 0 but you would be surprised just how abundant silver is.
The best thing to do is stop listening to "idiots in suits" on any medium, and do in depth research yourself.
If you get into supply and demand for silver over the long term, current stock piles, current reserves and resources and capital invested in silver mining it paints a real picture that you can evaluate yourself.
Often people talk about future technologies that will drive silver demand. Actually run the numbers, how much silver does product x require? and how many units would be manufactured in a year?
If you want to gamble just goto the casino ffs.

Amen, thanks for that post. Exactly my sentiments.

Tabjockey, your post above is a lot of bollocks. Since 2001 silver has been in a strong uptrend that is very much intact. Paper money, inprticular the US$ has been in a down trend, (still intact) for the same period. And do not talk Aussie to me, silver is in the same uptrend against that too.

Gauge it against everything else. If its just paper money going down, everything would be going up by similar amounts. However its not, silver went up by much more.

I will seek out the links later in the day, but there is in fact less silver than gold and that is why there is so much whoo har

Yes but the issue is the cost of extraction. The actual silver percentage content of the earth is not really economically relevant. The last mining cost figure I saw was $15/ounce of silver. Inflation will increase the cost, sure, in time.

Sure it is not a good idea to have all eggs in one basket. I hold bars of different sizes, silver coins, silver stocks and some cash (for opportunities).

Lol, come on, that's one basket
There are plenty of other assets that would go up for the same reasons silver would go up.

 

[explod]

Re: SILVER

Here I am, popping up. Just this week we shipped in 20 tonnes (643,015oz) of 1000oz silver bars (with more coming). We are selling that physical at the "paper" price. It is laughable to think that the prices on ebay represent the "real" price, or that the volume of oz sold on ebay have any effect on worldwide silver prices.

Yes, we are in the middle of production improvements which has curtailed our ability to melt those 1000oz bars into retail sizes, but that is not a good indicator to rely on as to the real supply/demand balance.

I am not convinced. Ebay is not the only place, I regularly make personal visits to W. Davis and I. Wright in the Melbourne CBD. Silver is growing harder to acquire.

http://www.beaconequity.com/silver-...-stocks-to-consider-2011-06-02/#ixzz1OAqtlraQ

This does confirm your input Bron Suchecki but on reading through it only confirms that there are questions pointing strongly to the rising demand.

http://www.bullionbaron.com/2011/02/perth-mint-vs-royal-canadian-mint.html

Google also reveals huge a debate on many fronts and the vehemance of those trying to deny the problem only confirms that there is a problem.

 

[explod]

Re: SILVER

Lol, come on, that's one basket
There are plenty of other assets that would go up for the same reasons silver would go up.

Not one basket at all. Many investors are holding only cash at the moment as there are signs of another servere global stock market crash.

Silver is money, it is cash and I can convert it to cash within hours, stocks take four days to settlement.

And silver has been doing much better than cash or term deposits since 2001 and there are no signs that is going to change for some time yet.

 

[Mr Z]

Re: SILVER

Product shortage <> silver shortage ---> get it? The main issue is with refinery & mint capacity.

I can't count how many times we have done this silly little dance in the silver world over the last decade. Wake me up when someone defaults on a large obligation!!!

 

[tothemax6]

Re: SILVER

Many investors are holding only cash at the moment as there are signs of another servere global stock market crash.
Silver is money, it is cash and I can convert it to cash within hours, stocks take four days to settlement.

If silver were a money, people would use it as the means of exchange. Since I see no evidence that silver is being used as such, it is not a money, it is a commodity.

 

[Mr Z]

Re: SILVER

If silver were a money, people would use it as the means of exchange. Since I see no evidence that silver is being used as such, it is not a money, it is a commodity.

No that is not true, you are confusing currency with money.

Gold and silver are money because of their attributes, nothing can change that, they both meet the criteria that humans need in a natural money.

PS. It is still minted as legal tender in the USA... albeit unused in that roll.

http://en.wikipedia.org/wiki/Gresham's_law

 

[cynic]

Re: SILVER

No that is not true, you are confusing currency with money.

Gold and silver are money because of their attributes, nothing can change that, they both meet the criteria that humans need in a natural money.

PS. It is still minted as legal tender in the USA... albeit unused in that roll.

http://en.wikipedia.org/wiki/Gresham's_law

There seems to be some confusion between current/liquid assets, commodities and currency in these posts.

Just because a precious metal can at times be minted does not automatically confer the status of "money" to all of it's occurences in nature, mining, refining etc.

However, a precious metal may be considered to be a "current" or "liquid" asset as it can normally be readily exchanged for legal currency.

A minted silver or gold coin is considered as money because it is assigned a specific value for the purposes of legal tender. A gold or silver nugget is not. The gold or silver coin can be readily deposited into one's bank account (at face value) without any intervening transactions. The gold or silver nugget cannot, it must be exchanged/traded for money first. The value of the precious metal content of the minted coin will (almost invariably) be different from the legal tender value, so one must exercise discernment before deciding whether to visit the bank or the local bullion company.

Surely one can easily recognise the difference? The minted coin is considered to be money and the nugget is still a commodity.

Since the abolition of the gold standard, certain precious metals might prove to be worthwhile investments or hedges against inflation, particularly given that there are now several major economies recklessly printing money with insufficient regard to the need for asset backing. Of course one will have to DYOR (I'm beginning to like these four letter acronyms!) before deciding how best to invest one's money.

 

[explod]

Re: SILVER

Silver and gold have been money for 5000 years. For convenience paper backed by gold became the norm till the Britton Woods agreement. And of course the intrinsic value of money (paper) has been diluted ever since and is why we find we have problems today.

Following is a good definition of where we were at in the understanding of silver as money but is dated. I contend we will have to return to this definition when paper currencies do collapse. Utah in the USA have just legislated to include silver into thier currency so the shift is on.

http://www.gold-eagle.com/editorials_01/morgan071001.html


In history the major monetary metal is silver, see

http://www.moneychoices.com.au/blog/the-rise-of-silver-infographic.php