What's going on with Gold & Silver?
Posted March 31st, 2008 by LibertyBaby
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Ever since Gold briefly hit the record 1000oz mark (about 3 weeks ago), both Silver and Gold have subsequently nosedived downward in dramatic fashion. Silver has lost almost a whopping 25% of its value (21+ oz).
Now, I may be ignorant here, but given a financial environment where we have perpetual War, perpetual and inescapable Debt, and lowered interest rates (thus, increasing the expansion of the money supply volume), shouldn't we then continue to see the U.S. Dollar fall in value, and therefore the price of commodities to be moving upward, and not downward?
Understand, we are not talking about just mere periodic profit-taking, or the normal up & down fluctuations here, but it appears that instead that a major wholesale reappraisal of the value of commodities has just taken place (Silver down 25%) that is now comparable to the dot.com bubble burst, and the housing bubble burst.
So, are we now in a commodities bubble burst period?
If so, then I do not understand how Gold & Silver are meant to stablize currency (the Ron Paul, Lew Rockwell position) in the first place.
Even factoring in the "profit-taking" activity, why wouldn't the larger contemporary economic dynamics (and massive debt) continue to push the prices of commodities up further? But instead, we have seen 3 weeks of Silver far, far off its value of only 3 weeks ago and not moving upward, and it also doesn't look like Gold is going to get back to the 1000+ level anytime in the next few weeks (if not months).
What would explain this?
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something to consider
There are a few reasons why gold is dropping. First of all, one would expect a pullback at 1000. Psychologically, it is hard to break it. Secondly, there was somewhat of a small scale mass hysteria in buying as was evidenced by many people rushing to buy "at the market", which usually signals a temporary peak. Thirdly, and maybe most importantly, the dollar has been hammered for a long time. It looks like it is trying to form a bottom and enter a bear market rally. SInce the weak dollar is one of the main causes for the gold rally, then a dollar rally will cause a gold bull market decline. I looks like the dollar rally will continue for a while longer unless there is something catastrophic. When the dollar rally is over (if that is what is happening) then gold will continue upward. If you bought on the short term, then you will take a loss. If you understand what is happening, then I do not believe there is need to panic. Basically, the market is waiting for all of the soft buyers to lose faith, then it will scoop up everyone's loss and move forward. It will generally move forward right when you think you can't take your losses anymore. It is just the nature of the beast.
Re. Gary North and his call for a commodities blow out. It is quite possible that he is correct in the short term (which could mean 6 months to 1.5 years)
Anyway, this is just my humble opinion. Take for what you think it is worth.
Buy as much as you can and forget about it for a while
You should get some physical gold/silver and also buy some gold/silver stocks if you want to make big profits in the near future (ex. look at UXG, SDRG)
and read this article: Doug Casey: "Gold is Going to the Moon"
http://www.financialsense...
And stop whining please and do some canvassing for Dr. Paul instead, register as precinct leader and take over your delegates caucuses for RP!
The IMF
is flooding the market to artificially supress prices.
Gold Bullion
What happened to the gold bullion stored in the basement of the World Trade Center? Does anybody know where it went?
I'm pretty sure Rudy shut
I'm pretty sure Rudy shut down the WTC rescue operations for a few days until they could dig the gold out and I may be mistaken but I think it belonged to the IMF.
Things are only impossible until they are not.
-- Jean Luc Picard
well, if your in for the
well, if your in for the long haul, no.
Trader Dan Norcini
at jsmineset.com had the following comments regarding the silver mystery:
"What is particularly amazing to behold is the horrific price action in the silver market which flies directly in the face of the reports that are circulating out there that many dealers are running out of silver to fill orders for physical. If those are true, then behold how easy it is to manufacture all the paper silver one wants to sell at the comex. Need silver? No problem - we will just make some paper slips and sell it to you! It's as good as the metal and you don't even need to worry about storing it! WOW! What a novel idea! Paper Silver."
reminds me of the early days of fractional reserve banking
Remember, the issuance of more currency (paper) based on a smaller amount of bullion (money) reserves has been around since the Dark Ages, and was how the banking families gained power. The companies who are doing this are setting themselves up for a situation similar to a bank-run. Buy bullion and hold it. View it as your savings--it holds its value relative to the other goods in the economy--not as an investment--a speculation where one tries to increase their holdings of fiat currency.
What do we mean by cost?
We are comparing a stable element (or metal) to a very unstable dollar. When the dollar is a unit of the metal, the economy is stable.
The dollar is not based on anything but like our economy, it requires that those of us in the system BELIEVE in the dollar and the economy. While most here understand the dollar is only valuable because we agree that it is, 99% of the people who traffic the greenbacks are clueless. So while we know better, the system will continue to "work" as long as the vast majority believe that it will work.
Don't worry either way, it will give us more opportunity to purchase gold and silver with our fiat stuff at a much better rate of exchange. I expect silver to dip below $15 and gold to maybe $750... somewhere in the Sept of '07 range. Look for oil to dip to the $85 -90 range by May-June too. just my guess, mind you... don't listen to me, I don't know.
“Liberty means responsibility. That is why most men dread it.” - George Bernard Shaw
wants are unlimited, means are scarce...
Soooo...
My paying $19.00 per oz recently is a loss? ...
No way
Once you buy it, hold on to it and be prepared to defend it. It's a savings account for the future that cannot be looted by the banksters.
Cannot be looted???
There's an old saying by Jefferson...first by inflation, then by deflation...
Modern translation: Buy High, Sell Low.
FRNs in the bank
can be looted by the banksters through inflation. Physical gold and silver bullion stashed in (or around) your home cannot be looted by the banksters.
Gary North Says it's a Commodities Bubble
Gary North is a noted Mises follower and he says the Fed is deflating right now, not inflating. He says M3 is a bogus measure for inflation, and that M1 is more accurate. He says to short gold. He argues that there will be mass inflation at some point, but not right now.
He seems to know what he's talking about, but I don't understand Gary North's arguments. How can the Fed be deflating when they're slashing interest rates and swapping bad credit for good credit? To increase liquidity you have to create more money.
His theory does explain the current drop in commodities prices ... If anyone's interested in reading his articles and parsing them for us, I'd appreciate it.
http://www.lewrockwell.co...
http://www.garynorth.com/...
You follow Gary.
I will continue to do exactly the opposite. Have done so for years.
________________
Good luck to us all,
Lisa C.
www.women4ronpaul.com
The FED does not Deflate
or inflate. I've said this so many times...LOL.
The FED RATE does NOT cause inflation or deflation. If the FED drops rates to zero, that does not AUTOMATICALLY mean we'll get inflation. A lower FED rate ENCOURAGES borrowing. Borrowing/Lending increases the money supply, it is inflationary. BUT, it is the BORROWING/LENDING that accomplishes the inflation, not the lower interest rates. Borrowing and lending is encouraged by lower rates, but it REQUIRES 2 things, a WILLING LENDER and a WILLING BORROWER. If either the lender or the borrower lose confidence in ability to collect/repay the loan, then they become UNWILLING, then lending and borrowing cease to occur. Without new credit being created, combined with defaults that are removing credits from the system, the money system begins to contract, deflate. End of last year the FED was pumped a couple HUNDRED BILLION into banks so they would feel confident. It didn't work, they held on the money instead of lending it out, they held on to it because they felt a lack of confidence, they felt they would need cash reserves for future unforseen occurences. So the FED has cut rates to encourage lending, and it hasn't worked. The FED has pumped massive liquidity to encourage lending, but that hasn't worked.
New credit has stalled because the FED is NOT omnipotent. So far, they only have the power to ENCOURAGE new credit. But Lenders have lost confidence in the current system, they've become very wary of lending.
And foreigners have lost confidence in the US dollar.
________________
Good luck to us all,
Lisa C.
www.women4ronpaul.com
Exactly
they are our MEGA Lenders. And why would they want to keep lending to a country that is becoming a HUGE credit risk for a mere 3-4% return, BEFORE inflation? Would make so much more sense for these foriegn lenders to hold what they already have, wait for our prices to fall and then slowly spend those holdings, buying our country for pennies on the dollar...
It's a healthy correction
Gold should have corrected to about 870-890 a couple weeks ago but it only got down around 910. It could go much lower now but the correction is perfectly normal and healthy. Don't worry. Study DOW theory and correction levels. Gold was in a bit of a bubble for a minute. Just watch it and buy more when the this reversal gives way to inflation. Look at the US $ index and when it breaks below 71 again, buy more metals.
No offense DBase
but that's not the gold market. DOW theory ain't got nothing on the Plunge Protection Team, et. al.
________________
Good luck to us all,
Lisa C.
www.women4ronpaul.com
The market is stronger
than the redbook. That's how the fed can drop rates and gold goes down anyway. All I'm trying to say is that it will correct up again. If "they" continue to push the stock bubble, the worse the correction will be. The market will win...eventually. God help us when it does.
What are your thoughts
If we go into a global depression, what will happen to silver and gold? Will anyone have money to buy metals. Wouldn't metals go down for a period of time? Wouldn't consumption drop?
In a true depression
one oz of silver will buy one week of bread. When 500 oz will purchase a 3 bedroom home, if you can, do it. Metals will become the best way to purchase valuable items such as FOOD. The rich will always be able to buy metals to hedge against inflation and during periods of hyperinflation, they make billions!
What are your thoughts
If we go into a global depression, what will happen to silver and gold? Will anyone have money to buy metals. Wouldn't metals go down for a period of time? Wouldn't consumption drop?
Gold's rise has just started
Harry Browne used to say that gold doesn't take off until you have so much inflation that the public is forced to look at alternatives to the dollar. Usually, inflation has to hit 6% or so before the public feels that way. When gold takes off, its price multiplies 10-20 or more times in short order, not at the gradual pace gold has taken since 2000.
Moral of the story. We haven't seen anything yet. The public has no clue that rising gasoline prices are strongly linked to the sinking dollar. It is only when John Q. Public finally worries about the dollar that gold will take off like a rocket.
You are probably right.
But that's true of anything that produces light.
You would need to rest too
if you were getting ready to race to the top of Mt. Everest.
This might help.
There is a group called GATA (The Gold Anti-Trust Action Committee) who have been following the manipulation of the gold price for years. Like Ron Paul, they are censored by the media. They recently paid around $250k to place this ad in the Wall Street Journal: http://www.gata.org/node/...
You ask a good and reasonable question "if" this is going on "why" is gold/silver falling?
The short answer is: government.
Paper gold/silver might get "trashed" on a certain day but physical has continued to climb in price. Try to buy some physical metal and see what it's going for (hint: it's not the Kitco price). There is an article right now talking about a fall in "gold futures" -- this is paper gold.
There is no doubt about the Plunge Protection Team and its efforts to keep the stock market propped up. Well, the sad fact of the matter is that governments also suppress the price of gold and silver (but not platinum or rhodium). Why? Because they know people keep an eye on the metal to gauge the health of an economy.
After playing this game for many years, I can tell you that metal drops: at the end of the week; at the end of the month; and right before the "shorts" are set to expire. It's like clockwork. Hey, isn't it the end of the month today???
Just remember to own physical metal and not certificates. All this thrashing about is going on in the paper market. Nothing has changed as far as the US economy to warrant a drop in metal prices. If anything, the situation gets worse by the day.
I "lost" enough in this latest downturn to buy a small house but I didn't lose one minute of sleep over it. I've been through it before. The same thing happened with gold tried to blow through $300. Getting past $400 was a particularly tough time. See, how this works? Sure getting past $1000 solidly will take some effort and so will the $2000 mark.
Be right and sit tight. This is an extremely small market (metals) and you need to get some -- it's getting very tight out there.
Lisa C.
www.women4ronpaul.com
I agree... mostly...
However, the value of something is what you can sell it for on the open market. I haven't found any place where I can sell my physical gold/silver for much more than spot. Can you provide some resources for getting a better price above the "paper" metal price?
Let's not forget.
Let's not forget that the governmental elitists don't care about wealth. They want power. Wealth is for those on the lower levels of the pyramid to fight over. At the top they don't even use money. They can stay anywhere they wish without paying, they have the government buy up property next to theirs so that they don't have to deal with neighbors. They have the government invade countries so they can have even more power. They have the government pay for everything, security, transportation, you name it. So sure Ron Paul makes wise personal investment, but he is like us at the bottom trying to keep what he has worked for all his life, but if he was truely selfish and not selfless, it would be to his benefit not to fight the system, but play along.
Those in power also have the
Those in power also have the power to "steal" from the wealthy when they need to...
Don't you think he takes pleasure
in being an iconoclast? He's a rebel and enjoys being one. Going along with the flow probably wouldn't give him satisfaction in life.
Go to the front page
and listen to the audio he touches on this subject in the interview.
Ron Paul is talking about gold?
I don't think I have ever read anything about him wanting to go back to the gold standard, I believe he has been talking about fiscal responsibility, and solid money, he has talked about a mixed basket of commodities to be used as the monetary standard, so unless he is invested in a large variety of commodities, your point is a little mute. Now as for the dollar being backed by something this could easily be done by the government, since there is a lot of gold in Fort Knox as well as a lot of land owned by the goverment. Road could be privatized, ports could be privatized, and the military could be privatized. So the U.S. government/elite have a lot of cards to play in this poker game.
RP does advocate returning
RP does advocate returning to the gold and silver standard.
He has also mentioned that we have no clue if there is even any gold left in Fort Knox. RP has also stated that it is easier to get info from the CIA than the Federal Reserve.
Who knows what gold exists and where it is located...
Was
There WAS a lot of gold in Fort Knox.
It's been transferred to the custody of the Fed as collateral for US loans.
What about marriage, rational or irrational?
What about men do they have children for rational reasons? Were soldiers and revolutionaries who gave their lives for our freedoms acting irrationally? Wouldn't it be more rational to submit to authority to have survived. In other words is liberty a rational or irrational goal?
Whats rational
for one person can be irrational for another. If one's goal is to have a happy life, then some particular occupation may make one person happy and another frustrated. The same for having children, or anything else.
I've bought 405 silver dimes for $500 over the past four weeks.
Figuring each dime at .0715 oz. and multiplying by today's spot silver price I get a rough equivalent worth of $501.25. The markup and the 10% non-silver content supposedly cancel each other out. So I'm just about even. I'm way ahead on the silver quarters I bought in January though.
There are more than political reasons to depress a commodity price, especially if a wild price increase can be projected. If the market can be manipulated down just before that wild ride, then major players can better their positions in these commodities while the price is low. Much depends on what it costs to manipulate prices downward. If it costs too much to trick run-of-the-mill investors into selling, there would be no gains in the offing. But I think the big money knows how to play this game without incurring losses.
All the requisites are present for a huge price climb (dollar devaluation, short supply of silver, threat of war with Iran, etc.). I think we should trust that the yawning chasm is real and the economy will plummet, and we should keep buying silver.
I still need to understand?
So explain to me? Was it rational or irrational for your mother to give you birth? Since she probably knowingly subjected herself to labor pains and possible risks. Was her risk to her selfish benefit?
Yo Momma!
And my momma, and just about everyone's momma takes a certain amount of pride and satisfaction in her children. Yes, childbirth until about a century ago was the leading cause of death among women, yet they considered it to be worth the risk because the assumption that they could bear children made them more marriageable. Bearing and raising children used to be old-age insurance -- having someone young and vigorous around who loved and revered you and would take care of you when you were no longer capable of it. Because reproduction is a survival mechanism, organisms that desire offspring are more likely to out-populate organisms who'd rather not bother. Like every other rational human act, it always comes back to selfishness.
Viva Agora!
Professor Bernardo de la Paz
www.citizenduquesne.org
Wouldn't driving the price of gold and silver work against Paul?
Surely they will be doing everything they can to drive the price of gold and silver down before the elections. Or do you think they want to hand the election to Ron Paul? They will take a lose if they have to, but if they win the election they will get back their investment ten fold. Let's force them to drop the price of gold down to the ground, so we can buy it cheap.
Very enlightening.
From the logic you are pointing out then Budda basically made a choice between two selfish acts.
Take a look at a silver
Take a look at a silver chart from the past 5 years and you will see that the price did not rise in a continual smooth fashion the entire time: http://www.silverseek.com... The price will rise, but there will be short term dips along the way - in my opinion.
Regarding gold and silver backed currency being able to stabilize the markets, it's about purchasing power. The purchasing power of gold and silver does not fluctuate anywhere near as significantly as the purchasing power of the dollar. Commodity prices in terms of gold or silver have been extremely stable over the years. The instability comes from a currency (the US dollar) which is not backed by any sort of asset which enables it to be manipulated in big ways, to our detriment.
I've read recently in an article something about 50 or 80 years ago a one ounce silver dollar purchased around 4 gallons of gas. A one ounce silver dollar today still purchased approximately 4 gallons of gas. Over the same time period, today's gas is 20x more expensive in terms of dollars - but interestingly gas prices remained the same in terms of silver. The silver price is much more stable than fiat money.
Do I understand you correctly.
From what you are saying there does not exist any act which isn't selfish or selfless. Since even if I lose something to help someone else, I am doing it to make myself feel good.
I don't know for sure
but it appears that people don't do acts that make them unhappy to perform if they have a choice to do otherwise. Some people act in their short-term self-interest, and smarter people act in their longer-term self-interest doing things that may be repugnant in the short term but leads to greater benefit to the self (greater happiness) later. Maybe some people act with complete disregard for themselves, but I doubt it. If there are people that do, I suspect they end up dead quickly or go into a deep depression.
My position is that the only rational acts are those that are done in order to obtain personal benefit. I see no rational basis for doing things for others if it's going to hurt me, or even if it's neutral, because the basis of my values is my own well-being.
Go to Vegas if you want to gamble at least you get free drinks.
Just like the price of oil. Those in charge of the OPEC nations are going to increase the flow so that we will see the prices fall. Sure they will take a lose, but their hope is that after the election they will have the puppet they want in office to keep our military working for them protecting their interests. At the same time we will probably see more violence from the middle east shown on T.V. this is so we can justify more military spending. It doesn't take a genius to figure this stuff out people.
$35 an ounce, whatever.
As I said, gold is only worth what they say it is worth, regardless of it's real value. It's a poker game and they are trying to get all your chips. Then they have more control. This is why they had FDR prohibit people from owning gold and turning it into the government. It's like sitting at a poker game with $10 to your name and the guy in front of you is a millionaire, he'll buy every pot. Eventually our elected officials will turn over all gold to the Fed, if there is any left in Fort Knox and they will control that as well. Who is going to stop them, you? Most Americans don't even know what is going on. Just trying to get from one paycheck to another. Buy food, If you can afford to buy gold or silver buy a little, but never sell. Trade it for services with the Amish.
It has only been a few
It has only been a few weeks. How about you wait a little while before you predict a decline in the price. Our current predictions are backed by a commodity bull market.
yours is based on a sell-off and scare.
.
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