SILVER - WAS $31-$49, WAS $33-$43, NOW $44+

[68Camaro]

Can you elaborate on the US Dollar Index ?

What do you want to know? I hate to presume either ignorance or knowledge. One of my key talents is to be able to re-state the obvious!

I presume you all know that it is a market-basket of key other currencies, weighted by type (Euro, yen, pound, canadian $, swedish krona, swiss franc) relative to the US dollar. Look it up on wiki (U.S. Dollar Index) for details.

The original weighting was set at index of 100 = par with dollar. A value higher than 100 indicates that the dollar is stronger than the weighted average. A value lower than 100 indicates the dollar is weaker. From the wiki article

At its start, the value of the US Dollar Index was 100.000. It has since traded as high as 148.1244 in February 1985, and as low as 70.698 on March 16, 2008, the lowest since its inception in 1973.

(Note these values quoted above aren't the closing value high/low, but the intra-day high/low.)

A number of conservative analysts who are smarter than I am say that a closing value below 72, in a downward trend (and especially given the weakened state that both the US and the world are in) is a strong indicator of signficant trouble. They believe this is one of the key warning indicators of imminent collapse (note that we were "there" in 2008, but QE 1 staved it off, temporarily). 72 is not a literal hard, fast rule, but anything near that value needs to be considered. The closer to it the more the warning bells should be going off. If we pass below 72 and things haven't collapsed, the further below 72 we get, the more conservative positions should become. And at that point, make sure you are stocked up, and your powder is dry, literally. There are no doubt other clarifying indices that need to be considered with this. I'll continue to post any strong conclusions that I hear from the newsletter summaries I get.

[TXBullion]

Can you elaborate on the US Dollar Index ?

What do you want to know? I hate to presume either ignorance or knowledge. One of my key talents is to be able to re-state the obvious!

I presume you all know that it is a market-basket of key other currencies, weighted by type (Euro, yen, pound, canadian $, swedish krona, swiss franc) relative to the US dollar. Look it up on wiki (U.S. Dollar Index) for details.

The original weighting was set at index of 100 = par with dollar. A value higher than 100 indicates that the dollar is stronger than the weighted average. A value lower than 100 indicates the dollar is weaker. From the wiki article

At its start, the value of the US Dollar Index was 100.000. It has since traded as high as 148.1244 in February 1985, and as low as 70.698 on March 16, 2008, the lowest since its inception in 1973.

(Note these values quoted above aren't the closing value high/low, but the intra-day high/low.)

A number of conservative analysts who are smarter than I am say that a closing value below 72, in a downward trend (and especially given the weakened state that both the US and the world are in) is a strong indicator of signficant trouble. They believe this is one of the key warning indicators of imminent collapse (note that we were "there" in 2008, but QE 1 staved it off, temporarily). 72 is not a literal hard, fast rule, but anything near that value needs to be considered. The closer to it the more the warning bells should be going off. If we pass below 72 and things haven't collapsed, the further below 72 we get, the more conservative positions should become. And at that point, make sure you are stocked up, and your powder is dry, literally. There are no doubt other clarifying indices that need to be considered with this. I'll continue to post any strong conclusions that I hear from the newsletter summaries I get.

Hey thank you very much for posting this. I didnt know anything about it. i will take some time to do some more research but this is very helpful!

[beauanderos]

Something else to consider when evaluating if the dollar is "strong" or "weak" compared to the basket. Our relative number comparitively to the basket may not at times be obviously worsening, and yet it can be. The basket is not fixed, those other currencies are depreciating as well, so it's a matter of who is printing the fastest by which comparisons are calculated. Say the index stays "fixed" for a week and commentators are all aglow with the strength of the dollar and yet... there might be a significant downside move against other global currencies not included in the basket because all of the weighted fiat currencies are weakening rapidly in tandem. I read something on Daily Reckoning about how bad prices were in Argentina, when one of the writers visited there. They would not even quote real estate prices in dollars because it is destabilizing so fast.

[68Camaro]

Something else to consider when evaluating if the dollar is "strong" or "weak" compared to the basket. Our relative number comparitively to the basket may not at times be obviously worsening, and yet it can be. The basket is not fixed, those other currencies are depreciating as well, so it's a matter of who is printing the fastest by which comparisons are calculated. Say the index stays "fixed" for a week and commentators are all aglow with the strength of the dollar and yet... there might be a significant downside move against other global currencies not included in the basket because all of the weighted fiat currencies are weakening rapidly in tandem. I read something on Daily Reckoning about how bad prices were in Argentina, when one of the writers visited there. They would not even quote real estate prices in dollars because it is destabilizing so fast.

Yes, all true.

[TXBullion]

Something else to consider when evaluating if the dollar is "strong" or "weak" compared to the basket. Our relative number comparitively to the basket may not at times be obviously worsening, and yet it can be. The basket is not fixed, those other currencies are depreciating as well, so it's a matter of who is printing the fastest by which comparisons are calculated. Say the index stays "fixed" for a week and commentators are all aglow with the strength of the dollar and yet... there might be a significant downside move against other global currencies not included in the basket because all of the weighted fiat currencies are weakening rapidly in tandem. I read something on Daily Reckoning about how bad prices were in Argentina, when one of the writers visited there. They would not even quote real estate prices in dollars because it is destabilizing so fast.

Which is why it doesnt make sense to even have a measure like that in the first place. Variables against variables do not offer a very good foundation for comparison.

[aloneibreak]

the trade weighted exchange index includes a few other countries, such as argentina, that the USD index does not

it has been bouncing around 69ish which appears to be a new low

does this mean the dollar is actually worse off than shown by the USD index we all watch ?

[beauanderos]

the trade weighted exchange index includes a few other countries, such as argentina, that the USD index does not

it has been bouncing around 69ish which appears to be a new low

does this mean the dollar is actually worse off than shown by the USD index we all watch ?

I would have to say Yes to answer your question. My guess would be that there isn't much difference between the misdirection and obfuscation employed by the govt (in falsifying "real" consumer index price rises with holistics and exclusion of core items such as food and gasoline) in an effort to allay and forestall the fears of the sheeple that inflation is much worse than it is, than there is in purposefully employing comparison to this basket of other currencies as a measure of stability. They know damn well the other currencies are sinking too, it works to their advantage to provide an illusion of stability, or even strength in the dollar (when the euro or yen temporarily weaken) so that enraged consumers don't foment an uprising. All the machinations that we're aware of, and many that exert a subliminal effect, are all demonstrated in an array of legerdemain flourished by the great Wizard of Oz himself (Bernanke, Geithner) so that the audience is hushed by awe into silent admiration.

[slvrbck]

Came damn near $47 there.

[68Camaro]

Came damn near $47 there.

Doesn't look like the Hong Kong exchange is dealing much in silver (unlike their gold trading, interesting comparison there), so it'll be quiet now until Sunday evening.

[Lemon Thrower]

not a bad week, even if it was only 4 days. up $3.50 - $4.00, close to 10% in a week.

[68Camaro]

not a bad week, even if it was only 4 days. up $3.50 - $4.00, close to 10% in a week.

In a four day week...

[slvrbck]

well, so much for little action. . . flyfish almost just got stopped out!!!

[theo]

47.64 on Goldshark. Up a dollar. Is someone cornering the market?

[beauanderos]

47.64 on Goldshark. Up a dollar. Is someone cornering the market?

Hadn't been to Goldshark before. Nice looking site. Are their "spot" prices the actual market melt? Or are they what they project dealers are willing to pay each other? It's a bit unclear, and none of the other sites I checked had silver priced nearly as high. We need an international site that can verify prices. How hard would it be for our moderators to modify the header to include some small up-to-the-minute price charts for PM's?

[Lemon Thrower]

even if those figures are correct they are not very reliable. its sort of like the after hours trading in a stock. sure, those trades really happen at wierd prices, but they have little predictive value for what happens when the regular market opens again. I expect the rpice to go up on monday based on what happened on thursday, not based on what's happening today.

[Treetop]

How hard would it be for our moderators to modify the header to include some small up-to-the-minute price charts for PM's?

that would be cool if someone could do that...

[theo]

47.64 on Goldshark. Up a dollar. Is someone cornering the market?

Hadn't been to Goldshark before. Nice looking site. Are their "spot" prices the actual market melt? Or are they what they project dealers are willing to pay each other? It's a bit unclear, and none of the other sites I checked had silver priced nearly as high. We need an international site that can verify prices. How hard would it be for our moderators to modify the header to include some small up-to-the-minute price charts for PM's?

One of my favorite websites is http://dollarcollapse.com/. They have had Goldsharks' gold and silver quotes pasted on their site for the past few months (before that it was Kitco). This the first time I've seen Goldsharks differ from Kitco by more than a few cents. I agree that the GS price should be taken with a grain of salt as reflects a very thinly traded market.

Having said that, is it possible that some of the big players (COMEX, JPM etc) are desparately trying to secure physical silver in the available Asian markets to make good on delivery obligations next week?. . . just a thought.

[brian0918]

BullionVault gives similar data to GoldShark's. I'm fairly confident that we've left $46 behind.

[NickelExpress]

looks like were about to leave 47 behind to :O

[DeanStockwell]

Figured out why goldshark is showing such high prices. They are incorrectly displaying the ask price and not the bid price to make the spot price appear to be higher.
Correct quotes are here:
http://www.forex-markets.com/quotes.htm

[justj2k78]

I have a question. I'm trying to get my wife interested in this too (it's been easier then stocks and bonds... shiny and all).... ANYWAY, today when I look at the price of silver, just before 10am and just before 12am, silver drops about a dollar and instantaneously pops back up about a dollar. My wife looks at the chart and asks me why that happens.... I have no idea why that happens. Anyone care to educate?

[68Camaro]

You should probably post a plot of exactly what you are noting, but today was odd because only market open was small and there were very few trades, so what i think you were seeing is individual transactions.

[justj2k78]

You should probably post a plot of exactly what you are noting, but today was odd because only market open was small and there were very few trades, so what i think you were seeing is individual transactions.

Was looking at silverprice.org. I'll be damned if I can make the chart go back in time. Boo.

[theo]

I have a question. I'm trying to get my wife interested in this too (it's been easier then stocks and bonds... shiny and all).... ANYWAY, today when I look at the price of silver, just before 10am and just before 12am, silver drops about a dollar and instantaneously pops back up about a dollar. My wife looks at the chart and asks me why that happens.... I have no idea why that happens. Anyone care to educate?

I agree with Camaro that what you are seeing is volitality in a very thinly traded market. Also the fact that some price tracking services (like Goldshark) chose to track the open Asian markets on Friday and others (like Kitco) didn't adds to the confusion.

I'd keep an eye on the news today and tomorrow as well as the next few weekends. If I remember correctly Lehman Bros. and Bear Stearns both defaulted over a weekends in March and September 2008. If and when the COMEX and/or JPM fall it would likely happen in the same way.

[henrysmedford]

Today we were at Chase getting Franklin his pennies to sort when the price of silver came up with the teller . She said thousands of dollars had left the bank this week for silver. I ask in boxes of 50 cents she said no in FRN and cashiers checks made out to the coin shop. And not just one person a lot of customers she said and when she asked them about silver most said it was there first time buying silver. My thoughts lemmings ? Also stop by the coin store and found out they had nine buyers for each seller last week.