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Does the argument for higher gold and silver prices in the link below ring true to you?

http://www.marketoracle.co.uk/Article26494.html

I thought it was a logical read. No doubt about where he stands.

I was going to quote an excerpt but figure it may be copyrighted but I do appreciate his view of the banks in this quandry. A buddy of mine went down to a bailed-out bank last month to try to obtain an unsecured loan for a medium-sized tractor, about 10 grand. Mind you he has a couple of hundred thousand in this bank including some CDs that will garnish 0.15% if you don't negotiate with them. The interest rate on the loan would have been 13% (unsecured). He, of course, didn't take them up on their offer and just pulled money out and bought the item outright but.....charging over 75x what they are paying in interest is hard to swallow, particularly when they advertise as "YOUR NEIGHBORHOOD BANK".

shinnosuke wrote:Does the argument for higher gold and silver prices in the link below ring true to you?

http://www.marketoracle.co.uk/Article26494.html

I don't think Jason's views are controversial, not by any means for any who have studied the history of the markets, the fundamentals of both metals today as they relate to present and ongoing ever-burgeoning and accelerating money supply, and the potential represented should more than the present tiny percentage of investors become a steady flow outstripping the finite supply available to investors. Given the physical scarcity of silver available to large investors, one question becomes "will they turn to gold bullion as an alternative to silver?... or will they invest instead in paper equities and drive silver mining stocks skyhigh, leveraging investor's exposure to the physical?" What I do find interesting is most analysts reliance on the Hunt Brothers-driven silver spike as a legitimate previous high, and their subsequent dependence on that high as a realistic target - whether as a nominal figure or as an inflation-adjusted high ($130 or more). The $50 level is essentially meaningless, other than psychologically, but the awareness of that prior high, regardless of how it was achieved, does exert a subliminal effect on people's expectations. It shouldn't, but does. Eventually price discovery for silver will far surpass that level, but using $50 as a target is no more realistic than stating a Yankees team in 2020 is bound to win a World Series, just because a George Steinbrenner over-funded one once won one before.

franklin wrote:I thought it was a logical read. No doubt about where he stands.

I was going to quote an excerpt but figure it may be copyrighted but I do appreciate his view of the banks in this quandry. A buddy of mine went down to a bailed-out bank last month to try to obtain an unsecured loan for a medium-sized tractor, about 10 grand. Mind you he has a couple of hundred thousand in this bank including some CDs that will garnish 0.15% if you don't negotiate with them. The interest rate on the loan would have been 13% (unsecured). He, of course, didn't take them up on their offer and just pulled money out and bought the item outright but.....charging over 75x what they are paying in interest is hard to swallow, particularly when they advertise as "YOUR NEIGHBORHOOD BANK".

why would he borrow 10 grand for a tractor when he has a couple of hundred grand in the bank. that is very odd.

i have never heard of an unsecured loan for a motor vehicle. typically the bank holds the title until you pay for it. Why was he adamant about it being an usecured loan? That is quite unusual.

what do you mean by "bailed out" - do you mean a bank that was forced to "sell" an equity interest to uncle sam and pay preferred dividends on it?

LT:
The guy had a lower credit rating than he wanted due to him not owing anyone any money and he was advised that the easiest way to raise it was to borrow money, despite it not being in his best financial interest to do so (already having it in the bank). He didn't want to put any property up for collateral, necessitating the unsecured loan. Tractors, at least here, aren't considered motor vehicles and don't have titles. For some odd reason, even if the bank could repossess the tractor if payback wasn't made, it is still considered unsecured.

franklin wrote:LT:
The guy had a lower credit rating than he wanted due to him not owing anyone any money and he was advised that the easiest way to raise it was to borrow money, despite it not being in his best financial interest to do so (already having it in the bank). He didn't want to put any property up for collateral, necessitating the unsecured loan. Tractors, at least here, aren't considered motor vehicles and don't have titles. For some odd reason, even if the bank could repossess the tractor if payback wasn't made, it is still considered unsecured.

I'm not sure who was giving him advice, but it was as poor as his poor credit rating.

Get a credit card, even a secured one. Keep it paid down each month. That will cost him $50/year at most. As opposed to a 13% loan on 10,000 for a total of $1,000+ each year.

Also, a credit rating is worth a lot less than $100,000 cash So he's better off using the power of that!

Barry:
I am pretty sure he decided he wasn't going to be concerned with his rating after all. I'm not sure if he had/has a card or not.
Shinnosuke:
Apologies for hijacking your thread with a personal story.

franklin wrote:Barry:
I am pretty sure he decided he wasn't going to be concerned with his rating after all. I'm not sure if he had/has a card or not.
Shinnosuke:
Apologies for hijacking your thread with a personal story.

I don't consider it to have been hijacked. The anecdote was relevant to the world of banking which affects us all. The moral of the story is be debt free and hoard metal.

shinnosuke wrote:

franklin wrote:Barry:
I am pretty sure he decided he wasn't going to be concerned with his rating after all. I'm not sure if he had/has a card or not.
Shinnosuke:
Apologies for hijacking your thread with a personal story.

I don't consider it to have been hijacked. The anecdote was relevant to the world of banking which affects us all. The moral of the story is be debt free and hoard metal.

I don't like your morals I have credit card debt that I can easily service each month. I would much rather continue to pay them their interest at a little over 8 percent instead of, for instance, paying down the highest card first with an additional $1000 a month. With that $1000 a month I will continue to buy silver which is far outperforming the interest debt. Now then, if my interest rate was exorbitant, I'd have to reconsider this strategy. But for now I'm firmly convinced that silver is just about ready to launch at least a double, and when that happens it'll be hard to FIND silver to buy without a huge premium. When I can't find silver without an intense bidding war... that's when I'll use the fiat to give it back to the bankers.

shinnosuke wrote:Does the argument for higher gold and silver prices in the link below ring true to you?

http://www.marketoracle.co.uk/Article26494.html

Actually Shinnosuke, these predictions have been around for many years.

Gold was suppose to be over $2,000 by the end of 2008 according to Agora Financial, and you could buy gold for only "pennies on the ounce".

Ted Butler predicted that "one day soon" ASE's would go for $500 each more than two years ago.

Prof. Antal Fekete predicted that gold would go into "permanent backwardation" and the end of Western Civilization was upon us.

No one knows when all this is really going to happen, but I do believe it will all happen some day in the not so distant future. Our politicians in D.C. seem hell-bent on making sure it does happen!

That was very good news on the Texas silver mine!! I gotta check that one out! Thanks for the tip! Best one I have heard in years!!!