When Silver Hits the Wall By Rusty McDougal

[Copper Catcher]

This is an excellent article that really opens your eyes to the truth and cuts through the hype!http://www.silver-investor.com/misc_articles/SilverHitsWall.htm

[68Camaro]

The article was written at $5 silver, and in a nutshell the premise is simply that there is a lot of untapped silver, which with $30 silver will create new supply. I'm sure that's true, but demand is still outstripping supply. When that changes, or threatens to change, then I'll start to rethink strategy. I also think there is at least as great a chance that supply might not ever catch up to demand again. The author, as long as he is studying, needs to read about peak silver, because it will happen - just don't know when, and he doesn't mention it.

[Copper Catcher]

I have to wonder at what point the price of silver would have to get before all the junk jewelry as well as tea sets etc. would come out of the woodwork and flood the market. Likewise people that buy silver as and investment versus see it as a source of security will sell at some point. If demand has truly outpaced mining supply for the last twelve years the silver has come of somewhere!

[68Camaro]

As I understand it there was somewhat of a "glut" of inventory previously, which is mostly gone.

As I read stories (there was another article at the base site you posted) of what happened circa 1980 (I was there, but was pre-occupied with my then young life and new career, so most of it went over my head), there was a period of craziness when silver approached $50 (which would be circa $130 now) when people were pulling stuff out of the woodwork. Price was moving up so fast that things like buying new sterling flatware to turn around and resell and making thousands instantly were in the news.

This silver run, when we hit that last price surge, something similar will happen, I believe. It will surge to a "ridiculous" price, then fall back. During that last surge crazy things will happen. That will be a difficult decision time even for us that belive in silver, because we will always be wondering, as it gets steeper and steeper, if this is the peak. Nope, there is more. Is this the peak? Nope, there is more. Then, by the time the peak will be obvious, it'll be behind us and if you bought late, or wanted to sell near the top, it'll be too late. There will be a time to stop buying, a time to hold, and there may be a time to sell (at least in part - and depending on other socio-economic circumstances). But I won't sell unless I clearly have something risk-free to move it into. Maybe gold. Who knows. I think that is several years away, but trying to keep my wits about me.

I think that even with a surge, looking really long term silver will still average to a trend up. However, that time scale may be longer than I have on earth, so at some point I stop caring about that far out, and have to re-focus to a time scale that meets my life needs. If silver surges to 150 or more, and gold rises but seems more stable, at some point I will consider keeping only what silver would be helpful for trade, and move much to gold. Right now I'm about 60/40, silver/gold, value wise. Might move more to 20/80. (This may be years away, and this is just out-loud thinking...)

[moneydog]

keep buying myself