Concerning the "Bottom"?...i might have been hasty.

[neilgin1]

recently, a week ago, we sure had one heck of a day to the upside. It felt good, felt real, and I didn't hesitate to say "bottoms" in.

week later?...i'm not so sure....its 0240 CST Friday, and we're trading 54 cents lower to $19.16, and i'm not feeling so exuberant.

maybe it because I read the latest Kyle Bass sent back from a visit to Japan, entitled "Kyle Bass Hunkers Down: "We Dramatically Reduce Portfolio Risk"

http://www.zerohedge.com/news/2013-07-0 ... folio-risk

in the read, Kyle speaks of deflation, and my question is to the group, would deflation impact the price of silver to the downside dramatically?

on the surface, I realize, that sounds like a stupid question, but would it?

I also realize that's why tech analysis is always helpful...the "unseen hand" etc.

time will tell....another empty bit of prose....but what do you all think?

[Engineer]

in the read, Kyle speaks of deflation, and my question is to the group, would deflation impact the price of silver to the downside dramatically?

on the surface, I realize, that sounds like a stupid question, but would it?

I say yes. One of these days stocks will crater, and silver will go along for the ride.

[68Camaro]

The interesting thing to consider... if the "value" of everything goes "down" as measured in FRNs then what are people doing with their money? If they are all selling, then what will they be doing with the proceeds? Going to literal cash (which are debt instruments of government)? Going to bonds? Neither seem like much of a place to store wealth in this environment.

[Engineer]

The interesting thing to consider... if the "value" of everything goes "down" as measured in FRNs then what are people doing with their money? If they are all selling, then what will they be doing with the proceeds? Going to literal cash (which are debt instruments of government)? Going to bonds? Neither seem like much of a place to store wealth in this environment.

Many will be paying down debt. That's what sunk the GB stimulus, and I'm glad to say I helped.

Regarding wealth storage, why not sit in cash until it's clear that we're turning the corner? Watching the value of FRNs actually grow would be a nice change of pace.

[68Camaro]

Paying down debt will be a great option for many, but doing that, or going to literal cash... I don't think they answer several questions. I don't have the answers, just thinking out loud.

a) There isn't enough literal cash to go around so most people will actually have that cash in electronic balances. They will literally own an electronic record of a promise to repay a debt instrument owed by an insolvent government. If the modern electronic markets become untrustworthy (if, for example, Cyprus occurs in the US and potentially cascades) much of that cash could evaporate. What are the options for those that fear that (besides PMs) and if it occurs, what will the masses do, and what will be the Fed/Treasury/Presidential reaction?

b) Seniors require earnings on their cash to live on, or else they are consuming their capital and will soon reach a crisis (this is already happening). Currently it is essentially impossible to grow savings at any reasonable rate without unreasonable short-term risk. This is because the Fed is holding the interest rate down. And the ability of the government to continue to borrow is predicated on their ability to have people buy their bonds at the low rates. If the rates start to rise - to allow people earnings on their savings - the US monetary crisis gets emphasized. If they don't allow the rates to rise then only the Fed will buy them in sufficient quantity. It appears to me they are between a rock and a hard place. The only path I can see will be the government to continue creating and funding programs (with money printing) that make seniors increasingly dependent on the government due to their inability to take care of themselves. This may serve the purposes of some in politics that actually want this dependence.

Further thoughts?

[shinnosuke]

The Fed hates deflation, as do all fiat systems. However, allowing inflation to discover its true rate is no longer an option for them either. The fiat-denominated currencies have painted themselves into a corner. Allowing the rates to rise would help the fixed-income crowd but only short-term because governments and private banks (essentially one-and-the same organization now) are so highly leveraged that any refinancing activity would crush them and then the pain will be so widespread interest rates won't matter. The Fed may be the last man standing in that scenario, but even it cannot continue indefinitely. So I assure you that the IMF and/or the BIS and/or the UN already has a plan in place. We may all become very familiar with SDRs or some other similar "currency" in the very near future.

So that's why I don't care if the price of metals fall again and then fall some more. $2 silver and $35 gold? Bring it. Whatever "price" they are, they are still the only real currency of value, with the seal of approval from some smart guys from Genesis to Revelations. Besides, you guys know better than 95% of all Americans, we've been buying precious metals with Monopoly money all this time. Yes, due to normalcy bias, we've become accustomed to buying everything else with those same Fed Res Note debt instruments so it's hard watching silver purchased at $35/toz fall to $18, but we don't own a crystal ball and therefore, based on the fundamentals, we made the best decision we could at the time. Woulda, coulda, shoulda.

My question for all of you is this: Now that you've built up your financial foundation, do you have enough calories stored? Do you have fuel for cooking? Yeah, you can soak hard red winter wheat over night and eat wheatberries in the morning, but wouldn't it be nice to eat something warm on a cold winter morning? "But pray that your flight will not be in the winter..." Matt. 24:20

[theo]

The interesting thing to consider... if the "value" of everything goes "down" as measured in FRNs then what are people doing with their money? If they are all selling, then what will they be doing with the proceeds? Going to literal cash (which are debt instruments of government)? Going to bonds? Neither seem like much of a place to store wealth in this environment.

Many will be paying down debt. That's what sunk the GB stimulus, and I'm glad to say I helped.

Regarding wealth storage, why not sit in cash until it's clear that we're turning the corner? Watching the value of FRNs actually grow would be a nice change of pace.

You're assuming that the average citizen with the mortgage/car loan/credit card has the assets to sell in the first place. I doubt that 90% of the population have much to sell outside of their house and 401K. I'm pretty sure private ownership of stocks (outside of retirement funds) is at its lowest level in the past couple of generations. The GB stimulus went straight to the general population. Today the only part QE that makes it into the economy gets in through walfare/foodstamp and disability programs. Almost all of this money is being used to buy fast food meals and pay the cable bill (read bread and circuses). The rest goes to support the twin confidence games of the stock market and the housing market, which primarily benefit the banks, large hedge funds and corporations as well as present the illusion of a healthy economy (wealth effect).

[68Camaro]

You're assuming that the average citizen with the mortgage/car loan/credit card has the assets to sell in the first place. I doubt that 90% of the population have much to sell outside of their house and 401K. I'm pretty sure private ownership of stocks (outside of retirement funds) is at its lowest level in the past couple of generations.

The GB stimulus went straight to the general population. Today the only part QE that makes it into the economy gets in through walfare/foodstamp and disability programs. Almost all of this money is being used to buy fast food meals and pay the cable bill (read bread and circuses). The rest goes to support the twin confidence games of the stock market and the housing market, which primarily benefit the banks, large hedge funds and corporations as well as present the illusion of a healthy economy (wealth effect).

Good points - I'll take issue with just this one, in part

I'm pretty sure private ownership of stocks (outside of retirement funds) is at its lowest level in the past couple of generations.

Yep, 95% of people own very little, but I'm referring to the ultimate owners. Except for government-owned assets (a lot of realty either directly or via mortgages, and specific corporations - finance, GM, etc propped up by the Treasury) the balance of everything owned within the US is ultimately owned by a private citizen, whether indirectly in a pension fund, or via a trust fund (such as a charitable trust, or hospital/educational institutional trust), a 401K-type of device (using the generic term), or a billionaire. Where will these decision makers park their money in this type of situation?

[68Camaro]

"But pray that your flight will not be in the winter..." Matt. 24:20

Good points. Not to make light of this but in all seriousness have somewhat the opposite concern - I'm praying that any flight (which I'm hoping doesn't hvae to occur) doesn't happen in the summer.

[shinnosuke]

"But pray that your flight will not be in the winter..." Matt. 24:20

Good points. Not to make light of this but in all seriousness have somewhat the opposite concern - I'm praying that any flight (which I'm hoping doesn't hvae to occur) doesn't happen in the summer.

As a resident of south Texas, I know what you mean and have often thought that verse of scripture would not apply to me. Air conditioning is one of the 8 Wonders of the World.

[ZenOps]

Bulls capitulate. Bears never lose strength, but they do decide to go into hibernation.

http://www.bloomberg.com/news/2013-07-0 ... uyers.html The strangest thing happens when metals enter a multiyear bear, people buy less physical. I don't claim to understand it, but that is what seems to happen.

Choppy trading ahead.

[barrytrot]

Bulls capitulate. Bears never lose strength, but they do decide to go into hibernation.

http://www.bloomberg.com/news/2013-07-0 ... uyers.html The strangest thing happens when metals enter a multiyear bear, people buy less physical. I don't claim to understand it, but that is what seems to happen.

Choppy trading ahead.

Here is the answer to that: People are generally not smart

Everyone has heard "buy low, sell high", but what their minds tell them is "gold is worth less now, that's bad". Instead of what my mind is telling me, "gold and silver are on sale stock up!"

[neilgin1]

So that's why I don't care if the price of metals fall again and then fall some more. $2 silver and $35 gold? Bring it. Whatever "price" they are, they are still the only real currency of value, with the seal of approval from some smart guys from Genesis to Revelations. Besides, you guys know better than 95% of all Americans, we've been buying precious metals with Monopoly money all this time. Yes, due to normalcy bias, we've become accustomed to buying everything else with those same Fed Res Note debt instruments so it's hard watching silver purchased at $35/toz fall to $18, but we don't own a crystal ball and therefore, based on the fundamentals, we made the best decision we could at the time. Woulda, coulda, shoulda.

I think about that all the time....monopoly money...frn's. it bothers me intensely, that's why I don't and wouldn't sell a single toz of silver for frn's...the ONLY silver I ever traded for are to my brother. He wont let me cut big sticks, trees down....so, what he does...WE do, is mark the ones for firewood, he's a arborist, and a tree cutter...he lays them down, then he 'biscuits' the trees,ash or shagbark hickory, white oak, while I bucket the biscuits to the back with the tractor, where I got the splitter set...a 22 ton splitter....this last lot we laid down, we let them "wick out"...that means to leave the limbs intact, the moisture in the wood will evap out of the drying leaves, and then in two weeks, you can biscuit the tree....(that's in answer to your, do have the fuel?...answer is yes, both in firewood, and large tanks of propane, which supply both the heater and the auto genny in case I lose power....due to ice storm, the grid going down, etc)

his wife thinks i'm nuts about the whole silver versus frn thing, and wont let him "buy" any silver, so what we do is, so it doesn't seem like i'm just laying charity on him, we figure out how much the deal is worth, which in this case, i'm "paying" him a roll of 68 BU Kennedy's for this latest job, that's just about 3 toz, which adds to his small stack, and doesn't get him into trouble with the wife...its one of them deals, where we hang out up here, and I don't usually go down there....like I tell him, "that's your wife's house, she just lets you live there"....its true, that's why its best I just hang up here, and stay away. i'm a "bad" influence...he doesn't get money to stack silver, stack lead...nothing....while she regards me as "white man run amok"...doing whatever he wants, buying whatever he wants, and that's that....but you don't come between brothers....sorry for the long response....but monopoly money...yep, we'll play that game as long as the board stays on the table....after?.....we get out the stacks.

My question for all of you is this: Now that you've built up your financial foundation, do you have enough calories stored? Do you have fuel for cooking? Yeah, you can soak hard red winter wheat over night and eat wheatberries in the morning, but wouldn't it be nice to eat something warm on a cold winter morning? "But pray that your flight will not be in the winter..." Matt. 24:20

yes...many calories, that's why we put up the finishing paddock...finishing off a pair of lamb to be taken in around Sep/Oct...using cracked corn and square bales...maybe pick up some calves, run corn thru them for a month, take them in too, we'll see. I like that end times Discourse of Jesus' in Matthew, quite different from John's Revelation.....much more succinct...its true about winter and being a "refugee"...obviously, lives would be in extreme peril. I saw a 10 minute clip the other day that had the hairs on the back of my neck standing up.

watch the body language,it is SO obvious that Putin is in such distain of Obama, and at the end Obama trys to get smooch, and flashes that 100 watt grin at Putin, listen to the last line and watch Putin's face when he says it...it'll put a chill in you...these guys STILL have many nukes, and they don't like whats going on in Syria...I don't know whats going on in our "Harvard" President, but its obvious he doesn't know the ways of the world, and thinks if you threaten and then joke around, flash a smile, the son of Cossacks is gonna just keel over.....i'm MORE than a little nervous...here watch:

[68Camaro]

There certainly is an element of stupidity to it - at my first professional job one of my co-workers was famous for buying high, panicking, and then selling low - over and over. No amount of council could fix it - he is one of those that should never be handling his own investing as he overthought everything and second and third guessed himself until he tied himself into knots.

You do have to have conviction of your beliefs, which should be based on something specific and logical. You also need to prioritize correctly - eliminate debt (most, if not all), prepare for basic long-term survival, keep a cash reserve. With those things taken care of you can then sleep at night no matter what the market does.

I do think there are other things involved - I think another factor is that a number of the PM bulls just shot their wad in the Feb-Apr time period, and are now reloading capital before they can jump on more in any large fashion. I count myself in this group.

[neilgin1]

"But pray that your flight will not be in the winter..." Matt. 24:20

Good points. Not to make light of this but in all seriousness have somewhat the opposite concern - I'm praying that any flight (which I'm hoping doesn't hvae to occur) doesn't happen in the summer.

these are all great posts...there's a great brain trust here...I liked your post above 68, and I want to think about it....but I can say this to you, and to Shinn, and maybe some other brothers...know what book you all might like?...its a powerful book....."Why Revival Tarries" by Leonard Ravenhill....just trust me, go to Amazon, 12 bucks, buy it...read it...Len says we need Two Things....more prayer, more tears. I feel this is a powerful truth. be well ya'll.

[neilgin1]

There certainly is an element of stupidity to it - at my first professional job one of my co-workers was famous for buying high, panicking, and then selling low - over and over. No amount of council could fix it - he is one of those that should never be handling his own investing as he overthought everything and second and third guessed himself until he tied himself into knots.

You do have to have conviction of your beliefs, which should be based on something specific and logical. You also need to prioritize correctly - eliminate debt (most, if not all), prepare for basic long-term survival, keep a cash reserve. With those things taken care of you can then sleep at night no matter what the market does.

I do think there are other things involved - I think another factor is that a number of the PM bulls just shot their wad in the Feb-Apr time period, and are now reloading capital before they can jump on more in any large fashion. I count myself in this group.

yep...all SOUND advice...

[Jonflyfish]

Many are confused when price doesn't do what they want/expect. When one aligns their views with what the market is telling instead of yelling into deafness, amazing things happen.
Most people try to argue why the market should do as they would like. Most people share the same result.
Truth in price.
Cheers!

[scyther]

I'm disappointed to see the price today. I was really starting to think this wasn't another dead cat bounce. The reason is that with the others, when the price went up, it didn't go as high as it was before it fell. It went from 27 to 23, then back up to 24. From 22, down a bit past 20, then a bit over 20 again. But here, it went from 19 to 18, then back just as high to 19 (and stayed there for several days). So I was thinking that really was the bottom. But now it's under 19 again... oh well. I won't be buying more unless/until it drops a few more dollars.

Also, I don't see why selling low is a mark of stupidity. Yes, you lose money, but you could avoid losing a lot more money. Selling at the end of 2008 would have been bad, selling at the end of 1980 would have been good. It really depends on the situation. Obviously they sell because they feel it will drop farther, and they're not always wrong.

[Jonflyfish]

I'm disappointed to see the price today. I was really starting to think this wasn't another dead cat bounce. The reason is that with the others, when the price went up, it didn't go as high as it was before it fell. It went from 27 to 23, then back up to 24. From 22, down a bit past 20, then a bit over 20 again. But here, it went from 19 to 18, then back just as high to 19 (and stayed there for several days). So I was thinking that really was the bottom. But now it's under 19 again... oh well. I won't be buying more unless/until it drops a few more dollars.

Also, I don't see why selling low is a mark of stupidity. Yes, you lose money, but you could avoid losing a lot more money. Selling at the end of 2008 would have been bad, selling at the end of 1980 would have been good. It really depends on the situation. Obviously they sell because they feel it will drop farther, and they're not always wrong.

Buying high and selling higher and selling low and covering lower have proven to be top strategies. The only way $4 silver goes to $50 is buy passing through higher and higher hurdles.
On the way down to $18 the price had to keep passing through lower hurdles. Being on the right side of the tape eludes the majority because they view this in opposite and consequently fight the tape with typical results. It's good to be long a market that is rising and short a market that is falling.

Cheers!

[johnbrickner]

snip . . . in the read, Kyle speaks of deflation, and my question is to the group, would deflation impact the price of silver to the downside dramatically?

snip ....but what do you all think?

What do I think? The prophets speak of either inflation or deflation, all speak of a decline. I think covering your self for all three is the right thing to do.

It's a Jungle out there,

edited to add

Thanx for the vid Neil. Liked it. I think Putin looks like he was told to tow the line and is disdainful of Obama for having told him so. Raising and lowering his foot again and again, and going thru the motions like he couldn't wait to leave.

[neilgin1]

Thanx for the vid Neil. Liked it. I think Putin looks like he was told to tow the line and is disdainful of Obama for having told him so. Raising and lowering his foot again and again, and going thru the motions like he couldn't wait to leave.

you know what John Brickner?....swear, that's EXACTLY what I was thinking...that's how I read what had just transpired...and I love that last line of Putin's after Obama tried the "charm offensive", Putin says "the President wants to relax me with the age statement"....and John since I watched that, I've done a cram course on Putin, watched everything I could get ahold of, not just about him, put Putin against the historical backdrop in Russian history.....and i'm red white and blue, never thought i'd say this, but I have WAY more respect for Putin as a leader, than I do the last two American Presidents.

never thought i'd say that, but I think that we get the leadership we deserve....which was underlined in the incredibly shabby way that Ron Paul was treated by corporate media in 08 and 12. Here you have a candidate with an impeccable record of respect for our Constitution and Bill of Rights, and he gets painted as a "cranky old man".....its unbelievable.

[neilgin1]

for John Brickner (and any of my other bro's so interested)

this is a FASCINATING 90 minute documentary from CBC...Canadian Broadcasting, on Putin and what happened in that post Soviet era.....its stuff I never really knew, and want to share, because imho, it helps us to understand..possibly...whats next....enjoy..its NOT boring. to "write off" Russia as irrelevant is folly to the nth degree.

[AGgressive Metal]

Back over $19. Hopefully we are out of the woods, but I'm afraid a lot of people will sell when it hits $20 again.

[johnbrickner]

Now back under and falling.

[neilgin1]

back and forth, there's just too much demand sub $20....its a bottom.