What goes up...

[aloneibreak]

well watch closely

because i hope to never again see this kind of vicious selloff...

[68Camaro]

Well, all the shorts are getting their positions re-baselined... This is when you have to verify your convictions

[scrapper2010]

I'd never make it as a trader. My palms are sweaty just thinking about trying to sell my ATB set for a profit. LOL.

[Jonflyfish]

I think what we may very well be seeing is portfolio restructuring as USD reverses and commences an uptrend and commodities roll over into a downtrend.

[Country]

Could SILVER be basing at around $33-$34? Buyers seem to appear every time SILVER goes below $33. Does anyone know if the commericials are closing out their short positions?

Usually, SILVER corrections are fast and the bottom is reached quickly (2008 being the exception), sometimes within 2 weeks. A period of consolidation follows for a much longer period of time. While I don't expect any upward progress until late summer, it might be we have seen the worst. The rise in the dollar might not last, but for sure a bounce in the dollar was long overdue.

[68Camaro]

There is some speculation of a new base. That doesn't strongly affect my decisions. I'm still buying. Not as strongly as I might if I KNEW this was a new base, as there are still unforeseeable events that could drive it down further, no matter the long term prospects.

[Country]

Bottoming!!!

SILVER should try to get to $39 - the 50-day moving averaging. It's resistence, but we can be hopeful.

[Jonflyfish]

Not too overly concerned about the short to intermediate prospects, even surpassing the recent highs.
Long term, I would not be surprised to see silver dipping into the low to mid teens, or even single digits.
I know this won't be very popular here. My apologies in advance. Not trying to stir the pot nor debate the issue.
Everyone has their views and opinions I respect that. The next economic dip can be far deeper than the last and assets will be sold even deeper.

BRIC countries may very well pop and hemorrhage even worse. USD may become a very scarce resource in such an environment.
QE2 is almost done and the Fed will have a difficult time trying to re capitalize the additional asset losses that are coming.
Real estate has suffered terribly and will continue to decline. The QE bubbles have not been enough. The so-called economic recovery has not made it to a self-sustaining level.
Job growth is still meaningless and many are still scraping by. Without more QE, which will be very difficult to engineer, esp with the fiscal budget mess, the artificial asset recovery scheme will unravel.

People keep talking about all the inflation that is to come. I think we have seen what we are going to see for a while. Much later, we will see the massive inflation. Inflation requires money to be floating around in the system with economic expansion (even if incomes grow slower than prices). An economy needs more money chasing fewer goods.
As it is, people have less money and fewer jobs. There is no effective catalyst working to reverse that at this time. Velocity of money keeps going backwards and base money keeps shrinking. It doesn't matter if the fed taps a few keys and says your favorite bank now has an extra $quadrillion in excess reserves. You still have no more cash. With a continued declining housing market, QE pumped up markets winding down, the negative feedback loop will regain a strong footing and base money will shrink even more as the fractional reserve note valuations vanish due to continued loan defaults and property foreclosures. Wealth and base money destruction. It would be no surprise to see 10 yr treasury notes rally to the point where yields drop to 2%.

Cheers

[68Camaro]

All valid points, concerns. A drop of that magnitude, even if I thought it was certain, would not make me sell physical, I think. Because I would always be concerned that the return point at which I could not get physical would come on me faster than I could react. But it has me questioning how long I want to hold paper metal, and where to put all my paper money into during that period. This is paper that can't be converted to physical.

Not too overly concerned about the short to intermediate prospects, even surpassing the recent highs.
Long term, I would not be surprised to see silver dipping into the low to mid teens, or even single digits.
I know this won't be very popular here. My apologies in advance. Not trying to stir the pot nor debate the issue.
Everyone has their views and opinions I respect that. The next economic dip can be far deeper than the last and assets will be sold even deeper.

BRIC countries may very well pop and hemorrhage even worse. USD may become a very scarce resource in such an environment.
QE2 is almost done and the Fed will have a difficult time trying to re capitalize the additional asset losses that are coming.
Real estate has suffered terribly and will continue to decline. The QE bubbles have not been enough. The so-called economic recovery has not made it to a self-sustaining level.
Job growth is still meaningless and many are still scraping by. Without more QE, which will be very difficult to engineer, esp with the fiscal budget mess, the artificial asset recovery scheme will unravel.

People keep talking about all the inflation that is to come. I think we have seen what we are going to see for a while. Much later, we will see the massive inflation. Inflation requires money to be floating around in the system with economic expansion (even if incomes grow slower than prices). An economy needs more money chasing fewer goods.
As it is, people have less money and fewer jobs. There is no effective catalyst working to reverse that at this time. Velocity of money keeps going backwards and base money keeps shrinking. It doesn't matter if the fed taps a few keys and says your favorite bank now has an extra $quadrillion in excess reserves. You still have no more cash. With a continued declining housing market, QE pumped up markets winding down, the negative feedback loop will regain a strong footing and base money will shrink even more as the fractional reserve note valuations vanish due to continued loan defaults and property foreclosures. Wealth and base money destruction. It would be no surprise to see 10 yr treasury notes rally to the point where yields drop to 2%.

Cheers

[Country]

Not too overly concerned about the short to intermediate prospects, even surpassing the recent highs.
Long term, I would not be surprised to see silver dipping into the low to mid teens, or even single digits.
I know this won't be very popular here. My apologies in advance. Not trying to stir the pot nor debate the issue.
Everyone has their views and opinions I respect that. The next economic dip can be far deeper than the last and assets will be sold even deeper.

BRIC countries may very well pop and hemorrhage even worse. USD may become a very scarce resource in such an environment.
QE2 is almost done and the Fed will have a difficult time trying to re capitalize the additional asset losses that are coming.
Real estate has suffered terribly and will continue to decline. The QE bubbles have not been enough. The so-called economic recovery has not made it to a self-sustaining level.
Job growth is still meaningless and many are still scraping by. Without more QE, which will be very difficult to engineer, esp with the fiscal budget mess, the artificial asset recovery scheme will unravel.

People keep talking about all the inflation that is to come. I think we have seen what we are going to see for a while. Much later, we will see the massive inflation. Inflation requires money to be floating around in the system with economic expansion (even if incomes grow slower than prices). An economy needs more money chasing fewer goods.
As it is, people have less money and fewer jobs. There is no effective catalyst working to reverse that at this time. Velocity of money keeps going backwards and base money keeps shrinking. It doesn't matter if the fed taps a few keys and says your favorite bank now has an extra $quadrillion in excess reserves. You still have no more cash. With a continued declining housing market, QE pumped up markets winding down, the negative feedback loop will regain a strong footing and base money will shrink even more as the fractional reserve note valuations vanish due to continued loan defaults and property foreclosures. Wealth and base money destruction. It would be no surprise to see 10 yr treasury notes rally to the point where yields drop to 2%.

Cheers

Good points... The possiblity of severe deflation forces preparation as to how one allocates wealth. A personal decision needs to made as to the impact of inflation and deflation. How will you get by in a deflationary invironment? For retirees, inflation is the killer. For younger persons building their wealth, deflation is the killer. Important allocation decisions preclude throughing caution to the wind and putting all your bets on PMs.

JonFly - What's your timetable on the impending deflation and following hyper-inflation? I don't see the deflationary wave happening, other than for a very short term period, because sovereigns risk their demise under deflation. While our economy has not been energized by QE, the FED and other sovereigns are creative and will promote other schemes to engender the inflation they desire. IMHO, they will continue to promote inflation until they finally see it abounding. The FED does not want a stronger dollar and will do everything it can (with the exception of dubious speaking events) to weaken the dollar further.

[Treetop]

I will always be a PM holder, even if I am wrong that they have a long way up to go..... Deflation, stagflation, inflation.... I think we are likely to get them all at different times and phases. that said i did pretty much put all my eggs into silver. but Im young, nearly own my home, and think its a good bet myself.... I decided it was best to get a nice stack of metal a few years ago thinking its future is up.... Its still way above what i paid.... the numbers Im talking about would likely be rather low compared to most here.... It was my childhood nest egg I put into silver.

In about 15 months we will own our house, in 24 the trucks paid off... around that time I will be studying investing in much more detail, because hats when our real wealth accumulation will start.....

that said, Im a weird guy, single digit silver wouldnt bother me at all... Id just buy lots more of it. Perhaps its just because its shiny, but even with its volatility, I like having it around.... If theres such things as past lives I have actually wondered if I was a pirate..... I sure feel like a pirate with my treasure buried all over the place....

[68Camaro]

Timing the unknown is difficult, if not impossible. It's a bitch to try to plan for hyperinflation, stagflation, deflation, end of the world etc, all at once... You can't even count on continuing to own what you do own, as it can be taken away from you. You just do the best you can with what you have using common sense decisions, hope and pray for the best. Keep your friends and family close - you may need to count on each other.

[slickeast]

Single digit silver? Bring it on. I will buy as much as I can. We saw it in 2008. Bought some. Not as much as I should have, but I was new to the game. less than 3 years later we saw $48. Could have sold at 5x what I paid. Think about it. $100,000 of silver at $10/oz. from nwtm would have yielded $500,000 just a few weeks ago. I think that is a great return. We don't know what the future holds. If we play our cards right buying the dips and selling the spikes we should be able to make money along the way.

[Sheikh_yer_Bu'Tay]

Single digit silver? Bring it on. I will buy as much as I can. We saw it in 2008. Bought some. Not as much as I should have, but I was new to the game. less than 3 years later we saw $48. Could have sold at 5x what I paid. Think about it. $100,000 of silver at $10/oz. from nwtm would have yielded $500,000 just a few weeks ago. I think that is a great return. We don't know what the future holds. If we play our cards right buying the dips and selling the spikes we should be able to make money along the way.

Even at the lowest of the dip in 2008, no coin shop in my town would sell to me at spot. Not even close. The best deals I got were $17.00 per ozt when spot had come back up to $12.00. That was okay. I was happy to buy. I sold 100 ozt at the peak, so I more than doubled my money buying at $17.

Jonflyfish, you are doing it again. Making me scratch my head in wonderment. I was expecting an inflationary depression, now you are predicting the opposite!

[brian0918]

It's not necessarily one or the other. We could get a hyperinflationary depression... as we try to stop a deflationary depression. In that case, it would be good to hold PM long-term, but also to have cash on hand (not in the bank) for the short-term.

[Mossy]

Not too overly concerned about the short to intermediate prospects, even surpassing the recent highs.
Long term, I would not be surprised to see silver dipping into the low to mid teens, or even single digits.

I'd be cussen up a storm. Not because the PM's I have lost value, but for how much I could have bought had I waited.

[SteelCityCopper]

Given all this discussion about ups and downs, inflation and deflation, its important to keep all this in perspective as it relates to your PM goals. Why are you buying PMs in the first place? To make a quick buck? Focus on the trader mentality if that's the case. The "what goes up must come down" theme which is at the heart of this thread must be viewed by others not flipping silver from a longer timeframe than months or even years. What has gone up and must come down is the fiat system. Again I'm using another reference previously posted of looking at history to prove the point that fiat hasn't worked for 1000s of years. The fiat beast cannot be tamed... And what kills me is we continue to make the same mistakes. We tried fiat already in this country and it failed. Why didn't we learn?

If silver drops to single digits, I'm definitely buying as much as I can but good luck finding any at those prices as a few have mentioned.

[Jonflyfish]

The heart of the theme of this thread is that commodity, equity and certain fixed income markets have been propped up by the fiat system via artificial insemination.
What pumped it up will also lead to the demise. No wonder the bernank is most concerned with deflation. The fomc is becoming impotent and can't keep it up for much longer.

Meanwhile, inflation occurs when there is more currency chasing the same or fewer goods. To increase currency we need to see velocity. That is NOT occurring, with the exception of narrow liquidity pools hopping and skipping as they cantankerously frolic through various targeted market opportunities. Do you really believe that silver is the USD antithesis with a -1.00 correlation. as it raced to 50 then evaporated 30% in a scant few heartbeats?
What IS occurring is that there is a SHORTAGE of USD in people's wallets/accounts. Without an economic expansion (which will come later), people continue to struggle and try to make do with less currency and fewer goods. Less consumption = less production = fewer jobs = no housing recovery = no economic recovery. Shrink Shrink- Economy & base money.

People talk about "If silver ever gets back to x or xx I'll buy it all." No doubt some will. I'm sure some said the same thing during the Hunt bro's era during the similar peak of delusional euphoria.
Of course people will say "but this time it's different". Well yes it is and no it isn't. The stories to drive investor psychology are different but the behavior is infallibly and cyclically the same.

Cheers

[slickeast]

Single digit silver? Bring it on. I will buy as much as I can. We saw it in 2008. Bought some. Not as much as I should have, but I was new to the game. less than 3 years later we saw $48. Could have sold at 5x what I paid. Think about it. $100,000 of silver at $10/oz. from nwtm would have yielded $500,000 just a few weeks ago. I think that is a great return. We don't know what the future holds. If we play our cards right buying the dips and selling the spikes we should be able to make money along the way.

Even at the lowest of the dip in 2008, no coin shop in my town would sell to me at spot. Not even close. The best deals I got were $17.00 per ozt when spot had come back up to $12.00. That was okay. I was happy to buy. I sold 100 ozt at the peak, so I more than doubled my money buying at $17.

I bought from NWTM for $10.64 /oz back then. I just had to wait a few weeks for them to deliver. Freshly made 1 oz bars in protective packages. That was the best deal going. I sold them for $20 each.

[Treetop]

People talk about "If silver ever gets back to x or xx I'll buy it all." No doubt some will. I'm sure some said the same thing during the Hunt bro's era during the similar peak of delusional euphoria.
Of course people will say "but this time it's different". Well yes it is and no it isn't. The stories to drive investor psychology are different but the behavior is infallibly and cyclically the same.

Cheers

For me I consider metals a great hedge.... If we somehow corrected our current woes, Id still think that even is silver crashed back to a few dollars, and was likely to stay there the rest of my life. really has nothing to do if this time is different then the run up with the hunt brothers, which of course it is imo. doesnt mean it wont still crash, but it is indeed different.... the dollars role as reserve currency is threatened, but even ignoring that, I would always be a Pm holder. Heck I hope I never need to use it, or cash it out as an investment. Just like I hope to never need my car insurance.

I like the assurance of having car insurance. I like knowing I have a rifle should I need it... I see PMs as the same thing.

Just to explain further... my great grandfather kept several hundred face of silver coin after the switch over in 64. he knew it was a "good" time to sell during that run up, but he didnt do it. he continued to hold it until he died.... for him as I am saying it was simply a hedge, he hoped to never need. he didnt need it during the run up, and wasnt investor minded anyway, so he kept it. sadly all but one of his kids sold their part of it, Im trying to convince an uncle to trade me out some, so i can have a piece of grandpas stash....

[Treetop]

Also my DCA is literally well into the negatives.... I essentially have a decent (by my standards) sized stack for free, minus the time devoted to buing and selling. so holding it, causes no pressure....

[surfcaster]

What IS occurring is that there is a SHORTAGE of USD in people's wallets/accounts.

Hi Jonfly & others,
I've been lurking for a while and first time posting here. Great board!
Jon, while I agree with most of what you said, I want to point out a different scenario. Yes, the past QEs have mostly gone to various bank's balance sheets and people really didn't get the money. But the third time around, in order to put money into people's pockets, the powers can simply create a tax credit type of scheme similar to what Bush did to give "free" money to every man, woman and child in this country. That would surely be stimulative! In the 2008 crisis, Taiwan gave free money/consumption certificates to all its citizens. Our government can certainly do that too. Afraid of deflation? Easy, simply give each person $10,000 and see what happens! They ain't call him Helicopter Ben for nothing!!

[Jonflyfish]

It's game over....An absolute must read in my humble opinion. Very different understanding than the popular, fully discounted, old and tired empty false rhetoric that many individuals have been clinging to for very opposite reasons than what their "new normal" may be.

Many points that I have miserably failed to convey on this forum...
http://www.zerohedge.com/article/game-over-redux

Cheers

[68Camaro]

Some good observations there mixed in with some stuff I don't trust... I think game over could well be true for China, at least short-term, which is where the title of the article came from. And the ripples that come off that will go far and wide. The analogy of modern China to the US of the late 20s was thought-provoking.

An edit - a major BS-alert item I noted in the article, which I keep seeing repeated the blogs of other with similar opinions, is that no one is borrowing. That's a redirection of the truth (i.e. a lie). That, and the reference to Keynes, are red flags to the bottom line conclusion in this. What is really happening is that both individuals and small businesses - those with impeccable credit - are desperate to borrow. The banks have gone full circle from being outrageously irresponsible in their lending, to choosing to make it outrageously difficult to borrow. In this cycle they can keep their Fed dollars and play with them. They've been successful in making money either way, and they will continue to game the system so that they always come out on top. It's like a casino, with house rules. {having trouble spelling this early in the morning}

It seems the Fed has (or thinks it has) perfected monetary practice over the past 60+ years, and fears deflation more than inflation...

http://en.wikipedia.org/wiki/File:US_Hi ... ncient.svg

This even though the banks can make money either way.

[Jonflyfish]

Some good observations there mixed in with some stuff I don't trust... I think game over could well be true for China, at least short-term, which is where the title of the article came from. And the ripples that come off that will go far and wide. The analogy of modern China to the US of the late 20s was thought-provoking.

An edit - a major BS-alert item I noted in the article, which I keep seeing repeated the blogs of other with similar opinions, is that no one is borrowing. That's a redirection of the truth (i.e. a lie). That, and the reference to Keynes, are red flags to the bottom line conclusion in this. What is really happening is that both individuals and small businesses - those with impeccable credit - are desperate to borrow. The banks have gone full circle from being outrageously irresponsible in their lending, to choosing to make it outrageously difficult to borrow. In this cycle they can keep their Fed dollars and play with them. They've been successful in making money either way, and they will continue to game the system so that they always come out on top. It's like a casino, with house rules. {having trouble spelling this early in the morning}

It seems the Fed has (or thinks it has) perfected monetary practice over the past 60+ years, and fears deflation more than inflation...

http://en.wikipedia.org/wiki/File:US_Hi ... ncient.svg

This even though the banks can make money either way.

Easy with the quick draw. There is no major BS alert (lie) about the demand for money. No idea where your assertions come from.
While underwriting standards have improved (Sorry- No more liar loans), the demand for credit is far, far below where it was, and for good reason. People in business do not borrow for CapEx (acquire physical assets to increase the scope of business) and the matching increase in headcount (Employment) with the continuing economic frailties, current political threats of raising taxes on the so-called "rich" for redistribution purposes etc are all staring at them like a well trained fully loaded shotgun. Instead of the government talking about what they plan to do about unemployment etc, they need to learn how to get out of the way and stop preventing economic growth. Businesses and individuals are running leaner and more efficient, not attempting to grossly engorge themselves in debt- that took place a few years back. Now, without any need or incentive to increase debt, people are more conservative and prudent.