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Sunday, April 24, 2011
Bob Chapman explains the explosion in Silver prices
http://goldbasics.blogspot.com/2011/04/bob-chapman-explains-explosion-in.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+blogspot%2FDVTI+%28Gold+%26+Silver%29
CHART OF THE DAY: Silver's Jaw-Dropping Rise In Context
Joe Weisenthal|Apr. 22, 2011, 9:15 AM
http://www.businessinsider.com/chart-of-the-day-silver-10-year-performance-2011-4?utm_medium=email&utm_campaign=Clusterstock_COTD_042211&utm_source=Triggermail&utm_term=Clusterstock%20Chart%20Of%20The%20Day
Based on the precious metal price action, I expected to see a bump in price here as well as everywhere else. Not to be. I hope it doesn't reflect on earning news coming our way. But in a larger sense all my PM mutual funds lost ground today. USSIF was far from alone.
You hear more and more bubble talk about both silver and gold, especially about silver, because of the incredible run it's having. I think the cynicism comes from all the folks who are missing out on one of the greatest bull markets in history and are a little envious.
For anyone who gives you the bubble argument, just throw back the following chart of what the Fed is doing and have them give you a good reason to sell any of your commodities right now.
http://research.stlouisfed.org/fred2/series/BASE
Is the Silver Trade Getting Too Crowded?
By Jeff Clark04/05/2011
http://www.financialsense.com/contributors/jeff-clark/is-the-silver-trade-getting-too-crowded
From what I've read, volume in this stock market rise has been historically very low. I don't think the big move in the stock market has been driven by individual investors. I think it's been driven by the Fed. Both Greenspan and Bernanke admitted early on that an indirect effect of QE was a rise in the stock market, which in turn could create a wealth effect. I think the Fed has purposefully wanted to drive the stock market higher, and they are injecting money into the big banks as a means of doing so.
The problem with what the Fed is doing are the unintended consequences. $107 oil is going to be great for the economy. Inflation is ramping up as a direct result of Fed monetization of debt. At some point everything cracks. I have always believed that precious metals will be the last assets standing.
All the markets are at inflection points right now. Gold is pushing up against it's all-time high of $1448, close of $1438. Silver is pushing up near it's multi decade high above $38. And the stock market is pushing up near it's January high. I wouldn't be surprised to see a lot of resistance in here for all these markets. As a "permabear" I clearly don't see the fundamentals behind the stock market's moves and I predict we will again see the March 2009 lows taken out at some point. I think inflation continues to ramp up. And while we'll face a choppy market for precious metals, I still think we aren't anywhere near the ultimate highs. And if my predictions are true, a junior mining stock, like USSIF, should do very well. But it ain't going to happen overnight.
CHART OF THE DAY: SILVER COIN MANIA
Joe Weisenthal | Mar. 30, 2011,
http://www.businessinsider.com/chart-of-the-day-silver-coin-sales-2011-3?utm_source=Triggermail&utm_medium=email&utm_term=Clusterstock+Chart+Of+The+Day&utm_campaign=Clusterstock_COTD_033011
NYBob,
That's a great chart to put everything in perspective. Yes USSIF has faced a lot of resistance at the current levels. No doubt a lot of profit taking, consolidating, and day traders leaving.
And for folks who got in very recently, that is a frustrating thing. But when looked at in a longer term perspective, the stock has come a heck of a long way in a short period of time. I challenge folks to show me other stocks, precious metal or otherwise, that have had a better percentage return in the last year than USSIF. Heck, we leave Apple in the dust.
http://www.gracelandupdates.com/images/stories/how%20and%20when%2003-01-2011.pdf
Martin Armstrong analysis of gold. Don't be put off by the old fashioned typed paper. Martin Armstrong was a well respected Wall Street analyst who got himself in some trouble and is in jail. He writes his analysis from inside jail, but remains widely read and respected.
I agree. When I saw the price of gold and silver collapsing, I expected a big bounce in the dollar index. But the dollar index, after a brief bounce, is back down, almost testing multi year lows again. Some dollar bears I read are predicting an imminent collapse in the dollar, which should in theory be good for gold and silver. We are at key support levels for the dollar. This Japan thing may have thrown all the trends for a loop.
Silver price to hit $80: Louise Yamada
Published on: March 08 2011 12:05 GMT
http://www.commodityonline.com/news/Silver-price-to-hit-$80-Louise-Yamada-37046-3-1.html
Silver Shocker
By: Theodore Butler
Posted 7 March, 2011
http://news.silverseek.com/SilverSeek/1299509764.php
Who wouldn't love the stock to rocket up? At a price of $.725, I'm sure not complaining. I've been around well more than a year and I'm up many times from my buy price.
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=ussif&insttype=&freq=1&show=&time=9
I'm not in this for a quick trade. I'd just as soon see the company continue to make progress on their silver production and make steady profits on the rising price of silver and profits the company makes. Too many folks in speculative stocks are in for the momentum trade. If we got the big run-up many here are hoping for, it would just as likely drop down the other side (pump and dump). A slow but steady move is more resiliant and more profitable in the long run if you have the cajones to hold it through all of the inevitable corrections.
I won't be surprised to see a strong close today. Sometimes there has been good action at the end of the day.
Precious metals are breaking out to the upside. Many analysts I read are looking at $1600 gold and $40 to $50 silver by the end of the year. If these predictions ring true, it will be very positive for a stock like USSIF.
Short term movements can drive you crazy if you are watching moment to moment. But just look where this stock has come in the last year and what the potential is going forward if precious metals keep with the trend that they are in. I believe that we are still several years away from the ultimate top in precious metals. When the top finally comes (think tech stocks in the late 90s and housing a few years ago) we will probably see the masses rushing to get in and the price will be rising exponentially. It will be at that point that folks like us, who got in early, will want to take our profits. And who knows what a stock like this might be trading at? Kinross Gold (KGC) is an example of a stock that I saw back in the late 1990s trading at pennies that is now trading at $15.00. The same potential is true for USSIF.
I went into reading that article expecting a real cynical piece about how absurd conspiracy theories are. By the end the article totally was supporting the case made by all the conspiracy theories we've been posting about for years. It will be very interesting to see how all this plays out. For all the damage done by the big banks, including JP Morgan, and all the millions in bonuses these folks have walked away with, with practically zero prosecutions, these big banks deserve to take it one the chin. I'd love silver to be one of the ways they pay the price for their greedy ways.
I like the message and information that NIA puts out specifically making the case for inflation. Whether they got into the business for benevolent reasons or greed, and whether they turn out to be right by luck or by true intention, I think the message they are providing is probably going to turn out to be the right one. That is the actions of the government (namely debt and monetization) will lead to a very high stagflation or even what NIA warns about, an ultimate hyperinflation.
It's too bad that NIA charges so much for their picks. It just looks like another stock pushing internet operation when they are making profits off their picks.
The one thing NIA did do for this stock is bring a lot of new investors in and multiplied the price by about three times. I think a lot of the momentum investors brought in by NIA are probably gone by now. But those who were wise enough to remain will be well rewarded.
I wonder if there is something more going on behind the scenes. Silver isn't doing anything today that it hasn't done in recent days. The stock was stuck on modest volume and then all of a sudden it busts out today. It looks like some larger entity may be trying to accumulate or something happened that we don't yet know about.
Eric Sprott: The government lied; there is no more silver
http://www.marketoracle.co.uk/financial_markets_analysis_videos_10.htm#vid14
On the Verge of a Gigantic Move Higher!
By: Roy Martens | Sun, Feb 27, 2011
http://www.safehaven.com/article/20112/on-the-verge-of-a-gigantic-move-higher
The best way to trade silver - don't
By Dominic Frisby Feb 23, 2011
http://www.moneyweek.com/investments/precious-metals-and-gems/money-morning-silver-price-bull-market-10706
We have no one more to thank for what is happening that Ben Bernanke, the helicopter man.
QE2 and its Consequences (Part 2)
Submitted by Ron Hera on Mon, 21 Feb 2011
http://www.financialsense.com/contributors/ron-hera/qe2-and-its-consequences-part-2
Precious metals are taking it on the chin today after Europe Central Bank indicated a priority on fighting inflation. Yeah right. Europe has debts up to their necks. Japan's debt was just downgraded. The U.S. budget deficit estimate was just raised to $1.5 trillion for this year. And these central banks are going to prioritize fighting inflation? What a joke. It's inflate or default. That is their choice and they know it. They will all end up following Bernanke and print like crazy to avoid default. That will be good for precious metals.
We can thank the Fed for today's pop. All this talk about the great economic recovery and the Fed won't need to continue with their Quantitative Easing program. Think again! The Fed is buying up to 70 percent of the debt that the Treasury is issuing. The Fed owns over $5 trillion in treasury securities. The Fed is basically monetizing half of the American debt. There is no free market in treasury securities. The whole thing is a massive ponzi scheme. It's amazing they've kept interest rates as low as they have with deficits of $1.5 trillion.
Looking ahead, the doom and gloomers who have been warning about the dangers of fiat currency are going to be proven right. Whether it's the Euro, Yen or dollar, we're all running massive deficits and covering them by printing money. All fiat money is going to lose value the more they make and inflation is headed our way big time. The only way to protect yourself is to buy precious metals and other hard assets.
If you had bailed out of gold and silver investments every time they corrected, you would have missed the best bull market of the past ten years. Precious metals have moved in a stair step manner throughout this bull run. Strong moves higher, followed by corrections and consolidations. Every time they correct, the gold bears come out in full force and say that the bull market is over. And every time they've been proved wrong. Until there is a change in fundamentals, the long-term secular bull market in precious metals should continue on. There's no need to repeat the fundamentals here. We all know what they are and nothing has changed to alter the long-term prospects for gold and silver. The only question is how high they go.
We're not all that far apart. As many of you know I am more of a mainstream Democrat which differs from most on these boards and my blame lies in the buildup of debt and the idea of free markets which basically allowed our manufacturing base to be decimated by globalization. I'm not one to blame the Fed for everything, although I will say that both Greenspan and Bernanke helped add to our structural problems by repeatedly preventing recessions using easy money.
Speaking of the Fed, the following link has some fascinating stats, which I don't see being discussed anywhere. I would think the bearish commentators would be all over these stats. Most notably look at who is number one and how much higher their position is than all others. Probably will surprise a lot of people. It sure surprised me.
http://vaninvestor.blogspot.com/2011/01/blog-post_19.html
I disagree heartily with the NIA position on the Chinese Yuan. China is the second largest economy in the world. There is absolutely no justification whatsoever for their Yuan to be pegged to any other currency, short of gold perhaps. The Yuan should be a floating currency just as the Euro, Yen, and other major world currencies are. The only reason that China keeps their currency pegged is because it provides them with a trade advantage and allows them to maintain a strong export industry to boost their economy. The Chinese aren't doing this out of the kindness of their heart. They are doing it for nationalistic advantage.
This is not to defend the actions of Bernanke and the Fed. I am actually somewhat sympathetic to Bernanke's plight. If Bernanke werent' printing and hadn't bailed out the financial system in 2008, the U.S. would already be in a deflationary depression similar to the 1930s. His choice has been reflate or watch the economic depression unfold.
The U.S. problems go way beyond the Fed. The U.S. has been running budget and trade deficits for decades. We've lived on easy money and debt. In 2008 the bills came due. In response, the U.S. government has jacked up the budget deficits even more and Bernanke has printed money. Thus far it's worked to stabilize things. But the policies are inherently unstable. We have massive structural problems that haven't been addressed.
Bernanke is a true believer in the powers of the Fed. He is known as "helicopter Ben" for a reason. It's because he has alwasy believed that the Fed has the power to prevent deflation and economic collapse using the printing press. That's what his 2002 speech was all about. But there is no easy solution to structural problems. Bernanke, and his predessor, Milton Friedman, are all mistaken if they believe that the Fed can rescue the economy from massive policy errors. The only thing that can truly rescue the economy is increasing exports (and that gets back to China's currency and protectionist policies, as well as becoming oil independent). And second, we need to balance our budgets. And that means cutting spending and raising taxes. Do I hear politicians facing up to these problems? No. That's why Bernanke's policies trying to rescue the economy by printing money is going to create massive inflation down the road.
There is a method to Bernanke's madness. All his efforts have in fact reversed the deflationary pressures that were killing the economy in 2008. There are several benefits to the money printing he has been engaging in. First, he has been reasonably successful at keeping interest rates low. I don't know how they have gotten away with it thus far, but they have. I've seen estimates that the Fed may be buying as much as 60 percent of Treasury bond sales lately. How they are ever going to get out of this, I have no idea. But somehow the market is cooperating at keeping rates low. Second, the Fed has admitted that stock and asset market price increases benefit the economy. Both Greenspan and Bernanke admitted as much just as QE2 was getting off the ground. And sure enough, the stock market is up something like 20 percent since the start of QE2. And along with the stock market has come the economy as well. Finally, I think Bernanke, Geithner, and American powers that be are really pissed off at the Chinese for artificially keeping their currency low. But how can we retaliate at the Chinese for this economic trade advantage of a suppressed currency? One way is to throw liquidity into the system and export inflation to China. China has two choices in how to deal with this imported inflation. Raise interest rates, which is what they've done recently. Or cave to American demands and raise their currency. I think part of Bernanke's motive is to force China to raise their currency by flooding the world market with dollars. If Bernanke succeeds in getting the Chinese to cave on the Yuan, then at least in this one instance, I give him a kudo. China has been playing us for fools for years. It's about time we pay them back just a bit, with a little inflation. The problem is that what goes around will come around, as inflation is also going to be headed our way. The best way an individual can deal with an exploding inflation and devalued currencies is to buy precious metals.
I think it was mostly about China today, with the rise in their interest rates. Any excuse to bring the price down. But silver and gold are far from alone. Oil dropped more than $2.00 today as well.
Going forward all this money printing has to take its toll. All western paper currencies are being debased. In the end hard assets will be the place to be. Inflation is just beginning to bite. First in the emerging markets. Then it will spread here. I predict that we will have inflation rates running 10 percent plus in the coming years.
Montanore,
We have all posted numerous reasons why silver has been rising. Short covering may or may not have anything to do with it. If in fact JP Morgan has the size of the short position that many claim they do, then maybe Max Keiser's prediction of $500 silver may come to fruition if they really got trapped. But I haven't seen any evidence of a dramatic rise in the price of silver that would indicate any panic silver short covering. Silver has moved up along with gold and other commodities in a pretty strong bull market move that has been associated with QE2 and other fundamental factors that would devalue the dollar and other monetary currencies and increase the relative value of silver and gold. The gold/silver ratio still favors silver having a bigger move going forward. The problems in Europe, Japan and the U.S. indicate debt remains a massive problem going forward and it's likely there will be a lot more money printing. China, Russia and developing countries buying up gold and silver has given a great boost to precious metals. Central banks are net buyers rather than sellers of gold. The rise of ETFs has brought tons of new money to the precious metals markets not only in the U.S. but around the world. Do I need to go on as to reasons why the price of silver is rising? Everyone here has bought into the story. If in fact there is massive short covering by JP Morgan, that only gives the move a supercharge boost going forward. We will all be rich rich rich if we have the patience to hold the stock and it really comes to pass. Even if it doesn't I still think we're going to make lots of money here just being patient.
I don't have an opinion either way on the JP Morgan shorting issue. I just don't know enough. We have to trust the folks who really study this stuff deeply to get a handle on what is going on. I know precious metals believers have talked for years about a massive covering of short positions, gold backwardization and hard metal shortages on the paper markets but nothing ever comes of their predictions. Until something real happens, all this stuff remains in the conspiracy theory realm.
The Silver Conspiracy From JPMorgan Makes No Sense And They Could Actually Be Making Money
Mike "Mish" Shedlock, Global Economic Intersection
Dec. 14, 2010
http://www.businessinsider.com/jpm-morgan-silver-conspiracy-2010-12?utm_source=Triggermail&utm_medium=email&utm_term=Clusterstock+Select&utm_campaign=Clusterstock_Select_121510
Let's put this in perspective. The stock is up something like 400 percent in the last couple months. Even superstar Apple hasn't performed like USSIF. We've probably got a fair amount of new, impatient investors in the stock as a result of the NIA announcement. There is undoubtedly some profit taking after making such a good run. You have to ask yourself if you're in this stock for a momentum play or if you're in this stock or an investment. If you're in this stock for an investment, as long as the company is moving the right direction and silver is moving higher, I'm feeling pretty good.
$500 Silver!?- Max Keiser
November 26, 2010
http://maxkeiser.com/2010/11/26/500-silver-max-keiser/
Considering how silver and gold got hammered today, I would have expected a bigger hit on the stock. I have to assume that the market wasn't so turned off by the report. Buying this stock is speculating on the future, both on the future price of silver and the future prospects for this company. Both remain extremely positive.
And once again, that hedge near the top of the silver market increasingly looks like a really smart move by the company.
Everything I've seen from this company is pretty solid. Hedging 18 percent or so to ensure solid cash flow and as an insurance policy against volatility makes sense to me. They will still benefit from an increase in silver prices over time. The company is still in the growth stages even though it's been around forever. The hedging looks a heck of a lot better today than it did the other day. I expect a lot of volatility in precious metals prices in the coming months, after the run-up we've seen. The stock market is overdo for a correction and the dollar may very well correct to the upside, at least in the short term. I'm here for years not days or weeks and I expect to see a lot of ups and downs before the day I finally unload this thing. Hopefully for a very nice profit. :)
Know one really knows what the end game is to the mess we're in. Regardless of ones political views, I think most of us can agree that our politicians are not really dealing with our economic problems. Namely that the U.S. is running these massive budget and trade deficits and the Fed is trying to smooth everything over by printing money. What happens if other countries like China decide to stop buying American debt because it is no longer considered reliable? What happens if interest rates suddenly spike higher and instead of $400 billion per year in interest payments the U.S. government has a trillion per year in interest payments? If the Fed ends up monetizing this kind of debt, we're going to see hyperinflation. And it's not just the U.S. that can blow up. Europe and Japan are just as vulnerable to a financial collapse. The situation between Iran and Israel remains very risky. In other words we are headed into uncharted territory. I see the current period as like the beginning of one of these catastrophe movies where you know something bad is going to happen but everyone is going about their business in a normal world. I really don't believe that we can get out of the mess we're in without some really nasty pain at some point.
Ben Bernanke is our best friend, although he may not be the country's best friend if we end up with hyperinflation.
I have always been skeptical of conspiracy theories in general. We've read for years about JP Morgan's attempt to hold down silver prices. And we know the banks are under investigation for their manipulation of these markets. But is anything actually going to come of this? If in fact JP Morgan holds the amount of silver shorts they are alleged to hold, it could cost them billions of dollars. And if in fact they are forced to cover their shorts, at least from what I've read, it could cause the stock to literally go into the stratosphere.
But in the real world, we've heard about scenarios like this for years in various asset classes. But in the real world they only exist in theory. If this does turn into a reality, we could see $100 silver. But will the powers that be ever really let it happen? Going back a step, does JP Morgan really hold all the short positions they are alleged to hold?
Only time will tell.
Looking at who is posting, I see less of the newbies posting. Looks like the correction shook many of them out. Buy high, sell low is a great strategy. Those who are patient will be well rewarded holding this stock. The company continues to do the right things and build for a promising future. Silver prices remain in a strong and powerful SECULAR bull market. This is one of those stocks that can make folks who hang in there with it a heck of a lot more money than those who are in and out for the quick trade.