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I'm a long-time holder and as frustrated as everyone else. My feeling lately has been that higher PM prices will cure all problems. Today PM prices were up and yet PM mutual funds I hold were down. The fact of the matter is that USGIF stock price is far from the only PM stock price that has sucked lately. The entire sector has sucked lately and dramatically underperformed a semi suckish PM performance. Most of us invested in PM believe that the sky is the limit. It's now been over a year that gold and silver have been in a consolidation mode following the peak runs to $1900 gold and $50 silver. How much of the lousy stock price is due to the lousy performance of USA management, and how much is due to the out of favor performance of the entire PM stock market?
USGIF is moving in the same direction as all the PM stocks this morning. I thought we'd see a bump up with the price of gold and silver higher. It looks like a move back to the safety of treasuries and away from all risk assets today. USGIF needs a higher silver price more than ever right now. I'm not sure when that is coming, as PMs have continued their long consolidation for the past year and more. At some point they have to move out of their trading range. Investors in PM stocks have to cross our fingers gold and silver move out of the trading range the right direction.
I'm curious, is Sprott still invested in this company?
Everyone gets grumpy when they lose money. I've been investing in stocks long enough to see how moods change with the price action. Whatever the good or bad moves this company has made in the past two years, the larger reality is the price of gold and silver has been weak at best (long term correction) and the price of mining stocks, large and small, has been pathetic across the board. If most of us, who believe in precious metals long term are right, once the price of silver (and now gold for this company) start to turn around, my guess is that the price and fortunes of this company and stock also turn around. Many of us are looking for much higher prices for both gold and silver in the coming years. Now that our company mines both, we will benefit if gold outperforms, plus we now have a more diversified company.
September has traditionally been the beginning of the best seasonal period for precious metals. We may only be days or weeks away from the next gold and silver bull market. If this comes to pass, I predict that this board will be in the "happy days are here again" mode soon enough.
USSIF will move with the direction of silver. Right now silver is hitting new multi month lows, along with gold, oil, copper, and agriculture commodities. For those who have followed these stocks for a while, they have been very volatile over the years. Europe is a mess. China's economy is weakening. Prospects for the global economy are weakening. This looks like another one of those deflationary moves where everything goes down in unison. We've seen this story several times before.
If you think that the current trends will continue, then by all means, get out. But if you think, as I do, that the Fed and the world's central banks will get back involved and start printing money again, then you want to hold on, if not add to your positions. There will be political pressure on the Fed to stand aside because more QE will be seen as political with the election coming. But Bernanke isn't one to be shy about stimulating. My view is that if the economy and stock market continue to weaken, Bernanke comes back with QE3, and it will once again be off to the races.
I know a lot of us look to Eric Sprott to give us hope of better days to come. In this interview, he predicts a $2000 gold price and $50 silver by the end of the year.
http://www.cnbc.com/id/47358233
The truth is we are in another one of these protracted consolidations for precious metals. Mining stocks of all caliber have gotten crushed. Junior miners have gotten battered harder than the big boys. This is one of those times that test your commitment to precious metals. All the weak hands bail out at the time that these stocks are probably the best time to accumulate.
I have no idea how long this down period lasts. But if the bull market in gold and silver is still in effect, which I personally beleive it is, then it is only a matter of weeks or months before the uptrend continues. And once it does, USSIF will awaken along with the rest of the miners.
Folks need to keep their eyes on the big picture. Silver is taking a pounding along with gold and other commodities in part because the Fed's most recent announcement didn't mention any hint of any more Quantitative Easing. Gold has ridden the QE binge because of all the money printing that contributes to debasement of the dollar and increase of value of stuff, like gold and silver. Some conventional money pundits are saying, as always, that the gold bull market is over. If you believe that, then get out of all the miners, including USSIF. If, on the other hand, you believe that the current economic recovery is a head fake and the Fed won't have a choice but to bring back more QE, then hang in their with your PM holdings, including USSIF. Eric Sprott continues to predict that this is going to be the decade for silver, and silver is going well north of $100. If Sprott is right (and his track record is excellent), USSIF won't be trading in the $2.00 range forever.
I bought more shares for the first time in a very long time this morning once I saw that announcement. Looks like the company is serious about keeping the stock price above $2.00. On a benefit vs. risk basis, the upside looks so much more promising than the downside at the current level.
We're in another deflationary phase. We go from waves of inflation to deflation. If the economy and stock market tank too much, Bernanke will bring back the trusty old helicopter known as QE3. Until that day comes, it could be a painful drawdown for just about every asset class. For those who get impatient, we've seen this movie before. The question is how ugly does it get and how low does it go. 2008 was quite painful for precious metals investors, but in the end we still made our money back and then some. You can try to play the highs and lows, but if you happen to be out when the big up-move comes, you may miss out on the real money. I hate the drip drip drip of losses day after day, but I remain confident that if I just maintain my discipline and hold on tight, better days are yet to come.
For whatever reason precious metals stocks all around seem to be lagging compared to physical. My SLV I bought when silver dropped to $32 is doing very well while my mining stocks are kind of moving at a snails pace. It usually goes the other way around but not lately.
I was one that hated the idea of the reverse split. I still feel it's probably cut about 10 to 20 percent off the value of the stock. Still once its all done, if the company continues to produce and silver continues to rocket higher, we should double, triple, or much more our money from these levels. I'd just as soon get that reverse split and AMEX listing over with asap. The reverse is like a cloud hovering over the stock.
From the larger picture perspective, precious metals have been holding up very well here with all the turbulence going on with the debt ceiling and the weak economy. All the economic numbers are pointing down and the stock market is following them down. With Republicans insisting on spending cuts, with the states in austerity mode, with Europe in austerity mode, with China fighting inflation, there are no catalysts to bring the economy back. I continue to feel we are in an economic depression not some "Great Recession". This thing is going to last for years and it's going to get worse before it gets better. I have been predicting for some time that Bernanke will start firing up his helicopter soon enough. He doesn't want things to get out of hand and he is always aggressive. I believe we will see QE3, or some version of it soon enough.
As for precious metals prices, we are now entering the best season of all. The September through January period has more often than not been very strong. Who wants to invest in the dollar, euro, and yen with all the mess these economy faces. The only true safe haven left is precious metals. I'm looking for substantially higher prices in the coming months. It can only help our little stock which is blossoming at just the right time.
We're in the doldrums of summer. Precious metals have been taken down along with other commodities (oil has gotten crushed) in response to problems in Europe, the end of QE2, along with some seasonal trends. The powers that be I think are actively working to take commodity prices down as a means of helping to juice the economy because they are out of ammo on both the fiscal and monetary front.
Seasonal factors get much better for PMs in August and especially September. Personally I'm looking for a deflationary dip in the coming weeks and months, with a stock market correction, and increasing alarms about the weak economy. I'm predicting we see QE3 by the end of the year. If I'm right it will be off to the races again, and new highs for both gold and silver in the next year.
I haven't posted here in a while. I haven't kept up with the posts here in a while. I'm one of those who warned what a reverse split would do to the stock price. This still may work out in the long run, but more often than not reverse splits degrade the value of a stock.
The price of silver and company's performance will ultimately determine the value, but I'd say we've lost at least 20 percent already based on the announcement of the reverse split.
Looking forward we are in the usual summer doldrums for precious metals prices. The biggest seasonal moves of the year occur in the August/September time frame. Hopefully the company will keep moving forward producing silver and making a profit. Once silver starts moving again, we should make out very well.
Peter Schiff takes the NIA to task:
The conservative Heritage Foundation is throwing out the idea of selling U.S. reserves of gold to pay off debt.
http://www.newsmax.com/US/gold-Heritage-fortknox-debt/2011/05/16/id/396540
As the article above shows, at current $1500 price, selling U.S. reserves would raise all of $370 billion. This wouldn't even make a dent in the national debt of over $14 trillion. It would barely scratch the surface of the current budget deficit of $1.5 trillion.
In short, it is a lunatic idea and I'm glad to see some sense is coming out of the White House rejecting the idea.
If in fact they did decide to sell the gold, we would see a crash in the gold price worse than 2008. Investors in gold would get crushed. But I don't think it's happening any time soon.
I can see a scenario down the road, when the U.S. might get backed into a corner and be forced to sell its gold. If the bond market and dollar suddenly collapsed and China threatened to sell off it's treasury bonds. If the U.S. was facing total collapse, that would be the time the U.S. might be forced to sell its gold. This is not an impossible scenario by any means. But if it happens, I think gold will be trading north of $5000 an ounce.
We are entering that malaise phase, otherwise known as a correction. April, May is historically just about the worst time of the year for precious metals. The move recently is following similar moves of varying degrees in past years.
I don't know what Montanore was saying in suggesting we risk a "bond default". I don't think Wall Street will let Washington not raise the debt ceiling. It is a foregone conclusion. I can almost hear the conversations behind closed doors. Boehner to Goldman Sachs CEO, Lloyd Blankfein, "yes sir we understand the gravity of the situation, but we want to get as much out of the Democrats as we can before we agree to raise the debt ceiling". And I assure you, they will raise the debt ceiling. They aren't THAAAAAT stupid.
As for Montanore's point about the deflation risk, this is the important point. QE2 is scheduled to end in June. We had a weak GDP report in the first quarter. The Empire State manufacturing number was weak this morning. Jobless Claims have started to trend up instead of down. The economy is teetering on reversing gear downward. Once QE2 ends, and Congress cuts more spending, the economy is going down down down. Then the question becomes, how long does it take for Bernanke to announce QE3? The conventional wisdom is that the Fed is done with QE. I've been predicting for months that we would see QE3 by the end of the year. I have been among the small minority in predicting this. Until we get an announcement of QE3, the stock market is vulnerable to a downturn as are commodities. And unfortunately for us, silver could have more downside to go if commodities and the larger stock market go for a ride down. But I'm still holding tight here, because I think the powers that be will have no choice but to renew trying to inflate our way out of the mess. Because if this thing goes to its ultimate conclusion, we will see the 1930s all over again. And Ben Bernanke will never let that happen without a hell of a fight.
I am more liberal politically which usually doesn't jibe with a view favoring a return to the gold standard. But I am a fiscal hawk first and I just see our political system failing in the ability to balance it's books. It's just too easy to spend too much AND tax too little to please the people and the special interests and to run up these chronic budget deficits. It's not only happening in the U.S.; it's also happening throughout the western world- especially Japan and Europe. A gold standard may put constraints on the government's ability to act irresponsibly. It's no panacea for everything as downturns wouldn't be as easy to fend off as the Fed has done for the past 30 years. But in the long run we may be better off if constraints are put on government's ability to act irresponsibly.
I'm sticking with my view that a reverse is not in our best interests, AMEX listing or no AMEX listing. As the article posted suggested, more often than not reverse splits lead to lower valuations afterwards. I would much rather see US Silver continue to grow the company and the profits. I am confident that silver prices are headed higher from here in the future, and I believe good things are in store, for those who are patient. Eventually the company might get to the point where they can actually buy back some shares to help boost the price of the stock. That is a much better way than a reverse split.
If US Silver management happens to read these boards, hello management. Don't listen to all the panicky investors who are urging you to do something to get listed. Just keep on doing what you are doing, bringing silver out of the ground, keeping costs down, and keeping dilution of the stock to a minimum.
The price has come down so far so fast it's coming close enough to my target price to look for a reentry into a silver ETF.
High Frequency Trading in the Silver Market - Unsustainable!
CNBC 5/5/2011
High Frequency Trading in the silver market .The paper games days are numbered too fast and it's just unsustainable for the markets to even control
http://networkedblogs.com/hvDiW
There are many different factors at play right now in the volatility of silver. First off, the run up may have had some fundamental reasons behind it, but it clearly got to the mania stage in the last couple weeks. It was a move ready to crash. Raising the margin requirements was clearly an effort by the powers that be to bring down the price. But all it did was produce the reason for all the speculators who were getting in for the momentum run to head for the hills at the first sign of trouble.
There are historical seasonal patterns to the moves in gold and silver. http://www.spectrumcommodities.com/education/commodity/charts/gc.html
April, May is historically a weak period. There isn't the jewelry demand in India and other places. Prices are generally weak, all the way through the summer and then August is the time to buy again. Plus you've got QE2 ending at the end of June which may scare folks in both the commodity and equity markets and create some support for the dollar short term. I can see this correction and stagnation lasting into the summer before the next ride up.
I don't think we've yet seen anywhere near the ultimate highs in silver and gold. But like I said before, it isn't going to be a one way ticket. It's going to be one hell of a roller coaster ride. And right now it's down down down.
It's not just a crap shoot. And every time a stock or commodity go down in price doesn't mean manipulation. Sometimes assets go up in price. And sometimes they go down in price. Whenever you see anything go up in a straight line, as silver has in the past couple weeks, it is being overbought and is due for a correction. And that's exactly what has happened.
Don't just take it from me; take it from the Gold and Oil Guy:
http://www.thegoldandoilguy.com/articles/parabolic-moves-are-only-temporary-for-silver-and-gold/
Parabolic Moves are Only Temporary for Silver and Gold
The past few weeks we have been seeing the US Dollar slide to new lows at an increasing rate. The strong devaluation of the dollar has sent precious metals like silver and gold rocketing higher out of control sending them parabolic!
During the past 6 weeks both silver and gold have been rising in a parabolic formation. Meaning the price is going straight up with strong volume as everyone gets greedy and buys into the commodities at the same time. Most of you who follow my work already know that if the general public is piling into an investment rocketing prices higher, you better start focusing on tightening your protective stops and or taking some profits off the table before the price collapses.
Take a look at the weekly chart of Silver below:
Silver was grinding its way higher from July into March of this year. Only in the past 6-7 weeks did we start to see silver open up and run with expanding candles growing at an accelerated rate. This virtually straight up rally is a signature pattern and tells me that price action is now VERY unpredictable and anyone getting involved should be tightening their stops and or taking partial profits on price surges.
Parabolic moves can provide some big gains but most traders end of giving it all back and then some because the price can drop very abruptly as seen on this chart.
continued...
How Far Does Silver Fall?
By Jeff Clark
05/04/2011
http://www.financialsense.com/contributors/jeff-clark/how-far-does-silver-fall
My reiterations of fiction may seem that way to you, but I predicted on this very board that we were headed for a nasty correction as the price of silver approached $50. Just go back and look at my posts.
Any time you see a parabolic move, like we saw in silver the last couple weeks, 9 times out of 10, a correction is coming. (Bullish) traders had a magnet taking it to $50. We may all agree that the fundamentals look great for silver going forward. But nothing goes up in a straight line. Increasingly silver has become attractive to investors (whether it be paper or physical). Where investors are dominating a market, it is very prone to both manipulation and profit taking.
Markets often follow trading patterns. Whether it is the stock market, commodity market or whatever. There are going to be upward moves, followed by corrections. As some have pointed out on this board, corrections are actually healthy for the longer term move. Jim Rogers said recently that he was hoping that silver would correct and take it's time going up rather than going straight to $100 for a move like that indicates an ultimate top.
Traders try to play both sides. I generally just maintain a long position unless I feel really strongly that a correction is due. In the case of silver, correction was blinking a flashing red light for those who wanted to see it to get out.
Like I said, silver is going a lot higher. But it isn't going there in a straight line. It will be very turbulent and those who are patient will reap the rewards.
Silver is a very volatile commodity. Moreso than gold, copper, oil or just about anything else. It's really a trader's dream. And the traders are indeed playing with it. But for all those complaining about manipulation taking it down, there is the counter argument about manipulation taking it to $50 in a very short period of time. From a more objective standpoint, I don't think it is a stretch to say that silver ran too far, too fast, and was due for a correction. Several of the analysts I read were predicting it and I took profit on my silver ETF in the $46 range. Going forward, the folks I read have varying opinions on where the bottom for silver will be. A worst case scenario suggests the low $20s. A best case scenario is between $37 and $38. The consensus says low $30s. This correction could play out for several weeks. We'll probably see a dead cat bounce or two along the way. So don't get all giddy if the price goes up for a day or two. Our stock is actually holding up reasonably well. Still hoping for good quarterly results. Looking out longer term, for those with the stomach to handle the turbulence, anyone that holds this stock for the long term should do pretty darn well.
I listened to the first few minutes. Bob Chapman sounded within the realm of possibilities suggesting that there is collusion to protect JP Morgan's short position on silver. I don't put it beyond Wall Street to pull something like that. But then Chapman starts on the conspiracy theories. This Bin Laden execution is made up. Benazir Bhutto was killed by the CIA, etc. Give me a friggin break. I read this conspiracy theory crap all over the internet. 9/11 was a plot of the Israeli Mossad and all this crap. Chapman loses all credibility in my eyes with this stuff. I couldn't listen any longer. And I no longer can take anything this guy says from this point forward seriously. What a pile of XXXX!
I don't claim to have any technical knowledge or ability to predict prices. But I follow several folks that do have pretty good track records, and what they've been saying since the high $40s is that silver was due for a correction down to the thirties. Almost universally they are optimistic longer term. But as for the short term, we may be in for a period of weeks or months where the price of silver lags. Shorters will use this time to take down our beloved stocks. But again, I have much confidence going forward that we will see much higher prices on USSIF, but you have to have a little patience. This stock can make folks a lot of money if you have the stomach to ride the roller coaster.
The stop on my silver ETF (DBS) got taken out this morning. Had a 4 bagger on that one. As I said before, I won't be surprised to see silver come down to the $30 something range before this correction is over. I don't believe we will see the $20s. I'll be looking for another entry point for the ETF. But I'm not playing with USSIF. I'm in this one for the long run. This is my shot at a grand slam and I won't mess with it until the end of the 9th inning, whenever that may come.
Not to toot my own horn too much, but I've been warning about a correction in silver for several days. Anytime you see a parabolic move like we've seen in silver lately, it is setting up for a sharp correction. Plus the run to the old high of $50 no less gave the shorters all the reasons in the world to take this back down. From the people I read, we could go as low as the low to mid $30s. Grandich is predicting support around $38. I still have much confidence silver ends up much higher. But short term looks a bit on the ugly side.
Everything needs to be kept in context. While many investors here are disappointed that the stock hasn't done well recently, the reality is that the stock has done very well for anyone holding this stock longer than 7 months.
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=ussif&insttype=&freq=&show=
As one of those older investors I've got a 5 bagger already. While I would love to have a 20 bagger, I am patient and think we will get there. I think the share price will continue to rise as long as the price of silver remains elevated and the company continues to make money.
Everyone wants instantaneous results. Those who are patient will get rewarded. We can get to $2.00 and an Amex listing without a reverse split. A reverse split in most cases will not be welcomed by investors and we will do better in the long run without it.
In the past folks have posted inside trading activity on this stock. This was the only info I could find on the net.
http://www.stockresearchportal.com/U-S-Silver-Corporation/Insider-Trading
Does anyone have any other info on insider activity lately?
From a mathematical perspective a reverse split should make no difference. But in reality it often leads to a real hit to the stock's value. Because after the reverse you often see new issuance of shares at the higher price diluting the stock and reducing the percentage of shares owned by the little guy. If they want to bring down the number of shares, they can keep bringing in the profits and buy back some of the stock. That is the way to increase shareholder value, not by reverse splitting the stock.
Amex or no Amex, a reverse split is the last thing I want to see. If they decided on the reverse, why stop at 3to 1? Why not go 5 or 10 to 1 or for that matter 20 or 30 to 1? I guarantee you this is the last thing you all want to see and I hope like heck they don't go this direction.
The share price will take care of itself. As long as the price of silver remains elevated, which I believe it will, the profits will come in, and the stock price will follow.
$50 silver is presenting some very understandable overhead resistance. Not only is the round number intimidating, but it also represents the all-time high for silver. I put a stop under a silver ETF I've been holding just to protect the profits in case it corrects sharply. Peter Grandich, who is a pretty savvy precious metals analyst, came out with a sell on silver but a hold on gold the other day, as he was looking for a correction back down to $40 before it reverses back up. Folks have to remind themselves where silver came from. $5.00 to $50.00 is one hell of a run, and nothing goes up in a straight line.
I am in no way considering selling out of this stock because the upside potential remains just too great, especially if or should I say when silver regains upward momentum. I think we have several more years of upside in both silver and gold. Can you imagine what USSIF will be trading at if silver ever reached $200, which I think is a real possibility in the coming years?
We should all send Bernanke a thank you gift. There is no better friend to this stock or the value of precious metals than Ben Bernanke. All these Wall Street gurus were saying that the Fed has to tighten monetary policy in response to this great, sustainable economic expansion and rising inflationary pressures. Not to be. Ben Bernanke continues to fight the bogeyman of deflation. He is following the model of Franklin Roosevelt who devalued the dollar against gold in an attempt to reflate the economy. Ben Bernanke will continue these policies until oil reaches a danger point again. Maybe the 2008 highs of $147 might get him to take his foot off the accelerator pedal.
I admit I thought a correction was imminent with $50 silver a tough resistance point. After this latest show Bernanke put on, I don't see a ceiling for precious metals, until like I say oil and gas prices become too painful for even Bernanke to ignore.
The good news on the earnings from could be countered by bad news on the price of silver. As I feared short term, it looks like $50 silver was a ceiling, at least short term. We'll see how it plays out, but I wouldn't be surprised to see substantial volatility in here.
Traders are clearly eyeing $50 as a price target for silver. I believe $50 was the all-time high back in the Hunt brother days. I would guess that once it gets there, resistance will build as well as profit taking. If silver can bust through $50 it's on to new horizons. If all the short rumors are true about JP Morgan, we may be seeing that long predicted short squeeze.
I've been debating lately whether to take some profits on some of my precious metals investments (mutual funds, DBS) lately, outside of USSIF which I'm holding tight for the big return on. Short term there is a case to be made for some short term profit taking. Silver has gone close to parabolic lately, which is never a good sign. QE2 is scheduled to end in June. The last time QE1 ended, stocks and commodities, including precious metals, corrected sharply. So from a short term standpoint, there is a case to be made for a correction. At the same time we've got these larger factors which could propel precious metals, especially silver, much higher in the short term.
Outside of short term considerations, because I still believe the longterm prospects are much higher, I am leaning against taking any profits on my precious metals holdings and just riding out whatever comes in the near term. I expect a bumpy ride. I don't think we'll see the smooth upward trajectory we've had lately in silver prices.
As for USSIF, my biggest concern for any low priced stock is always a reverse split. The late reporting is aggravating and probably creating anxiety in investors which is holding down the stock price. But the potential here remains enormous, and if silver prices continue to rise, I don't see how this thing can be a loser. But under no circumstances (even listing on a bigger exchange) do I want to see a reverse split here.