177 replies to this topic

[johngeorge]

dharma

printing fiat in the western world

Speaking of fiat this is from James Turk on KWN blog today:

<<snip>>

"Going back the KWN blog we did on February 10th, this backwardation in silver has potentially huge implications for the US dollar. Metal goes into backwardation for two reasons - Either short supply, or nobody wants to accept fiat currency. We know the backwardation in silver is because the supply of physical metal is so short.

But the lingering question in my mind is whether the strong hands who hold silver are unwilling to take a fiat currency. If that is the case, and this backwardation in silver eventually leads to a backwardation in gold, the implications for the US dollar, and indeed all of the fiat currencies in the world are ominous.”

<<snip>>

Thanks for the before sunrise ramblings.

[dharma]

rolling stone article
http://www.rollingst...n-jail-20110216

oil up 8 is problematic
gold up 17 is not
dharma

[inamosa]

However silver equities in my port have been negatively diverging?

Dougie, you may want to try something different.

My two cents:

Personally, I don't buy any juniors and usually stay away from individual companies. Only metal futures and levered bullion products. I prefer leveraged metal to risky companies posing as leveraged metal.

For silver, there are 4 products I like:
-SLV (1x silver) or the SI (big) or YI (mini) silver futures contracts
-AGQ (2x silver)
-SLW (silver seller and holder - not a mining company)

You can almost get as much leverage as you want with futures so know your limits.

For gold, I like GDXJ (junior gold ETF) or GLD (1x gold) or DGP (2x gold) or the GC (big) or YG (mini) gold futures contracts.

I use futures most of the time.

Of course, if you want to hold physical, you want to get that through a bullion dealer as well as consider closed-end funds like CEF and GTU and PHYS etc.

One of the reasons the metal has been doing so well as compared to companies, as opposed to the '70s bull run, is that people had a hard time investing in the metal back then. There were no gold or silver bullion ETFs or CEFs so they were forced to often use companies as a way to get into the sector. Times have changed. Silver bullion (at new highs right now) is leading most silver companies, for instance, and gold bullion has been trading at new highs for a hell of a long time while the HUI has lagged considerably and is only now eclipsing its 2007 highs. Junior gold has been even worse off but I'm sure will catch up over time.

If you're going to be investing in companies, it's a task by itself to find the companies that will really end up providing the reward to risk you originally expected. It's out there for someone who has the time, knowledge and experience - but I don't think many do, especially from an experience standpoint. Those who do have it in them can do enormously well, of course - and will end up beating most of those trading and/or investing in the PM space - but again I'd say they're few and far between.

Edited by alysomji, 21 February 2011 - 10:57 PM.

[dougie]

dharma's cycle high for the 21st? WHAT A CALL!

[JGUITARSLIM]

dharma's cycle high for the 21st? WHAT A CALL!

Or trend acceleration...

[dougie]

distinctly unimpressive action in the miners after the huge surge in underlying metals: though arguably bucking the pull of down markets still and yet, this being an ST- IT high would not surprise me

[dharma]

there is alot of resistance in this area, thus the pause. the metals are gaining strength and will take out this area, but 1st the pause. other than the metals shorts, no one is really affected by higher metals prices. however the $8 surge yesterday affects almost everyone. and obviously as a result of qe and qe2 and eu printing it has sent mid easterners to the bread line following the path to marie antoinettes door. how many regimes will be toppled? and wheat and rice the 2 staples for much of the world remain below their 08 highs. of course the ultimate tool to fight all this remains in the wings-----higher rates. thus my reference to the end of the 30 year bond bull. folks were forced into bonds looking for meager any returns on their money. sorry, but it was the ultimate suckers play. bonds are guaranteed confiscation of wealth. see that mountain over there, that is debt. if you have debt, do not wait for the wolf to come to your door, do what you have to , to rid yourself of this beast . or the banksters will do it for you. throughout history they have not just let people walk. we will see how long they let that happen????? maybe its a new breed of bankster. i doubt it. i do alot of research into the companies i buy. what is a liar. its a guy in a suit over a hole in the ground. its easy to buy miners. its much more difficult to separate the wheat from the chaff. do your homework, if this is not for you. alysomji has expressed wise old words for you. its another way to participate in the market. there are many ways to be successful . find your niche. and dont look back. a few years from now this opportunity will be over. you need to be able to walk away from the bull w/substantially improved finances when the bull ends, interest rates will be alot higher. and silver will tumble. now, i do think it has a long ways to go. but , like chess you have to plan your moves ahead. i do think the gold/silver ratio closes to near 16/1 . but swapping silver for gold along the way is much more prudent. to my knowledge, not one cb holds silver. enjoy the ride , it has alot further to go. one day, silver will start on its locked limit down saga. dharma the pause that refreshes. buy weakness , sell strength

[dougie]

pure speculation of course, but i suspect the powers that be would be grateful to see food prices just a tad lower... let them eat cake , yes, but not with wheat and sugar prices quite so high lest the guillotines blades be re-sharpened

[dharma]

http://www.marketwat...2B-00212804637C
dharma

[stubaby]

Where's the "flight-to-safety" into the US Dollar??? What has changed? Looks to me like the Yen is now the "go-to" safehaven currency! stubaby