ISF Logo   IS Forum
Forum Index Register Members List Events Mark Forums Read Help

Go Back   International Skeptics Forum » General Topics » Economics, Business and Finance
 


Welcome to the International Skeptics Forum, where we discuss skepticism, critical thinking, the paranormal and science in a friendly but lively way. You are currently viewing the forum as a guest, which means you are missing out on discussing matters that are of interest to you. Please consider registering so you can gain full use of the forum features and interact with other Members. Registration is simple, fast and free! Click here to register today.
Reply
Old 6th May 2011, 12:47 AM   #281
Eddie Dane
Philosopher
 
Eddie Dane's Avatar
 
Join Date: Aug 2007
Posts: 6,681
Originally Posted by UWdude View Post
It may burst all the way down to $12. That is what I would consider current rock bottom price w/o any speculation priced in.

I am not concerned, BTW. I am guessing it will stop at about $25.
Still buying.
My guess is also around $ 25.
But it would be great if it fell all the way to $ 15.
I'd definitely pick some up at that price.
__________________
Death to Videodrome! Long live the new flesh!
Eddie Dane is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 6th May 2011, 02:13 AM   #282
Puppycow
Penultimate Amazing
 
Puppycow's Avatar
 
Join Date: Jan 2003
Posts: 24,645
Originally Posted by mhaze View Post
I call minor bear run.

Just curious, do you have any stats on volatility of the gold/silver ratio, to support that there is a ratio that tends to be returned to? EG lower volatility when at the "right Ratio", etc.
No, my knowledge of the precious metals market is pretty shallow. I'm just pointing out what the ratio was in the recent past.

I don't know why silver over the past year has been (or had been) outperforming gold. There should be a reason, right? Is there any good reason why that you are aware of? If not, why wouldn't it return to a similar level to the recent past?
__________________
A fool thinks himself to be wise, but a wise man knows himself to be a fool.
William Shakespeare
Puppycow is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 6th May 2011, 02:23 AM   #283
Puppycow
Penultimate Amazing
 
Puppycow's Avatar
 
Join Date: Jan 2003
Posts: 24,645
Originally Posted by UWdude View Post
It may burst all the way down to $12. That is what I would consider current rock bottom price w/o any speculation priced in.

I am not concerned, BTW. I am guessing it will stop at about $25.
Still buying.
Originally Posted by Eddie Dane View Post
My guess is also around $ 25.
But it would be great if it fell all the way to $ 15.
I'd definitely pick some up at that price.
http://en.wikipedia.org/wiki/Silver_as_an_investment

As recently as 2005 it was $7.31. In 2000 it was $4.95

Adjusted for inflation, that's $6.42 in 2011 dollars for 2000, and $8.36 in 2011 dollars for 2005.

Maybe the rise of China precludes it from returning to those levels, though.
__________________
A fool thinks himself to be wise, but a wise man knows himself to be a fool.
William Shakespeare
Puppycow is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 6th May 2011, 02:41 AM   #284
Eddie Dane
Philosopher
 
Eddie Dane's Avatar
 
Join Date: Aug 2007
Posts: 6,681
Originally Posted by Puppycow View Post
http://en.wikipedia.org/wiki/Silver_as_an_investment

As recently as 2005 it was $7.31. In 2000 it was $4.95

Adjusted for inflation, that's $6.42 in 2011 dollars for 2000, and $8.36 in 2011 dollars for 2005.

Maybe the rise of China precludes it from returning to those levels, though.
Yeah,

In 2003 I bought some gold.
At the shop I considered buying some silver.
The guy behind the counter gave me a silver bar and said "this is 20, do you really want to carry 2000 worth to your car?"

I decided that it was not my ambition to own a forklift truck.

So, yeah it was a lot cheaper then.
__________________
Death to Videodrome! Long live the new flesh!
Eddie Dane is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 6th May 2011, 05:05 AM   #285
mhaze
Banned
 
Join Date: Jan 2007
Posts: 15,718
Originally Posted by Puppycow View Post
No, my knowledge of the precious metals market is pretty shallow. I'm just pointing out what the ratio was in the recent past.

I don't know why silver over the past year has been (or had been) outperforming gold. There should be a reason, right? Is there any good reason why that you are aware of? If not, why wouldn't it return to a similar level to the recent past?
I know that six months to a year ago, various people in the metals investment arena started pushing silver, saying it was undervalued compared to gold. This smelled a bit, because the "gold is overvalued" meant that they found buyer resistence at the then current prices, so they were trying to make sales by moving the customers to another, "cheaper" item. EG, "look this is $1300, but this here is $25".

At least in part then, it is a manufactured event from the git go. But there is the OTHER PART that is of more interest. And some people think in terms of weeks or months for investments, other think in terms of years.

The signal that gold and silver have just only started a major upward run is that they have been mainstreamed as investment vehicles. People who would laugh at them 2 years ago now repeated hear of countries buying billions of dollars of gold, pension funds buying it, etc. So where you previously had a fringe minority, now you have a lot of people in this market.
mhaze is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 6th May 2011, 05:18 AM   #286
Puppycow
Penultimate Amazing
 
Puppycow's Avatar
 
Join Date: Jan 2003
Posts: 24,645
Originally Posted by mhaze View Post
The signal that gold and silver have just only started a major upward run is that they have been mainstreamed as investment vehicles. People who would laugh at them 2 years ago now repeated hear of countries buying billions of dollars of gold, pension funds buying it, etc. So where you previously had a fringe minority, now you have a lot of people in this market.
One thing I think that gold has going for it that silver does not is the 800 pound gorrilas known as central banks buying the stuff.

http://latino.foxnews.com/latino/mon...100-tons-gold/

Of course if those gorrilas stop or if they turn around and sell their gold it could go the other way.
__________________
A fool thinks himself to be wise, but a wise man knows himself to be a fool.
William Shakespeare
Puppycow is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 6th May 2011, 05:58 AM   #287
Fast Eddie B
Philosopher
 
Fast Eddie B's Avatar
 
Join Date: Sep 2010
Location: Mineral Bluff, GA
Posts: 6,042
Originally Posted by UWdude View Post
It may burst all the way down to $12.
Or it may not*.

Quote:
I am guessing it will stop at about $25.
Operative word: "guessing".


*"May is the classic "weasel word". Whenever you hear it, mentally add "or may not" to the statement for balance.
Fast Eddie B is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 6th May 2011, 06:40 AM   #288
mhaze
Banned
 
Join Date: Jan 2007
Posts: 15,718
Originally Posted by Puppycow View Post
One thing I think that gold has going for it that silver does not is the 800 pound gorrilas known as central banks buying the stuff.

http://latino.foxnews.com/latino/mon...100-tons-gold/

Of course if those gorrilas stop or if they turn around and sell their gold it could go the other way.
But the primary factor, the underlying factor, is the printing of trillions of dollars. That is a cause, the actions by central banks an effect. And the moving of gold/silver into the "mainstream of investing", that is another effect.

I average over a couple years, so I ignore month to month or week to week swings. But as that printed money gets into the street value of the dollar, metals and other commodities cannot help but rise. By this thinking, we should see 1500 gold go to 3000 (but not really change in value).

The thing that makes this hard to talk about is that the USD is not any good as a measure, a basket of commodities would be better or one of the ultra stable currencies.

As an example of this problem I have had bank account in the US and Australia. In 2006, exchange rate 1:42 AUD to 1 USD, now .....
mhaze is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 6th May 2011, 07:17 AM   #289
michaelsuede
Graduate Poster
 
michaelsuede's Avatar
 
Join Date: Mar 2011
Posts: 1,416
China Buying Silver Overnight

Quote:
GoldCorp submits: "Gold and silver are tentatively higher after their 2% and 8% falls yesterday. In silver, speculators on the COMEX continue to liquidate en masse after margin was increased a massive 84% and various stop loss levels are hit, leading to further falls in the futures market.
That's why Silver moved so sharply.

It will move back up.

It can't help it.

Bernanke has a printing press.
michaelsuede is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 6th May 2011, 07:21 AM   #290
roger
Penultimate Amazing
 
roger's Avatar
 
Join Date: May 2002
Posts: 11,465
Originally Posted by mhaze View Post
But the primary factor, the underlying factor, is the printing of trillions of dollars. That is a cause, the actions by central banks an effect. And the moving of gold/silver into the "mainstream of investing", that is another effect.
Evidence?

Because the first thing to show an effect when you print dollars is the value of dollars goes down. It is the most immediate, and so far as we can argue, "correct" valuation of the dollar. But silver is not matching lock-step with the dollar devaluation; anything but.

Now, if by 'cause' you mean people freak out and create a bubble, perhaps. But I would argue that is an oblique/confusing way of describing it, as the wording implies that somehow the current money status = some massive devaluation.
__________________
May your trails be crooked, winding, lonesome, dangerous, leading to the most amazing view. May your mountains rise into and above the clouds. - Edward Abbey

Climb the mountains and get their good tidings.
Nature's peace will flow into you as sunshine flows into trees. The winds will blow their own freshness into you, and the storms their energy, while cares will drop off like autumn leaves. - John Muir
roger is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 6th May 2011, 07:53 AM   #291
michaelsuede
Graduate Poster
 
michaelsuede's Avatar
 
Join Date: Mar 2011
Posts: 1,416
Originally Posted by roger View Post
Evidence?

Because the first thing to show an effect when you print dollars is the value of dollars goes down. It is the most immediate, and so far as we can argue, "correct" valuation of the dollar. But silver is not matching lock-step with the dollar devaluation; anything but.

Now, if by 'cause' you mean people freak out and create a bubble, perhaps. But I would argue that is an oblique/confusing way of describing it, as the wording implies that somehow the current money status = some massive devaluation.
Yeah but the thing you are forgetting is that prior to Bernanke's insanity, almost no one was holding silver as a money (store of wealth). Most of silver's price was due to industrial usage and collectible coins. There has been a huge over-supply of silver because the fiat currency laws drove silver out of monetary usage and made all that silver available for industrial usage.

As silver and gold undergo the transition back into being a money, the demand for physical will out pace the devaluation of the dollar by a wide margin.

Eventually we will see silver reach at least a 16 to 1 price differential with gold simply because that's the ratio it has to gold in the ground. The many decades of undervalued silver are coming to an end and there will be severe shortages of the metal in the near future.

The eventual price of gold will reach a divisible number with all the wealth (real goods and services) available throughout the entire world. The GDP of the world is around 58 trillion dollars. 160,000 tons of gold has been mined.

That makes the eventual real dollar price of gold $362,500,000 a ton - or over $10,000 an ounce. That would make the eventual price of silver somewhere around $625 an ounce, not counting industrial usage.

All in today's dollar prices of course.

Last edited by michaelsuede; 6th May 2011 at 08:03 AM.
michaelsuede is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 6th May 2011, 07:55 AM   #292
mhaze
Banned
 
Join Date: Jan 2007
Posts: 15,718
Originally Posted by roger View Post
Evidence?

Because the first thing to show an effect when you print dollars is the value of dollars goes down. It is the most immediate, and so far as we can argue, "correct" valuation of the dollar. But silver is not matching lock-step with the dollar devaluation; anything but.

Now, if by 'cause' you mean people freak out and create a bubble, perhaps. But I would argue that is an oblique/confusing way of describing it, as the wording implies that somehow the current money status = some massive devaluation.
The bolded part is just flat wrong. Historically, inflation leads, lowered currency value lags. Let's say 18 months or longer, depending on several things. So there is after some money printing, an "unrealized or latent" inflation which may be simply forecast. Consider the very first day after printing a trillion extra. The street value of a dollar has not changed. Now consider how long it takes the street to absorb that new money, and for the values to average out.

And in some cases, GNP growth is 2-3 percent, and money printing is 2-3 percent, and they seem to cancel out for a while leaving currency values similar.

That's not going to happen on this merry go round, though.

Last edited by mhaze; 6th May 2011 at 08:11 AM.
mhaze is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 6th May 2011, 07:59 AM   #293
mhaze
Banned
 
Join Date: Jan 2007
Posts: 15,718
Originally Posted by michaelsuede View Post
Yeah but the thing you are forgetting is that prior to Bernanke's insanity, almost no one was holding silver as a money (store of wealth). Most of silver's price was due to industrial usage and collectible coins....
Right. Metals as investment "has been mainstreamed". So it's like looking at the number of espressos and lattes drank in the US before and after Starbucks mainstreamed them.

We are not going back to a pre Starbucks level on these specialty coffee drinks.

It's simply not possible. In fact, I suspect for a variety of reasons that this trend is just in the emerging stages.

But I disagree that any of this means the world is in large or small part headed back to a hard metals based currency whether implicit or explicit. That just ain't gonna happen, the unit of money now is the plastic credit card and the keyboard.

Last edited by mhaze; 6th May 2011 at 08:12 AM.
mhaze is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 6th May 2011, 08:10 AM   #294
Francesca R
Girl
 
Francesca R's Avatar
 
Join Date: Nov 2006
Location: London EC1
Posts: 18,596
Originally Posted by Eddie Dane View Post
Can anyone explain to me what margin hikes are, who controls them and why they are implemented?
Margin and collateral hikes are standard developments when the volatility of the underlying spikes higher.
Francesca R is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 6th May 2011, 08:23 AM   #295
michaelsuede
Graduate Poster
 
michaelsuede's Avatar
 
Join Date: Mar 2011
Posts: 1,416
Originally Posted by mhaze View Post
But I disagree that any of this means the world is in large or small part headed back to a hard metals based currency whether implicit or explicit. That just ain't gonna happen, the unit of money now is the plastic credit card and the keyboard.
Gold and silver can be represented electronically, which makes this argument moot.

As the government continues its debasement of the world reserve currency, we will see gold and silver become money once again.
michaelsuede is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 6th May 2011, 08:29 AM   #296
Puppycow
Penultimate Amazing
 
Puppycow's Avatar
 
Join Date: Jan 2003
Posts: 24,645
Originally Posted by mhaze View Post
But the primary factor, the underlying factor, is the printing of trillions of dollars.
But what I think you're missing is that the trillions printed comes at a time when the real estate market has lost trillions in value, so one effect cancels out the other.

Remember that as house prices were rising, people felt richer every year and they borrowed against the higher market values of their houses, and this new money went into the economy. Now that engine of growth has been reversed. The dollars being pumped in by the Fed are only to keep the economy from deflating, which would happen if the Fed sat idle while the housing market (and commercial real estate market) collapsed.

This is one reason why I don't expect hyperinflation. Another is the high unemployment. To get hyperinflation, you need an inflationary cycle, and that requires wage hikes as part of the cycle. If wages aren't going up, there's a limit to how much sellers can raise their prices, because consumers won't stand for it if their own wages aren't rising too. According to the latest jobs report this morning, wages only rose by 0.1% in April.

Finally, once real signs of inflation appear, the Fed will end its loose money policy. They know how to control inflation when the time comes.
__________________
A fool thinks himself to be wise, but a wise man knows himself to be a fool.
William Shakespeare
Puppycow is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 6th May 2011, 08:38 AM   #297
michaelsuede
Graduate Poster
 
michaelsuede's Avatar
 
Join Date: Mar 2011
Posts: 1,416
Originally Posted by Puppycow View Post
But what I think you're missing is that the trillions printed comes at a time when the real estate market has lost trillions in value, so one effect cancels out the other.

Remember that as house prices were rising, people felt richer every year and they borrowed against the higher market values of their houses, and this new money went into the economy. Now that engine of growth has been reversed. The dollars being pumped in by the Fed are only to keep the economy from deflating, which would happen if the Fed sat idle while the housing market (and commercial real estate market) collapsed.

This is one reason why I don't expect hyperinflation. Another is the high unemployment. To get hyperinflation, you need an inflationary cycle, and that requires wage hikes as part of the cycle. If wages aren't going up, there's a limit to how much sellers can raise their prices, because consumers won't stand for it if their own wages aren't rising too. According to the latest jobs report this morning, wages only rose by 0.1% in April.

Finally, once real signs of inflation appear, the Fed will end its loose money policy. They know how to control inflation when the time comes.
Hyper-inflation comes when people lose confidence in the value of the dollar.

By people, I mean China, Japan, Russia, Western Europe, etc..

The inflationary cycle comes from a wide spread dumping of our treasury bonds by State actors.

It doesn't matter if there is an excess of housing or not.

Consider the options of China:

They can take Bernanke's printing in the butt and suffer a loss of real wealth or they can dump the dollar totally and tell Bernanke to go screw himself.

When the printing by Bernanke reaches a point that is more painful for China than getting out of the dollar, they will get out.

Last edited by michaelsuede; 6th May 2011 at 08:40 AM.
michaelsuede is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 6th May 2011, 08:43 AM   #298
mhaze
Banned
 
Join Date: Jan 2007
Posts: 15,718
Originally Posted by Puppycow View Post
But what I think you're missing is that the trillions printed comes at a time when the real estate market has lost trillions in value, so one effect cancels out the other.

Remember that as house prices were rising, people felt richer every year and they borrowed against the higher market values of their houses, and this new money went into the economy. Now that engine of growth has been reversed. The dollars being pumped in by the Fed are only to keep the economy from deflating, which would happen if the Fed sat idle while the housing market (and commercial real estate market) collapsed.

This is one reason why I don't expect hyperinflation. Another is the high unemployment. To get hyperinflation, you need an inflationary cycle, and that requires wage hikes as part of the cycle. If wages aren't going up, there's a limit to how much sellers can raise their prices, because consumers won't stand for it if their own wages aren't rising too. According to the latest jobs report this morning, wages only rose by 0.1% in April.

Finally, once real signs of inflation appear, the Fed will end its loose money policy. They know how to control inflation when the time comes.
Well, no I am not missing the real estate issues. To reverse your statement, part of FED policy is to deflate real estate values and then to allow both commercial and residential owners to string along with loans higher than value, as well as taking something like a trillion in loans directly into the FED balance sheet. This policy cannot work in the long run unless real estate is permanently deflated. Yes in the short run you can deflate one sector, inflate another and have an average. But that average is still going to be affected by all that new money printed.

As for "full employment", traditionally it was thought that big time inflation could not occur without full employment. I don't think anyone believes that anymore and neither is is logical. The question is simply whether the number of dollars printed, and their effect on the economy, exceeds the effect of a simultaneous change in employment. And that's really obvious - if a 3% change in employment is exactly offset by $500B printed, then what happens if you print $2T?

So ultimately, those dollars printed have to come home to roost. And the FED cannot call them back in, without the banks having to call in loans. And that isn't going to happen, unless the FED wants to increase it's real estate inventory. This would be a socialization of the majority of real estate capital. Some might like that, and or some might try to effect it thinking the public would not realize what was happening.

Finally, I'll note one error in your thinking (in many respects we do agree). The FED or the government cannot control or manage hyperinflation. That is what happens when the people lose faith in the currency and the government behind it. By definition, hyperinflation is a loss of control. Historically, it seems to happen pretty easily and inevitably once certain conditions are set up.

Are those conditions set up in the USA now? Yep, pretty much. Does that mean we will experience hyperinflation? Nope, only if the attitude of the people shifts.

Is the current move toward gold good or bad for this?

The current move toward gold doesn't signal hyperinflation in the works.

What in my opinion would signal hyperinflation is very simple. It would be a failure politically by Boerner to extract a deal to cut trillions in exchange for raising the debt ceiling. As Bernanke said in 3-2009 "The medium term outlook for the US is quite dark".

"business as usual in washingon for 2011-2013" directly leads, inevitably to hyperinflation.

Well, that's my opinion.


Last edited by mhaze; 6th May 2011 at 08:48 AM.
mhaze is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 6th May 2011, 11:40 AM   #299
NewtonTrino
Illuminator
 
NewtonTrino's Avatar
 
Join Date: Jul 2007
Posts: 4,390
Originally Posted by michaelsuede View Post
Hyper-inflation comes when people lose confidence in the value of the dollar.

By people, I mean China, Japan, Russia, Western Europe, etc..

The inflationary cycle comes from a wide spread dumping of our treasury bonds by State actors.

It doesn't matter if there is an excess of housing or not.

Consider the options of China:

They can take Bernanke's printing in the butt and suffer a loss of real wealth or they can dump the dollar totally and tell Bernanke to go screw himself.

When the printing by Bernanke reaches a point that is more painful for China than getting out of the dollar, they will get out.

Except for one problem. If the dollar falls to nothing we can't buy anything from China. At the current time that would hugely set back their economy. It would be economic suicide. In fact china has a policy of artificially propping up the dollar by under pricing the yuan.

In the future as they grow this could change. Hopefully we will get our house in order before then.
NewtonTrino is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 6th May 2011, 12:10 PM   #300
michaelsuede
Graduate Poster
 
michaelsuede's Avatar
 
Join Date: Mar 2011
Posts: 1,416
Originally Posted by NewtonTrino View Post
Except for one problem. If the dollar falls to nothing we can't buy anything from China. At the current time that would hugely set back their economy. It would be economic suicide. In fact china has a policy of artificially propping up the dollar by under pricing the yuan.

In the future as they grow this could change. Hopefully we will get our house in order before then.
It is a fallacy to think China will be just as hurt by this as the US.

China will still have a viable currency and will be able to trade internationally for products and services.

Further, the Chinese people will simply buy their own products, just like we used to do before we found out that printing money to pay for foreign goods is easier than trading real resources for them.
michaelsuede is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 6th May 2011, 03:38 PM   #301
mhaze
Banned
 
Join Date: Jan 2007
Posts: 15,718
Originally Posted by michaelsuede View Post
It is a fallacy to think China will be just as hurt by this as the US.

China will still have a viable currency and will be able to trade internationally for products and services.

Further, the Chinese people will simply buy their own products, just like we used to do before we found out that printing money to pay for foreign goods is easier than trading real resources for them.
Correct, but many nations, besides the US, are inflating their currency. As I recall, pretty much across the G20 this exists. Their currencies are all falling, just at different rates. Any argument on money and value based on a single nation's perspective is going to be false. For example, if the Euro collapses, then at least for w while, the USD would look pretty good.
mhaze is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 6th May 2011, 05:37 PM   #302
UWdude
Banned
 
Join Date: Mar 2010
Posts: 431
Originally Posted by Puppycow View Post
http://en.wikipedia.org/wiki/Silver_as_an_investment

As recently as 2005 it was $7.31. In 2000 it was $4.95

Adjusted for inflation, that's $6.42 in 2011 dollars for 2000, and $8.36 in 2011 dollars for 2005.

You are using CPI inflation, while in my estimates, I am using ground observation inflation.

Originally Posted by Fast Eddie B View Post
Or it may not*.



Operative word: "guessing".


*"May is the classic "weasel word". Whenever you hear it, mentally add "or may not" to the statement for balance.
what's your point?
I am not making predictions, I am just stating what I think is possible. I do not think it will go below $12, and am guessing in all likelihood, it will fall to $25 at worst.

to put it another way, Ill be surprised if it goes below $25, but I know it isn't going below $12... ever.

Last edited by UWdude; 6th May 2011 at 06:11 PM.
UWdude is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 7th May 2011, 04:05 AM   #303
Fast Eddie B
Philosopher
 
Fast Eddie B's Avatar
 
Join Date: Sep 2010
Location: Mineral Bluff, GA
Posts: 6,042
Quote:
...but I know it isn't going below $12... ever.
Some of us old timers have been watching gold and silver prices for 30 or 40 years.

I remember when the Hunt brothers were trying to manipulate the price of silver in the 80's. It went to about $50 then, and lots of people made statements similar to yours about how low it could go from there. And most of them were wrong.

My point is? That, in principle, no one knows where precious metal prices are headed. It's part of the baggage a free market brings with it. It's NOT a reason not to own some, if it fits your overall investment strategy. But guessing is all you're doing, and attempting to profit from short-term predictions has proven to be a fool's errand in the past. I see no fundamental reason why that has changed.
Fast Eddie B is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 7th May 2011, 12:33 PM   #304
Tippit
Master Poster
 
Tippit's Avatar
 
Join Date: Jul 2007
Posts: 2,739
Originally Posted by mhaze View Post
The bolded part is just flat wrong. Historically, inflation leads, lowered currency value lags. Let's say 18 months or longer, depending on several things. So there is after some money printing, an "unrealized or latent" inflation which may be simply forecast. Consider the very first day after printing a trillion extra. The street value of a dollar has not changed. Now consider how long it takes the street to absorb that new money, and for the values to average out.
No, if new money is created and spent (or invested), the effects, in an absolute sense, are immediate. The source of confusion has to do with how inflation is measured (a doctored CPI) and more importantly, the absence of domestic asset prices (let alone foreign dollar denominated asset prices). Asset inflation is further obfuscated by the fact that the supply of financial assets can be increased just as easily and arbitrarily as fiat money. The "lag" you are speaking of only refers to how long it takes the increased asset prices to translate into an increase in the doctored index of consumer prices, but the effects on some asset prices, somewhere, is immediate.

In simple terms, the benevolent recipients of the Fed's easy money policy get richer in terms of nominal asset prices long before their increased consumption gets resolved in higher consumer prices. The man on the street doesn't notice if David Rockefeller's bond portfolio jumps from $100B to $200B, he only notices when this has a material affect on Rockefeller's consumption of real goods and services.

Quote:

And in some cases, GNP growth is 2-3 percent, and money printing is 2-3 percent, and they seem to cancel out for a while leaving currency values similar.

That's not going to happen on this merry go round, though.
We always have monetary inflation that exceeds real output, because we're told that forcing the saver to spend by stealing from him is the key to prosperity, and that economic armageddon would result otherwise. But as more cronies get arbitrarily rich from what the Fed is doing, they will inevitably consume more (without producing anything), and that will translate into pain felt by everyone else.
__________________
"The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks."
- Lord Acton
Tippit is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 7th May 2011, 12:38 PM   #305
Tippit
Master Poster
 
Tippit's Avatar
 
Join Date: Jul 2007
Posts: 2,739
Originally Posted by Puppycow View Post
One thing I think that gold has going for it that silver does not is the 800 pound gorrilas known as central banks buying the stuff.

http://latino.foxnews.com/latino/mon...100-tons-gold/

Of course if those gorrilas stop or if they turn around and sell their gold it could go the other way.
The problem with this logic, of course, is that gold and silver prices are used as a barometer of central bank monetary inflation by many. It's in the central bank's interest to perpetuate a fiat money regime by selling, not buying precious metals, so as to attempt to manage "inflation expectations". So the only central bank buyers of gold are likely to be those banks with the least to gain from their own fiat currency regimes.
__________________
"The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks."
- Lord Acton
Tippit is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 7th May 2011, 12:59 PM   #306
Tippit
Master Poster
 
Tippit's Avatar
 
Join Date: Jul 2007
Posts: 2,739
Originally Posted by roger View Post
Evidence?

Because the first thing to show an effect when you print dollars is the value of dollars goes down. It is the most immediate, and so far as we can argue, "correct" valuation of the dollar. But silver is not matching lock-step with the dollar devaluation; anything but.
The value of dollars inevitably goes down when new dollars are created, the question is, using what as the numeraire? Silver is volatile now as the result of others anticipating higher nominal silver prices due to currency devaluation, as well as others speculating on this. The equilibrium price of silver in dollars, however, will in the long run reflect the supply of dollars, among other things.

Quote:

Now, if by 'cause' you mean people freak out and create a bubble, perhaps. But I would argue that is an oblique/confusing way of describing it, as the wording implies that somehow the current money status = some massive devaluation.
Have you seen this?

__________________
"The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks."
- Lord Acton
Tippit is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 7th May 2011, 09:23 PM   #307
UWdude
Banned
 
Join Date: Mar 2010
Posts: 431
Originally Posted by Fast Eddie B View Post
Some of us old timers have been watching gold and silver prices for 30 or 40 years.

I remember when the Hunt brothers were trying to manipulate the price of silver in the 80's. It went to about $50 then, and lots of people made statements similar to yours about how low it could go from there. And most of them were wrong.

My point is? That, in principle, no one knows where precious metal prices are headed. It's part of the baggage a free market brings with it. It's NOT a reason not to own some, if it fits your overall investment strategy. But guessing is all you're doing, and attempting to profit from short-term predictions has proven to be a fool's errand in the past. I see no fundamental reason why that has changed.
"ever" is not a short term prediction. If I were trying to profit from short term predictions, I would be shorting or selling silver and hoping to buy on the dips. I am not. I am buying silver and holding it until I need it or I am dead.
UWdude is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 8th May 2011, 06:03 AM   #308
mhaze
Banned
 
Join Date: Jan 2007
Posts: 15,718
Originally Posted by mhaze
The bolded part is just flat wrong. Historically, inflation leads, lowered currency value lags. Let's say 18 months or longer, depending on several things. So there is after some money printing, an "unrealized or latent" inflation which may be simply forecast. Consider the very first day after printing a trillion extra. The street value of a dollar has not changed. Now consider how long it takes the street to absorb that new money, and for the values to average out.

Originally Posted by Tippit View Post
No, if new money is created and spent (or invested), the effects, in an absolute sense, are immediate. The source of confusion has to do with how inflation is measured (a doctored CPI) and more importantly, the absence of domestic asset prices (let alone foreign dollar denominated asset prices).....
Suppose we were on a small remote island which had a 1000 units of currency total. We go make 1000 more units of currency, and take some of them down to the village to trade. Initially, they buy the same amount of goods. At first, nobody realizes "money is plentiful". As they are spent, there exists a latent inflation. That's the difference between the actual diluted value and the prior value at that moment in time, leaving aside factors of GNP changes and of velocity for the moment.

But it isn't instantly realized.

And this has nothing at all to do with doctored CPIs.
mhaze is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 8th May 2011, 08:45 AM   #309
Tippit
Master Poster
 
Tippit's Avatar
 
Join Date: Jul 2007
Posts: 2,739
Originally Posted by mhaze View Post
Suppose we were on a small remote island which had a 1000 units of currency total. We go make 1000 more units of currency, and take some of them down to the village to trade. Initially, they buy the same amount of goods. At first, nobody realizes "money is plentiful". As they are spent, there exists a latent inflation. That's the difference between the actual diluted value and the prior value at that moment in time, leaving aside factors of GNP changes and of velocity for the moment.

But it isn't instantly realized.

And this has nothing at all to do with doctored CPIs.
I submit that if you doubled the money supply on a small island, and used all of the proceeds to bid up goods and services right away, that the shopkeepers would find out what is going on almost immediately. But I grant your point, it's not "instant". My point wasn't that it has to do with the CPI, it has to do with massive amounts of money bidding up assets, both domestic and foreign, in a non-transparent way. What I'm essentially trying to say is, there are massive transfers of wealth going on in spite of relatively mild changes in CPI. If I counterfeit $100M and don't spend it on any goods and services, but instead buy beachfront property in Costa Rica, poor and middle class people aren't necessarily going to feel that immediately, but I'm that much richer anyway. Sure, I will use the rent proceeds to gradually ramp up my consumption of goods and services, but I'm still $100M richer than my neighbor almost overnight, and yet the CPI didn't budge. So there isn't so much of a lag as there is a complete failure to measure the effects of asset inflation.
__________________
"The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks."
- Lord Acton
Tippit is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 8th May 2011, 10:05 AM   #310
mhaze
Banned
 
Join Date: Jan 2007
Posts: 15,718
Originally Posted by Tippit View Post
.... If I counterfeit $100M and don't spend it on any goods and services, but instead buy beachfront property in Costa Rica, poor and middle class people aren't necessarily going to feel that immediately, but I'm that much richer anyway. Sure, I will use the rent proceeds to gradually ramp up my consumption of goods and services, but I'm still $100M richer than my neighbor almost overnight, and yet the CPI didn't budge. So there isn't so much of a lag as there is a complete failure to measure the effects of asset inflation.
Yep. That's the difference between asset inflation and CPI style inflation.

There is a key, seldom mentioned point. There isn't any way that money can be printed, with or without GNP rising, without it being a redistribution to the parties favored by the money printers, and a theft from the public. It's curious that any public would fall for the propaganda "this is good for you"...
mhaze is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 10th May 2011, 07:53 AM   #311
michaelsuede
Graduate Poster
 
michaelsuede's Avatar
 
Join Date: Mar 2011
Posts: 1,416
The silver spot price is back above 38 and trending northward once again.

At no time did physical bullion being sold at online auctions dip below 40 during this episode.

During the past week, nearly 90% of SLV silver contracts traded hands. This is unprecedented. What we witnessed were the weak under-capitalized hands getting driven from the futures market while strong players that are fully capitalized came in to play with their own money.

Currently, 1 oz of silver bullion is trading for $55.00 on Ebay with heavy action.

That is a $17.00 premium on immediate physical delivery.

Last edited by michaelsuede; 10th May 2011 at 07:56 AM.
michaelsuede is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 10th May 2011, 08:03 AM   #312
Tippit
Master Poster
 
Tippit's Avatar
 
Join Date: Jul 2007
Posts: 2,739
Originally Posted by michaelsuede View Post
The silver spot price is back above 38 and trending northward once again.

At no time did physical bullion being sold at online auctions dip below 40 during this episode.

During the past week, nearly 90% of SLV silver contracts traded hands. This is unprecedented. What we witnessed were the weak under-capitalized hands getting driven from the futures market while strong players that are fully capitalized came in to play with their own money.

Currently, 1 oz of silver bullion is trading for $55.00 on Ebay with heavy action.

That is a $17.00 premium on immediate physical delivery.
1oz silver bullion coins have always carried a hefty premium to spot silver prices, though, because 1oz coins are more liquid than bars. This should come down as the price of silver rises.
__________________
"The issue which has swept down the centuries and which will have to be fought sooner or later is the people versus the banks."
- Lord Acton
Tippit is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 10th May 2011, 09:35 AM   #313
The Don
Penultimate Amazing
 
The Don's Avatar
 
Join Date: Nov 2002
Location: Sir Fynwy
Posts: 27,882
Any kind of old **** will sell on eBay.

If you're going to buy silver, buy in bulk (multiples of 1000's of ounces) and don't take delivery.

A handful of silver coins is neither here nor there.

Whether silver is a good investment is a completely different topic but if you insist on investing, do it wholesale not retail.
The Don is online now   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 10th May 2011, 11:36 AM   #314
timhau
NWO Litter Technician
 
timhau's Avatar
 
Join Date: May 2004
Location: Looks like Finland. Smells like Finland. Quacks like Finland. Where the hell am I?
Posts: 13,407
Originally Posted by michaelsuede View Post
The silver spot price is back above 38 and trending northward once again.
And you know that silver isn't doing a dead cat impression because... ?
__________________
When I was a kid I used to pray every night for a new bicycle. Then I realised that the Lord, in his wisdom, doesn't work that way. I just stole one and asked Him to forgive me.
- Emo Philips
timhau is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 10th May 2011, 12:02 PM   #315
michaelsuede
Graduate Poster
 
michaelsuede's Avatar
 
Join Date: Mar 2011
Posts: 1,416
Originally Posted by timhau View Post
And you know that silver isn't doing a dead cat impression because... ?
Because fundamentals say otherwise.

I'm sure there will still be some price volatility in silver following the expulsion of the weak players from the market, but there is nothing that will fundamentally make the demand for silver go away.

The US is actively debasing its currency.
michaelsuede is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 10th May 2011, 12:03 PM   #316
NewtonTrino
Illuminator
 
NewtonTrino's Avatar
 
Join Date: Jul 2007
Posts: 4,390
Originally Posted by michaelsuede View Post
The silver spot price is back above 38 and trending northward once again.

At no time did physical bullion being sold at online auctions dip below 40 during this episode.

During the past week, nearly 90% of SLV silver contracts traded hands. This is unprecedented. What we witnessed were the weak under-capitalized hands getting driven from the futures market while strong players that are fully capitalized came in to play with their own money.

Currently, 1 oz of silver bullion is trading for $55.00 on Ebay with heavy action.

That is a $17.00 premium on immediate physical delivery.
I can still call up my local coin ship and buy bullion for $2 over spot.
NewtonTrino is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 10th May 2011, 12:12 PM   #317
michaelsuede
Graduate Poster
 
michaelsuede's Avatar
 
Join Date: Mar 2011
Posts: 1,416
Originally Posted by NewtonTrino View Post
I can still call up my local coin ship and buy bullion for $2 over spot.
I'm sure you can. And I'm also sure that they are not selling those coins at the prices they could be selling them for.

They are giving you a deal.

Current auction price of a 2011 silver eagle:
http://cgi.ebay.com/1-2011-1oz-OUNCE...#ht_3465wt_968
michaelsuede is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 10th May 2011, 03:45 PM   #318
Fast Eddie B
Philosopher
 
Fast Eddie B's Avatar
 
Join Date: Sep 2010
Location: Mineral Bluff, GA
Posts: 6,042
Originally Posted by UWdude View Post
"ever" is not a short term prediction. If I were trying to profit from short term predictions, I would be shorting or selling silver and hoping to buy on the dips. I am not. I am buying silver and holding it until I need it or I am dead.
Then we're in general agreement. Its just that I try to never make any predictions, especially about the future.

I do own some gold coins and some silver coins. I've stayed away from bullion due to what I see as less liquidity. Like you, I have no plans to ever sell the coins, though who knows what the future may bring - I see the coins as some "insurance" against inflation - no more, no less.

I want to comment most everyone on this thread for generally rational and informed discourse. Another thread about $1,500 gold turned really mean and personal, with anyone electing to hold any precious metals called all sorts of names. I eventually made that the first thread I ever added to my "ignore" list.

Nice to see that intelligent individuals can just agree to disagree without any name calling (at least for now).
Fast Eddie B is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 10th May 2011, 10:20 PM   #319
timhau
NWO Litter Technician
 
timhau's Avatar
 
Join Date: May 2004
Location: Looks like Finland. Smells like Finland. Quacks like Finland. Where the hell am I?
Posts: 13,407
Originally Posted by michaelsuede View Post
Because fundamentals say otherwise.
Are you sure it's fundamentals, not fundamentalists?
__________________
When I was a kid I used to pray every night for a new bicycle. Then I realised that the Lord, in his wisdom, doesn't work that way. I just stole one and asked Him to forgive me.
- Emo Philips
timhau is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Old 10th May 2011, 10:23 PM   #320
michaelsuede
Graduate Poster
 
michaelsuede's Avatar
 
Join Date: Mar 2011
Posts: 1,416
Originally Posted by timhau View Post
Are you sure it's fundamentals, not fundamentalists?
The silver spot price will be back over 40 tomorrow.

I think my position has been vindicated already.
michaelsuede is offline   Quote this post in a PM   Nominate this post for this month's language award Copy a direct link to this post Reply With Quote Back to Top
Reply

International Skeptics Forum » General Topics » Economics, Business and Finance

Bookmarks

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump


All times are GMT -7. The time now is 10:17 AM.
Powered by vBulletin. Copyright ©2000 - 2020, Jelsoft Enterprises Ltd.

This forum began as part of the James Randi Education Foundation (JREF). However, the forum now exists as
an independent entity with no affiliation with or endorsement by the JREF, including the section in reference to "JREF" topics.

Disclaimer: Messages posted in the Forum are solely the opinion of their authors.