Engineer

Oil Majors Should Just Buy Real Gold

As a shareholder in several oil and gas companies, I would be completely fine with managment using 1% of current assets to purchase gold as a hedge against long-term inflation.

After all, this used to be the case by default for all current assets before 1971.

Sluggard Silver

You should look at both sides of the recession equation: demand destruction AND supply destruction.

With respect to silver production, approximately 60% comes from other metal mines as a byproduct.

When commodity values drop below the cost of production, these mines will simply shut down.

In a normaly recessionary environment, the existing surplus warehouse stockpiles will be drawn down unitl the price rises above the cost of production and the mines then reopen.

However, In our bizzare recessionary environment, the existing stockpiles of silver (and all metals by the way) are by all historical standards...LOW. It is estimated that there are now approximately only 1 billion oz available to investors compared to 20 billion oz in the 1970s. This is the result of decades of skewed trading to the short side making silver almost not worth the effort to mine and produce.

Watch this market closely to see if Adam Smith eventually triumphs.

Gold in a Credit Crisis

That there is no commentary on the recent unusual & overwhelming short positions taken by the largest 2-3 traders in gold and especially silver, leaves one wondering who is speaking the truth anymore.

A speculative short position is NOT A FUND LIQUIDATION, it is capital at risk. A speculative short position in a silver secular bull market - equal to the entire COMEX warehouse stockpile - is an INSANE level of risk...

...unless one knows it is a sure thing.

For an alternative view on these matters, check out www.investmentrarities...

Pay Attention to Indian Silver Buying Spree

Closer to home, sales for silver eagles are the highest they've been in 20 years - over 14MM eagles sold year to date. Probably would be higher still, except the US mint is having trouble sourcing blanks. And there's still two months to go.

See for yourself: www.usmint.gov/mint_pr...

Interestingly, the dollar value of silver eagles sold this year is only slightly less than the dollar value of gold products sold by the mint - and both are up sharply this year.

The investment demand is there. Now where is the supply?

Precious Metals: Scapegoats to Skyrockets

I wonder if the paid bashers we all know and love were smart enough to have taken their gains and invest them in gold and silver?!!

iShares Silver Trust: Inventory Climbs as Metal Price Plunges

It has been a privilege to watch recent events in the silver "market". It has prompted me to investigate how things really work.

The "price of silver" we are seeing has little relation to the underlying physical product. This is easy to do thanks to how the futures exchanges have been structured. On the futures exchanges market makers can go long and short at the same time being both buyers and sellers setting prices in a zero sum game. Also, there is no obligation to physically deliver on a contract - you can pay out in cash equivalent, therby discouraging those who hope to arbitrage between paper and physical. Furthermore, there are limits on the amount of physical product that can be taken off an exchange per month - this is what stopped outsiders like the Hunts. And 100 times the amount of silver trades on paper than actually physically backs it - in other words if they are not able to source the silver from elsewhere, the intrinsic value of 99 out of 100 contracts is ZERO.

Here's the revelation: the "market price" that we all check in the morning has the appearance of reality in that it's a number we all look to to determine our reality. In other words we make it real because we believe it to be real. However, does it really represent the value of silver? Or is it more and more beginning to represent the value of paper?

How to Explain Fiat Currency to Silverbugs

PS. Our clock started ticking in 1971.

How to Explain Fiat Currency to Silverbugs

Then ask them, "how many fiat currencies have survived longer than 50 years?"

(This is not a trick question).

Independence Day: Decoupling Gold and Silver from the Dollar

Some people miss the point of the whole article:

When real estate is down, stock markets are down, commodities are down, bonds are down, and savings are paying a negative real rate of return, what can the average person turn to preserve their wealth?

Like the author says, I think you know the answer to this question.

Sorry, There Is No Silver Conspiracy

"It's different this time" in that this past shorting event has seen the RSI for all bullion investments pushed down to all-time, even ridiculous, lows. All this at a time when the bullish fundamentals remain completely unchanged.

I find it telling that during this event, the buying in the bullion ETFs has skyrocketed. You know, it is possible to have short and long postions at the same time, through separate entities.

Gold, Silver and the Great Unwind: No Conspiracies Here

MIchael, could you please address the following question for your next post?

"Why is physical silver nearly impossible to obtain in the midst of a price collapse?"

Thanks.

Not all Metals are Created Equal (Part I)

I agree with geo and ozzy. Also note the 'y-axis' in all the graphs above. These graphs show value relative to the $US. What has the $US done over the same time period???? A large part of the so-called 'bubble' in commodities has been illusionary - it is merely that the unit of value they are measured in has become diluted.