Silver under my Skin?
It dawned on me lately that I am in danger of becoming a silverbug. I love collecting silver coins, the older the better. Bullion of interesting design catches my eye. I have to fight the urge to buy large amounts. I fear my shipments will give the UPS deliverer a hernia. As a silver bug, I could also collect side-by-side, 12- gauge shotguns with silver accents. That would fend off unwelcome nocturnal visitors of both two and four-legged variety. No silver bullets for me though, just good ole buckshot. I’ll take my chances with vampires.
Silver mining companies are attractive when you look through silver rimmed specs. My rims are cheap, but I wish they were silver. Silvermining operations have a tendency to be grand in scale and can be mined for many years. They are quite profitable when silver prices remain high as they are in production. Often the mines can be very efficient especially when co-located metals are sold to lower the cost of production. Gold explorers seem more hit or miss to me.
Large, efficient silver mining operations have the potential to be a household name. I followed CDE for the longest time waiting for my good fortune. Naturally I cashed out with a small loss just before it went up several dollars. Yes, the common mans gold, and a common traders mistake. I wish I knew more about the lifecycle of a mine then. I’ve been at this a while, but I still don’t get the silver market. I like to think that I read those who do. Are the Silver Bears collectively correct, or are we all deluded? Is it deluded or diluted? Regardless, manipulation certainly has made the news this month.
Silver always catches my eye in the news. I’ve been reading everywhere about Silver manipulation, ETFs distorting the silver market, silver and the COMEX. Silverbullets. It’s like a spaghetti western where the drifters are waging war with the cattle barons. Back then it was free-range cattle, now its manipulated markets. The barons are now the large banks and nefarious oligarchs. I just read about Mexico and its push for a silver standard, but their central bank most likely squelched it in the house. Rumor has it the banks’ reserve of silver was too low, so they wouldn’t have profited from the move. This will be an interesting story to follow if the banks increase their inventory before the ink is dry on new legislation.
Why weight into silver with all the apparent manipulation? Here's a few reasons off the top. A silver bug doesn’t have to hold their breath to see if India is buying. A silver bug doesn’t have to hope congress for the Nth time doesn’t approve the release of gold inventories. Silver has enough industrial applications to be in demand regardless of jewelry consumption or coin uses. With medical, clothing and even solar panels using silver, demand must be on the rise. These applications are consuming silver, not just stockpiling it. So if Adam Smith was correct, in a laissez-faire market, supply and demand rules. Demand is on the rise, and cheap silver is getting tougher to find if one believes peak silver articles.
Is it a laissez-faire market? How much manipulation is possible? Having lived through the Huntian 70’s I can confidently say, quite a bit. Can one yield profit going long on silver mining stocks to leverage a bull run? Or for such a volatile metal, perhaps the day-traders could find a niche. How often can the market be diluted every time there is a run up in the spot price? Who is stock-piling silver that would dilute the market? Do Silver ETFs actually have the bullion, or are they paper giants? These are common questions for a common man who loves common man’s gold.
I do love the lunar metal, and common is ok. At a point in ones life, one should be comfortable with the skin you are in. I’m considering trying colloidal silver. It supposedly has positive health effects. At least I will get honest feedback from friends and strangers alike. Every prolonged glance upon my blue countenance will tell me if I got into silver a little too much.
Boot 30 June 09