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The Disturbing Truth About Silver’s Rally



Comments (15)

  1. john says:

    Some good points here, but the article fails to mention JPM-Chase and the many lawsuits filed by investors for market manipulation; this was even admitted to by former CFTC commissioner Bart Chilton.

    Silver’s historical sub-twenty dollar an ounce price may have been the result of price suppression via JPM manipulation. In other words silver may have been under valued for years and is now coming closer to it’s true value regardless of the current investor speculation.

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    Brad Reply:

    I think some of this acticle is rubbish. We’re in a whole new world. There are other major variables that were not noted in the article, which Louise must already know about. (Gold/silver 16:1 ratio disparity, US Fed/inflation, possible USD currency change in the world, continuing unrest in the middle east, China and other countries hoarding gold/silver, I dissagree with the over-supply argument as we’ve just seen backwardation recently). My prediction is that the hedgers and specs will not affect the market to the extent that she expects. If it does “correct”, what a great buy-in opp. If there is another pullback, my leveraged money is on a very small one and I’m buying in all the way to around 80/oz.

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    ivan copeland Reply:

    Hey John

    i was wondering u said silver could actually be going closer to its true value, and i was wondering could the same thing be true with gold? I inherited six Kruger-rands and am now reconsidering selling them.

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    john Reply:

    Ivan,

    Gold and silver tend to move in the same direction, if one goes up or down the other follows but percentages are different. So yes if/when silver makes another climb gold should move up as well. Silver has corrected ( was manipulated down-again) and may go lower (gold too) but I don’t believe it will stay low for long before anther sharp rise. I would not sell unless you need the funds. If you do sell consider buying silver-it’s upside is greater.

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  2. Bullion Bars Coins says:

    Hmmm interesting article, but what if this doesn’t happen? Allot of the rules seem to be breaking when it comes to trying to work out what way the price will go – many people thought there would be a dip and held off from buying only to see the price rise drammatically. Only time will tell I guess….

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  3. Trevor says:

    In addition to John’s reply above your article neglects to mention the historic au/ag ratio which substantially overshot and has, for the last year been moving back to its mean. Also if, as GFMS says, there is adequate supply, why has there been no silver (except scrap) available at any of the refiners in India since April 1? Can you say manipulation? Oops.

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  4. At least part of the rise in silver prices is the weakness of the ever expanding dollar trail. Each new one that is printed lessens the value even more. Silver may go down, but I doubt speculation is as reliable a driver of the price as the weak dollar is. Gold is climbing rapidly as well. Real money (gold and silver) always reassert themselves when fiat currencies fail.

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  5. I actually completely agree with the potential for a correction, though I personally own silver as a save haven — a worst case investment.

    As for a correction, I’ll increase my weekly silver buying to profit when silver returns to it’s increases. ::shrug::

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  6. Ransome says:

    People who own physical are hoarding an illiquid asset. When the speculators holding semi-liquid paper silver leave the room, the hoarders will be looking for a buyer amongst themselves. After all, we all know the price of housing can only go up, regardless of the price today.

    The hoarders are telling us that all the dollar denominated prices are wrong, only the price of silver is right. All we need is a financial blip and the sellers will pile up at the very small doorway looking to convert to a liquid asset, the dollar. The perplexing part is that the hoarders are preparing for this day by buying silver and pushing the price up while saying the dollar is trash. People simply do not understand how economies run by speculators transfer wealth.

    Why was JPM suppressing the price of silver? They haven’t been doing a very good job of it. Also, I think people are spending too much time looking a graphs that project 50 years into the future. If anything happens like that, we would be in collapse far sooner and that is not going to happen. The worst thing that could happen is 100% employment as we go back to making things when the China deal sours. China has high unemployment which makes it’s society price sensitive and like America, it has wealth disparity putting pressure on wages and ultimately it’s ability to consume production. We are sending production and technology outward bound. If China hiccups, there will be financial collapse here and it won’t be because of the dollar. It will be caused by the crazy house of cards business structure we are creating based on a short term profit worldview.

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  7. John Schroter says:

    Your article didnt touch on several key factors. Andrew Maguire’s confirmation of GATA’s claim on the previous manipulation. One might assume that perhaps less manipulation is now occurring since the whistle blower has spoken. The physical market is going absolutely through the roof because folks want insurance against Ben Bernanke’s policy of devaluating the dollar by the $600B qe2. Physical bullion spread is now about $4 more than the paper. There are delivery’s which are being settled in FIAT at much higher levels than the spot because there isn’t enough physical at the comex. Look At the trend in inventories at the comex. Silver will surpass $50 an oz quite soon…I pray that I’m wrong but the dollar seems doomed and that is the reason for the silver market upheaval.
    As far as silver being illiquid, it’s been money for thousands of years. Judas was paid 30 pieces this week a couple of thousand years ago. The Fiat dollar has only been around since Richard
    Nixon and it is trending away from being the world’s reserve
    currency. China and Russia are starting to trade directly without going through dollars. Foreign governments are discussing other options than the dollar. Citizens are fed up and are bartering. Meanwhile, to help the Ben, the Feds are jailing Patriots like Von Nothaus that put Ron Paul’s face on a silver round saying its counterfeit to a US coin. States governments are taking matters into their own hands and are considering other forms of legal tender. These are the reasons that some of the Sheople are opting out of the paper FIAT and going with the classic form of money. We are disgusted. We are buying the physical now. Maybe, just maybe the Republic or the States will get it under control and stop the spend and print.
    What did the founding fathers say about a private bank like the (not)Federal Reserve printing our currency instead of Congress coining it? Something about our children being homeless on the
    land that their fathers conquered because of the private banks controlling the currency (inflation and deflation) and thereby Depriving the property of its Citizens.

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  8. Taco says:

    Speculation drives every single investment in the world. This is a BAD thing? I see — only when it applies to a non-fiat currency that will hold value. I wish I was a central banker… I could print all sorts of money out of thin air to prevent people from using other currency, through the use of paid-for propaganda. Nice try buddy.

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  9. srikanth says:

    stop going for bulk buying of silver. If correction occurs it would be very severe and do not stop buying in systematic qty. with egual amont regularly still correction.

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  10. Deft says:

    I’m not going back to paper.

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  11. Hard Justice says:

    Pullback! Good I need more physical.

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  12. Well this article was written a month ago, and though I do not agree that speculators are driving silver higher (as the correlation to the falling US dollar is too clear), the correction has been swift and sharp as the article predicted.

    Onward and upward from here however, now that the most fickle speculators have headed to the next pet investment.

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