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The case that Gold is NOT a bubble
http://www.industrymailout.com/Industry/...&qz=ee153c
Lots of good info in here but a key paragraph is
Quote:The increase in gold ownership from 0.2% in 2000 to 0.7% in 2010 is also misleading. If you consider the approximate $227 billion that was invested in gold bullion in 2000, that level of investment would have grown to $1.18 trillion, or 0.6% of financial assets, by the end of 2010 - based purely on gold appreciation alone.2 In other words, the actual amount of new investment into gold since 2000 represents only 0.1% of current global financial assets, or about $250 billion.
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GO Silver...it's ya burfday....we gonna party like it's ya burfday....
sorries.
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another 30 year high for Silver today
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[youtube]http://www.youtube.com/watch?v=oMlqn_Hjyi8[/youtube]
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Yeah, I wish I'd kept some silver. I have GoldCorp calls, but silver is smoking gold right now.
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I am currently holding a modest amount of physical silver and gold, as well as actively trading in SLV, SLW options and GPR, TK stock
I started back in Nov and I think I am hooked
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One day Ill be right. You'll see. :lol:
Maul, the Bashing Shamie
"If you want to change the world, be that change."
--Gandhi
![[Image: maull2.gif]](http://bengtel.com/maull2.gif)
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One day, it WILL become a bubble I have no doubt.
it just isn't today and it just hasn't happened yet.
The inflation hedge power alone will keep it driving forward on good fundamentals. The US dollar is decreasing in value and inflation is starting to take hold.
One example from Walmart RE inflation, as for the dollar take a look at the USDX it is in the dumps already and heading lower.
<!-- m --><a class="postlink" href="http://www.usatoday.com/money/industries/retail/2011-03-30-wal-mart-ceo-expects-inflation_N.htm">http://www.usatoday.com/money/industrie ... tion_N.htm</a><!-- m -->
Silver flirting with all time highs now, although adjusted for inflation the old high is about $160 / ounce today.
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Silver's rise has been mind boggling. I still remember it being around $14 a couple of years ago and people saying it was a bubble. Now it's close to $50. I bought call options last week...now it's going to be a case of how long I can hold my nerve before selling them. Gold and silver corrections tend to be sudden and very steep.
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I rest my case...
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Yeah this correction has hurt pretty bad, but even now it has only dropped it down to the level from Early March.
There is some serious problems at COMEX and silver will recover and go to new highs in the next few months
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What is going to happen to commodities when QE2 stops funneling money into wall street. Seems to me that the drop is because people are already starting to dump out of the ETF's that artificially drove prices high.
It doesn't matter to me cause I never jumped in. But I still rest on the fact that real demand has not driven the process up. Over supply of cash has.
Maul, the Bashing Shamie
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well, that's the whole point of investing in commodities isn't it? To hedge against inflation? :mrgreen: Funny enough after this massive selloff Im still up 42% on SLV =) The fundamentals are still all a disaster and this was the banks trying to push back one last time against the inevitable. Silver will rebound. COMEX still doesn't have anywhere near the silver on hand to meet their contracts so the supply is still limited. Obviously Id be happier if I sold at the high and then rebought some now, but I am always looking long term.
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Down 27% for the week, most in 36 years - ouch!
I'm keeping my Jan '12 call spreads...
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Quote:Subject: Butler on silver
I agree with Butler's comments below:
Butler Research LLC.
May 5, 2011 - Update
posted: 5/5/2011
Update
Jim Cook from Investment Rarities asked me to write a note for his firm’s salesmen about the current state of the silver market. I thought subscribers would be interested in what I wrote for them -
This is quite an unusual and historic time in the silver market. We didn’t have financial television back in the Hunt Brothers’ 1980 silver episode, but I’m sure there couldn’t have been greater coverage than is being given currently to silver. Same with newspaper coverage. It is amazing that despite the great quantity of coverage, virtually all of it seems wide of the mark to me.
There was no bubble in silver and, therefore, there is no bursting of a bubble. Silver did not go up primarily due to excessive and widespread speculative leveraged buying. That’s proven out in the only reliable measure of leveraged speculative participation – the Commitment of Traders Report. There is undoubtedly speculative long liquidation here, which improves the market structure; but my point is that silver didn’t run up because of hot spec money. It ran up for a variety of reasons, including commercial short covering.
Why is it going down so sharply and what happens next? My best guess (from all available data) is that it is going down on margin call liquidation momentum and because of short selling in the big silver ETF, SLV. If I am correct, this type of selling will soon exhaust itself. That means, at some point, this type of selling dries up suddenly and we stop going down. It’s hard to measure when that occurs precisely, but it will end suddenly. It is like a crowd of people trying to all rush through a narrow door to sell.
But if I’m correct about the short selling in shares of SLV, then the silver market will not only stop going down, but will rocket to the upside as the new short sellers try to reverse themselves and buy back their positions. I think it probable that we will then have an even bigger crowd trying to get through an even narrower door to buy.
There is no way of predicting the precise bottom of this move; but if I am correct, there is also no way to know how quickly and forcefully we turn up. There is a risk of going lower in price temporarily, as almost everyone understands. But I don’t think many fully understand how quickly we could turn up. That means there may be a greater risk of missing a fabulous buying opportunity for fear of further short term declines. Buying silver here is like tossing horse shoes or hand grenades – you don’t have to hit the exact bottom. In long-term investment, close enough is good enough. I’m convinced we will look back at this time and price in silver and marvel at the opportunity we were given to buy.
Ted Butler
May 5, 2011
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As I said, those "in control" where doing one last pushback with that flash crash, but people still want to get their hands on physical silver and COMEX can't meet demand. Investors can play with paper all they want, but they can only play with something that actually holds value when in physical possession for so long:
<!-- m --><a class="postlink" href="http://www.zerohedge.com/article/comex-registered-silver-bullion-inventories-fall-sharp-385-two-weeks-%E2%80%93-risk-comex-silver-def">http://www.zerohedge.com/article/comex- ... silver-def</a><!-- m -->
Should be seeing some nice upticks soon. But the reality is, upticks in an ETF price might mean jack squat against physical possession. Of which I have very little and now need to address.
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