Posted on 04/25/2011 11:11:41 AM PDT by SeekAndFind
In case you're not paying attention, the silver market has gone nuts today, surging until near $50, before collapsing to around $46.
It's the most controversial, hotly-followed asset class in the world.
So what's the real story.
Earlier this month, Philip Klapwijk of GFMS presented a very through, complete look at the silver market: from its demand, its production, and where the current market stands in history.
It's definitely a great, complete lesson.
CLICK ABOVE LINK FOR THE REST
(Excerpt) Read more at businessinsider.com ...
Presentation does not account for price increases due to currency debasement and the trend silver is acting more like money as well as an industrial metal. Much of the price increase is due to QE1 and QE2.
RE: Much of the price increase is due to QE1 and QE2.
So, with QE2 just about to end pretty soon, do you think that Silver prices will retrace downwards a little? Maybe so.
But then we have this 1.6 Trillion dollar deficit we have to fund which the feckless Republicans only fought to trim by a mere $38 Billion.
The obvious question is this -— where are we going to get the rest of the money if we don’t borrow more? (this Congress thankfully isn’t going to raise taxes and with the Bush tax cuts in place until end of next year, new Fed taxes are not in play ).
So, the only two weapons left to fund the 1.6 Trillion deficit are to borrow and print.
Therefore, I can’t see why there would not be a QE3 and of course more devaluation in the USD and (unfortunately for those who are not into precious metals), the continued rise in Gold and Silver prices.
The scuttle butt I heard was the Feds might raise interest rates a bit (1/4 pts max) just to assure the markets and hopefully stabilize the dollars fall. The Fed also has made some money on its toxic assets, mortgages and loan repayments and will not withdraw that money from the system. Rather it will be used to buy more T Bills. The remaining shortfall will be met with a mini QE (QE3) which will be disguised in another name. June is going to be an interesting month. What will kill us is the overseas higher interest rates will attract money and leave us with very little capital to work with. Definitely there will be more inflation.
Be careful about Ebay. There are fake US silver coins appearing on the market.
A local coin shop works. Or Apmex or Kitco or .....
On a long enough run, the tradeoff in premium and shipping you pay to Apmex or its competitors is balanced by the safety of using a better known source.
Buying from random strangers on Ebay doesn’t seem the thing to do for a first time buy.
We will probably see a short-term drop of about $10-$15 it wouldn’t surprise me. Then it will be off to the races I had set my sights on $50 by year end but all bets are off now...we could be looking at well north of $100 even this year.
Old pre-65 silver coins? I buy from only repeatable people on ebay. You can look at their history.
S&F, thanks for all the interesting graphs and info.
If you find a reputable source of Sterling Silver, marked 925, meaning it is 92.5% silver, it might be nice for a child to invest in jewelry that can be used in adulthood or given as gifts to their children. I think eBay has a ranking system for sellers, I don’t know how reliable it is or how it works. Someone else know??
I have been buying from ebay for years. You do have to be careful but, the rating system is accurate. You can see how long the person has been selling, what they’ve been selling and any positive to negative feedback, including the percentage of said ratings. Also, if you use paypal to pay for your item and you have a problem, paypal will freeze the persons account for that amount of money until it is settled. If you have a paypal account they also have at least one credit card on record that they can use to freeze an amount too. Not that you can never get ripped off, but, there are certainly plenty of safety measures in place. I’ve had a few deals that weren’t that great but, it wasn’t for silver coins. After complaining the problems were resolved. I’ve bought a lot on ebay. My hubby can attest to that ;)
Here is a new story at Market Watch on the silver drop and all the other commodity drops. Over 300 comments, many very interesting and market strategy oriented. Perhaps someone could post this as an FR post. I have to leave for work now, but it is a really interesting story.
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