Economist Predicts that the Price of Gold & Silver will Drop this Year. Is he Correct?

[Aurave]

thats one reason i keep posting that the CFTC should raise the margins on crude oil from 6% to 75% and run the funds out of crude mkt , also make all contracts that are bought delivery only , if you buy a contract you must take delivery.

you would see crude at $50-60/ba very fast.

headge funds have trillions of dollars .

I don't think so. What you would see is liquidity in the futures market plummet, with producers and consumers finding it increasingly difficult to risk manage or hedge. Price volatility in commodities is generally known as an increasing linear function of scarcity; scarcity being defined as the inverse of inventory. A relatively illiquid futures market increases price volatility which wreaks havoc on inventory management. Futures markets for commodities play a very important and positive role in a free market especially in the realms of price discovery and price stability.

You would not see crude oil spot price drop in half from your proposals, what you would be more likely to see is massive price swings in short term periods as producers and consumers rush to lock in contracts knowing there was no guarantee of a strong secondary market after the break of any positive/negative news relevant to the market. Do not let yourself be misled into socialist type fallacies because of emotional reasons.

[Don Lapre]

I basically agree with Dent, and I sure wouldn't be buying anything right now.

I expect a serious deflationary crisis - due to excessive debt... everywhere.
Think we will begin to see the downturn fairly soon.

He who holds cash will be king, imo, and there will be a TERRIFIC buying opportunity down the road a bit.


jmo

[ILUVRP]

I don't think so. What you would see is liquidity in the futures market plummet, with producers and consumers finding it increasingly difficult to risk manage or hedge. Price volatility in commodities is generally known as an increasing linear function of scarcity; scarcity being defined as the inverse of inventory. A relatively illiquid futures market increases price volatility which wreaks havoc on inventory management. Futures markets for commodities play a very important and positive role in a free market especially in the realms of price discovery and price stability.

You would not see crude oil spot price drop in half from your proposals, what you would be more likely to see is massive price swings in short term periods as producers and consumers rush to lock in contracts knowing there was no guarantee of a strong secondary market after the break of any positive/negative news relevant to the market. Do not let yourself be misled into socialist type fallacies because of emotional reasons.

Looks like something out of a text book , there is no scarcity of crude oil , there is no scarcity of gasoline , i do hate it when people call something they don't agree with socialist fallacies.-----i will repeat ---no commodity that is controlled by a cartel should be traded on our exchanges.

what don't you understand about in america we use 400 million gallons of gasoline everyday , we export about 120 million gallons of gas everyday. to me this is like selling planes/arms to germany/japan during ww2.

read what happened to silver in the early 80's when bunker hunt and 2 others tried to control the silver market , read what the CFTC did to him. silver went from about $50/oz to about $20/oz very fast.

Name me ONE commodity that is traded on our exchanges other than crude oil being under a cartel. this effects every american more than most understand , of which i feel very sorry for.


don't you understand your saying about liquidity makes no sence because 99% of the crude contracts are never delivered , its just a game , i will repeat the defin of commodity trading is----someone that does not have the product selling to someone that don't want the product , and both sides trying to make money-----

raising the margin will just cost them more if they want to play the game , making them take delivery will kill the game.

i will tack on a link about what goldman sachs ( one of the worse ) says , also read some of the comments.

http://www.google.com/url?sa=t&rct=j...44dFUFvckdFpZA

you people wonder why gas / heating oil / diesel fuel is so high , there are companies that love money more than america , i guess the next time they need military help they should ask those they export to for help. check below.....


For the first time since 1949, the United States exported more gasoline, heating oil and diesel fuel last year than it imported, the Energy Department reported today.

Bloomberg writes that to offset weak U.S. demand, refiners exported 439,000 barrels a day more than were imported the year before. In 2010, daily imports averaged 269,000 barrels,

[Aurave]

I specifically defined a term and you chose to ignore it completely with what was effectively a straw man. You are aware of this or you are not, either way it doesn't bode well for any future discussion.

Half of your post is completely irrelevant to the point you wish to make by the way.

There is no convenience yield in precious metals futures, speculative storage is possible. Those conditions don't exist in any other commodity futures market.

[Paul Or Nothing II]

Looks like something out of a text book , there is no scarcity of crude oil , there is no scarcity of gasoline , i do hate it when people call something they don't agree with socialist fallacies.-----i will repeat ---no commodity that is controlled by a cartel should be traded on our exchanges.

It's a socialist fallacy because it involves government dictating things to businesses & people which is antithetic to free markets & liberty, it's none of government's business what commodities are traded on what exchanges, unless you believe in the socialist premise that government owns everything

In a free society, people have what we call "property rights" which allow private owners full discretion over their property & same holds true for exchanges as well as those trading on them

what don't you understand about in america we use 400 million gallons of gasoline everyday , we export about 120 million gallons of gas everyday. to me this is like selling planes/arms to germany/japan during ww2.

NationalSocialismForums is right around the corner, this is ronpaulforums so you're mistaken I think

read what happened to silver in the early 80's when bunker hunt and 2 others tried to control the silver market , read what the CFTC did to him. silver went from about $50/oz to about $20/oz very fast.

They had money, they bought silver in anticipation of inflation due to US going off gold-standard (buying gold was prohibited at the time) so what? Ron Paul has been buying gold & silver since the 70s too, & I'm sure if he had the kind of money Hunts had, he would've piled up on gold & silver as well, in fact, that's what most people here are doing right now
And it was very disingenuous of comex, they played all sorts of shenanigans as people running it were short-selling silver & they'd stake in causing the prices to fall so they played all kind of tricks like, even ceasing trading, to cause silver prices to fall, after that Volker massively raised interest-rates which was the primary determinant to keep the prices of gold & silver down after that, not to mention even a lot of central-banks dumped their reserves to say to people - hey, gold, silver, etc is useless, look, how good the toilet-paper-money is - so of course, the government had to demonize Hunt to move attention away from what was actually going on with inflation, if it had continued for a while, sooner or later there would have been cries from public to go back on gold-silver standard, Ron Paul was even on Gold Commission at the time

Name me ONE commodity that is traded on our exchanges other than crude oil being under a cartel. this effects every american more than most understand , of which i feel very sorry for.

I feel sorry for people who support Ron Paul & yet oppose the very principles that he's held dear for decades

Cartels CAN'T DICTATE PRICES, supply & demand do - unless of course, it's a coercive monopoly/cartel, which is usually government-enforced - healthcare is a decent example, but in this case I suppose it's more like thieves than cartels

BUT nobody is forcing to buy oil (unlike healthcare would be ) so the more prices rise, the demand falls & they've to lower prices to make profits, it's irrelevant what prices they "want" to sell it at, they do NOT stick to their guns, they're made up of self-interested individuals who want to make profits so when prices rise they automatically produce more oil which causes supply to increase & puts downward pressure on prices

Central-planning doesn't work for same reasons, just because they're cartel doesn't mean that they cease to be self-interested individuals, no the don't; people like you who think such planned cartels can work are poster-children for the failed central-planning programs

The fact that neither cartels nor speculators control prices can be realized from the fact that oil was about $150 before the collapse & in a short while it fell to $50, where were these cartels & speculators then? Why didn't they hold the price at $150??? It's simple, the demand just fell through the floor due to weaker outlook & deflating effect

And why are they at ~$100 right now, I mean they're cartels, right? And they can charge whatever they want, right? So why $100, why not $1000? How about $10000? Million? Why aren't they doing that? How about speculators, wouldn't they make a lot of money if it went $million/barrel? So why aren't they doing it?

BECAUSE none of them dictate prices, supply & demand does! Prices are products of supply & demand! The more prices go up, the more lucrative selling becomes which increases supply & pushes prices down!

don't you understand your saying about liquidity makes no sence because 99% of the crude contracts are never delivered , its just a game , i will repeat the defin of commodity trading is----someone that does not have the product selling to someone that don't want the product , and both sides trying to make money-----

You don't understand that those 99% is what keeps liquidity, otherwise the futures market would be stale, there'd be low volumes & very little trading if only actual buyers/sellers were allowed to trade & everyone else was driven They keep the markets liquid & keep up the volumes otherwise spreads would massively increase & volumes go down & there would be wild swings in prices leading to higher costs for actual buyers/sellers

Saying speculators increase prices is like saying that X + 1 - 1 = X + 1 , obviously, it equals only X, in short, when speculators buy, yes, they temporarily put upward pressure on price but they reverse the same when they square off so the net effect is nil, & that's why only the actual buyers/sellers & information about supply & demand can move prices in the long-run

So even if you get your wish of 75% margin, that's just going to drive speculators out & there will be FEWER people willing to trade at any given time, causing low volumes & low volumes mean higher spreads & therefore higher cost of trading & all you're going to get is wild swings in prices because there are only a few people willing to trade

Not to mention, you'd be asking actual buyers & sellers to unnecessarily lock more money for long periods which they could've put to better use & thereby it's only going to end up raising cost of pretty much everything in the economy

Are you part of OWS or something? I'd recommend you the communist-clique there - there you'd find a lot of people who hate on "rich evil basterds" that make money in ways that they don't understand & that's why they think it's bad because they can't do the same, seems like you suffered some losses in the futures-market & now, blaming the "those evil hedge-funds"

I'm just curious, why are you here? This movement is about personal liberty, property-rights, free markets & free trade, all of which Ron Paul stands for & for someone with the nick "I love RP", you seem to stand for almost everything Ron Paul stands AGAINST

If you really want to learn about futures & speculation then google "price discovery" & about the history of futures markets & why speculators are an important part of it

I don't think so. What you would see is liquidity in the futures market plummet, with producers and consumers finding it increasingly difficult to risk manage or hedge. Price volatility in commodities is generally known as an increasing linear function of scarcity; scarcity being defined as the inverse of inventory. A relatively illiquid futures market increases price volatility which wreaks havoc on inventory management. Futures markets for commodities play a very important and positive role in a free market especially in the realms of price discovery and price stability.

You would not see crude oil spot price drop in half from your proposals, what you would be more likely to see is massive price swings in short term periods as producers and consumers rush to lock in contracts knowing there was no guarantee of a strong secondary market after the break of any positive/negative news relevant to the market. Do not let yourself be misled into socialist type fallacies because of emotional reasons.

You wouldn't believe how many socialists are on these forums that have no clue about how the markets work & what property-rights mean & what Ron Paul stands for!

Welcome to the forums by the way, the more free marketers are here the better for the movement so that it doesn't get taken over by socialists

[ILUVRP]

"They had money, they bought silver in anticipation of inflation due to US going off gold-standard (buying gold was prohibited at the time) so what?"

nixon dropped off brenten/woods in 1973 .

i feel very sorry for people that don't understand FREE TRADE . i see all the above BS on hannity/limpbaugh forums where the FASCIST have control.

my advice is to get out of the kool-aid (crude oil ) line . stop reading so many worthless books and learn for yourself what is really going on.

i can tell you are not a real RP believer as you do not believe in real free trade , but controlled trade , sort of like people at goldmen sucks/jpmorgan .


i guess when gas gets to $7-8 a gallon you will scratch your head and say , whow -how did this happen.

i am 74yrs old , i have seen this great country taken away from the avg american and given to big oil/banks/fed res and we will never get it back.

people 30 yrs and under think this is all normal , i feel very sorry for them.



"Are you part of OWS or something? I'd recommend you the communist-clique there"

after 12 yrs in the military to help people like you so you can spout your worthless BS , everytime someone doesn't agree with them they spout the commey BS. i won't even comment on your idiot post as you really don't understand the way things should work.

please don't give your views to others as RP will lose too many votes , keep your worthless thoughts to yourself.

i will add that when goldmansucks say about 30% of the price of crude is because of speculators , goldman must be commies.

i do think there are those that like seeing crude oil price go up , as it drags gold/silver with it , therefore the price of their 30 oz of silver and .1 oz of gold go up , very sad.

[xFiFtyOnE]

"They had money, they bought silver in anticipation of inflation due to US going off gold-standard (buying gold was prohibited at the time) so what?"

nixon dropped off brenten/woods in 1973 .

i feel very sorry for people that don't understand FREE TRADE . i see all the above BS on hannity/limpbaugh forums where the FASCIST have control.

my advice is to get out of the kool-aid (crude oil ) line . stop reading so many worthless books and learn for yourself what is really going on.

i can tell you are not a real RP believer as you do not believe in real free trade , but controlled trade , sort of like people at goldmen sucks/jpmorgan .


i guess when gas gets to $7-8 a gallon you will scratch your head and say , whow -how did this happen.

i am 74yrs old , i have seen this great country taken away from the avg american and given to big oil/banks/fed res and we will never get it back.

people 30 yrs and under think this is all normal , i feel very sorry for them.



"Are you part of OWS or something? I'd recommend you the communist-clique there"

after 12 yrs in the military to help people like you so you can spout your worthless BS , everytime someone doesn't agree with them they spout the commey BS. i won't even comment on your idiot post as you really don't understand the way things should work.

I'm 27 and thanks to RP and people like you I know this is not normal. Thank you. But for the most part you are probably right about most of my age group. Just a few of us are awake.

[Guzabuza]

buy the dip

[Bossobass]

Cartels CAN'T DICTATE PRICES, supply & demand do - unless of course, it's a coercive monopoly/cartel, which is usually government-enforced - healthcare is a decent example, but in this case I suppose it's more like thieves than cartels

Wow.

BUT nobody is forcing to buy oil (unlike healthcare would be ) so the more prices rise, the demand falls & they've to lower prices to make profits, it's irrelevant what prices they "want" to sell it at, they do NOT stick to their guns, they're made up of self-interested individuals who want to make profits so when prices rise they automatically produce more oil which causes supply to increase & puts downward pressure on prices

Central-planning doesn't work for same reasons, just because they're cartel doesn't mean that they cease to be self-interested individuals, no the don't; people like you who think such planned cartels can work are poster-children for the failed central-planning programs

The fact that neither cartels nor speculators control prices can be realized from the fact that oil was about $150 before the collapse & in a short while it fell to $50, where were these cartels & speculators then? Why didn't they hold the price at $150??? It's simple, the demand just fell through the floor due to weaker outlook & deflating effect

And why are they at ~$100 right now, I mean they're cartels, right? And they can charge whatever they want, right? So why $100, why not $1000? How about $10000? Million? Why aren't they doing that? How about speculators, wouldn't they make a lot of money if it went $million/barrel? So why aren't they doing it?

BECAUSE none of them dictate prices, supply & demand does! Prices are products of supply & demand! The more prices go up, the more lucrative selling becomes which increases supply & pushes prices down!

Cartels exist and they control the markets completely (especially supply and demand).

"Competition is a sin." John D. Rockefeller

To use this method of airframe shock testing in economics engineering, the prices of commodities are shocked, and the public consumer reaction is monitored. The resulting echoes of the economic shock are interpreted theoretically by computers and the psycho-economic structure of the economy is thus discovered. It is by this process that partial differential and difference matrices are discovered that define the family household and make possible its evaluation as an economic industry (dissipative consumer structure).

Then the response of the household to future shocks can be predicted and manipulated, and society becomes a well-regulated animal with its reins under the control of a sophisticated computer-regulated social energy bookkeeping system.

Eventually, every individual element of the structure comes under computer control through a knowledge of personal preferences, such knowledge guaranteed by computer association of consumer preferences (UPC, etc.) with identified consumers (via use of credit card and later a permanent tattooed body number invisible under normal ambient light).

The above quote was written in 1979.

The point is that you don't have to raise the price to $1,000 to make record profits (Exxon/Mobil) when you control the market.

Do you think you could make untold riches if you knew exactly when a commodity would be shocked and what affect that would have on other commodities as well? Duh. It's the same as raising the price to $10,000, or, as high as you want to raise it.

Ron Paul advocates the return to a free market, but he most certainly doesn't preach that one exists today.

Monetary policy is controlled with no oversight. Energy is controlled by regional monopolies. Supply is controlled by covert and overt installation of puppet regimes. Demand is controlled by a media cartel. Your future income has already been determined and divided.

Romney is the guy whether they have to stuff ballots, rig the electronic voting machines, black out the rest of the field from public view, blatantly lie in the media, run smear campaigns, pour money into the chosen coffers or other. Or, I'm wrong and there are "free elections" as well as a "free market".

I'm astounded at anyone who believes the commodities (or any other) market is dictated by free market supply and demand... truly baffled.

[ILUVRP]

the commodity markets were set up mainly so that farmers could sell their crops at the elevator ( which headges it off at the board of trade ) , then the farmer could lock in a profit on his labor/costs.

i do think all commodities except for crude and its cracks ( gasoline-heating oil ) are pretty much supply/demand controlled , there is a lot of front running going on floors of the exchanges but they are very short term movers.

overall most commodity mkts work as intended ( i do think margin rates 5-6% is too low , in 1929 stocks margin rates were 10% ) , it is not a free mkt when the supply is controlled ( sort of like the Texas Railroad Commission before OPEC ).

sometimes i think there are mitt r./ rick s. shills on this forum.