What is wrong with silver?

[W_BRANDON]

I have continued to buy physical silver for the past year or so. It just makes so much sense to my understanding of monetary theory and our current precarious financial state. However, every day I look at the price of silver, while I know the economy is being flooded with new "high-powered money" (credit), and....nothing. The price seems flat between $30-40 per oz. I understand naked short selling is partly responsible for keeping the price of silver artificially down but what else? Are people still buying claims on silver and not the real thing? I'm thinking about keeping what silver I have and just putting my savings henceforth into low risk (low-yield) investments like t-bills and CDs. I would appreciate anyone's thoughts on the subject.

Also, buying gold right now if just not in my budget.

[Seraphim]

Calm before the storm. That is all.

[torchbearer]

nothing wrong with silver. i'd fix your electronics for silver.

[Seraphim]

I think we are fast approaching the time where many transactions will be paid in specie: copper/silver bullion. Gold for estate swaps.

If only due to currency crisis.

nothing wrong with silver. i'd fix your electronics for silver.

[torchbearer]

I think we are fast approaching the time where many transactions will be paid in specie: copper/silver bullion. Gold for estate swaps.

If only due to currency crisis.

i think of hard money like this-
Your laser printer breaks and you need help getting it back online. i agree to fix it for you. You could then say, 'hey, i owe you one. i grow vegetables, come back in spring and i'll give you some" or we could create a token for that rain check, let's say an ounce of silver.
You give me an ounce of silver for the job and when i come back in spring i give you an ounce for your your veggies.
now, that is a simple economy of two people... but add in the whole human tribe, and that hard money represents production and human effort... your contributions to society.
Federal reserve notes represent debt... servitude for future production.

[Seraphim]

Furthermore, Brandon - please be advised that the market in silver is becoming extremely costly to manipulate downward. These huge price drops are taking ASTRONOMICAL amounts of paper contracts to drop the price. It has gotten to the point now where for every 1 ounce of physical bought up, it is taking nearly 100 ounces (well north of 50) in paper contracts to have a counteracting effect.

[NoOneButPaul]

It's being manipulated to the extreme.

I posted here on Wednesday that I made significant purchases on Monday because I didn't feel the price would ever go below 30$ again unless tptb try to crash it prior to, and right after, the presidential election.

They crashed it today hard.

As long as you are in this for the long term you need not worry about these volatile drops... it's merely manipulations from the banks. In the long term silver will win out and those that are buying physical now will be happy 5-10 years from today.

If you're trying to make a quick buck you're in the wrong place. But with silver closing just under 31$ this weekend it is time to buy buy buy... I've had a lot of friends, whose opinions I trust dearly, tell me that they think it will crash further to the 26-27 range. I'm still not willing to wait. I think just under 31 is good enough for me.

Don't worry, stay positive, and keep stacking. Silver's time will come.

As David Morgan always says... 90% of this run will come in the last 10% of the time.

Stay patient and keep stacking. Worst case scenario is it crashes to 1$ and we get to keep stacking more and more and more until it goes back up. The amount of silver left on the planet is very telling... the $ value is clearly incorrect or lagging.

My only advice would be to Dollar Cost Average when you buy... set an amount in dollars you're willing to spend on a monthly or weekly basis and just stick to it. The theory, which I believe in, is you'll average out at the end. The only time I buy larger quantities than my set price per month is when I see a tremendous opportunity.

I think this weekend, and perhaps the next couple of weeks, are those opportunities.

But don't listen to me, i'm just some guy on the internet. Make up your own mind and do what's right to YOU. The only thing I need to stress is staying positive, I truly believe faith and persistence always pay off.... together if we stay positive and persist nothing will stop this silver train or the stackers that are aboard it.

[Steven Douglas]

A lot of changes have been occurring in the silver market over the past couple years, the biggest arguably being the dramatic increases by CME for COMEX margin requirements. One reason that this is significant is that smaller buyers and retailers are most prone to buy long and demand physical delivery against all the naked shorts. That is especially true of foreigners who are not looking for dollar profits, but are using Comex simply to dump their Federal Reserve Notes in exchange for any physical they can get their hands on. The increased margin requirements serve as barriers to entry that flushes out many of these smaller buyers and retail traders.

Here's a pretty decent piece that talks about this:

CME Group Raises Comex Gold Margins By 21.5%, Silver Margins By 15.6%

TAKING DELIVERY OF COMMODITIES CONTRACTS
It is possible to “take delivery” of a contract. There is a delivery month when a contract expires, and the buyer pays for the contract in full. Since they have come to doubt the U. S. will ever curb its spending, Asians have been using the COMEX to gradually unload dollars. Instead of taking their profits in dollars, big buyers have been paying off gold and silver contracts and actually taking delivery.

THE MONOPOLY GAME TUG–OF–WAR IS CAUSING EXTREME VOLATILITY
The on-going tug-of-war between the shorts and the big players who are unloading billions of fiat dollars for gold and silver is causing tremendous volatility in the COMEX. The rules of this giant monopoly game are changing as the global monetary crisis deepens. For example, exchanges raised margin requirements aggressively in 2011.

THE GAME RULES FOR SILVER TRADING HAVE BEEN CHANGING
Huge, back-to-back increases in COMEX margin requirements have

• Chased away small investors (retail and commercial)
• Driven down metals prices
• Halted break-away markets.

And here's the part, further down in the same article, worth paying attention to:

CASH SETTLEMENTS
The default mechanism for failure to deliver on commodities is cash settlement. The COMEX can limit delivery of silver to 1.5 million ounces to any individual. However, when demand overwhelms supply, the exchange has a clause that allows for a cash settlement or payment for gold or silver.

J P Morgan has unlimited access to cash.
J P Morgan is a stock holder of the Federal Reserve banking cartel.

In 2011, delivery contracts have been settled in dollars rather than in precious metals. Industry watchdogs say cash settlements are getting larger and more frequent. There are rumors buyers who were legally contracted to take physical silver delivery were, instead, paid dollar premiums as high as 20-30% as an incentive to settle.

There will come a time buyers will not accept dollar cash settlements. All it would take to trigger a default event is one large investor who refuses the cash settlement and demands the actual silver (or gold). When that happens, the silent default will become a public default. The run on physical silver will cause a major naked short squeeze.

Is a naked short squeeze on the horizon? Yes. Eventually, but how soon is anyone's guess. I hope its later rather than sooner, but that's only because I am STRICTLY LONG, and on physical only. So I want more time to buy, and I'm grateful for the price suppression along the way.

Either way it all really ties into confidence in FRN's. My ear to the railroad tracks are further and more rapid escalation of margin requirements. That's the equivalent of the Comex pushing more and more of the smaller, more opportunistic zombies out of the room, and boarding it up. That won't last forever; it won't be long, I think, until the larger players wise up, tire of the dollar, and demand physical themselves, as they wash their hands of the entire Comex scam. That's when there will be nothing but defaults, with smaller "farmer/rancher"-sized investors, like those who were punked up the ass by MFGlobal, will find themselves on the losing end, and forced to settle in devalued FRN's rather than PM's. And that is also when the gold and silver doors slam shut, with major shortages, even as paper derivatives disintegrate. And all that cash is going to have to be spent on something...fueling shortages and inflation in that 'something' as well.

[Brian4Liberty]

...The default mechanism for failure to deliver on commodities is cash settlement....

And such a convenient mechanism that is...

[Carson]

I have continued to buy physical silver for the past year or so. It just makes so much sense to my understanding of monetary theory and our current precarious financial state. However, every day I look at the price of silver, while I know the economy is being flooded with new "high-powered money" (credit), and....nothing. The price seems flat between $30-40 per oz. I understand naked short selling is partly responsible for keeping the price of silver artificially down but what else? Are people still buying claims on silver and not the real thing? I'm thinking about keeping what silver I have and just putting my savings henceforth into low risk (low-yield) investments like t-bills and CDs. I would appreciate anyone's thoughts on the subject.

Also, buying gold right now if just not in my budget.

If you've been buying for the last year I'm thinking nothing is wrong. Your going to be all right.

I hear you though. I think the economy stabilized somewhat starting about a year ago. Silver was at $40.00 an ounce. The traffic on the road going to work showed hardly anyone could afford to hire anyone or if anyone did find a job earn a living wage. Things were at an all time low for earning a living. I noticed the price of silver back then really took a hit. All of the commodities and stocks were dropping. During the year the more prices dropped the more traffic increased.

I think the counterfeiting has the economy stretched just that tight. Like a drum.

Drum???

~~~Time for a commercial break! and a little thread music!

I've been remembering one of the first concerts I went to. I can't remember who all was there. I do remember Lee Michaels and Buddy Miles. Lee Michaels played the organ great. The part of them playing that really stuck in my mind was the drum solo of Buddy Miles. Drum solos were kind of our onions in our belts at the time. Buddy Miles was like no other. You can sort of get a taste of the heavy beat he could resonate the audience with. It would just consume the whole auditorium. The beat grew and grew to a fevering crescendo and then at the peak his drum sticks flew high up into the sky and tumbled away but the thundering beat went on. He was beating the hell out of the drums with his fist. I couldn't believe what I was seeing and hearing.

Anyway I couldn't find anything near what we saw. I suppose you had to be there anyway. This sort of has the feel of his beat.



The unforgettable Buddy Miles (died February 26, 2008)


~~~

I think the reason the value of the dollar didn't keep falling and actually gained some value for the year was that some of the currency had to be written off because of defaults on loans. It looks like inflation is back with a vengeance now. I suspect your going to do fine. Then again maybe we would be better suffering a little loss on our silver and having a healthy economy with people working again.

http://www.silverandgoldaremoney.com/