Warning Fools! Silver Will Fall by 66%

[Brian4Liberty]

Another buying op coming up. Still has a way to go. Once again, 30 is a potential buy spot. (barring that big crash, as always).

[bobbyw24]

Why the short-term pain of the post-"Twist" sell-off in #gold and #silver will give way to long-term gain.



“Should you worry if the gold price falls another $100?,”asked a Daily Wealth article, when gold was just north of $1,800 an ounce: “As you can see from the chart, gold ’sprinted’ this summer. The metal surged from $1,500 to $1,900 in under two months. This type of parabolic move is often followed by a healthy ’shakeout’ that backtracks 50% of the previous climb. Should the ‘50% rule’ apply to gold’s latest jump, the precious metal would fall down to $1,700 per ounce. This fall might scare some latecomers, but we’d see it as a natural, healthy selloff.”

About that sprint, Gold Newsletter editor, Brien Lundin, says that “If the European debt crisis and the S&P downgrade of U.S. sovereign debt had happened separately, say a couple of months apart, I think gold would have risen just as far, but the rise wouldn’t have been as steep and the market wouldn’t have overheated. But they happened to occur right on top of each other, so the market got ahead of itself and went nearly parabolic.” Longer term, he points out that “There is no way, especially under the weight of those austerity programs, that growth can be robust enough to overcome these debt burdens. At some point and to some degree, inflation will have to depreciate those debts away. That is the very reason why investors with a long-term view are buying gold.”

http://silverandgoldcoinblog.com/

[-C-]

If you have any inclination to what is going on, even if its limited to the central banks becoming the powerhouse purchasers of Gold, then you would cheer when you see both Gold and Silver prices go down. It gives YOU a chance to get on THEIR scheme. The PM bubble, imo, is no different than any other bubble. Hell the Gold Florin had a paper bubble on top of it in the 1300s(lol this $#@! isnt new and Gold was worth "zero") and it blew all to $#@! leaving all of Italy, and eventually Europe, tattered.

So ride the wave and go physical regardless if its gold or silver...stay away from that "paper metal," its bull$#@!. In my honest opinion, if you have financial aggregated future contracts, which sum is larger than the annual global production, traded over and over again in a less amount of time than it takes to produce...it totally rules out the so-called "golden rule" to a fixed amount of inflation of said gold, or any other so-called precious metal for that matter.

[bobbyw24]

[Bern]

The London hammer strikes as soon as Asian trading closes. It's been the pattern since the Swiss peg announcement more or less.

[sluggo]

Just bought some more.

32/oz is a bargain.

[bobbyw24]

[bobbyw24]

It was the biggest single-day decline in silver in two decades. On Friday, silver futures at one point posted losses of 17.7% for the day, as the spot price closed just over $31. On early Monday morning, it fell into the $26s before recovering to $29.
Earlier last week the Federal Reserve issued a policy statement warning of "significant downside risks to the economic outlook." You'd think that if silver got walloped over fears of another global recession, the stock market would have been similarly affected. Strangely, the equity markets on Friday acted as if nothing happened. The S&P 500 posted a 0.6% gain on the same day the metals complex got smashed to smithereens.
The violent price drops in the metals appear to have been driven less by the fundamentals of physical supply and demand and more by technical paper selling in the illiquid futures markets. Margin calls to leveraged futures traders – as well as increases in margin requirements by the Chicago Mercantile Exchange – have accelerated the selloff.
Independent Living Bullion - A trustworthy source for gold and silver bullion.
Keep in mind that when the price of a commodity is set artificially low, shortages eventually emerge. We are already seeing signs that certain types of silver products in the retail market are becoming scarce at these prices, which are stimulating demand from bargain hunters. Asian buying in the physical market is brisk as well.
Unnatural sell-offs in these markets make many precious metals bugs irate. I take a more opportunistic view.
When the price of silver gets artificially low, I view it as an opportunity to buy ounces at a discount to the real value I'm receiving. I don't invest funds that I expect to need in the short to medium term, so these violent corrections are mostly an annoyance. Staying calm and buying more when these sharp corrections come along has been a winning strategy for this entire bull market. During the 2008 financial crisis – after silver prices collapsed by 50% to under $10 – those who had the resolve to exploit the situation are today up over 200%!
Silver's Long-Term Chart Still Looking Up
More downside is possible in the paper trading market before a major support level is reached. Discouragingly, however, silver broke below its 50-week moving average, which it will need to regain before we can say all systems are go. On the bright side, the major uptrend that has been in place since late 2008 has remained intact.

Silver Long Term


There are times to be buying aggressively and times to be cautious. I was cautious on silver for much of this year. In fact, in the spring silver had gotten so overextended technically and in relation to gold on an intermediate-term basis that we at Independent Living suggested to readers that they consider selling some silver and switching it into gold. Since then, silver has fallen sharply in relation to gold.

MORE

http://cl.publicaster.com/ViewInBrow...3SaLFw&sysid=1

[bobbyw24]

Will it happen in February 2012?

[Zippyjuan]

Looks like the original post was pretty correct on the price direction for the price of silver. It was about $45 an ounce back then (end of April 2011- and according to the chart above was the peak price) and is around $30 an ounce now. Not a 65% decline but it has been going down.

[swissaustrian]

Open interest in futures is at record lows. The futures curve is still partially backwardated, indicating physical shortages. It´s unlikely that silver drops another 50 % from here. The dollar would have to strengthen a lot for that. The FED will not allow that. They need a cheap dollar.

[fj45lvr]

Yahooooo!!!!!


hope if falls so I can buy more

[seraphson]

Looks like the original post was pretty correct on the price direction for the price of silver. It was about $45 an ounce back then (end of April 2011- and according to the chart above was the peak price) and is around $30 an ounce now. Not a 65% decline but it has been going down.

Temporarily...Right? The word on the street is that silver will gain quite a bit of momentum in 2012. This is just another buying opportunity, right? What was all that talk about gold/silver prices being artificially maintained? I thought the true value of silver was much higher.

[Seraphim]

This.

It's been a while since I could really afford to add to my silver position. Now that I'm just weeks away from being able to make a significant (for me) purchase...well I hope it falls to 25$ !!

2 months ago when silver dropped to 26$ like a knife...it shot back up equally as fast - many didn't notice how far it fell it was so quick.

Bring on the knife like drop to 20$.

I for one will be searching far and wide for cash to immediately flip for some 20$ silver.

This time around, 16-22$ silver will be very much like 8-9$ silver in 2008. STRONG strategic buy point.

I`m not convinced it will even go that low. It might though.

Gasoline is getting cheaper as well.

Yahooooo!!!!!


hope if falls so I can buy more

[Steven Douglas]

Bring on the knife like drop to 20$.

...thus putting many silver mines out of business, keeping new silver production out of circulation.

I'd throw a massive party if it dropped to $1 and stayed there for the next five years. I've never bought paper silver, let alone on margin, in my life. It's not a "position" or an investment for me. I'm just stupidly, naively using it as a store of wealth. Money. I say wipe out that "wealth". Pop that bubble, baby, as I am not holding my breath for anything. I would LOVE to be wrong, and would gladly take one for the team. I will just continue to stock up on the worthless, volatile stuff, as I always have. Bring it, the lower the merrier!

[devil21]

QE3 rumblings are restarting so this drop will be short-lived. Deflation is what the Fed fears.

[Seraphim]

It wouldnt stay there for long. Doubt that puts a lot of mines out of business.

...thus putting many silver mines out of business, keeping new silver production out of circulation.

I'd throw a massive party if it dropped to $1 and stayed there for the next five years. I've never bought paper silver, let alone on margin, in my life. It's not a "position" or an investment for me. I'm just stupidly, naively using it as a store of wealth. Money. I say wipe out that "wealth". Pop that bubble, baby, as I am not holding my breath for anything. I would LOVE to be wrong, and would gladly take one for the team. I will just continue to stock up on the worthless, volatile stuff, as I always have. Bring it, the lower the merrier!

[Steven Douglas]

It wouldnt stay there for long. Doubt that puts a lot of mines out of business.

I was being facetious, taking it to ridiculous extremes for those silver/gold anti-bugs who, in their wildest and most bizarre fantasies, honestly believe the value of gold and silver is fictitious (if people would just see it this way, and everyone could finally agree - which they never will).

To all such, gold and silver are essentially no different than the intrinsically worthless fiat currencies they believe in and worship, which really are nothing more than fictitious value made real, rather than the reality: that they are only dilutions of real wealth, and real productivity, unlike gold and silver, which do have real floors, and are ultimately governed by intrinsic value and the underlying fundamentals.

[Brian4Liberty]

So where's the bottom going to be?

IMHO, worst case scenario (total crash) takes us down to a minimum of $20/oz. Barring a total crash scenario, and looking at a typical draw-back, maybe $30 will be the bottom?

What do the technical gurus think?

Wow, what a long thread... luckily my initial prediction (above, from 05-04-2011) is intact.

I've been buying under $30, had my finger on the trigger today but didn't pull. I am anticipating a near-term low (dollar cost averaging buy point) this week or next.

[swissaustrian]

Wow, what a long thread... luckily my initial prediction (above, from 05-04-2011) is intact.

I've been buying under $30, had my finger on the trigger today but didn't pull. I am anticipating a near-term low (dollar cost averaging buy point) this week or next.

12-28 is january options expiry. Usually the day before options expiry is a good time to buy:

[Steven Douglas]

I've been buying under $30, had my finger on the trigger today but didn't pull. I am anticipating a near-term low (dollar cost averaging buy point) this week or next.

I love the word trigger. Some are trigger-shy, while others are trigger-happy, usually as it applies to major buys and sells. I'm more of a trigger-pressure kind of guy. As silver goes down, I apply more pressure, as silver goes up, I apply less pressure. But I never sell, I never try to parlay. I never stop buying, and the trigger is always pulled. That decision was made in 2006, and has yet to fail me.

Screw the conventional wisdom of buying on dips and selling on peaks. That is gambling, trying to parlay - unnecessary when you have a sure thing. I accelerate on the downturns, and decelerate on the upswings, but my foot is on the accelerator only, and never once hits the brakes.

[heavenlyboy34]

...thus putting many silver mines out of business, keeping new silver production out of circulation.

I'd throw a massive party if it dropped to $1 and stayed there for the next five years. I've never bought paper silver, let alone on margin, in my life. It's not a "position" or an investment for me. I'm just stupidly, naively using it as a store of wealth. Money. I say wipe out that "wealth". Pop that bubble, baby, as I am not holding my breath for anything. I would LOVE to be wrong, and would gladly take one for the team. I will just continue to stock up on the worthless, volatile stuff, as I always have. Bring it, the lower the merrier!

+1

[Zippyjuan]

QE3 rumblings are restarting so this drop will be short-lived. Deflation is what the Fed fears.

The Fed has been giving no indications of starting any QE3 at this time. At their latest meeting (which was last week) the Fed said they would keep things as they are with no hints of any new actions.

[devil21]

The Fed has been giving no indications of starting any QE3 at this time. At their latest meeting (which was last week) the Fed said they would keep things as they are with no hints of any new actions.

That's nice. I never said the Fed itself mentioned QE3. I will however counter your statement because the Fed has mentioned in previous recent meetings that additional stimulus may be necessary, but that's not what I was talking about. The rumblings are in finance articles, blog posts, etc.

[Zippyjuan]

That's nice. I never said the Fed itself mentioned QE3. I will however counter your statement because the Fed has mentioned in previous recent meetings that additional stimulus may be necessary, but that's not what I was talking about. The rumblings are in finance articles, blog posts, etc.

"May add stimulus as necessary" or "monitoring the situation" has been part of their statement for years. The Fed always gives warnings well in advance of any moves they intend to make so that markets have a chance to plan for and react to them- and to not spook the markets. If they are going to offer more stimulus, they will let us know well ahead of time and since they are still saying no, that means that nothing will happen in the near future. Blogs are not the Fed and are free to speculate about whatever they want. It is just that- speculation.

Article from December 1st:
http://money.cnn.com/2011/12/01/news..._qe3/index.htm

NEW YORK (CNNMoney) -- Investors clamoring for another round of Federal Reserve bond buying need to root for a blue Christmas. That's according to St. Louis Fed President James Bullard, a self-described inflation hawk and influential member of the central bank.

Bullard said at a Bloomberg hedge fund conference in New York Thursday that the Federal Reserve should get a read on the holiday season before making a decision on so-called third round of quantitative easing or QE3.

In other words, don't expect any quantitative easing in 2011.

The Fed OMC statement from last week:
http://www.federalreserve.gov/newsev.../20111213a.htm

[Steven Douglas]

"May add stimulus as necessary" or "monitoring the situation" has been part of their statement for years. The Fed always gives warnings well in advance of any moves they intend to make so that markets have a chance to plan for and react to them- and to not spook the markets. If they are going to offer more stimulus, they will let us know well ahead of time and since they are still saying no, that means that nothing will happen in the near future. Blogs are not the Fed and are free to speculate about whatever they want. It is just that- speculation.

Article from December 1st:
http://money.cnn.com/2011/12/01/news..._qe3/index.htm


The Fed OMC statement from last week:
http://www.federalreserve.gov/newsev.../20111213a.htm

You do realize that you're quoting the Fed itself in both cases as a source, right? One is an article quoting the Fed as a source, the other is the Fed itself. Is there a de facto presumption of faith that the Fed is telling the truth?



Did the last Fed audit, not to mention the track record of the Fed, teach us nothing? I personally don't buy into the nice rounded integers that describe QE in terms of QE1, QE2, QE3, etc., as if they really were some kind of official discrete units. To me it's more like saying morning, afternoon and evening.

[Zippyjuan]

Can you show a time when the Fed began any quantative easing or made any other significant moves without announcing it first? I can't. They have always announced their intentions. Even if it is simply a tiny raising or lowering of interest rates they charge banks to borrow from them.

[Steven Douglas]

Can you show a time when the Fed began any quantative easing or made any other significant moves without announcing it first? I can't.

That's the point. I can't even show you a time when the Fed made any moves other than interest rate setting, regardless of whether it was preceded by an announcement.

If I could lob a slow floating invisible weather-balloon bomb in your direction, one that takes six months to actually reach you, and then "announced" that I'm doing it a few weeks before it arrives, would that count as "announcing it first" in your mind? Not too far fetched, coming from an entity which, which it says "inflation", means price inflation (the effect), not currency inflation (the cause).

Everything the Fed does behind closed doors has a delayed effect, while everything the Fed announces in public has some immediate effect.

Hey, you seem to trust them, taking them at their word. I have every reason in the world not to trust them, given what I see as treason in just the basics which are well known. Beyond that I need to see how far I can throw them first before I can trust them. So far, not so far.

[cubical]

nm

[cubical]

Can you show a time when the Fed began any quantative easing or made any other significant moves without announcing it first? I can't. They have always announced their intentions. Even if it is simply a tiny raising or lowering of interest rates they charge banks to borrow from them.

Without announcing anything M2 has risen 7% since the fed stopped QE2 only 6 months ago.