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GoldarSilvarGam
04-14-2011, 12:31 PM
FWIW, I am a CPA who started getting educated on PM's just after the 9/11 event (so 10 years ago) for the purpose of aiding high net worth clients of mine make investment decisions in PM's.

We are at a place in price now (around $41 as of this writing) where even $2-$3 swings within a week or so are not serious. I think you have to have something on the order of a 15-20% price retreat to be considered a serious pullback. In my opinion that isn't going to happen. I'm not a "to 'da moon" guy either. Once we get to $50 IMO it is going to take a lot more time than people think to get to $100--I think 2-3 years.

Part of my silver investment right now in my IRA is in AGQ. I've owned that position for over 2 months with no in/out trading and I sleep peacably at night. I don't think there is more than a 20% chance of a serious pullback this side of $50 spot. Just my opinion, formulate your own that you can live with and you're set. Sometimes you win, sometimes you lose.

I still contend that silver going to $100 or more is not a matter of fear and SHTF scenarios. The US will address its debt problems soon enough to avert disaster. It is rather a matter of supply and demand and in the US having accepted investment theory cycling back to people having AT LEAST 5% of their portfolio in PM's, and no more than 100 minus your age in equities. People talk about silver and gold being "overbought." What a joke!

Growth (non-income producing) equities are overbought by the baby boomers to the tune of $3 trillion by my estimates. Non-boomers are likewise overbought in all equities by another $3 trillion. I don't know how much in PM's is currently held by investors, but assume (broadly) 2011 silver supply is roughly 1 billion oz (value=$41 billion), mostly made up of current year mining production, as above ground stockpiles have plummeted in recent years. All above ground gold ever mined and not used up is somewhere around 5.5 billion oz (value=$7.7 trillion).

Part of the fallout of the world economic crisis we are fighting through is that people are shifting investments towards PM's. IMO, once the crisis averts (could be a few more years) one of the residual things we will see is people will not completely sell off their PM's when they head back stronger into equities. Think about the generation that came out of the Great Depression--there were things they always remembered and never departed from thereafter. If all US investors were to get back to historical norms, JUST IN THE US there would be investment demand for somewhere between $750 billion (5% of portfolio) and $1.5 trillion (10%) in PM's, mostly made up of silver and gold (even then, gold mostly). Now factor in worldwide demand...then factor in non-investment demand for silver...and don't forget foreign govt. demand for gold.

In the end it doesn't equal silver "to 'da moon." It does equate to a seismic shift in investment demand for PM's, which the numbers today show is only just underway. You also have to come to grips with the reality that as silver and gold have gone up in value, it becomes more profitable to go after lower grade gold and silver ore in mining. Forget about silver here, as the market cap. potential is driven more by gold--the reality is that going after lower grade ore doubles the amount of gold supply within some number of years (I don't know how many.) The value of gold is the market cap. that fuels this whole PM engine from an investment side. At some point when it comes to investors using PM's as a storehouse of value, the masses will shift more towards gold than silver. Sure the 16 to 1 GSR is approachable, but not beyond that. I think 20 to 1 is more realistic, then (or by then) investors will jump over more strongly to gold.

JMO, but if you factor in a 20/1 GSR, I think silver can go on its own to somewhere in the $65 to $75 range, mostly independent from gold, but in the end it always rides the coattails of its big brother, so it needs gold to go to $2000 for it to get to $100. I still think that is possible within 2-3 years. Beyond that I see a major leveling off for both, mostly because of the viability of going after lower grade ore meeting growing investment demand.

I think realistically:

-Gold/silver $2000/$100 within 2-3 years
-then 10-20% annual value growth for both for another 2-3 years
-then inflationary growth for both thereafter

Silver will still be the more thinly traded during and after all these events play out. Thus, it still has the potential for manipulation, shorting, more volatility. Long-term that means I don't think you can count on a stable GSR.

radioone
04-14-2011, 12:42 PM
I don't think you can count on a stable GSR.

Other than when it was government enforced, I don't think there ever really has been a truly "stable" GSR.....

FoolOnTheHill
04-14-2011, 01:09 PM
Good common sense !

galtbob
04-14-2011, 02:07 PM
Here are a couple of incomplete thoughts.

The analysis is done in a bit of a vacumn. A big driver of PM pricing is demand by China and India and OPEC. Until we fix that import equaition, they will be sucking up demand even as teh dollar continues to devalue against their currencies.

If China ever calls Obama's bluff and revalues their currency upwards, gold will become 20% cheaper overnight for chinese buyers, and demand will surge until their price re-equlaizes and OUR price is 20% higher. But absent a big move, the currencies will have to slowly adjust anyway, and not in our favor.

As far as higher prices increasing mining capex and improving yields, I am skeptical. Mining companies are already fighting inflation in labor rates and equipment that impact their profits significantly. If these trends continue, costs will suck up any incentive to create more low-grade capacity.

As I said, quick and incomplete.

Thx1138
04-14-2011, 02:27 PM
Very nice post, nice to hear from a money pro who is not allll down on PMs, lol.

The most revealing thing to me was the idea that the PMs will be valuable enough to make lower grade ore mining feasible.

Thx :)

GoldarSilvarGam
04-14-2011, 02:58 PM
Bob, thoughtful analysis--I like it when somebody brings it like that! As to mining lower grade ore, I think it is inevitable--I read somewhere this year that mining companies have invested $40 billion plus towards that effort, and short of a massive retreat in the price of gold/silver they are making it become a reality. Bottom line is that it would be a very long time before there could be a sustained supply shortage of gold.

Thx--I've never been called a money pro before! Sounds good, but I am more of a tax pro, not a certified investment advisor, CFP, any of that stuff. I am a big picture guy though.

I'll give an interesting little back story from right after 9/11. I was working as a tax advisor for a private company who would soon exit a sizable profitable investment (a transaction which I saved them over $1 mm in income taxes on BTW, but I digress) who had $10 to $15 million to invest, likely in private equity type stuff. We were looking at buying a particular company, turning it profitable, and then reselling it for a nice multiple. I thought it was a longer term project than some of the rest (which it turned out to be) and after some careful analysis said there were factors at work that could create the perfect storm for gold as as superior, safer, better performing investment over the next several years. I got laughed at for that one. Fast forward to the end of 2009, and gold was up 300% when the company sold off controlling interest in its "other" investment that was made in 2001, essentially losing $15 mm that my advice woud have tripled to around $45 mm. Hindsight is always 20/20 though...

Cold Front
04-14-2011, 02:59 PM
Consider the 100% confidence in Ben Bernanke's statement to be able to control inflation...

Consider the worries that somehow raising rates in the US will stomp/control/snuff-out the precious metals...



Finally, consider...___________China, which officially reports consumer price data on Friday, has struggled to clamp down on inflation in the past year. Despite raising interest rates four times and demanding banks keep 20 percent of their capital as reserves, food and fuel prices have continued to rise. Cotton and corn prices have risen more than 100 percent in the past year. Crude has climbed more than 25 percent....

http://www.cnbc.com/id/42591419

How did El-Elrian from PIMCO put it today: "It's like throwing a large glass of water and hitting a plate sitting on a table. The plate can't absorb it, so it splashes out hitting everything around it."

Skydude
04-14-2011, 03:17 PM
Very nice post, nice to hear from a money pro who is not allll down on PMs, lol.
Thx :)

really..!Most are all about paper.

Thx1138
04-14-2011, 03:23 PM
really..!Most are all about paper.

I haven't met one who:

A. Wasn't an automatic expert in PMs. I think they teach them in school that PMs are, always have been and always will be a dog.

Something you need in your portfolio for the sake of "diversification", but not something you need to pay attention to.

B. As good as PMs have been the last decade, no matter how well they outperform other investments, it is all a fluke and they will crash at any moment, probably by Monday morning.

Thx :D

GoldarSilvarGam
04-14-2011, 09:26 PM
really..!Most are all about paper.

But don't forget, we will get the POS where we want it partly on the backs of massive amounts of paper silver investors--the masses who could shift 5-10% of their investment portfolios to silver will likely do so in paper form in funds/ETF's backed by real physical.

Paper trading is not bad, just one mechanism, as is holding physical.

Thx1138
04-14-2011, 09:38 PM
But don't forget, we will get the POS where we want it partly on the backs of massive amounts of paper silver investors--the masses who could shift 5-10% of their investment portfolios to silver will likely do so in paper form in funds/ETF's backed by real physical.

Paper trading is not bad, just one mechanism, as is holding physical.

Lol, I've had people in other economics forums tell me that PM investing and the whole concept are "poppycock" and that PM dealers and traders were "scammy".

I reminded them that there was nothing "scammy" about the beautiful pile of silver on my table and that FRNs are "scammy".

It used to get pretty heated when silver was $15... Haven't heard a peep since it crossed $30. :D

Thx :)

Silver Spurs
04-14-2011, 09:48 PM
That's why I have both (mining stocks and physical), that and reducing/keeping out of debt.

coindog
04-14-2011, 11:08 PM
I haven't met one who:

A. Wasn't an automatic expert in PMs. I think they teach them in school that PMs are, always have been and always will be a dog.

Something you need in your portfolio for the sake of "diversification", but not something you need to pay attention to.

B. As good as PMs have been the last decade, no matter how well they outperform other investments, it is all a fluke and they will crash at any moment, probably by Monday morning.

Thx :D

B) that's my favorite of the night. some give it till next month. but i have been hearing that since gold went from $500 to $650, maybe by next monday. :D

Carpenter
04-14-2011, 11:16 PM
Other than when it was government enforced, I don't think there ever really has been a truly "stable" GSR.....

It was "stable" for the 500 years prior to the crime of '73.

I think it was government intervention that destabilised it.

http://goldinfo.net/silver600.html

Hugh B
04-14-2011, 11:20 PM
Bankers and governments absolutely HATE precious metals. Gold and silver always tell the truth.

Paper begins with the truth and slowly starts with little white lies that grow into complete fairy tales.

Meanwhile, metals continue to tell the truth. When gold and silver increase in price they are only reflecting the gross paper lies.

So investment bankers and most investment guys need to sell paper lies so they dis the metals.

Thx1138
04-14-2011, 11:39 PM
B) that's my favorite of the night. some give it till next month. but i have been hearing that since gold went from $500 to $650, maybe by next monday. :D

My "The Silver Bears" thread is the deadest one at the forum.

I expected some Chicken Little type gloating when silver dipped to around $25 last time.

No, they don't want to open up those old wounds. :D

And, I figured just one would come back to the thread for an epilogue or something and maybe even tell me I didn't have my head up my butt.

These guys could have trippled their money in two years if they would have invested alongside me.

The advance in PMs hasn't actually happened... this is taking place in some fantasy land in another dimension.

They expect God to come down and say "Hmpf, gold isn't worth no $1400, *poof*, back to $400 where you should be! And as for the "gutter" metal"!

Thx :D

Deezuhl
04-14-2011, 11:48 PM
Im ok with 100.00 silver taking 2-3 years.. actually id prefer it happen that way rather than the next 12 months..

Stewie
04-14-2011, 11:55 PM
I will say this.
Obviously you're not seeing what's happening with Silver at the moment. It is truly on fire. It can't always go straight up, but that's where it is headed in these times. 100.00 is going to happen well before 3 years from now.

I'll leave you with this.

In 1972, Richard Nixon, proudly proclaimed that he was doing away with the gold standard. Going further to say that the value of the United States dollar would be backed by full faith in the United States economy.

Now how about giving me a projection on , that.

It was a plotted move to vest the citizenry in paper while the FED, the banks and the Elites moved their gains into items of value. Metals and property.

Dollars hold no other value than the a fore mentioned.
This will be more evident to you, in about 6 months.

As I type this, any dip that the shorts throw at the market will be bought up like wild fire. Everyone's waiting for a dip even if it's only 1.00.

Your projection is wrong. Though, the shorts will enter the market at higher numbers expecting metals to pull back.
They will, but in the end the shorts will be crushed, much like what's happening now.

The shorts that are left standing will take delivery ( if they can) and go long on physical. They won't have a choice.
The rest will settle with the dust.

I have no data to back this up but I see. I see well..

I've watched a lot of you people selling at 20.00, 21.00 22.00 , 25.00, ( the dip from (30 something down to 28 something).........and they are all sorry.
I wonder how they feel now.

Killver
04-15-2011, 12:04 AM
The US will address its debt problems soon enough to avert disaster.

I don't see how this can ever happen. From what I understand the US is scores of trillions in debt, printing limitless unbacked dollars with zero intrinsic value. The tactics are those of thugs and counterfeiters, not responsible government that cares anything about people below the top 10% in wealth.

We are done. That's the news, and it's unavoidable. I know a CPA and told him about PMs, especially silver, and he said he had a 7% simple interest loan he'd offer me. I told him Ag was going at 20% or more per year (over 100% in the past year), and he said, "I can PROVE that my 7% loan has higher return than your silver", and that "any CPA would say I am right". If this is true, I live upside down so nothing has any meaning anyway, but this person has a lot of experience in his field, yet is able to say things like this that are simply ridiculous.

The idea that the US in its present form (corporate kleptocracy, bloated military employed in a perpetual-war scenario backing corporate plundering/destruction of the planet for short-term gain and zero sustainability and zero accountability) can pay off anything, let alone recover from a depression that Wall Street, which has now become the center of everything from military planning to education (even university economics has been corrupted by Wall Street's 'thinking') actually caused, seems pretty unlikely.

I will make a wager for silver that the US gets 1) further in debt, or 2) only 'reduces' debt by destroying the critical working institutions of the country to benefit the rich: e.g. destroy Social Security and Medicare in order to replace these dreadful 'socialistic' entities with FOR-PROFIT replacements that will cost enormously more and do much less, benefiting a very few corporations and absolutely no citizens except the very wealthy.

After a "war on terror" caused by 9/11 that had to be the most obvious oil-grab ever seen, we are in at least FIVE foreign countries (all have oil or vital connections relative to it) after TEN YEARS... we have won NOTHING. We are stuck EVERYWHERE. Our cost to fight these wars is: incomprehensible, bankrupting, insane. We lose. Gasoline cost average for army: $300. Check it out...

You think a country that accepts this is going to act SANE? Too late unless we get an FDR with guts. So far no candidates, from either party... meanwhile the corporate power structure is increasing its grip. It's just done unless we have a new revolution... truly time for REGIME CHANGE: get the "shadow gov't" out and democracy by the people in... this is the most disastrous situation the US has ever been in and the media are blind and deaf, no actual war news etc. Total blackout/disinformation situation unless you go online.

We use depleted uranium that is toxic for 4.5 billion years (as long as the earth existed, "in other words, forever"- Dr. Rokke) to destroy our 'enemies' -created to justify increasingly inhuman crimes against humanity, torture (waterboarding, Gitmo, other CIA-run foreign dungeon etc), all for profit for a few corporations. No moral country would ever use such weapons, or if somehow this was morally acceptable, wouldn't they at least tell THEIR OWN TROOPS about it? Well, not us: the films are not shown. Almost half of Gulf War vets are on medical disability... good old depleted uranium: somehow this caused more casualties than all the 'al Qaeda' fighters by orders of magnitude.

"I will defend the Constitution against all enemies, foreign AND DOMESTIC"... we really need to heed this.

Comet
04-15-2011, 12:05 AM
The US debt problem will not be solved and the $ will be destroyed.

Stewie
04-15-2011, 12:13 AM
The US will address its debt problems soon enough to avert disaster..

You're either a believer in the very same Government that lies to you on a daily basis, or you've been drinking the Kool-Aid.

If every man woman and new born child had a 40 hour a week paycheck, and donated 100% of that check to the IRS for taxes, it would take about 10 years to pay only the Interest on the current deficit that is rising exponentially.
Course my calculations may well be wrong. But it would take a dam long time.

oztiks
04-15-2011, 09:42 PM
Im ok with 100.00 silver taking 2-3 years.. actually id prefer it happen that way rather than the next 12 months..


That is a reasonable guess..As reasonable as my 17 year olds guess. Times have changed and NO analyst can say anything is certain when it comes to PMS in this totally different environment from 1980. You may use all the fancy words you'd like or charts and cycles but in the end, a guess is a guess ;) As for my guess 100.00 will come a lot sooner than your guess, unless the world suddenly realizes its self destructive behaviour. I prefer it taking its time also to 100.00 but unfortunatley (or maybe it's a good thing) I stongly believe ( my guess) within the next year we will be at 100.00. This environment is ripe for an economic collapse and people are looking for some reassurement, and many find it in PMS. Than again what do I know? I'm just an old man. As for data...go to a fortune teller.

Bman2011
04-16-2011, 01:15 AM
FWIW, I am a CPA who started getting educated on PM's just after the 9/11 event (so 10 years ago) for the purpose of aiding high net worth clients of mine make investment decisions in PM's. .

I am a licensed securities broker and financial planner. I am a business analyst for Fortune 500 companies. I am a professional daytrader and have been building proprietary, automated trading systems for about 12 years.

I think your analysis is worthless. If you had done any level of worthwhile homework, you would know that all the major financial institutions on the planet are dedicated to seeing the US dollar collapse in slow motion. I won't get into the political reasons because I would lose you after 2 feet into the walk.

Go back to Go and do not collect $100.

hortstu
04-16-2011, 01:23 AM
I am a licensed securities broker and financial planner. I am a business analyst for Fortune 500 companies. I am a professional daytrader and have been building proprietary, automated trading systems for about 12 years.

I think your analysis is worthless. If you had done any level of worthwhile homework, you would know that all the major financial institutions on the planet are dedicated to seeing the US dollar collapse in slow motion. I won't get into the political reasons because I would lose you after 2 feet into the walk.

Go back to Go and do not collect $100.

I think I could keep up. I'd like to hear it and I'm sure a few others would too.

badfrog101
04-16-2011, 01:29 AM
Goldar, you seem to have hit a nerve. Good post.

Up until a couple of weeks ago I would have agreed with you. I still hope you are right. But lately POS has been up 4-5 dollars a month, with no reason to slow down. From my recent reading, things are more dire than had been thought, less existing silver, more people buying, less responsibility among our leaders than hoped for. Dollar is mostly down against other currencies, oil is mostly up, inflation 20% in the last 12 months. If it goes on like this POS will be $80 or more by Christmas, but I now believe the rises will intensify. If we are only at $100 by the years end, I will be happy, and of course fairly wealthy, but much of that will be at the expense of my country. I hope we don't enter serious hyperinflation, but see no real reason why we should not.

God bless us all. God bless you all.

lowcommotion
04-16-2011, 01:32 AM
I am a licensed securities broker and financial planner. I am a business analyst for Fortune 500 companies. I am a professional daytrader and have been building proprietary, automated trading systems for about 12 years.

I think your analysis is worthless. If you had done any level of worthwhile homework, you would know that all the major financial institutions on the planet are dedicated to seeing the US dollar collapse in slow motion. I won't get into the political reasons because I would lose you after 2 feet into the walk.

Go back to Go and do not collect $100.

Wow! If you are for real I would certainly like you to expand on this.
Not that I don't believe it but would enjoy a more in depth essay.
Thanks

Stewie
04-16-2011, 03:02 AM
Wow! If you are for real I would certainly like you to expand on this.
Not that I don't believe it but would enjoy a more in depth essay.
Thanks

If he gives a more in depth essay, which I am sure he probably can, he will be labeled by some.

Some of them like to ridicule and make comments about tin foil hats and whatnot.

Meanwhile some of the same people who ridicule lost 401k's back in 08, only to see bailouts for the criminals who lost those 401k's, along with 8 million dollar bonuses, and such.
No tin foil there, now is there?

Anyway, without sounding like a loon it goes much further in depth than that and dates back over 200 years.
You see, 200 years ago, Americans were much smarter than they are today. I wonder why that is?
Could it possibly be because they fought a war waged against Government for some of the very things we see today in 2011, from a Government we created? Makes you wonder doesn't it?
Now you have to ask yourself why, today 200 and something years later, we have a Government we created, that is much like the Government we defeated which spawned the Declaration of Independence in 1776.


You can evidence the part highlighted in red by reading the Constitution.
No tin foil hat there either, huh?

AgAuCaliente
04-16-2011, 03:48 AM
If all Americans, including the kiddos, had a good job and stopped this silly stacking hobby, we'd have that national debt tackled in about a year.
"The estimated population of the United States is 310,395,625
so each citizen's share of this debt is $45,994.56." from http://www.brillig.com/debt_clock/
OR
Each person could have approximately 30 ounces of gold/ ~1000 ounces of silver
OR
A few could have a whole lot of gold and silver, the USA debt increases, and no one has to worry about finding a 50K/year job for a 1 month old baby.

chrisiden
04-16-2011, 07:09 AM
we are living in different times now.... most people know this..:rolleyes:
silver and its friends will eventually rise for inflation and Fifty bucks is far from the top in my humble opinion...
dont be surprised if silver gold ratio goes under 16-1:cool:

urban prospector
04-16-2011, 07:21 AM
Very nice post, nice to hear from a money pro who is not allll down on PMs, lol.

The most revealing thing to me was the idea that the PMs will be valuable enough to make lower grade ore mining feasible.

Thx :)


how low do you go .. the most ever producing gold mine in oz is running at under 1.6 grams a ton,,boddington
the wages are huge .. there is half the answer

they want it its going to cost

urban prospector
04-16-2011, 07:25 AM
If all Americans, including the kiddos, had a good job and stopped this silly stacking hobby, we'd have that national debt tackled in about a year.
"The estimated population of the United States is 310,395,625
so each citizen's share of this debt is $45,994.56." from http://www.brillig.com/debt_clock/
OR
Each person could have approximately 30 ounces of gold/ ~1000 ounces of silver
OR
A few could have a whole lot of gold and silver, the USA debt increases, and no one has to worry about finding a 50K/year job for a 1 month old baby.

na they cant cause us outside the usa got lots of it

ToDaMoon
04-16-2011, 09:48 AM
Goldar, you seem to have hit a nerve. Good post.

Up until a couple of weeks ago I would have agreed with you. I still hope you are right. But lately POS has been up 4-5 dollars a month, with no reason to slow down. From my recent reading, things are more dire than had been thought, less existing silver, more people buying, less responsibility among our leaders than hoped for. Dollar is mostly down against other currencies, oil is mostly up, inflation 20% in the last 12 months. If it goes on like this POS will be $80 or more by Christmas, but I now believe the rises will intensify. If we are only at $100 by the years end, I will be happy, and of course fairly wealthy, but much of that will be at the expense of my country. I hope we don't enter serious hyperinflation, but see no real reason why we should not.

God bless us all. God bless you all.

I agree with $80 by Christmas. In January I agreed with $50 but my stack has increased in value by 30% since January. If silver puts in another stellar performance this year it will double again in the following year as everyone jumps on the bandwagon.

lonewolf
04-16-2011, 10:07 AM
It could double again next year as everyone jumps on the band wagon. I can see it now...2012 election year. Inflation. Unemployment. Stock market crash. Forclosure crisis.middle east turmoil. Democrats wanting stimulus republicans trying to outlaw abortion and cut Medicaid and social security....Silver up 80% in 2010 and 2011...all those Americans who melted down their gold and silver will be trying to buy some back...
2012 is going to be NUTS.

Chukar Hunter
04-16-2011, 10:32 AM
how low do you go .. the most ever producing gold mine in oz is running at under 1.6 grams a ton,,boddington
the wages are huge .. there is half the answer

they want it its going to cost

I think Boddington's head grade is a bit higher.

Bullion_Bob
04-16-2011, 11:24 AM
It will not take very many people to wake up, and make physical disappear overnight, and for decades.

Toss around global Ag production numbers, and then figure the average person wanting at least 100 ounces, pretty soon you will see decades of global production go poof on purely investment demand.

Then there's industrial demand to factor in.

break out the calculator...have fun.

Thx1138
04-16-2011, 12:21 PM
Goldar, you seem to have hit a nerve. Good post.

Up until a couple of weeks ago I would have agreed with you. I still hope you are right. But lately POS has been up 4-5 dollars a month, with no reason to slow down. From my recent reading, things are more dire than had been thought, less existing silver, more people buying, less responsibility among our leaders than hoped for. Dollar is mostly down against other currencies, oil is mostly up, inflation 20% in the last 12 months. If it goes on like this POS will be $80 or more by Christmas, but I now believe the rises will intensify. If we are only at $100 by the years end, I will be happy, and of course fairly wealthy, but much of that will be at the expense of my country. I hope we don't enter serious hyperinflation, but see no real reason why we should not.

God bless us all. God bless you all.

Nice post. ;)

Thx :)