SILVER v USD

[ananda77]

peat:

...Silver US$ 25.00 - Gold US$ 900.00...there is still a huge mountain of floating subprime trash -even AAA/AAA+ tranches of debt loosing value by the minute- unaccounted for and waiting to be written off

...wait for Bernankes next interest rate $dust

Kind Regards

[Alec]

Happy weekend all,

I presume silver will break $20 by Xmas / Jan-Feb 08, we may also see some profit taking over this time but I expect this will be absorbed by seasonal buyers + increased investment buying. The next few months in the season are usually the strongest for silver.

It was interesting to watch the silver market this week. There is strong support in the $15 to $16 dollar range. Personally, I find it hard to analyze the silver market at the moment as there are just too many intangibles (non conventional analysis). Although it appears to be predictable to an extent, and the rise in silver is partly attributed towards the devaluing the fiat US dollar ponzi scheme + investor buying, (Credit bubble = Inflation = higher silver prices) As silver has still been gaining in value across the board in most currencies shows that we are in a classic secular silver bull market in stage 2 with stage 1 overlap.

1. Currency devaluation, 2. Investment demand, 3. Panic speculative mania

Even with silver at 15 to 20 an oz - it is at a super discounted rate, it hasn't really started! ($100 / oz, still cheap I say!!.) Silver always shines at the end - keep an eye on the Silver gold / ratio. The balance will be somewhere between 10 / 20 to 1. At this time gold may be 2000 to 3000 / oz. (in the long term) When silver reaches this level, you can be sure that the dealer shorts (futures / options) will be overrun which will fuel the market like throwing petrol on a fire (please do not try this at home !!). Currently recorded in the last COT report, there are 202422 open futures contracts for silver. How can that be? Each contract is 5000 oz’s, all up, that’s 1012110000 oz of silver. Where is the physical, sure there may be a few hundred million oz’s floating around in Warehouses here and there. But the bottom line is someone is going to have to buy physical to cover!!!. Move over credit bubble.

Yes - Citibank, 11 billion dollar write down last week, there goes this years profit. With a proportional holding of over a trillion tied up in derivatives based around sub prime exotic credit bundles. When those babies spit the dummy – will Citibank along with many other big hitters remain solvent? Time will tell…. I believe the worst is far from over. Bernanke admits that the economy will slow "noticeably" in the fourth quarter (hello, didn’t this start happing some time ago, talk about sweat the asset) He is holding fast to his optimistic predictions of an improving U.S. economy early next year. In reality, they have no idea where the economy is, don't let yourself be fooled by Ben and friends, these are the same heads who said the sub prime mess wouldn't have a noticeable impact on the U.S. economy. He had better crank up the helicopter again and get that new line of printing presses rolling!!!.

(note : I am just a "backyard" investor / silver bug - what I say and write should not necessarily be taken as investment advice !!)

Have a good week all.
reg Alec.
http://www.nzsilver.com

[ananda77]

... thought this might interest a few people;

http://www.marketoracle.co.uk/Article2759.html

Kind Regards and long in Silver and Gold

[Alec]

That was a very interesting read (Elliott Wave Theory) - according to this article, I can get truck loads more physical silver at super discounted rates for a couple of years (phew)

Silver may go sideways but slowly follow the current trend until 201X. It is also probable that we will see a bit of a correction / sell off coming up, maybe after the silver season (march / may 08) - Either way, I would expect to see the strongest volatility over the next few months. In looking at the overall trend, we should see higher highs and higher lows.



Back to the Elliott Wave Theory, so according to this, silver may go sideways or even down until 201X and then is will really take off when the USD gives its last gasp. It gives us a couple more years to stock up on sub 20 to 40 silver. In the past, it has been hard to put a date to when silver will take off, it could be anything from a couple of years to 5 or even 10 – but the more I read, it looks to be on the couple of years side of the scale.

Until my next lot of blabber, have a great week all and it is good to see summer is here at last.

reg Alec

www.nzsilver.com

[Alec]

Elliot wave applied to silver as explained by Roland Watson, The Silver Analyst

http://news.silverseek.com/SilverSeek/1195428258.php

[peat]

Heres a colourful view of Silver with the ADX and the Awesome Oscillator and RSI. In some ways not a great buy at these levels - but would become so in the mid 13's. One should be looking for more of a retracement from the recent strong gains so I'm prepared for those levels to occur and continue accumulation.
ADX has not broken its positive signal tho Awesome needs to turn. RSI is bouncing along the middle at present after having coming off overbought. Although one always like prices to go up in some ways dips are good - like the one we just had in the last few minutes really.

[Ish]

Hi guys, I have a question.

I have accumulated a decent holding of physical silver as a longish term hold.

What would be the best way to sell it (and not loose too much on the spread) when the time comes?

[arco]

Ish

I dont know anyone in the S.I

Perhaps call NZ Mint for a price/info.

http://www.newzealandmint.com/nzmint...llion_products

rgds - arco

[Alec]

Hi, Along with NZMint, you can also try Morris and Watson or AGR Matthey (both in Auckland) there is also New Zealand bullion recovery services (they have a branch in CHCH last time I checked)

(Google search or Yellow Pages for any of the above)

Depending on who issued / assayed your silver can effect the buyer spread in NZ. You could also export to Australia if required. There are numerous big refiners over there that will buy.

It is hard to say what will happen when silver does shine its true value. Will bigger NZ buyers keep buying ?. who knows. For example, and hypothetically speaking if silver peaks like it did in the 80’s and at an inflation adjusted price – we could easily be looking at anywhere between 200 to 500 and oz. If you have 1 Kg ingots @ 500 / oz that $16K. The spread will not matter as it will be so small compared to what you are selling at / profit you are taking. One problem is if silver does goes to this price, you can only really easily sell 1kg + items to bigger refineries as they have the buying power. (How many 1 kg gold ingots do you see on trademe or ebay ? nil) That is one of he reasons I mainly collect Maples and Eagles, they are both an internationally well know, precision struck 1 troy oz item. There are many more big international buying houses that buy these coins. A 1 oz coin is easier to buy / move at a few hundred an oz. When the time comes, I will be organizing a buy pool to help the masses move their silver coins ( through www.nzsilver.com)

Also remember, what pushes the price up ? buying mania. More people will see silver as an investment class asset + industrial stock piling, so in theory it should be very easy to sell regardless.

I hope this helps.

Reg Alec

[peat]

hey craig
I was just about to post something on the metals too....

while gold was doing a classic compression/consolidation and as you say appears to have broken out now , Silver was doiing a Bullish 3 drives