Friday, September 18, 2009

Keeping Silver in Perspective...

With the run up in silver lately surely traders must be nervous. I am not a trader and I am far from nervous. Look at these charts, courtesy of

The 5 day looks like it might roll over but when you look at the 1 year it appears we're just warming up! Be diligent and stay faithful.

Besides, this could gain .50 by the end of the day.

Thursday, September 17, 2009

The Fed's New Mouth Piece


Greenspan Sees Threat U.S. Congress Will Hamper Fed.....source

Sept. 16 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said he’s worried that lawmakers will hamper U.S. central bank efforts to rein in its monetary stimulus, and that inflation might “swamp” the bond market.

“It’s the politics in the United States that worries me, whether the Congress will basically feel comfortable” with the Fed withdrawing its stimulus, Greenspan said.

So what do we make of this? I'll tell ya' what I make of it. The Fed has Congress by the sack and there's not much they can do about it. Have you ever heard the quote, "Evil turns in on itself"? At the end of the day when this all falls in on itself the politicians and bankers will be at each others throats. Politicians will blame Wall Street for being irresponsible. Wall Street will blame each other first, then the Fed for not providing proper oversight. The Fed will blame politicians for spending too much.

But can't Congress take away the powers of the Fed? Can't they abolish them? Yeah, right!! The heroine addict always pushes away their pusher. The political fallout would be intolerable. If they do that they better be ready for a new currency and Marshall Law. Nope, they're married and the bickering will continue until it falls apart. At the end of the day.

Lo! The sun sets!

Wednesday, September 16, 2009

Silver and the Raw Deal

Gold closes today at it’s all time high, $1,020.20! Incredible, no?


What's incredible is that silver is no where near it's all time high. There's a couple of interesting points when one thinks about this.

1) There's a lot less silver in the world today then there was back in 1980 due to industrial demand burning through reserves, literally in some cases.
2) Investor demand as a percentage of total supply has skyrocketed.

So what's the difference today? I'd like to know myself. Perhaps some speculation is in order.

First off I'd have to say that back in 1980 gold had just recently been legalized to own. That's right, since 1933 until 1975 it was illegal for citizens to own gold. Silver on the other hand was/is still in circulation as money although Johnson had declared silver would no longer be used for monetary purposes due to silver shortages. That's right, shortages. That's for another time. What's important to think about is that silver was freshly thought of as money then, not an industrial metal (segue, if you gave someone a silver quarter today who believes that silver is not money I wonder if they'd reject it? They'd say it's make a great spoon or something and take it anyway, dorks).

So, what do we see after gold is legalized to own? It zooms up to $875 an ounce slightly surpassing the official value of gold compared to the US money supply. Neat huh? Silver also shoots up to the traditional historical ratio of about 16 to 1 in relation to gold. Soon thereafter as the world realizes that fiat currencies are here to stay both gold and silver fall out of favor with the masses and drop precipitously. Silver then evolves into a highly desired industrial metal and still is to this day.

I guess it's that simple then. Silver is more typically thought of as an industrial metal and not money although people will gladly accept silver quarters for spoons. I love logic.

Well after the PUMMELING that silver took last year I guess people fear owning it as much since if the market tanks again silver will get smashed again, right?

But hold on! Presently there's record investor demand. Also, the number of short positions on the CO(N)EX against silver is simply staggering. There's more open short positions than there's silver to back up the contracts with! Now that makes sense right? It's always legal to sell something you don't have.

Ah well. On and on I could go. But one thing is for sure: silver and gold have always been money and the world is currently realizing once again that it is. And slowly but surely those dollars, dinars and dongs will all flood back into the metals. And when they do even the industrialist will learn to appreciate silver for it's monetary qualities. At that point the price will be so high most won't "buy" it anyway. Silver is so cheap now it's practically free.

I remember the first time I bought silver from the Toledo Coin Exchange. I plopped some cash down on the counter and said, "Give me that much in silver". I actually felt bad. I felt like I was ripping someone off buy hey, they were selling it!

I've often wondered at what point I would stop buying silver. I think soon I may be put to the test!

Wednesday, September 9, 2009

Is Gold Money?

Is the world flat, still....?

At one point in time people did believe this (actually still do). They also believed that the sun revolved around the Earth.

They believed in the Easter Bunny, Santa Claus, the Tooth Fairy and every other preferred hobgoblin of the mind.

But to wonder if gold is money? Why that just stinks of conspiracy! George Bush would be ashamed! So would Captain Hook, "For shame, for shame!"

Apparently Alan Greenspan would also disagree as he was recently quoted as saying, "What is fascinating is the extent to which gold still holds reign over the financial system as the ultimate source of payment,” Greenspan said....source.

In all actuality, the majority of folks who state that gold is not money simply have a great desire for it to be true, though they know it is not. For example, if I owned a bank and the Fed gave me a bunch of free "money", i.e., currency, a.k.a., Federal Reserve Note, I would not want people to think that gold was money. They might keep it at home and then I couldn't lend it out. Or take it home, as say, a bonus! Yeah baby!!!

If I were a professor of economics and had told students year after year that federal reserve notes were money and not gold and then gold ended up being money, boy would I look like an ASSSSSSS!!!!!

There are many other reasons why this would be happening but I shall spare you here and direct you to the GATA website where you can learn more about it than you ever cared to. GATA has exposed many of these players and their motives, which simply is to suppress the price of gold so people think that currency is money. As you look into this, keep one quote in mind.....

“Any rational person who continues to dispute the existence of the rig after exposure to the evidence is either in denial or is complicit”. Robert Landis, Harvard trained attorney.

So I guess it is true that there are people out there that believe that gold is not money. They would be called, "idiots".

Thursday, September 3, 2009

The future portends what?

Take a look at the chart above (click to see full chart)...source

Gold price has been keeping pace with the money supply introduced in the market. Today's price action deviated from this relationship so is a correction in gold and silver likely or will it continue upward based on a different set of fundamentals?

You can bet your sweet azz today's price action got the attention of the Fed. What are they to do? Well, what did they do the first time gold broke $1,000? They withdrew credit from the market causing a collapse of the Dow. By limiting the amount of money introduced into the system the Fed is basically pulling credit from the markets. Banks have simply been speculating with the freebies from the Fed so the result of this will be the imminent collapse of the Dow.

The strategy of course is to cause a mad dash to bonds and the dollar and take down silver and gold which will probably work since the trading lemmings and sheeple can't fathom silver and gold as money. If the Dow crashes and silver and gold hold their own, it may be the dawning of a new era we have all dreamily yet anxiously anticipated (dreaded?). The day must come when silver and gold go off on their own. What will that day look like?

Then and now

Have people changed this much or has the perception of the people changed by our leadership??? Why?

Did they promise too much or did we expect too much? Both?

Peruvian riot police.