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oly1oly1
Penny Sorter Member
USA
81 Posts |
 Posted - 11/04/2009 : 21:39:37
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Supply and Demand
Shortage, price will go way up if everyone wants it!
Price goes way up because everyone wants it, those with lots sell and make big money. Metal bubble pops and now everyone sells as price falls again.
Buy Low, Sell High then buy low again
Its metal and you can't eat it, it just sits around hopefully making you money. Its probably a whole lot better than accumulating US Dollar bills which are shrinking each day you hold onto them with inflation imminent.
I live in a copper mining town and our economy for over 100 years has been dependent on copper and moly prices. It has been a roller coaster for 100 years and will be a roller coaster probably for another 100. |
T.O. |
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Lemon Thrower
1000+ Penny Miser Member
USA
1588 Posts |
Posted - 11/05/2009 : 05:40:26
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quote:
Originally posted by oly1oly1
Supply and Demand
Shortage, price will go way up if everyone wants it!
Price goes way up because everyone wants it, those with lots sell and make big money. Metal bubble pops and now everyone sells as price falls again.
Buy Low, Sell High then buy low again
Its metal and you can't eat it, it just sits around hopefully making you money. Its probably a whole lot better than accumulating US Dollar bills which are shrinking each day you hold onto them with inflation imminent.
I live in a copper mining town and our economy for over 100 years has been dependent on copper and moly prices. It has been a roller coaster for 100 years and will be a roller coaster probably for another 100.
for those who are not familiar, bull markets have 3 stages - stealth, wall of worry, and mania. we are in wall of worry now. mania could happen any day or years from now. when the mania happens, everyone will be buying gold and silver. where i live a month ago there were hardly any coin ads. now there are a dozen a day. i see new coin shops all the time. hear ads for gold on talk radio. those are the early movers. at some point they'll be swamped with customers. thats when you know its close to time to get out. |
Buying:
Peace/Morgan G+ at $15.00
copper cents at 1.3X
wheat pennies at 3X
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
Posted - 11/05/2009 : 06:12:57
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Article written in 2006 by Izzy Friedman, mentor of Ted Butler:
Price Points and the Coming Silver Squeeze
To define what I mean by shortage in silver, I say categorically that I’m not interested in the level of world inventories of silver, COMEX inventories and the guru’s stories. I am only interested to know if the users are receiving their shipments of silver on time. When a delay of silver shipments occurs, and affects most the users, I will consider this as a shortage.
Let’s see the stages of a shortage.
1) Pre-shortage – the users will have to wait 3 to 6 weeks extra for shipments. Then the prices can rise to $20-30/oz.
2) Shortage – the users will wait an extra 6 weeks to 4 months for silver. Then the prices can rise above the old all-time highs of $50/oz.
3) Super shortage – the users have to wait more than 4 months for their silver shipments. The price will range from $100 to prices you won’t believe.
If this last scenario occurs, and gold has plenty of supply, the price of silver, at a minimum, will equal the price of gold. And my crystal ball tells me that silver can exceed the price of gold by a great deal.
You should be asking, how did I calculate the prices for the different stages?
My calculation is very conservative. I only take into consideration the future deficits between the producers and users, which is running currently at around 50 million ounces annually. I also take into consideration that private investors have 400 million ounces in bullion and coins that they will sell in some stages.
-In stage one, pre-shortage, I think investors will be willing to sell 50 million ounces at a price between $20 to $30.
-Stage two, shortage, investors will sell 200 million ounces between $30 and $100.
-And the remaining 150 million ounces will be sold in stage three, super shortage and the prices will be truly shocking.
These prices are very conservative, in my opinion, because they don’t take into consideration the naked shorts, new investments, or those banks worldwide that sold silver certificates without real silver backing, only derivatives backing.
Commercial Silver Users (Manufacturers)
The users will be the key for the future price of silver. No user wants to stop production, and will pay any price for silver if that means staying in business. For you the investor, who wants to know when stage one will start, my answer is simple – not me or anyone will know in advance when it will start. No one will ring a bell.
In my opinion, all of these stages will happen in silver, and super stage three will take years to develop. I ask you, do you believe that, when stage three comes, you will benefit if you hold a paper-leveraged contract? The Exchange will change the rules; including changing margins, and maybe by canceling the delivery process, and you will be left with a paper only contract.
The conclusion is, if you believe in a shortage situation, you will be secure only if you buy physical.
The Best Kind of Silver to Own for Stage 3
The only question is what to buy? Because I believe that at some point we will arrive at stage three, super shortage, when prices will be over the old all-time highs and will fluctuate by dollars per day, no investor will have the money to buy 100 or 1000 ounce bars.
For the small to medium investor, I say buy U.S. Silver Eagles.
And for rich investors buy Eagles and bars. I like Eagles because I think, at some point, the Mint will stop minting them and they will develop a numismatic and scarcity premium. Plus, in my opinion, they are the most beautiful coins in the world, and when I hold one they make me feel good about America.
Dance to the Bank
If my vision comes true, and we arrive at the super shortage stage, the Congress will ask a lot people hard questions, and the questions will be how we came to this situation. And Mr. Butler’s past complaints will be checked.
Physical investment is the safest way to riches, in my opinion. When the naked shorts go to bankruptcy courts, including the big sharks, you will dance to the bank.
Remember, do your homework before you invest. Cover all the angles, but don’t speculate, only invest in physical silver with free cash money. And take in consideration you can buy silver 30% cheaper than a month ago. And this is a fantastic, fantastic, fantastic opportunity.
Good luck and remember the modern gold is silver.
Israel Friedman
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Hoard now and hold on!
http://coppermillions.blogspot.com/
http://wherewillyoubein2012.blogspot.com/ |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
Posted - 11/05/2009 : 06:18:23
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That said, here's my questions. 1) If we get hyperinflation  and 2) If TSHTF (as it probably would if 1 occured) then 3) we reap huge profits in FRN's ? So, 4) What the heck do we do with our paper profit if it ever gets that bad? 5) Ride it out? 6) Just spend coins for food/goods? 7) Buy real estate and survival stuff?  |
Hoard now and hold on!
http://coppermillions.blogspot.com/
http://wherewillyoubein2012.blogspot.com/ |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
Posted - 11/05/2009 : 06:23:45
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I'm really hoping it NEVER gets as bad as the previous scenario, but just that supply and demand (thanks, Oly1Oly1) with mild inflation makes us all wealthy.  I'd hate to see the USA deteriorate into nationwide chaos  like during Katrina if the "have nots" decided they wanted what the "haves" accumulated. |
Hoard now and hold on!
http://coppermillions.blogspot.com/
http://wherewillyoubein2012.blogspot.com/ |
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Lemon Thrower
1000+ Penny Miser Member
USA
1588 Posts |
Posted - 11/05/2009 : 11:15:16
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quote:
Originally posted by beauanderos
That said, here's my questions. 1) If we get hyperinflation and 2) If TSHTF (as it probably would if 1 occured) then 3) we reap huge profits in FRN's ? So, 4) What the heck do we do with our paper profit if it ever gets that bad? 5) Ride it out? 6) Just spend coins for food/goods? 7) Buy real estate and survival stuff?
well unlike the people holding frn's or gm common stock, you'll be able to exchange your eagles for a gun and groceries and anything else that money buys. people holding frn's will be able to wipe their butts and that's about it. |
Buying:
Peace/Morgan G+ at $15.00
copper cents at 1.3X
wheat pennies at 3X
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