Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
The AI Mega-trend Stocks Investing - When to Sell? - 28th May 20
Trump vs. Biden: What’s at Stake for Precious Metals Investors? - 28th May 20
Stocks: What to Make of the Day-Trading Frenzy - 28th May 20
Why You’ll Never Get Another Stimulus Check - 28th May 20
Implications for Gold – 2007-9 Great Recession vs. 2020 Coronavirus Crisis - 28th May 20
Ray Dalio Suggests USA Is Entering A Period Of Economic Decline And New World Order - 28th May 20
Europe’s Coronavirus Pandemic Dilemma - 28th May 20
I Can't Pay My Payday Loans What Will Happen - 28th May 20
Predictive Modeling Suggests US Stock Markets 12% Over Valued - 27th May 20
Why Stocks Bear Market Rallies Are So Tricky - 27th May 20
Precious Metals Hit Resistance - 27th May 20
Crude Oil Cuts Get Another Saudi Boost as Oil Demand Begins to Show Signs of Life - 27th May 20
Where the Markets are heading after COVID-19? - 27th May 20
Silver Springboards Higher – What’s Next? - 26th May 20
Stock Market Key Resistance Breakout Is Where the Rubber Meets the Road - 26th May 20
5 Ways To Amp Up Your CFD Trading Today - 26th May 20
The Anatomy of a Gold Stock Bull Market - 26th May 20
Stock Market Critical Price Level Could Soon Prompt A Big Move - 25th May 20
Will Powell Decouple Gold from the Stock Market? - 25th May 20
How Muslims Celebrated EID in Lockdown Britain 2020 - UK - 25th May 20
Stock Market Topping Behavior - 24th May 20
Fed Action Accelerates Boom-Bust Cycle; Not A Virus Crisis - 23rd May 20
Gold Silver Miners and Stocks (after a quick drop) Ready to Explode - 23rd May 20
3 Ways to Prepare Financially for Retirement - 23rd May 20
4 Essential Car Trade-In Tips To Get The Best Value - 23rd May 20
Budgie Heaven at Bird Land - 23rd May 20
China’s ‘Two Sessions’ herald Rebound of Economy - 22nd May 20
Signs Of Long Term Devaluation US Real Estate - 22nd May 20
Reading the Tea Leaves of Gold’s Upcoming Move - 22nd May 20
Gold, Silver, Mining Stocks Teeter On The Brink Of A Breakout - 21st May 20
Another Bank Bailout Under Cover of a Virus - 21st May 20
Do No Credit Check Loans Online Instant Approval Options Actually Exist? - 21st May 20
An Eye-Opening Perspective: Emerging Markets and Epidemics - 21st May 20
US Housing Market Covid-19 Crisis - 21st May 20
The Coronavirus Just Hit the “Fast-Forward” Button on These Three Industries - 21st May 20
AMD Zen 3 Ryzen 9 4950x Intel Destroying 24 core 48 thread Processor? - 21st May 20
Dow Stock Market Trend Analysis and Forecast - 20th May 20
The Credit Markets Gave Their Nod to the S&P 500 Upswing - 20th May 20
Where to get proper HGH treatment in USA - 20th May 20
Silver Is Ensured A Prosperous 2020 Thanks To The Fed - 20th May 20
It’s Not Only Palladium That You Better Listen To - 20th May 20
DJIA Stock Market Technical Trend Analysis - 19th May 20
US Real Estate Showing Signs Of Covid19 Collateral Damage - 19th May 20
Gold Stocks Fundamental Indicators - 19th May 20
Why This Wave is Usually a Market Downturn's Most Wicked - 19th May 20
Gold Mining Stocks Flip from Losses to 5x Leveraged Gains! - 19th May 20
Silver Price Begins To Accelerate Higher Faster Than Gold - 19th May 20
Gold Will Soar Soon; World Now Faces 'Monetary Armageddon' - 19th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

Buying Silver and Avoiding the Sharks

Commodities / Gold and Silver 2011 Mar 30, 2011 - 10:35 AM GMT

By: Richard_Daughty

Commodities

Best Financial Markets Analysis ArticleI keep pounding, pounding, pounding the table that silver is the biggest bargain out there, for, at last count, a jillion reasons, and that anybody who does not buy silver Right Freaking Now (RFN) is making the mistake of a lifetime, and the family is all, like, "Will you please stop pounding the table? It is irritating and is making things spill, aside from the fact that we don't have any money with which to buy silver, and you know that!" which devolved into a lengthy discussion about who among them was the most irritated with me and everything I say or do.


So, to make these idiots happy, I stopped pounding, losing a lot of my spark of emphasis in the process. It just wasn't the same, and my breakfast cereal was getting soggy, too, so without using my trademark pounding to buttress my arguments, I decided to just let Jason Hommel, of the Silver Stock Report newsletter, highlight my "Buy silver or you are a moron!" theme with notices of a few serious delivery problems in the silver market, indicating shortages, to which he surmises that "the futures market is about to default on silver and gold deliveries. There is a growing market awareness that the banks have sold short over $200 billion to $400 billion in silver, while all the world's silver mines only produce about $30 billion of silver annually."

The lesson seems to be that there is shark-infested water everywhere, and "Market participants are now taking on the cornered banks, putting them into an epic short squeeze of having to deliver silver that does not exist in quantity even remotely compared to the amount of money that exists that can buy silver."

Now, as a cynical, paranoid ordinary trader/investor kind of guy who has been around long enough to have been eaten by financial sharks a few times, I am sure that they exist, and even today, baby sharks nibble at me, eating me, bite by bite, taking 1.5% of assets in fees and expenses every freaking year!

On the other hand, I never thought that I could be on the side of the sharks, and prove that "what goes around comes around" to my advantage, for a change!

And the good news from a "buy silver and prosper from inflation, Pilgrim!" standpoint, inflation and money-inspired growth ain't a-gonna stop, neither, as I was reading a Bloomberg.com article that brought up the Federal Reserve perhaps ending their long series of monetary stimulus programs one day soon.

It ain't a-gonna be, because but "While the Fed hasn't committed to the specific methods it will use to exit, or in what order, it has been releasing details about its progress in building new programs and expanding its ability to drain reserves."

Making a little joke of this, I note that this is, of course, akin to the fire department buying fire extinguishers instead of putting out the fire, so that in the future, if they do decide to put out the fire, they will be able to put out the fire! Hahaha!

Of course, I know this is not a fair analogy, and it's not very funny, either, despite my pathetic use of "Hahaha!" to try and convince you otherwise.

To try to correct that serious shortcoming, and to perhaps make it more apt, let me expand to say that first the volunteer firefighters would have to set a lot of houses on fire so that there would be both a demand for a permanent fire department paying high incomes to full-time employees, and there would be a big need for new housing to replace all the charred rubble, both seemingly stimulating the economy, but, alas, as the Austrian School of economics shows, not, although they end up accumulating a lot of fire extinguishers.

Okay, I can see that it's more apt, but still not funny, and getting un-funnier all the time, a deplorable condition that will undoubtedly be made worse when I continue to expand the analogy to the corrupt city council counterfeiting money to pay the firefighters and themselves, and pay for that spiffy new firehouse and City Hall, and pay for all that shiny new government gear and programs, thus creating a continual addition of money to the economy that drives prices up, drives the riffraff like me out, and drives the economy into the toilet.

With a start, I recoiled in horror, showing what a wussy coward I am about inflation, as the analogy became all too frightening when it included the inflation in prices that an inflation in the money supply brings!

That was, however, not the actual part that made my eyes open wide and the skin on my head draw back in fear, although I must warn you that it doesn't look that way when it happens, as I ruefully noted when the kids said to each other "Hey, look! Dad's ears are wiggling!"

This, of course, started the predictable domino effect from, "Why do you need ears when you never hear anything we say?", to "We keep saying that we need you to give us more money!", to "You're a cheap, horrible person!", to "I hate you! I hate you! I hate you!"

No, the part that really, really REALLY scared me was when the Journal followed that up with the sentence "This includes increasing the number of its counterparties." Gaaaahhhh!

It's the idea of derivatives all over again! "Spreading the risk"! Yikes! Run for it! We're Freaking Doomed (WFD)!

If you are NOT running in fear, then you are either stupid (and thus you cannot learn that you should be buying gold and silver when the Federal Reserve is creating so monstrously much money) or it means that you are smart (and thus you already have a lot of gold and silver).

It's just that easy to distinguish between the two! Whee!

Richard Daughty (Mogambo Guru) is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the writer/publisher of the Mogambo Guru economic newsletter, an avocational exercise to better heap disrespect on those who desperately deserve it. The Mogambo Guru is quoted frequently in Barron’s, The Daily Reckoning, and other fine publications.

Copyright © 2011 Daily Reckoning

© 2011 Copyright The Daily Reckoning - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules