Most Popular
1. THE INFLATION MONSTER is Forecasting RECESSION - Nadeem_Walayat
2.Why APPLE Could CRASH the Stock Market! - Nadeem_Walayat
3.The Stocks Stealth BEAR Market - Nadeem_Walayat
4.Inflation, Commodities and Interest Rates : Paradigm Shifts in Macrotrends - Rambus_Chartology
5.Stock Market in the Eye of the Storm, Visualising AI Tech Stocks Buying Levels - Nadeem_Walayat
6.AI Tech Stocks Earnings BloodBath Buying Opportunity - Nadeem_Walayat
7.PPT HALTS STOCK MARKET CRASH ahead of Fed May Interest Rate Hike Meeting - Nadeem_Walayat
8.50 Small Cap Growth Stocks Analysis to CAPITALISE on the Stock Market Inflation -Nadeem_Walayat
9.WE HAVE NO CHOICE BUT TO INVEST IN STOCKS AND HOUSING MARKET - Nadeem_Walayat
10.Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - Nadeem_Walayat
Last 7 days
AI Tech Stock PORTFOLIO NAME OF THE GAME - 29th June 22
Rebounding Crude Oil Gets Far Away from the Bearish Side - 29th June 22
UK House Prices - Lets Get Jiggy With UK INTEREST RATES - 28th June 22
GOLD STOCKS ARE WORSE THAN GOLD - 28th June 22
This “Bizarre” Chart is Wrecking the Stock Market - 28th June 22
Recession Question Answered - 28th June 22
Technical Analysis: Why You Should Expect a Popularity Surge - 28th June 22
Have US Bonds Bottomed? - 27th June 22
Gold Junior Miners: A Bearish Push Is Coming to Move Them Lower - 27th June 22
Stock Market Watching Out - 27th June 22
The NEXT BIG EMPIRE WILL BE..... CANZUK - 25th June 22
Who (or What) Is Really in Charge of Bitcoin's Price Swings? - 25th June 22
Crude Oil Price Forecast - Trend Breaks Downward – Rejecting The $120 Level - 25th June 22
Everyone and their Grandma is Expecting a Big Stocks Bear Market Rally - 23rd June 22
The Fed’s Hawkish Bite Left Its Mark on the S&P 500 Stocks - 23rd June 22
No Dodging the Stock Market Bullet - 23rd June 22
How To Set Up A Business To Better Manage In The Free Market - 23rd June 22
Why Are Precious Metals Considered A Good Investment? Find Out Here - 23rd June 22
UK House Prices and the Inflation Mega-trend - 22nd June 22
Sportsbook Betting Reviews: How to Choose a Sportsbook- 22nd June 22
Looking to buy Cannabis Stocks? - 22nd June 22
UK House Prices Momentum Forecast - 21st June 22
The Fed is Incompetent - Beware the Dancing Market Puppet - 21st June 22
US Economy Headed for a Hard Landing - 21st June 22
How to Invest in EU - New Opportunities Uncovered - 21st June 22
How To Protect Your Assets During Inflation - 21st June 22
AI Tech Stocks Current State, Is AMAZON a Dying Tech Giant? - 20th June 22
Gold/Gold miners fundamental checkup - 20th June 22
Personal Finance Tips: How To Get Out Of A Tough Financial Situation - 20th June 22
UK House Prices Relative to GDP Growth - 19th June 22
Will Global Markets Be Pushed Deeper Into Crisis Event By The US Fed? - 19th June 22
Useful Things You Need To Know About Tweezer Top Candlestick Pattern - 19th June 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Silver Before it’s Too Late

Commodities / Gold and Silver 2014 Jul 18, 2014 - 02:38 PM GMT

By: Dr_Jeff_Lewis

Commodities The ongoing plight of the long term value investor continues - seemingly without end. However, decades of exuberance and greed have colluded. The financial establishment has created an accident waiting to happen. The mainstream has not "priced in" risk, which makes it even harder to travel the road less traveled.

And once the accident happens, it may be too late.



If silver prices were to suddenly move back toward natural price equilibrium, there would naturally (not always the best thing) be a rush to get on board.

This could very likely induce a shortage, which would temporarily stoke a new monetary enthusiasm for the buy side.

There would be some selling, but we remember that a large amount personally held scrap was purged years ago in its last run toward what would be at least $150 in today's inflated dollars.

Of course, that was followed by a massive and complete drawdown in world government stockpiles.

From a commodity standpoint, mining has suffered miserably. Any hope that new supply could be brought on quickly are pipe dreams.

If and when prices return to reality, production would severely lag.

First of all, there are very few primary silver mines left.

Secondly, by-product mining of silver is still the norm. This will not change overnight.

If commodity analysts were unable to see the value with prices being depressed for as long as they have, they certainly will not be inclined to chase another "bubble".

Of course, these same analysts are completely deaf and dumb to the monetary side to silver - or gold for that matter.

If the move back toward natural price equilibrium comes with a financial crisis, it will be even more difficult to resurrect a sector that has been crushed by artificially managed prices held at or below production on and off for decades.

Sadly, once the masses figure it out, it'll be too late.

Caught in the Romance of Zero-Sum Trading

People seem only capable of measuring value and understanding by watching price performance. A price that is essentially an anchorless derivative, where those same units are forced legal tender and created with the press of a button.

The key to value investing is the reverse.

Understand whatever it is you can about it, and then check the price.

From there it is a matter of rechecking your assumptions.

Sadly, it takes performance to garner attention. The attention tends to justify the array of macro-economic-financial-political reasons to be exposed to physical metal…for nothing else as an emergency hedge.

What happens in the aftermath?

Investors who feel that zero interest rate policy offers them no choice but to hold stocks are likely choosing to experience negative returns instead of zero.

Millions of investors appear to have the same expectation that they will be able to sell before everyone else, the question becomes…

Sell to whom?

When the opportunity comes to sell, it will be when conditions meet the following criteria:

The price represents fair or above value - in relation to the fundamentals.

Moneyness

Monetary asset has store of value - indirect to currency - or what passes for money currently. This comes with an entirely different behavior profile.

No one alive today can reference what that unwind would look like in a modern sense.

It's like the financial system is the paper to the economy the same way paper metal (re-hypothecated) is to the visible physical market.

In the meantime, a few new investors awaken to the window of opportunity each day.

For all the rest, it will be a spectacular show in which they cannot participate.

All the while, the world around us bubbles up with its immoral paper campaign shenanigans as if the imbalance can go on forever. The paper hecklers mistakenly assume that they will be able to sell in advance of the coming storm.

Those who have been riding the great precious metals wall of worry for some time know that we are worlds away from fair price. Volatility and price manipulation have been brutal. The mantra “ounces matter more” requires constant practice. The faster new investors arriving on the scene can embrace this phenomenon, the more prepared they will be for the turnaround.

For more articles like this, and/or for a breath of fresh silver market reality amidst the stench of denial and technically meaningless short term price obsessed madness, check out http://www.silver-coin-investor.com

By Dr. Jeff Lewis

    Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com

    Copyright © 2014 Dr. Jeff Lewis- 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.

Dr. Jeff Lewis Archive

© 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