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Predicting the price of silver
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Anonymous Coward
User ID: 464288
10/8/2009 1:48 PM
Report abusive post | Predicting the price of silver
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Looks like we are on our way sooner than later...
It's a shame Ted Butler's stuff is now for subscribers...although as a subscriber i can tell you it's well worth the money.
THE SILVER SHORTAGE WILL COME
By Israel Friedman
(Israel Friedman is a friend and mentor to Theodore Butler. He has followed silver for many decades. He has written articles for us in the past. Investment Rarities does not necessarily endorse these views.)
Based on the supply and demand situation of silver, it's only a question of time when a silver shortage will come. Nobody can predict exactly when this is going to happen, but we have more and more signs that those who control the price of silver are sweating to balance the supply.
The biggest question I have is, will the shorts be successful to cover their short position on time? Right now the CFTC seems to want to force all the manipulators to get in line by making them obey new rules of position limits, but I feel that the banks who are the big shorts will be exempt. Mr. Butler thinks that the CFTC will do the right thing, but I am skeptical. We argue about this a lot, as we both have strong opinions.
If the banks will not be forced to cover their short positions, only a true shortage in silver will bring the right price. Be prepared for that to happen. How much will silver be worth in a shortage situation? It's tricky to calculate, because a real shortage has never happened in silver history. But it is how you must think. My own thoughts go back to what some things cost during and after World War II in Europe. When there is not enough of something is when you see real crazy prices.
So I will give you my calculation. It will be a gradual explosion of prices and slowly the users and the new investors will eat up the world visible silver, which today is around 500 million ounces. In my calculation the first 100 million ounces of visible silver will disappear at a price of $60 to
$100 an ounce. The second 100 million ounces will disappear by $250, and the third 100 million ounces will disappear between $250 and the price of gold ounce for ounce.
We will be left with 200 million ounces of silver which the owners will be not taking profits on at any price. The bullion in private hands I calculate will be the first to take profits, but Silver Eagle holders will hold for the long run. I still believe that Silver Eagles will do the best investment-wise and I will not be surprised that at one point the Eagle price will trade much higher than the price of silver in a bubble mania.
I am a fanatic silver believer and what I write is only my private belief. There are not many believers in silver. Just look at CNBC, the newspapers, other media, and gold investors. Hardly ever a good word on silver. Silver for them is a forgotten metal. One day they will be shocked when the shortage of silver will come and the price will go up and then gold will be a forgotten sister. There is more gold in the world than silver, so parity in prices is a must.
I think Ted Butler spoke the truth in a recent speech he gave: “The supply/demand set up in silver, which has evolved over an incredibly long period of time, has been one continuous process promising to culminate in an explosion in price at some point. Quite simply, we are rapidly approaching that defining moment when there just won’t be enough physical material to go around at anything but rapidly escalating prices. Those escalating prices will encourage and drive others, including industrial consumers, to enter what should become a buying frenzy. Superimpose upon that the sudden destruction of a decades-old downward price manipulation and you have all the necessary ingredients for a price event that will be referred to forever.”
I would like to congratulate my friend Mr. Butler for releasing a newsletter on silver, and I hope it will become the No. 1 newsletter for the metal market. |
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Anonymous Coward
User ID: 786560
10/8/2009 1:54 PM | | Re: Predicting the price of silver | Quote |
never make it that high BUT you may see $35 oz silver this year and $60 oz in 2010.. this is from someone whos knows.. |
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Anonymous Coward
User ID: 768396
10/8/2009 1:57 PM | | Re: Predicting the price of silver | Quote |
The price it reaches is irrelevant because whatever it is, it will be worth a lot more than fiat US dollars. |
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Anonymous Coward
User ID: 464288 (OP)
10/8/2009 2:05 PM | | Re: Predicting the price of silver | Quote |
It's tricky to calculate, because a real shortage has never happened in silver history. But it is how you must think. My own thoughts go back to what some things cost during and after World War II in Europe. When there is not enough of something is when you see real crazy prices.
So I will give you my calculation. It will be a gradual explosion of prices and slowly the users and the new investors will eat up the world visible silver, which today is around 500 million ounces. In my calculation the first 100 million ounces of visible silver will disappear at a price of $60 to
$100 an ounce. The second 100 million ounces will disappear by $250, and the third 100 million ounces will disappear between $250 and the price of gold ounce for ounce. Quoting: Anonymous Coward 464288
One thing I found interesting about the article was the analogy to World War II shortages.
I believe the argument that silver is special bc of its many industrial applications is a powerful one. And that further, industrial demand is "price ineleastic" -- if the price goes through the roof you still DON'T get demand destruction.
But even conservatively, gold is at its all time high. For silver that is $50. granted that was almost a freak circumstance. But it's recent high was like $21 just a few years back.
So why isn't it at even $21 now??
It will be soon. And I think $30 sooner than we think -- say Thanksgiving. And that's being really conservative.
On the UPSIDE, could we get a slingshot to $50, $60 even $100.
Sure, it may equilibrate lower. But there is NO other investment with a reasonable chance of such a remarkable return. And if even ONE billionaire becomes convinced of that and starts investing in silver headlong, that's the only spark it will need.
Hang on.
"SILVER IS SIMULTANEOUSLY THE MOST CONSERVATIVE AND THE MOST AGGRESSIVE INVESTMENT POSITION ONE CAN TAKE" |
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Anonymous Coward
User ID: 771233
10/8/2009 2:07 PM | | Re: Predicting the price of silver | Quote |
Thanks OP! The only thing I don't agree with is the statement: "I still believe that Silver Eagles will do the best investment-wise and I will not be surprised that at one point the Eagle price will trade much higher than the price of silver in a bubble mania."
Why? If there is a raw silver shortage, which is what the article is all about, why would a coin with an eagle on it be more than a coin stamped ".999 Pure 1 Oz Silver"
Anyway, good article though. |
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Anonymous Coward
User ID: 771233
10/8/2009 2:10 PM | | Re: Predicting the price of silver | Quote |
On the UPSIDE, could we get a slingshot to $50, $60 even $100. Quoting: Anonymous Coward 464288
I say we get a slingshot to $100 Christmas and $250 by March. |
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Anonymous Coward
User ID: 464288 (OP)
10/8/2009 2:10 PM | | Re: Predicting the price of silver | Quote |
The price it reaches is irrelevant because whatever it is, it will be worth a lot more than fiat US dollars. Quoting: Anonymous Coward 768396
Granted. But my real question is, at what price point do you cash out, and immediately turn around and use that momentary fiat gain to buy another tangible asset, like LAND for instance (or guns/ammo etc).
In order to even prepare to answer that , one has to have an idea as to where silver might realistically top out.
It's great to buy low, but to close the loop you actually have to SELL high, at some point. |
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Anonymous Coward
User ID: 464288 (OP)
10/8/2009 2:15 PM | | Re: Predicting the price of silver | Quote |
Thanks OP! The only thing I don't agree with is the statement: "I still believe that Silver Eagles will do the best investment-wise and I will not be surprised that at one point the Eagle price will trade much higher than the price of silver in a bubble mania."
Why? If there is a raw silver shortage, which is what the article is all about, why would a coin with an eagle on it be more than a coin stamped ".999 Pure 1 Oz Silver"
Anyway, good article though. Quoting: Anonymous Coward 771233
Intersting that you point that out.
I actually beleive that Eagles will have a big premium, and have acquired them preferentially.
In fact, the first silver I will sell will be the 100 oz bars.
The Eagles (and Maple Leafs) will IMHO have a premium as suggested bc they are US (Canadian) Mint, which will always mean something, and bc they are immensely tradeable and therefore liquid. |
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R-fan
User ID: 656599
10/8/2009 2:25 PM | | Re: Predicting the price of silver | Quote |
What is Ted Butler's subscriber website ? I want to be a subscriber.
Thank you |
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Anonymous Coward
User ID: 464288 (OP)
10/8/2009 2:31 PM | | Re: Predicting the price of silver | Quote |
What is Ted Butler's subscriber website ? I want to be a subscriber.
Thank you Quoting: R-fan 656599
Not to advertise, but you asked.
[link to www.butlerresearch.com]
Butler wrote on article Oct.1 about silver availability that is just eye-opening. |
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Douglass Fir 
evolutionary malcontent
User ID: 534125
10/8/2009 2:54 PM
 | | Re: Predicting the price of silver | Quote |
The question is will the new communist regime
try to steal your AU and AG from you!
is this the best the human race can do?
do we really need leaders and followers ? |
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bill shitters
User ID: 789460
10/8/2009 3:01 PM
 | | Re: Predicting the price of silver | Quote |
Thanks OP! The only thing I don't agree with is the statement: "I still believe that Silver Eagles will do the best investment-wise and I will not be surprised that at one point the Eagle price will trade much higher than the price of silver in a bubble mania."
Why? If there is a raw silver shortage, which is what the article is all about, why would a coin with an eagle on it be more than a coin stamped ".999 Pure 1 Oz Silver"
Anyway, good article though.
Intersting that you point that out.
I actually beleive that Eagles will have a big premium, and have acquired them preferentially.
In fact, the first silver I will sell will be the 100 oz bars.
The Eagles (and Maple Leafs) will IMHO have a premium as suggested bc they are US (Canadian) Mint, which will always mean something, and bc they are immensely tradeable and therefore liquid. Quoting: Anonymous Coward 464288
From what i can make out demand for the likes of eagles and maples will be high as they are legal tender and instantly recognised world over
Last Edited by bill shitters on 10/8/2009 at 3:02 PM
The retired thread killer
we come in peace shoot to kill
[link to au.youtube.com] |
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Anonymous Coward
User ID: 694785
10/8/2009 3:10 PM | | Re: Predicting the price of silver | Quote |
The price it reaches is irrelevant because whatever it is, it will be worth a lot more than fiat US dollars.
Granted. But my real question is, at what price point do you cash out, and immediately turn around and use that momentary fiat gain to buy another tangible asset, like LAND for instance (or guns/ammo etc).
In order to even prepare to answer that , one has to have an idea as to where silver might realistically top out.
It's great to buy low, but to close the loop you actually have to SELL high, at some point. Quoting: Anonymous Coward 464288
I've been asking that question for four years. Have not sold. And I'm using the same thinking you are... Sell the metal for something else like food, guns/ammo, water, generator...
This is a very hard question, and very personal. |
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Anonymous Coward
User ID: 696041
10/8/2009 3:16 PM | | Re: Predicting the price of silver | Quote |
Get silver dimes and quarters while you can. These are the coins that will instantly be recognized as real money if the fiat crap disappears. Everyone knows they are 90% silver. Thats my advise. |
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Anonymous Coward
User ID: 771233
10/8/2009 3:19 PM | | Re: Predicting the price of silver | Quote |
I often wonder at what price I would sell. I need to pay off a remote ranch mortgage and one car. Knowing when to sell will be very tough. |
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Anonymous Coward
User ID: 464288 (OP)
10/8/2009 3:20 PM | | Re: Predicting the price of silver | Quote |
Get silver dimes and quarters while you can. These are the coins that will instantly be recognized as real money if the fiat crap disappears. Everyone knows they are 90% silver. Thats my advise. Quoting: Anonymous Coward 696041
Well, only true for dimes and quarters if they are pre-1964, for one.
But that also would give credence to the idea that Eagles and Maple leafs have a particular added value, above and beyond their intrinsic worth as silver bullion, namely that they are easily recognizable and are legal tender. |
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Anonymous Coward
User ID: 464288 (OP)
10/8/2009 3:24 PM | | Re: Predicting the price of silver | Quote |
I often wonder at what price I would sell. I need to pay off a remote ranch mortgage and one car. Knowing when to sell will be very tough. Quoting: Anonymous Coward 771233
Kinda why i ask the question.
Would love others' input.
As another poster mentioned, this is of course very personal, and the price point at which one sells is determined in large part by their individual circumstances.
At the same time, if we can start to at least more intelligently speculate about the type of price explosion we will see, now that it appears to be coming closer, that would seem to me to be an important first step.
You understand this is not exactly the type of conversation you can have with just anybody.
In a certain sense, glp is perhaps the BEST place to initiate that sort of discussion. |
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Anonymous Coward
User ID: 786560
10/8/2009 3:33 PM | | Re: Predicting the price of silver | Quote |
sell silver above $40 sell gold above $1600 |
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Anonymous Coward
User ID: 464288 (OP)
10/8/2009 3:46 PM | | Re: Predicting the price of silver | Quote |
sell silver above $40 sell gold above $1600 Quoting: Anonymous Coward 786560
I think it would be hard to resist the temptation to at least take some profits at $40 (maybe even $35). I would probably sell a portion there (maybe 20-30% of my stake).
But to put a prediction out there as to the top, I'm thinking like around $100 ounce.
A couple of reasons: that would put silver at the old 15-20:1 ratio with gold again, assuming gold goes to $1500-2000; and it's kind of a psychological barrier.
Any ideas about mining companies?? -- the five I see as best are Pan American Silver (PAAS), Silver Wheaton (SLW), Hecla (HL), Coeur d arlines (sp? -- CDE ticker) and SSRI. Check out their graphs over the last week btw. |
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Anonymous Coward
User ID: 542755
10/8/2009 3:48 PM | | Re: Predicting the price of silver | Quote |
Silver Eagles are for douchebags. A true investor is knee deep in American Prospectors by Engelhard... |
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Anonymous Coward
User ID: 789440
10/8/2009 3:50 PM | | Re: Predicting the price of silver | Quote |
The question is will the new communist regime
try to steal your AU and AG from you! Quoting: Douglass Fir
Is the Pope a Catholic? |
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Anonymous Coward
User ID: 789440
10/8/2009 3:52 PM | | Re: Predicting the price of silver | Quote |
sell silver above $40 sell gold above $1600
I think it would be hard to resist the temptation to at least take some profits at $40 (maybe even $35). I would probably sell a portion there (maybe 20-30% of my stake).
But to put a prediction out there as to the top, I'm thinking like around $100 ounce.
A couple of reasons: that would put silver at the old 15-20:1 ratio with gold again, assuming gold goes to $1500-2000; and it's kind of a psychological barrier.
Any ideas about mining companies?? -- the five I see as best are Pan American Silver (PAAS), Silver Wheaton (SLW), Hecla (HL), Coeur d arlines (sp? -- CDE ticker) and SSRI. Check out their graphs over the last week btw. Quoting: Anonymous Coward 464288
Coeur d,Alene. It's a good stock.
I hold SSRI, First Majestic, and a mad punt on ECU. |
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Anonymous Coward
User ID: 770865
10/8/2009 3:52 PM | | Re: Predicting the price of silver | Quote |
sell silver above $40 sell gold above $1600
I think it would be hard to resist the temptation to at least take some profits at $40 (maybe even $35). I would probably sell a portion there (maybe 20-30% of my stake).
But to put a prediction out there as to the top, I'm thinking like around $100 ounce.
A couple of reasons: that would put silver at the old 15-20:1 ratio with gold again, assuming gold goes to $1500-2000; and it's kind of a psychological barrier.
Any ideas about mining companies?? -- the five I see as best are Pan American Silver (PAAS), Silver Wheaton (SLW), Hecla (HL), Coeur d arlines (sp? -- CDE ticker) and SSRI. Check out their graphs over the last week btw. Quoting: Anonymous Coward 464288
Blue Note Mining looks promising to me as they just came out of bankruptcy (no debt) and will make some serious profit with high commodity prices. |
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Anonymous Coward
User ID: 770865
10/8/2009 3:56 PM | | Re: Predicting the price of silver | Quote |
I often wonder at what price I would sell. I need to pay off a remote ranch mortgage and one car. Knowing when to sell will be very tough. Quoting: Anonymous Coward 771233
Why dump all at once? A world post dollar collapse will be much different than todays. Sell as you need to raise whatever form of cash is out there. |
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Anonymous Coward
User ID: 464288 (OP)
10/8/2009 4:01 PM | | Re: Predicting the price of silver | Quote |
Silver Eagles are for douchebags. A true investor is knee deep in American Prospectors by Engelhard... Quoting: Anonymous Coward 542755
Why?? |
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Anonymous Coward
User ID: 542755
10/8/2009 4:16 PM | | Re: Predicting the price of silver | Quote |
Silver Eagles are for douchebags. A true investor is knee deep in American Prospectors by Engelhard...
Why?? Quoting: Anonymous Coward 464288
Because the government halts sales of them anytime they want. Other round bullions are regulated by the market. |
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Anonymous Coward
User ID: 464288 (OP)
10/8/2009 4:20 PM | | Re: Predicting the price of silver | Quote |
Silver Eagles are for douchebags. A true investor is knee deep in American Prospectors by Engelhard...
Why??
Because the government halts sales of them anytime they want. Other round bullions are regulated by the market. Quoting: Anonymous Coward 542755
Double edged sword, as they also don't have the mark of authenticity.
Any opinions on the silver ETF??
I have a huge chunk of my pension $ in it, as well as mining stocks.
I wonder sometimes if there is a huge price explosion would it be worth liquidating that and taking the penalties etc.
Not sure I really beleive anymore that a 401K is really safe.
maybe that's just paranoid... |
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Anonymous Coward
User ID: 788736
10/8/2009 4:30 PM | | Re: Predicting the price of silver | Quote |
Junk silver is a safe bet...still has face value, and is small enough that you can use it to buy things when you need them. Very tradeable.
Old US coins are 90% silver, and old Canadian coins are either 90% or 80% silver...very dependable. Just check the dates. |
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Anonymous Coward
User ID: 789440
10/8/2009 4:34 PM | | Re: Predicting the price of silver | Quote |
Silver Eagles are for douchebags. A true investor is knee deep in American Prospectors by Engelhard...
Why??
Because the government halts sales of them anytime they want. Other round bullions are regulated by the market.
Double edged sword, as they also don't have the mark of authenticity.
Any opinions on the silver ETF??
I have a huge chunk of my pension $ in it, as well as mining stocks.
I wonder sometimes if there is a huge price explosion would it be worth liquidating that and taking the penalties etc.
Not sure I really beleive anymore that a 401K is really safe.
maybe that's just paranoid... Quoting: Anonymous Coward 464288
Get all your fucking money OUT of any PM ETF, NOW!
They are paper-hanging scams!
BUY PHYSICAL! |
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Anonymous Coward
User ID: 542755
10/8/2009 4:37 PM | | Re: Predicting the price of silver | Quote |
Silver Eagles are for douchebags. A true investor is knee deep in American Prospectors by Engelhard...
Why??
Because the government halts sales of them anytime they want. Other round bullions are regulated by the market.
Double edged sword, as they also don't have the mark of authenticity.
Any opinions on the silver ETF??
I have a huge chunk of my pension $ in it, as well as mining stocks.
I wonder sometimes if there is a huge price explosion would it be worth liquidating that and taking the penalties etc.
Not sure I really beleive anymore that a 401K is really safe.
maybe that's just paranoid... Quoting: Anonymous Coward 464288
Mark of authenticity? Hah! I don't believe anything the guv say's even if it's stamped on a coin! Trust me, you could sell an engelhard round for nearlt twice as musch as a silver eagle any day.
As for any paper representation of silver. It isn't worth the paper it's typed on! If the silver is not in your hands it's worthless! Sell it and fast! Get the real deal in your hands TODAY! Look up Jason Hommel and he will explain all of this much better than I. Silver in paper form has been created just like the guv created dollars. There isn't enough silver to cover it all! What's that tell ya? |
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Anonymous Coward
User ID: 464288 (OP)
10/8/2009 4:48 PM | | Re: Predicting the price of silver | Quote |
As for any paper representation of silver. It isn't worth the paper it's typed on! If the silver is not in your hands it's worthless! Sell it and fast! Get the real deal in your hands TODAY! Look up Jason Hommel and he will explain all of this much better than I. Silver in paper form has been created just like the guv created dollars. There isn't enough silver to cover it all! What's that tell ya? Quoting: Anonymous Coward 542755
For a long time i used to beleive that too -- that all vehicled for "paper" metals were worthless.
This really frustrated me, bc I felt like I was losing a huge opportunity to invest "pre-tax" dollars in metals.
So i did a little research.
The Central Fund of Canada (ticker CEF) is hard core about making sure there is sufficient amount of metal on deposit.
So I invested in that. Problem is, it is half gold, half silver, and I wanted more exposure to silver.
So I wondered about the silver ETF -- SLV.
Was convinced when none other than Ted Butler gave it the thumbs up. Since my 401k money has to go somewhere...:
Sep 17 - The COTs, SLV and the CME
posted: 9/17/2009
The COTs, SLV and the CME
Forgive the alphabet soup in the title, but they are connected, as I hope to demonstrate. The news on silver has been good. Certainly, the price performance has been good. The price is at the highest absolute levels in more than a year. The price, relative to gold, has also reached its best levels in more than a year. What this means, in very simple but factual terms, is that anyone who bought silver instead of gold (or sold gold in order to buy silver) at any time during the past year, is better off for having done so. You sure wouldn’t reach that opinion based upon media pronouncements.
................
One of the main reasons I believe we are very close to a physical shortage is due to developments in the big silver ETF, SLV. I get many questions from readers about the SLV, principally concerning its legitimacy and whether it has the physical silver on deposit that it claims. There have been numerous articles on the Internet attacking the SLV and urging readers to avoid or sell the SLV because it is phony and even a tool for the manipulators to dump silver on the market. Many of these articles even quote me as being sympathetic to the anti-SLV sentiment. Let me answer that in a word – hogwash (I’d use some other words, but I don’t want to offend anyone).
I think the SLV is the best thing that ever happened to silver and silver investors. I am its biggest fan. If the SLV hadn’t come along when it did, we would have had to live through many years of continued price manipulation. That’s because the SLV (and the other ETF-like vehicles) absorbed almost 400 million ounces over the past three and a half years, gobbling up almost all the available silver bullion in the world, including Warren Buffett’s. That’s silver that has been taken off the market. If that silver had not been absorbed by the publicly owned ETFs, it could have been doled out by the crooked commercial shorts to balance any shortfalls over many years. That is no longer possible. I understand that some folks may be distrustful of the SLV, given the general and mostly deserved distrust of large financial institutions. Certainly, I can’t give you any personal guarantee about the SLV. All I can give you is my honest and sincere analytical opinion that, overall, the SLV is aces to me. Besides, if you have any reservations, the solution is simple – don’t buy it, buy something else silver related. I’ll write in more detail in the future about the SLV, but let me get to the issue at hand about pending silver shortage.
...............
For silver investors, the advice is clear. Maintain a meaningful long exposure in metal, shares and ETFs. Be prepared for a sell-off, financially and emotionally. Be just as prepared for a price explosion. Don’t let anyone tell you they know how it will be resolved in the short term, but know it will be resolved. |
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