jim4silver
Silver Member
- Apr 15, 2008
- 3,662
- 495
Seems like every PM bug commentator is always talking about the manipulation of the price of gold and mostly silver. Let's say that there is manipulation going on in the paper markets right now by a few large players shorting huge amounts of paper PMs. And that said paper market manipulation is directly affecting the price of physical metals. My view is that, at least for the time being, this is a GOOD thing for us PM bugs.
When we examine the reasons why we PM bugs like silver and gold, it is probably because we believe that at some point in the future, fiat currencies and possibly other non backed financial instruments will suffer losses in value due to inflation or hyperinflation, or some other type of seismic event ("bad events") that will wipe out the value of said paper assets and perhaps the savings of most of the population, meaning those who are not holding physical gold and silver. As we all know gold and silver have been valued as money for over 5000 years and that trend is likely to not end in the next year or two, or 200.
Since we believe that one or more of these "bad events" is likely to happen someday, especially when you throw into the mix the high level of national debt we have which is sure to grow more in the future, and the humungous derivatives market with all of its issues waiting like an unseen iceberg in the water as the world economy ship closely approaches, then it seems obvious that a true PM bug's best interest is served by holding as much/many PMs as possible before such an event occurs. We cannot go back in time and buy silver at 5 bucks an ounce or even 20 bucks anymore. Once one or more of these "bad events" happen and PM prices shoot up, the average income PM bug (like me) will not be able to afford to buy much anymore. And I and many others believe once the PM rocket takes off, it is not coming back down until the bull market finally ends, which could be many years later.
So, if what I have written above is generally true, why in the world would PM bugs right now keep whining about how the price of PMs is being kept artificially low? I will tell you why. The main reason is greed. I don't mean greed in a bad way, as in being greedy is evil. I mean greed as in a way of self preservation, where one wants to see his investments rise in value, which is completely natural and sane (and definitely not evil). In this use of the term "greed", I would quote Gordon Gekko from the movie Wall Street, when he said "greed is good". And of course, it is frustrating to keep seeing the prices of PMs drop (our "investments") when we know in our hearts and minds that they will one day, possibly soon, be considered one of the best assets to be holding.
But in the present world of PM prices, it may not be in a PM bug's best interest if/when they get their wish and the manipulation ends. Yes, our PM holdings will shoot up in value most likely, but unless a PM bug has "enough" PMs stashed, their holdings will probably stop growing in terms of ounces considerably once the manipulation ends and prices go through the roof. The price drops in PMs do unfortunately cause some PM bugs to give up and sell, often times at lower prices than they paid for them. To others, these dips are "golden" buying opportunities that are celebrated. It took me a while to reach that point of mentality, but it help keeps me sane and has caused my PM stash to increase a bit recently. I don't know about you all, but I don't think I will ever feel like I have "enough" in terms of PMs, so I want to keep stacking until the proverbial fat lady sings.
My view is that someday the manipulation will end, maybe not due to regulations or enforcement, but due to one or more of the "bad events" taking place which will cause demand for PMs to increase greatly. At that point the large shorts will lose their "shorts" if they keep betting against an asset that's demand is rising significantly. Some commentators are saying that it appears that the big shorts are decreasing their short positions quite a bit lately. Maybe they believe enforcement is going to limit position size, or maybe they know something big is coming that is going to cause the demand for PMs to rise? We will have to wait and see.
All just my opinion.
Jim
When we examine the reasons why we PM bugs like silver and gold, it is probably because we believe that at some point in the future, fiat currencies and possibly other non backed financial instruments will suffer losses in value due to inflation or hyperinflation, or some other type of seismic event ("bad events") that will wipe out the value of said paper assets and perhaps the savings of most of the population, meaning those who are not holding physical gold and silver. As we all know gold and silver have been valued as money for over 5000 years and that trend is likely to not end in the next year or two, or 200.
Since we believe that one or more of these "bad events" is likely to happen someday, especially when you throw into the mix the high level of national debt we have which is sure to grow more in the future, and the humungous derivatives market with all of its issues waiting like an unseen iceberg in the water as the world economy ship closely approaches, then it seems obvious that a true PM bug's best interest is served by holding as much/many PMs as possible before such an event occurs. We cannot go back in time and buy silver at 5 bucks an ounce or even 20 bucks anymore. Once one or more of these "bad events" happen and PM prices shoot up, the average income PM bug (like me) will not be able to afford to buy much anymore. And I and many others believe once the PM rocket takes off, it is not coming back down until the bull market finally ends, which could be many years later.
So, if what I have written above is generally true, why in the world would PM bugs right now keep whining about how the price of PMs is being kept artificially low? I will tell you why. The main reason is greed. I don't mean greed in a bad way, as in being greedy is evil. I mean greed as in a way of self preservation, where one wants to see his investments rise in value, which is completely natural and sane (and definitely not evil). In this use of the term "greed", I would quote Gordon Gekko from the movie Wall Street, when he said "greed is good". And of course, it is frustrating to keep seeing the prices of PMs drop (our "investments") when we know in our hearts and minds that they will one day, possibly soon, be considered one of the best assets to be holding.
But in the present world of PM prices, it may not be in a PM bug's best interest if/when they get their wish and the manipulation ends. Yes, our PM holdings will shoot up in value most likely, but unless a PM bug has "enough" PMs stashed, their holdings will probably stop growing in terms of ounces considerably once the manipulation ends and prices go through the roof. The price drops in PMs do unfortunately cause some PM bugs to give up and sell, often times at lower prices than they paid for them. To others, these dips are "golden" buying opportunities that are celebrated. It took me a while to reach that point of mentality, but it help keeps me sane and has caused my PM stash to increase a bit recently. I don't know about you all, but I don't think I will ever feel like I have "enough" in terms of PMs, so I want to keep stacking until the proverbial fat lady sings.
My view is that someday the manipulation will end, maybe not due to regulations or enforcement, but due to one or more of the "bad events" taking place which will cause demand for PMs to increase greatly. At that point the large shorts will lose their "shorts" if they keep betting against an asset that's demand is rising significantly. Some commentators are saying that it appears that the big shorts are decreasing their short positions quite a bit lately. Maybe they believe enforcement is going to limit position size, or maybe they know something big is coming that is going to cause the demand for PMs to rise? We will have to wait and see.
All just my opinion.
Jim
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