silver train leaving the station?

[dropthatcash]

Re: Peak cheap oil....

One thing that has concerned me is that many emerging markets (due to cheap labor) can produce products far below what developed nations can.

If an emerging market can produce a widget for X$, and it takes the U.S. 2X$ or 3X$, you have to devalue the $ an awful lot before you put a dent in their exports and improve your own. In fact, not only will you be creating inflation for products at home, you'll be importing inflation as prices of imports rise, but still remain below the cost of production here. It seems to me that if China were to actually bow to the pressure to rapidly raise the Yuan, we might see a POOM effect until prices finally rose enough where our widgets would be competitive with theirs.

Inflation is heating up in these countries, wages are rising. Even a modest (by third world standards) rate of 9%, doubles wages in 8 years. Were also not considering a collapse in China/India as these nations have bloated corrupt governments. I doubt even one of the banks are being run on the up and up and a stumble will cause a cascade of bankruptcy's. Consider too, that 3 trillion in treasury's only buys enough food to feed China for a year. We complain about our lousy politicians but a lot of these guys in China and India would make Genghis khan blush.

I remember counciling euphoric friends in the late 1990's bull market. They'd bought the line "I'm invested for the long term cause prices always go up". I'd point out that shares in GM hit an all time high in 1955 and never exceeded that price again (real dollars) (Now of course that GM doesn't even exist and those shares are worthless). GM must have been a "no brainer buy" to our 1955 investing equals and any argument against it as an investment must have been something like this;

"We just crushed Germany and Japan!, We're the mightiest nation the world has ever seen. We have a huge baby boom that will all need cars, quality is at an all time high and GM's the biggest company and eating the competition up in the world and your suggesting it might not be the best investment ever?!? Who's the competition? Flattened Germany and Japan HawHawHaw, "

[LargoWinch]

Re: silver train leaving the station?

Both though I think more Joe six pack americans are starting to be aware of the collapse of the dollar.

Indeed, as they do need to eat and some even buy gas once in a while for work.

[jpetr48]

Re: silver train leaving the station?

Both. Though from more and more interviews with business executives, I think more Joe six pack americans are starting to be aware of the collapse of the dollar. Guess you don't have to be a rocket scientist to figure we have problems when China and Russia start cutting back room deals.

What does surprise me is how many think the economy is improving. This gets to EJs post earlier today on how our beliefs are shaped by self serving groups.

[LargoWinch]

Re: silver train leaving the station?

Must be something really important going on here...

Did anyone else notice that CNBC pulled the silver price from the rolling ticker on their standard (non-HD) service. Blythe must have called the WH and Bammy called NBC...."Sheep, you don't need to see that silver price, you might want to buy some."

It will be interesting to see what Blythe & Co. will do when people lines up outside buildings to buy physical silver during stage 3.

I bet it will be a bit harder to hide from view, but unfortunately it will be too late for the sheeple.

[cpnscarlet]

Re: silver train leaving the station?

Must be something really important going on here...

Did anyone else notice that CNBC pulled the silver price from the rolling ticker on their standard (non-HD) service. Blythe must have called the WH and Bammy called NBC...."Sheep, you don't need to see that silver price, you might want to buy some."

[metalman]

Re: silver train leaving the station?

...this period of denial...

so much denial, so little time... which denial are you referring to? denial about the realness of the phony 'recovery' or the about the viability of the busted monetary system?

[metalman]

Re: Peak cheap oil....

Well...since you asked, true peak oil itself occurred in 1853 when the first commercial oil well was drilled. We've been draining the worlds tank ever since and usage has increased nearly every year since but those two facts alone would have never made you a penny and from an investment standpoint the concept 'cheap peak oil' is far to ambiguous to be traded. Just ask Jim Rodger and T Boone Pickens whom rode oil all the way up and down from $50 to $150 to $50 and made and lost a fortune. Timing is crucial. If you don't have timing your gambling.

really? here's ej's pco chart/forecast from May 2008...



here's what went down...



look darn trade able to me.

Right now most traders are working under the assumption that the BRIC nations will only continue to use more oil. This model doesn't conform with the U.S. hyper inflation theory. A weaker dollar will destroy their exports and impede growth in these nations. It will also destroy oil consumption here as limited wealth will require consumers to start using fossil fuels like the irreplaceable gift they are.

here's an opposing view...

'For a dictatorship running an oil producing country, the more oil you consume at home to pay off your opposition, the less oil you have for export, the higher oil prices go even when you are operating at maximum production, the more power domestic and international political [power] you have. The West's backing of dictators worked before the Peak Cheap Oil era, but the global oligarchy has a narrow window of opportunity to get them out of power before the Peak Cheap Oil Producer/Consumer Feedback Loop makes them too powerful to manage. '

http://www.itulip.com/forums/showthr...g-Eric-Janszen

Before this happens I still expect a further rally in metals and fuels as easy money (hence growth) is still flooding the system. Even stocks continue to act very bullish. I went long at 7000 on the DOW and my number one pick then was Ford at $2 (no longer a good investment at these prices).

thx. when do you plan to get out? why?

[jpetr48]

Re: silver train leaving the station?

Gold leads breakouts as confidence in our monetary system continues to deteriorate. Silver is being traded as a risk asset like stocks and commodities.

Chasing silver right now is like chasing the S&P 500 . Once we get thru this period of denial and as long as macro indicators like core retail sales net of gas and food and non farm payroll employment continue to bottom bounce, we will see another nice correction and slv with its high beta will go down for the ride.

Gold will break resistance and then silver follows. Calmer minds and hands will prevail.

[Kadriana]

Re: silver train leaving the station?

I'm trying to figure out how excited versus how scared I should be as silver crosses $34.

[we_are_toast]

Re: Peak cheap oil....

Right now most traders are working under the assumption that the BRIC nations will only continue to use more oil. This model doesn't conform with the U.S. hyper inflation theory. A weaker dollar will destroy their exports and impede growth in these nations. It will also destroy oil consumption here as limited wealth will require consumers to start using fossil fuels like the irreplaceable gift they are.

One thing that has concerned me is that many emerging markets (due to cheap labor) can produce products far below what developed nations can.

If an emerging market can produce a widget for X$, and it takes the U.S. 2X$ or 3X$, you have to devalue the $ an awful lot before you put a dent in their exports and improve your own. In fact, not only will you be creating inflation for products at home, you'll be importing inflation as prices of imports rise, but still remain below the cost of production here. It seems to me that if China were to actually bow to the pressure to rapidly raise the Yuan, we might see a POOM effect until prices finally rose enough where our widgets would be competitive with theirs.

[grapejelly]

Re: silver train leaving the station?

silver could take a quick runup of $10 to $20 and then crash by that much...I wouldn't be surprised to see silver at $45 or so, then $25. All in the next 30 - 60 days.

[dropthatcash]

Re: Peak cheap oil....

nice... 31 yrs. what's your take on trading a 'peak cheap oil cycle'?

Well...since you asked, true peak oil itself occurred in 1853 when the first commercial oil well was drilled. We've been draining the worlds tank ever since and usage has increased nearly every year since but those two facts alone would have never made you a penny and from an investment standpoint the concept 'cheap peak oil' is far to ambiguous to be traded. Just ask Jim Rodger and T Boone Pickens whom rode oil all the way up and down from $50 to $150 to $50 and made and lost a fortune. Timing is crucial. If you don't have timing your gambling.



Right now most traders are working under the assumption that the BRIC nations will only continue to use more oil. This model doesn't conform with the U.S. hyper inflation theory. A weaker dollar will destroy their exports and impede growth in these nations. It will also destroy oil consumption here as limited wealth will require consumers to start using fossil fuels like the irreplaceable gift they are.

Before this happens I still expect a further rally in metals and fuels as easy money (hence growth) is still flooding the system. Even stocks continue to act very bullish. I went long at 7000 on the DOW and my number one pick then was Ford at $2 (no longer a good investment at these prices).

[Spartacus]

Re: JPM silver story is a complete farce!!!

Look at the stock price! If any this were even remotely true, the arbitrage (and JPM's own traders) could make a fortune shorting the stock and buying futures contracts on silver. Anyone passing usless information like this is simply trying to keep a lid on JPM to buy stock cheap (unlikely). I've been trading for 31 years (I'm only 49) and following investment/speculation theory since I was 14. Plays like this are the stuff of fools dreams. Sorry to be so harsh but I get so annoyed with how carelessly people throw away money on amateurish investment theses.

Suppose the above from Jesse comes down to JPM and HSBC; IOW, JPM & HSBC have to take all those numbers as losses?

SO WHAT if JPM & HSBC have not yet collapsed?

I remember quite clearly reading this type of critique of those criticizing Enron ("If your critique of Enron was true Enron would have been dead years ago").

After Enron's collapse we found out there was massive arbitrage & shorting; the Enron doubters saw no need to publicize their actions, and those who did were laughed at.

There have been many, many examples over the last 20 years, and especially in the last 3. Your argument has some validity but history repeatedly shows it's very, very weak.

There's also a game theory argument that "proves" playing a hot tip (that's 100% accurate) doesn't pay off much of the time. I'll look for that. Post it first if you find it (or a disconfirming game theory treatment)

[Spartacus]

Re: JPM silver story is a complete farce!!!

Sounds like you think all of the above numbers will come out of JPM's books.

the BIS numbers above I believe aggregate derivatives from the entities BIS tracks. JPM's exposure is obviously a very small fraction.

massive unbacked-by-metal shorting has basically been confirmed by Bart Chilton, the CFTC's own reporting (the bank participation report) and CFTC's vote to exempt the standing position from position limits.

BUT it's still not verified that the final, final short IS JPM. JPM could have placed the trades for others.

Look at the stock price! If any this were even remotely true, the arbitrage (and JPM's own traders) could make a fortune shorting the stock and buying futures contracts on silver. Anyone passing usless information like this is simply trying to keep a lid on JPM to buy stock cheap (unlikely). I've been trading for 31 years (I'm only 49) and following investment/speculation theory since I was 14. Plays like this are the stuff of fools dreams. Sorry to be so harsh but I get so annoyed with how carelessly people throw away money on amateurish investment theses.

[jiimbergin]

Re: JPM silver story is a complete farce!!!

Look at the stock price! If any this were even remotely true, the arbitrage (and JPM's own traders) could make a fortune shorting the stock and buying futures contracts on silver. Anyone passing usless information like this is simply trying to keep a lid on JPM to buy stock cheap (unlikely). I've been trading for 31 years (I'm only 49) and following investment/speculation theory since I was 14. Plays like this are the stuff of fools dreams. Sorry to be so harsh but I get so annoyed with how carelessly people throw away money on amateurish investment theses.

Jesse has been trading and investing as long or longer than you and has a signifcant following here at itulip. No where in this post is there a suggestion that anyone should go out and buy silver right now.