Tuesday, July 10, 2012

Why do so few investors seem to understand the silver story?

From ArabianMoney.net

Original source

It is a mystery story really: why do so few investors seem to understand the case for silver? After all the track record is formidable. Silver prices have risen 10-fold in a decade, out performing gold and pretty much any other investment available to the ordinary investor.

You would need to have been a private equity investor like Mitt Romney to have done better or some kind of hedge fund rocket scientist trading derivatives in a favourable market. Silver is a boring lump of metal and anybody could have owned it. Those who did, and held their nerve during the volatility, are laughing.

Tempus fugit

The diehards who miss ever major investment call through excessive caution would now have it that silver’s game is somehow up. Industrial use will plummet in another global recession producing a panic crash in the silver price.

Well yes we saw that in 2009, except that silver prices rebounded faster than almost anything else and went to record a record high of almost $50 in April 2011. They then corrected by half and have been trading in a narrow range ever since, the classic market correction before another price advance.

So if we have already seen the silver price have a major correction recently why should it do so again if the rest-of-the-world decides to do the same? Or if it does then why should it be anything so dramatic? In short, this time the volatility factor favors investment in silver rather than argues against it.

Some serious investors probably will catch on to this point very soon and indeed the technical data from the futures market suggests those bets are already being placed. The stage for another very powerful upswing in silver is being set.

$50-60 target

Readers of Arabianmoney will recall the predictions in the Old Dubai Gold Souk of $50-60 silver by September (click here). We doubt this will be far wrong and it may be that these prices are reached in advance of a global financial crash of some variety in October that pulls silver down again.

Will silver then correct back to current prices or are these prices a floor in the market that will not be seen again. We wonder. With so much money printing by global central banks, currency instability and the banking system under severe pressure, silver is bound to shine sooner or later.

The latecomers to this investment party will then ask themselves why they did not understand the silver story earlier.

1 comment:

  1. People have been psycholgically destroyed on what money is. Simple gold and silver is money, paper is an empty promise and a Ponzi scheme. The debt black hole will suck everything to destruction the banks have conjured up, from paper money, electronic credits, derivatives, stocks.
    Silver/gold is a non income generating,that is the major psychological problem people have which was programmed into them. They believe the lies, and people who believe lies are stupid and ignorant.
    When the time comes when all the financial instruments will evaporate, they will run to silver, the silver holder will say "I dont want your worthless paper, go use it for something useful and burn it to keep warm."
    Gold and silver is limited and thats what stupid people dont understand, THERE IS NOT AN ENDLESS SUPPLY OF IT, unlike electronic credits.