BrotherJohnF’s latest Silver Update:
Mini Flash Crash

 

2013 Silver Eagles As Low as $2.59 Over Spot at SDBullion!

 

  1. Bro Jo makes a good point here with flash crashes.  We’ve seen those many times in precious metals, both from short unloadings or some sort of HFT algo driven price drop.  We’ve rarely seen flash crashes go upwards, moving upwards.   Once the crash runs it’s course the recovery can easily take 3 days to a month to move back to the original price.
    The unique nature of precious metals is that, while they move quickly, they will never go to zero and much more likely retain a significant portion of their values in the worst of times.  I’ve been ‘flash crashed’ in equities several times.  It’s painful.  My concern now is not the normal market movements but those created by governments and their mismanagement of factors that can produce serious market anomalies.  Like the shut down of the stock market for a week right after 9-11.  Certain trading types and volumes immediately prior to this event were most certainly the actions of people who knew this event was going to happen.
    Given the nature of the people in government and banking now, the results of a similar event will be much more severe, I fear.

  2. I think we could have a sharp and short term drop in precious metal prices due to a need for liquidation of all assets, equities, bonds, gold and silver.  This could push silver into the mid 20′s  Paper shorts total 300 MOZ and losses to the mega bank short holders would be in the billions if the COMEX defaults, and that is a pretty good chance if holders call for delivery rather than cash. We might then see the big upward spike.  Anything below $30 might be quite a bargain.  At that rate I would convert some gold to silver, particularly if the GTSR stays well above 50  . That ratio is still pretty ridiculous.  There is a good essay by Alistair McCloud on this subject.

  3. I’m thinking of my price points in relation to how many ozs I can get for a Benjamin. Now I can get over 3 ozs. At $25 you can get 4 ozs. Plus premium. At $20 silver you could probably get…. 4 ozs of silver! At $20 I bet premiums would be $8 on Eagles and $4-5 on bars. Just like in 2008 when silver was briefly $9 but even 100 ozs bars were $2 premium or over 20%. I will be ready for the mother of all smashes since I am heavyweighted in PMs, I keep large amounts of fiat around to hedge my PMs instead of the other way around like most people. LOL

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