The recent crash in silver and gold was one of many for the record books. But, gold is not the same as Enron stock. Tangible physical metals that have been a store of value for over 3,000 years are not the same as a paper promise made by less than reputable individuals and organizations.
History suggests we should side with 3,000 years of history during which gold and silver have been a store of value and the ultimate real money. History suggests that we should not trust our savings with either the paper pushers or their unbacked paper money.

For silver and gold investors, there are 3,000 years of history supporting your viewpoint and your commitment. There have been many rallies and crashes in both markets; but, even at their recent crash lows, the price of both is over five times higher than their lows in 2001. New highs will occur. Don’t let the paper pushers frighten you out of your investments.

buffaloMay1st

From Deviant Investor
:

The NASDAQ 100 index peaked at 1,485 in July 1998. It subsequently crashed to below 1,070 in October 1998, a loss of about 28%. But, it climbed back to nearly 5,000 in March 2000, a rally off the low of over 350% in 17 months.

The S&P 500 index peaked in October 2007 around 1,575. It subsequently crashed below 670 in March 2009, a loss of about 57%. But, it climbed back to nearly 1,600 in April 2013, a rally off the low of over 135% in 49 months.

Gold was priced at nearly $200 in January 1975. It subsequently crashed to about $100 in August 1976, a loss of about 50%. But, it climbed back to over $850 in January 1980, a rally off the low of over 750% in 41 months.

Crude oil peaked at over $147 in July 2008. It subsequently crashed to under $36 in December 2008, a loss of about 75%. But, crude climbed back to over $114 in May 2011, a rally off the low of over 210% in 29 months.

Natural gas exceeded $15 in December 2005. It subsequently crashed to under $5.50 in September 2006, a loss of over 64%. But, natural gas climbed back to over $13 in July 2008, a rally off the low of over 130% in 22 months.

Gold was priced at about $1,920 in August 2011. It subsequently crashed to about $1,350 in April 2013, a loss of about 30%. Gold will probably climb back to a large number in the relatively near future, a rally off the low that will be really impressive.

Silver climbed to over $48 in April 2011. It subsequently crashed to under $23 in April 2013, a loss of over 52%. Silver will probably climb back to a very large number in the relatively near future, a rally off the low that will be quite impressive.

Markets rally, correct, rally, and correct again. Some of the corrections are so severe we call them crashes. In the big picture, it hardly matters whether the crashes were accidental, encouraged, manufactured, or all three. In the big picture, what matters are the market fundamentals. After the correction, have the fundamental drivers of the market changed?

Important Questions for Gold & Silver Investors

    • Are the central banks of the world still rapidly expanding the money supply?
    • Are the derivatives and currencies bubbles in danger of crashing?
    • Are governments still spending much more than their revenues?
    • Are central banks, governments, and wealthy individuals continuing to buy gold?

 

    • Is total debt rapidly increasing?

 

    • Is consumer demand for gold and silver increasing?

 

    • Is faith in unbacked paper money decreasing?

 

    • Are faith and trust in banks and politicians decreasing?

 

    • Does the financial world appear to be more dangerous and unstable each year?

 

  • Are the above imbalances unlikely to improve in the next few years?

If YOUR answer to most of the above questions is “yes,” then regarding YOUR big picture perspective, gold and silver are probably very good investments, in addition to being valuable insurance in case some or all of the above imbalances do NOT resolve favorably and safely. Yes, this is likely to end badly.

The recent crash in silver and gold was one of many for the record books. But, gold is not the same as Enron stock. Tangible physical metals that have been a store of value for over 3,000 years are not the same as a paper promise made by less than reputable individuals and organizations. In the world today, it seems there are many disreputable individuals, corporations, and governments, all pushing paper. We have been warned!

History suggests we should side with 3,000 years of history during which gold and silver have been a store of value and the ultimate real money. History suggests that we should not trust our savings with either the paper pushers or their unbacked paper money.

For silver and gold investors, there are 3,000 years of history supporting your viewpoint and your commitment. There have been many rallies and crashes in both markets; but, even at their recent crash lows, the price of both is over five times higher than their lows in 2001. New highs will occur. Don’t let the paper pushers frighten you out of your investments.

GE Christenson
aka Deviant Investor

 

2013 Silver Eagles As Low As $4.99 Over Spot at SDBullion!

 

  1. A little inventory info required here.  This message directed at SRSRocco since he did the article:
    http://silverdoctors.com/comex-silver-inventories-fall-off-cliff-as-registered-silver-declines-by-10-in-48-hours/
    It seems the inventory at the Comex just shot right up from 37Moz to 46Moz over night.  Am I misreading this or is it possible the figures are incorrect or even more mystifying that us stackers are having nil effect on the stocks of silver or is this just a pile-of-paper?
    See this:
    http://www.24hgold.com/english/interactive_chart.aspx?title=COMEX%20WAREHOUSES%20REGISTERED%20SILVER&etfcode=COMEX%20WAREHOUSES%20REGISTERED&etfcodecom=SILVER

  2. The Climb will happen when the corrupt market is broken, not 1 second sooner. I certainly hope that dealers move alot of silver today – not that it will be a definitive deal maker. But it can’t hurt.. The system is pissing me off so bad. I could have done the wrong thing and backed the truck up in the stock market last year and made a fortune. Instead I’ve watched my store of value shart the bed. Oh well, I’ll be right someday. Maybe.
    I saw this note from texas precious metals ( I don’t buy there but am on the mailing list). They are basically still 500pz orders only. That to me shows that still this volume is being driven by smaller numbers of bigger money, as well as of course small stackers. We haven’t touched the surface in possible demand yet. Amazing to see this demand, and prices plummet. Thanks alot to the criminal government, the criminal banks and the criminal regulators.
     
    “Last week, on Tuesday, we offered 15,000 silver eagles on our website, and they sold in 8 minutes. On Friday, we sold another 15,000 in 4 minutes. All orders sold as monster boxes. The demand is so greatly outstripping supply that we do not have the option of offering smaller quantities”
     
     

  3. For silver and gold investors, there are 3,000 years of history supporting your viewpoint and your commitment. There have been many rallies and crashes in both markets; but, even at their recent crash lows, the price of both is over five times higher than their lows in 2001. New highs will occur. Don’t let the paper pushers frighten you out of your investments.
     
    The problem is that we keep falling in the trap that PM are investments.  They are not a investment.  It’s a insurance policy against the paper pushers, politicians, and the current monetary policies of the world.  It’s a hedge against the destruction of the currencies.  Physical gold and silver doesn’t produce a dividend.  The PM don’t act or represent a investment.  They could in the future but currently they don’t.  They are elements that people need and consider to be valuable.  The price doesn’t represent reality.  It can’t and won’t under this system.  There are several ways we can see where the metals are headed.  In this current monetary system, the metals are kryptonite to the central bankers. It’s really the only substance or object you can use to stop them.  They have mastered paper alchemy to represent the physical metal in the ETF’s.  This is just a illusion of movement, demand, supply levels of the physical metal.  It doesn’t represent the real world.  What would you do if you were a central banker to control the metal prices?  I would do what they are doing if I was a psycho, lunatic, control freak banker.  With zero oversight by the authorities to prosecute any crimes, what fear do they have?  Just keep doing what they have always done.  Do it until the music stops playing.  They run out of physical, well just change the rules.  Until we come to the collective conclusion that the metals are not a investment and the price indicated by the exchanges represents price not value, we will continue to be stuck in this illusion.  I feel for the people who bought at 45-50 bucks for silver.  I’m one of them.  I’m underwater if you look at price.  I’m not underwater if you see past their bullshit and see value.  I have the metal in my closet.  It didn’t disappear or evaporated when the price gets smashed down.  These shiny coins are for tomorrow and not today.

    • “Physical gold and silver doesn’t produce a dividend.”
       
      Neither does the currency in your wallet OR half of the stocks out there.  Whether or not something produces a dividend is not a measurement of its value as an investment, IMO.  Fine art, good booze, classic cars, rifles, handguns, and shotguns, good tools, plus a hundred other things that are well worth owning do not pay dividends.  None of my preps pay dividends either… but… someday, they very well might!  lol
       
      “I’m not underwater if you see past their bullshit and see value.  I have the metal in my closet.  It didn’t disappear or evaporated when the price gets smashed down.  These shiny coins are for tomorrow and not today.”
       
      Excellent comment and I agree 100%.

    • @Ed_B
       
      Sadly, I have to point out that nearly 2 millions of us in front of the Capitol in Washington City (backed by polling in the range of 70%) objecting to communization of this country’s health care segment, went arrogantly defied. No, all the flags, placards, banners and speeches are completely futile in the face of this Congressional Monarchy supported by groveling State-House Nobles. It’s time for us to take control back into our own hands DIRECTLY, through a country-wide network of Citizen’s Grand Juries.

  4. Another way to look at gold and silver prices is that it represents a default risk of the currencies.  The price of the metals are acting like a interest rate to show the risk of a default.  The higher the price of the metals, the weaker the currencies.  Just like the yields on sovereign bonds going up, this represents a higher probability of a default.  Normally, the greater chance of a default, the higher the demand that investors will have to pay for that bond.  The central banks have controlled and manipulated interest rates on every transaction.  Remember the libor scandal?  It would be a waste of time to control the yields on the bonds if you don’t control the metal prices.  Yields going higher on the sovereign bonds shows weakness just like the metal prices will show weakness in the paper markets.  One could spike to spark the other.  If yields on the bonds rise, the metals price would be harder to control.   They must control both at the same time.  They are both indicators of keeping the perception play going that the economy is getting stronger.  I could see a scenario that this corruption could get worse.   The central banks could sell CDS against the bullion banks going bust.  Kinda like what Goldman did to AIG.  They sold them bullshit to represent a sound investment like MBS and bet against them by buying CDS.  The central banks know that the vaults are going dry.  How do you hedge against a default?  You buy or sell insurance against a possible problem in the future.  They could also sell huge amount of put options and CDS to artificially lower the rates to show a lack of a possible default.  The Fed did this same play with artificially lowering the interest rates on bonds.  They sold huge amount of put options against rates from going higher.  This created the “insurance premiums” to drop because the put options were cheap.  So when the put options are cheap, it represents that there is little fear of a default from happening.  They could do the same thing about the bullion banks.  I could be off my rocker on this but it’s just a thought.

    • If the bullion banks go bust, they could sell put options against their own default.  It’s total fraud but it’s one way they can control the losses that could happen if they go bust.   The Fed did this already by controlling the yield curve on the bonds.  Eric DeCarbonnel researched and found this out by reading the June 2003 FOMC minutes.  Here is how it can happen.
       
      They can sell put options or “default insurance” against their position.  Their position is a “default” and they need to settle in paper instead of physical.  They will need to smash down the prices so if a “default” happens, they will pay with paper to the current spot price.  They will take losses but it can be minimized. How can they make up for this?  Sell a shit load of put options to offset the loss.  This will lower the risk premiums of the put options which will make them cheap.  The bullion banks will cash in on the put option premiums.  With selling this many put options against there their own “default”, this will off set and could exceed their losses on the default.

  5. I am totally ok with letting the bankers, speculators and central goverments f*** themselves into holes in the ground.  AIG, Lehman, Bear, GM, FNMA, Freddie weren’t worth the powder and shot to blow them to hell then or now, when the fat is the fire, the rest of the TBTF ass***** can go down in flames.  A blowtorch up the ass would be fitting.
    I do not expect some sort of banking collapse soon since these SOBs are experts at milking the system, stealing from their clients, while flimflamming the governments into bailing them in or out because they are SIFIs, Systemically Important Financial Institutions. 
    The best thing I can say is remain frostly, enjoy the popcorn, be patient and we will be vidicated big time.  Nothing happens quickly in this cluster f***   Buy when you can, Sell if you need to and hopefully on a price blip.  This whole mess will work itself through soon enough.  We’ve been doing the drill for 2 years now on Silver Doctors.  Another few months or even a year is immaterial
    But it will happen.
    The math is irrefutable.  And slide is inexorable.  The consequences are irreversible.

    • Well said, AG.  We all need to stop for a moment and consider that what we are now in IS a “slow motion train wreck”, with the emphasis on SLOW.
       
      “Bankers will become a hunted species for war crimes”
       
      Well, at least for for economic crimes.  They may well be guilty of war crimes as well but we will need the politicians to help us hang the banksters and we won’t get that if the politicians fear being tossed into the same bucket as the banksters.  The good news is that… no license will be required and screw the limit!  lol
       

  6. Thanks for the encouraging advise … a shame it was wasted on me. I didn’t need an iota of it. I dashed out and snapped up 50 oz at ‘high’ so-called ‘premiums’, but was nevertheless thrilled to add to my ‘stack’ and even more thrilled to deny the bankers their hypothecation of it. The dealer was lamenting the whole time that ‘no one is selling, only buying’.

    • I’ve been hearing that lament for months now, Pat.  Sellers are a rare breed these days, being outnumbered by buyers by about 8:1 or so.
       
      God job on the 50 oz. addition.  I have 2 orders on their way to my house as I type this.  Can’t wait to get them into the vault.  :-D

  7. Think about it. Bimetalism worked because of the population levels, back in the day. Now a day, silver and gold are industrial/jewelry metals. Maybe gold can be a tier one asset for nation banks, other than that, the prices will not advance much due to intrinsic uses in industry. There simply are too many people to have a gold standard. Really is a conundrum, ey?

    • Can’t tell from your post if your sarcasm font is on or not, but I have thought about it, and it seems to me that bimetallism would be most honest and I think would work quite well if allowed to. More population now than “back in the day?” Differing ratios of gold to silver? Just means that the values of the metals needs to be adjusted accordingly – by the free market, were it allowed to operate as such. That’s also where the value of base coinage comes in – intrinsic values, versus simply token, subsidiary coinage. Of course, that sort of system greatly reduces the influence of the moneychangers and the need for their fiat, and we can’t have that, can we, “ey?”

    • @Kenneth
       
      Good job. You’re perfectly correct. It’s just a pity you’ve had to reiterate that self-evident set of facts for the umpteenth time. One would expect that the obviousness of the argument would be common ‘folk-knowledge’ at this point. Such is the power of Pavlovian conditioning though.

    • Thank you, PatFields. I don’t follow your accusation of my reiterating anything for the umpteenth time here, though, nor the reference to Pavlovian conditioning – unless you’re referring to prevaling theory that we cannot live without fiat, of course. Have a swell day and keep stacking.

    • @Kenneth
       
      No manner of ‘accusation’ was intended at all. What I was alluding to is that ‘fluid rational valuation’ of metals totally discrediting the ‘fixed-value quantitative’ argument against them, has been so thoroughly proven out since the early 1700s, that it shouldn’t really ever have to be repeated again. But, here you are, having to patiently explain it still another time (making you a ‘better man’ than I, as my own treatment would have been more castigating). Reference to Pavlovian conditioning regards the stubborn, constant reiteration of the ‘fixed-value quantitative’ concept robotically tape-looped by current-day ‘economists’. In other words, they ‘repeat a big, obvious lie often enough and it gains cachet’.

    • I am thinking that for the US to adopt a gold standard to back up the currency, we will have to have Canada in on it as well. Also should include Mexico. Call the currency, the Amero. The hook? There are 450 million people in the three nations. 

  8. Just a quick LCS report:  Yestarday afternoon I dropped by a coin shop to find out whether they had restocked, after being sold out of ‘junk’ for the past few weeks.  The proprieter informed me that he has to pay $6.00/oz over spot for big bags of ‘junk’ now, and he is hesitant to do so.
     
    So there was nothing fresh in the store, just the numismatic coins which I passed on.

    • That’s a heckuva nice buy on those Mercs, Charlie… about $100 per roll for high quality coins.  Apmex is charging considerably more for these… around $185 or so IIRC.
       

    • @IdahoEagle999
       
      Reasonable actually. Mine is earmarked at 160 presently, or an average day’s wages I’ll NEVER ‘sell’ mine, but once it approaches it’s historic rationality with other goods, I DO plan to TRADE it.

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