Silver: What’s all the Hubbub? Everyone’s abuzz about Silver – What’s the Real Story?

26 Apr

The world is awash in points of view on the precious metals this week as silver and gold both reach out and touch unprecedented highs and then slip back a notch -

What’s all the noise about?

Is it really that silver is in a ‘speculative run’?

Investors Beware of Another Bubble in Silver Prices

Is gold “an investor’s pipe dream’? Or is there something fundamental to the story that is being overlooked in all those naysayer main stream press pieces?

Well, hmmm. Let’s take a look.

First, we have articles telling us that silver is plentiful and there is plenty of it to go around… Notably, they are written by folks who use publicly available claims by large institutions to back up their ‘fact checking’. Well, that is fact checking, of a sort we suppose;  so long as you believe the ‘authorities’ delivering the facts…

But what do you do when the ‘authorities’ are already known to be crooks and thieves who have been caught doctoring the books in every other arena in which they operate? (Even if the FOMC changes the rules and says it is okay for them to do so.)

Then there are those pesky articles covering the ‘race out of the dollar’ by the likes of such notables as Bill Gross at Pimco and Jim Rogers – now if these guys are dumping dollars, and they are supposed to be the leading players – or at least some of them, and are, from all accounts, doing okay for themselves as investors and managers of large amounts of money… well, hmmm. That’s not so great, but maybe it’s just a rumor. Or maybe it’s a plot… Maybe they just want everyone to junk dollars so they can rush back into them?
Well, let’s take a look:
Here’s what the world is saying about Jim Rogers today:

Jim Rogers reiterated his plan to short U.S. Treasuries in an interview with The Economic Times:

I plan to sell short US government bonds sometime in the next few weeks, months. Interest rates all over the world are going to go higher. We have inflation, staggering debt problems and currency problems facing us. So interest rates are going to go higher.

Rogers said the treasury market will collapse when QE2 ends on June 30. Soon enough Rogers says the Fed will return with QE3.


And the other great claim we hear all over the web is that some ‘speculator’ is trying to corner the silver market -and THAT’S what is driving the price higher…

Invariably the next thing we hear is that this is just ‘like the Hunt brothers’ in the 1980′s… and THEY drove the price up to 49.25 an ounce in 1980!  So THIS is JUST THE SAME!


We want to point out a very small problem with this logic.

It’s called inflation.

If the Hunt brothers drove the price of silver to 49 something or other in 1980; then 49 something or other in 2011 is not exactly making any sense as ‘pushing into the all time high’ except in literal terms; which, of course, is like saying a 25cent icecream sandwich is at an all time high in 2011. Except that icecream sandwiches never ‘peaked’ in the 1980s.  That is; what is the relative value of that 49somthing or other in 2011 dollars?

The price of silver today if it were to meet the Hunt brothers rally high circa 1980.


And what is it, particularly, after QE1 and 2?

Beginning to see the problem?

Based on this one minor detail, the entire discussion changes, doesn’t it?  And this is only pointing out one minor flaw in the ‘silver speculation driven rally’ theory…

When taken together with the global picture, which includes the ‘Flight Out of the Dollar Flood” as reported in the New York Times, it begins to look very different indeed.

And, of course, for those who have been following the now over nine months old story of the unravelling of the whistleblower and the CFTC regarding silver, well it’s all starting to look and feel very different indeed.

Is it a bubble?

Is it speculation?

Or is it, as some suggest, a flight to real currency that cannot lose its value by printing?

The answer you choose could change your future.

They say silver is ‘the poor man’s gold’. That’s worth thinking about. Particularly if you are paying attention to the lesser reported news stories this past week or so…

Did you notice this one?

University of Texas Endowment Holds 1 Billion in Gold



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