Silver

I bought a large amount of silver a little below $20 per ounce and now it is below $17.  This is down about 15%.  Does this bother me?  Not at all.  Let me explain.

The Web is full of all kinds of lunatics talking about conspiracy theories about precious metals, the death of fiat currencies, and other far out theories.  I didn't buy silver for any of these reasons.  I am a simple person who likes to do things for simple reasons.  I bought silver because I looked at the financial statements of silver mining companies and I concluded that the cost of production of silver is about $25.  And I am glad to buy any industrial product for below the cost of production, because this is simply unsustainable.  Of course I recognize that there is a lag time for something like silver where, once a mine is dug, it is still cheaper to keep mining than to shut down the mine even when the silver mined isn't profitable.  But there will be no more investment in new mines or in expansion, and in a few year this will result in decreased silver production which will force up prices.

So what would worry me?  It would worry me greatly if I saw a silver miner report a profit.  But this hasn't happened in the last year.  All silver miners reported losses.  This proves that my thesis was correct and I will eventually make a profit.  I just have to wait.  And the good news is that the lower the price of silver goes, the shorter my wait will be because silver miners will suffer that much more.

So given this obvious situation, why has the price silver dropped?  No it's not a grand conspiracy.  It's the same reason that people believe in feminism, liberalism, and other things that are obviously insane, because the masses are unbelievably stupid.  The silver markets actually has two parts, a physical part and a paper part.  You can buy physical silver or you can buy a piece of paper where someone or other (generally a bankster) promises to value the paper at the price of silver.  Of course this paper can be produced in unlimited supply since it doesn't have to be backed by anything (except the good faith of a bad bankster).  Those silver investors with brains buy physical silver.  The morons buy paper.  Since the morons greatly outnumber those with brains, the price of silver is set on the paper market.  The price on the paper market reflects the mass psychology of morons, and nothing else.  Physical investors benefit from this since it allows us to buy physical silver cheaply.

The purpose of investing in a free market economy is price discovery.  So does this mean that the silver market is broken?  Actually, not really.  The paper market just delays the process of price discovery, it doesn't break it.  The physical investors don't effect the price in the short term, but they do effect the available inventory.  We can't see the behavior of physical investors in the price, but we can see it public reports of physical sales, like government sales of silver coins, and we can see it in inventories of silver in exchanges.  And based on these things, we know that investor demand in physical silver is actually strong.  The day of reckoning, when the paper market falls apart, will be when the inventory of silver drops so low that a silver exchange won't be able to deliver on a contract for physical silver.  This will probably happen when a big buyer intentionally places a big physical order to break the market.  The more physical silver that investors buy, the sooner this will happen.  And when this happens, we will have real price discovery, much to the horror of central banks.

Whoever causes price discovery will be vilified for market manipulation and physical investors will vilified for hoarding silver.  This should be no surprise in a world where evil is generally considered good and good is generally considered evil.  Physical investors are actually providing a valuable service, not only in helping with price discovery, but also in storing silver now for a future period when there will be a silver shortage.  When I sell my physical silver at $100, it will be companies like Apple buying to make iPhones which need silver.  Without physical silver investors hoarding/storing silver, the world would actually run out of silver for several years until silver miners could again ramp up production.

Why did I write this?  Because I am amused at how insane the world is and I wanted share this.  Also, anyone who invests would do well to buy physical silver now.  I bought my silver through BullionBank which stores my silver while I have title.  It was quite painless.

Hi,

The value of silver (rather than gold) lies in it's valuable properties. As well as being an excellent electrical conductor it also has antiseptic properties and one use for it was to drop a silver coin into a water bottle where it would tend to kill off germs in the water and maintain some purity.

My view is that the masses are not 'unbelievably stupid' but in fact what you are seeing here is their almost identical thought patterns. It's not stupidity it's sameness. All the people mostly think in exactly the same way. Much like biological robots (probably a liberalist view). Consider the film 'Fight Club', a wonderfully negative film. The moral of the story is...

Fight Club: That Leadership and Leadership Skills, are symptoms of Clinical Insanity.

Therefore all of your leaders, Stalin, Hitler, Ghandhi, Thatcher, Churchill, Cromwell, have all been clinically insane. They were followed because the people whose thinking was robotic, were fascinated by these people who's thinking was different to their own. These faulty robots ended up in charge - because they were faulty and this was mistaken for being clever. The solution to this has been Democracy because asking the audience has been the best way to avoid one individuals poor thinking. There is some suggestion that a God like Jehovah might also function (exist) as the product of a kind of group mind (thus not insane, thus a suitable leader).

So you have a choice. Either to be an identical same thinking robotic human, or a faulty one, that claims by derangement to be in charge. We are a struggling race doing our best to survive. Please don't stab us in the back with your silver knife.

P.S. Okay, for any females reading this the female equivalent of 'Fight Club' would be a film called 'Ginger Snaps' which really gives the female perspective and identifies female issues (and thus the leniency with which they are treated). Oh... and the silver is good for the werewolves here.

I know I tentatively resemble those morons attacking me on liberal forums but in this case it's justified- what is the point of all of your nonsensical posts, ShaunS?

You're not trolling anybody. Just the amount of work you invest suggests  you have a big problem, even if cooking up this amount of nonsensical crap is easy.

Hi caamib,

The purpose of 'all of my nonsensical posts' is to educate. They tell you things that you don't seem to know. Of course these are things that you probably don't want to know but other people besides us, will be reading this forum.

My point above is that you're on your own. You can't rely on your leaders, and have already labelled them as fascist liberals, and it's clear that you can't rely on many other people either especially if they are all idiots. This means that many people (such as yourself) have the dubious task of working out the answers on your own because there's not a lot of people out there who can help. The planet thrives on sameness and we tend to be slightly different, thus we think slightly differently.

Troll:
In Internet slang, a troll (/ˈtroʊl/, /ˈtrɒl/) is a person who sows discord on the Internet by starting arguments or upsetting people,[1] by posting inflammatory,[2] extraneous, or off-topic messages in an online community (such as a newsgroup, forum, chat room, or blog) with the deliberate intent of provoking readers into an emotional response[3] or of otherwise disrupting normal on-topic discussion.

You seem to be correct again: "You're not trolling anybody".

I may upset people through my hostile nature - but it's not intentional. It's not really off topic. In fact your response looks more like trolling? I think what I think but I do think independently. I'm not putting in a large amount of time or effort. Why do YOU think that it's nonsense? Why do you think that I care what you think? If I were a libertarian (as you have suggested) then surely I would be happy for you to think whatever you choose. Clearly it is you that have the problem (which would be me I guess).

I do not think that you are a moron, but I do hope that this answers your questions?