View Full Version : Some good news and bad news
Thought this was interesting;
http://online.wsj.com/article/SB10001424052748703859304576307380172271272.html
Sirius Glass
8-May-2011, 15:58
Such is due those who speculate just to run up prices!
Steve
"I had been hearing that silver could go up to $150 an ounce this year," says Mr. Zornetsky.
I heard that the slots at Reno are loose -- I'm going to "invest" my savings in Reno. Yeah..."could go up".
Vaughn
Daniel Stone
8-May-2011, 16:36
some immediate family(who is here at the house celebrating mothers day) just transferred some $$$ into silver and gold from other types of "accounts". I'm now letting them know this news :(. I'm glad I don't invest in commodities :o. Fingers crossed they don't shit their pants.
-Dan
my folks just transferred some $$$ into silver and gol from other types of "accounts". I'm now letting them know this news :(. I'm glad I don't invest in commodities :o. Fingers crossed my dad doesn't shit his pants.
-Dan
Thats the bad news.
Daniel Stone
8-May-2011, 16:43
Thats the bad news.
tell me about it. He's not showing it really, but I know he doesn't like the news....
not to mention they did it 2 weeks ago. I make some silver jewelry as a side hobby through a local lapidary program, and I remember buying silver for ~$9/ounce 5 years ago(2005-2006). Silver and other commodities are just plain dangerous IMO, they're too volatile to make LONG-TERM investments in. Day trading commidities, MAYBE. But my family(including myself) can't watch the market 24/7/365. I invest locally in businesses(a local barbershop is doing nicely right now ;)), and check in weekly(or monthly) so its more person-to-person, independent investments. Even being 23, I've watched my grandparents lose a lot of money(and their parents too) during the Depression, and knowing that my immediate family has made DUMB(IMO) investments like this makes me feel sorry to be a part of it. I love my family, but sometimes they neglect to see that sometimes I can see through things better than they can(since I watch silver/gold prices b/c it affects film pricing), and they follow their financial "advisor" dude's advice like sheep. Pisses me off...
-Dan
Deane Johnson
8-May-2011, 18:28
I remember the silver run-up in the 1980s. What I have never forgotten was that Kodak raised the price of paper due to the silver prices and when silver tumbled, they didn't lower paper prices, but kept them at there high level. I've disliked Kodak ever since.
D. Bryant
8-May-2011, 18:51
I remember the silver run-up in the 1980s. What I have never forgotten was that Kodak raised the price of paper due to the silver prices and when silver tumbled, they didn't lower paper prices, but kept them at there high level. I've disliked Kodak ever since.
Yep! Silver went up, silver went down and Kodak never lowered the prices. IMO, the Hunt brothers attempt to corner the silver market was the beginning of the slow decline of film based photography. Digital technology wasn't a factor then but the industry was forever changed after that.
I remember the silver run-up in the 1980s. What I have never forgotten was that Kodak raised the price of paper due to the silver prices and when silver tumbled, they didn't lower paper prices, but kept them at there high level. I've disliked Kodak ever since.
That is the old "Supply and Demand" thing. Kodak and the other companies raised the prices and people still bought at the higher prices -- setting the "demand" part of the equation higher. We as customers showed Kodak that they had priced their products too low, and that the market could bear the price increase and still sell products...unfortunately for us.
Few companies will sell something for a buck if the customers are willing to pay two bucks for it...that is considered "bad business", no matter how good it may be.
Vaughn
Greg Blank
9-May-2011, 12:29
Likewise when Chinese workers start demanding pay on parr with (Country of choice here) workers.
Computers, TV's everything at Walmart, where will it end :)
That is the old "Supply and Demand" thing. Kodak and the other companies raised the prices and people still bought at the higher prices -- setting the "demand" part of the equation higher. We as customers showed Kodak that they had priced their products too low, and that the market could bear the price increase and still sell products...unfortunately for us.
Few companies will sell something for a buck if the customers are willing to pay two bucks for it...that is considered "bad business", no matter how good it may be.
Vaughn
ic-racer
9-May-2011, 12:39
And the bad part is??
Likewise when Chinese workers start demanding pay on parr with (Country of choice here) workers.
Computers, TV's everything at Walmart, where will it end :)
You mean I'll have to actually pay what something is worth? How bloody Un-American!
Can you imagine if we actually had to pay alien/migrant farm laborers full value?! Small family/cooperative farms might actually be able to compete with industrial farms, for one thing! Local Farmer's Markets could become mainstream instead of being "expensive" luxuries. There might be more vege gardens in the backyards of the McMansions, too. Not being able to afford a vacation to wherever due to the cost of food, at the end of summer the kids have to help with the harvest and then have a big family/neighborhood canning sessions. Dream on McVaughn...LOL!
Greg Blank
9-May-2011, 13:23
That actually does not sound half bad the way you state it. Prior to my days at Omega I worked in a Greenhouse. Lots less stressful and far better air quality. I did the 6.50 an hour bit for about 6 months there I was living at home at the time so I had enough money to meet some expenses. I was self employed for five years prior to going back to Omega after being away five years. Now I am more or less self employed again.
I have lots of thoughts on this topic, but lets just say hesitate to report them online.
You mean I'll have to actually pay what something is worth? How bloody Un-American!
Can you imagine if we actually had to pay alien/migrant farm laborers full value?! Small family/cooperative farms might actually be able to compete with industrial farms, for one thing! Local Farmer's Markets could become mainstream instead of being "expensive" luxuries. There might be more vege gardens in the backyards of the McMansions, too. Not being able to afford a vacation to wherever due to the cost of food, at the end of summer the kids have to help with the harvest and then have a big family/neighborhood canning sessions. Dream on McVaughn...LOL!
And I pumped gasoline at the minimum wage of $1.65/hr (1973 or 74)...but I could attend a state university at $150 a year tuition (and keep my monthly expenses, including tuition, books, rent and food to about $200/month)!
A few years later I pumped gasoline again (1977) at the Grand Canyon for $2.20/hr...and they took pout $0.90/hr for room and board! But they did have an employee darkroom where I made my first prints! I eventually became the shift manager at $3.10/hr (still minus the $0.90/hr) and saved about $800 that summer for college -- good enough for only a quarter's worth of expenses, so did not attend the Fall quarter. I planted trees that Fall and early Winter in the local mountains at 2.9 cents per tree (about 1100 to 1600 trees per day -- a 12 hour day including travel time). Ah, the good old days! What did not kill us made us stronger!
Later the contractors I was planting trees for stop hiring us undependable and slow locals and ran crews of non-documented citizens of Mexico...but I was back in school by then. Later a bunch of us got together and bid on our own contracts -- making bids that paid ourselves $10/hour...camped out at the worksites and worked together instead of the the more cut-throat practices that piece-work tends to foster.
Doubt film/paper prices will drop
Greg Blank
9-May-2011, 15:33
Not likely.
Doubt film/paper prices will drop
PViapiano
9-May-2011, 16:06
Likewise when Chinese workers start demanding pay on parr with (Country of choice here) workers.
Computers, TV's everything at Walmart, where will it end :)
I've been saying this for years now...
Greg Blank
9-May-2011, 22:38
To your credit :)
I've been saying this for years now...
The reason that silver corrected so strongly was the raised comex margin requirement, which was intended to keep silver down amid a glut of eastern buying. Not so good for us long term, but it should keep supplies more affordable in the short term and help manufacturers.
Why is raising the margin requirements a bad thing? I am not knowledgable on all this, but it seems like if you buy $1000 worth of silver, you should pay $1000 for it -- and not a lower percentage on the hopes that the value will go up and you can pay what you "borrowed" to buy it when you sell it. Margins seem to be just a risk-inducing loan system.
Donald Miller
16-May-2011, 21:28
Historically (over more than one hundred years) silver has a relationship to gold of approximately 16 to 1. At that ratio with the current price of gold, silver should be priced at above $90 per ounce. The reason for the recent drop in silver prices was a change in the margin requirements for silver purchases.
While gold has come off less than $100 per ounce from it's recent record high the price decline in silver has been much more extreme, percentage wise, than gold. The US Mint released statistics that indicate that while gold bullion has declined that they have produced over 84,000 ounces of gold coins since May 1st of this year. That indicates to analysts that gold has more room to the upside with prices of $1750 per ounce in the intermediate term. That would make silver worth above $100 per ounce when one considers the historical price relationship.
I own both silver and gold and consider it a prudent store for a sizable portion of my estate considering that inflation of the US dollar is predictable and probable. That will mean that assets held in dollar denoted instruments will decline in value to the extent that the US attempts to inflate as a means of paying its indebtedness.
Donald Miller
16-May-2011, 22:45
Why is raising the margin requirements a bad thing? I am not knowledgable on all this, but it seems like if you buy $1000 worth of silver, you should pay $1000 for it -- and not a lower percentage on the hopes that the value will go up and you can pay what you "borrowed" to buy it when you sell it. Margins seem to be just a risk-inducing loan system.
Buying stocks or commodities on margin is a way to maximize returns on investment. You are correct in that low margins can lead to excessive exuberance in the market (witness the results of the real estate bubble...which was the result of margin purchasing).
The overwhelming preponderance of real estate would never be sold if it were not for borrowed money...ie margin) However, that being said, margins have been around longer than I have been alive and I am older than dirt.
patrickjames
16-May-2011, 23:29
You could google JP Morgan and the silver market.......Fishy fishy
The major bank players in the precious metals markets have been playing fishy for years. There are many times more contracts out for gold and silver than there is gold or silver available for physical delivery. Some of the big banks have even billed clients for a "vault fee" on metal that was never physically in their possession and which was sometimes undeliverable upon demand.
I never liked the idea of margins in any market, just as I find "paper silver" to be absurd... either you have silver or you don't. But that's not how the financial barons work, they trade promises for it instead. The same is true for mortgages and even for checks drawn on banks- these things abstract money into promises that are traded instead, in essence temporarily create a type of money.
The timing of the margin change was a transparent attempt to stop a rally that was not in certain corporations' interests. In this case it worked, though it seems that the premium for the physical commodity has went up as a result; physical silver is still virtually unobtainable at traditional premiums over spot. Within a few months silver will probably rally again. Not so good for us here in the long term.
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