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View Full Version : Spot to physical, phsical to Spot or 2 seperate price in future?



Aksura
5th September 2008, 22:40
What will happen in 5-10 years times?

1) Spot price corrected to physical?
2) Physical corrected to Spot price?
3) or 2 seperate price for silver...?

JesterJay
5th September 2008, 22:58
Spot now represents ONLY paper price.
It will have to correct to REAL silver when the industrial supply gets pinched after an interum 2 tiered price structure as we have now.
When spot catches REAL...
BAM!!!
Spot is HOT!!!
JesterJay



What will happen in 5-10 years times?

1) Spot price corrected to physical?
2) Physical corrected to Spot price?
3) or 2 seperate price for silver...?

balou2
5th September 2008, 23:29
I believe Jester Jay is correct on this. We currently have an undefined, but very clear, 2-tier market system. Spot price, which is what ETF, SLV, pool, and other paper systems sell for, and PM value. I think what people mix up is Spot PRICE, and PM VALUE. I wouldn't be surprised to see paper PM investments go away all together some years down the road. Not likely any time soon, but when supplies completely deplete, the ability to purchase NEW shares of paper will be gone. I think it could be enough to eliminate paper investments, or at absolute minimum, they would be rare enough that Spot PRICE and PM VALUE would have to be equal. Hell...it wouldn't surprise me to see paper shares manipulated to be worth more than actual PM, when the day comes that everyone is hoarding, and nobody is trading. Either way you slice the pie, for my money, I'll hold PM and take my chances with its VALUE.

As always, what do I know.

JesterJay
6th September 2008, 17:09
You can't know too much if you agree with a lower-middle class, middle-aged, college drop-out forklift operator from the Midwest.
Those guys are dumb!
JesterJay



I believe Jester Jay is correct on this.

As always, what do I know.

balou2
6th September 2008, 19:13
You can't know too much if you agree with a lower-middle class, middle-aged, college drop-out forklift operator from the Midwest.
Those guys are dumb!
JesterJay

Like I said...what do I know. :cool:

hiyosilver
6th September 2008, 22:14
I don't know on what timeline, but this is what I think will happen. First, spot corrected to physical. Then if the price explodes rapidly as I think it will, then soon silver will be declared a strategic necessity for national defense, ending all public sales. Then, after a little more time passes, confiscation and prison for anyone trading with it. Why do I think this? Because that's the nature of the evil SOB's that run the show who want total control of everyone and everything.

Trvlr45
6th September 2008, 23:28
I believe Hyosilver is correct. However, It could take years or decades to get to that point. I think in the near term we will see investor demand increase as more and more people see the global banking system collapse.

I believe they are printing up all the trillions to patch the system to stall the inevitable until the biggest players have covered their butts limiting their losses. Once the biggest players in the banking industry have limited their losses they'll let everything fail.

For the time being invester demand in physical will continue to control the real price of silver and spot will mean less and less as time goes on. You can already see it happening and I have noticed that this forum is getting more and more viewers as time goes on.

There is one more small ray of hope for us all. Sarah Palin is a Ron Paul supporter which means she knows what we all know. I'm completely flabbergasted that a member of either party would pick someone like US to be vice president.

Since I know ALL the propoganda that is being passed aroiund about her is BS I can only hope she will be allowed to do for the entire country what she did for Alaska. She's no republican. She's a middle class American. Not an elitist. However, I am certain I am dreaming. She would have to find a way to fire just about everyone.

In any case, if she supports Ron Paul she will be a supporter of REAL money and that could be good for us all.

And, yes, my prediction is McCain, who I don't trust, will win the election in almost a landslide. I have NO doubt Palin already knows about the corruption at the CFTC. How could she be a Ron Paul supporter and NOT know?

Hopefully, this post won't start another political war on this forum. I just think Palin is VERY relevant to what we ALL want here.

We want the manipulation to stop.

valerb
7th September 2008, 01:57
The real question should be, is anyone in government big enough to stop the corruption? I sure hope so, but I doubt it!!

skijake
7th September 2008, 12:14
Since I know ALL the propoganda that is being passed aroiund about her is BS I can only hope she will be allowed to do for the entire country what she did for Alaska. She's no republican. She's a middle class American. Not an elitist. However, I am certain I am dreaming. She would have to find a way to fire just about everyone.

In any case, if she supports Ron Paul she will be a supporter of REAL money and that could be good for us all.

And, yes, my prediction is McCain, who I don't trust, will win the election in almost a landslide. I have NO doubt Palin already knows about the corruption at the CFTC. How could she be a Ron Paul supporter and NOT know?

Hopefully, this post won't start another political war on this forum. I just think Palin is VERY relevant to what we ALL want here.

We want the manipulation to stop.

Has anyone heard about the latest Palin rumor? Her oldest son got a speeding ticket 3 years ago for driving 35 in a 30 mile an hour zone. Reckless parenting. How could she possibly help run a nation when she can't even control her own kids?:p

cdavport
7th September 2008, 21:14
Has anyone heard about the latest Palin rumor? Her oldest son got a speeding ticket 3 years ago for driving 35 in a 30 mile an hour zone. Reckless parenting. How could she possibly help run a nation when she can't even control her own kids?:p

That just goes to show you that anybody with loose morals and poor parenting skills can run for VP these days!

Irons
7th September 2008, 21:17
There is already 2 silver prices now.The big sellers are listing buy prices well above paper spot prices now.More and more the paper prices are bring ignored.:cool:

JesterJay
7th September 2008, 22:04
Since IT SEEMS most here will agree we already have a 2 level silver price structure less change up the question a bit (and get off the political stuff):

WHEN and/or HOW will the following year progress?

Please elaborate on unfolding of the price progression, both spot AND Real Value. Will spot continue to go one way and REAL the other?

Whatcha all think about that?
JesterJay



There is already 2 silver prices now.The big sellers are listing buy prices well above paper spot prices now.More and more the paper prices are bring ignored.:cool:

balou2
7th September 2008, 22:37
Since IT SEEMS most here will agree we already have a 2 level silver price structure less change up the question a bit (and get off the political stuff):

WHEN and/or HOW will the following year progress?

Please elaborate on unfolding of the price progression, both spot AND Real Value. Will spot continue to go one way and REAL the other?

Whatcha all think about that?
JesterJay

If I knew that, I'd be in better shape than I am now, that's for sure.

Honestly...I have to say...I am not really sure. 6 months ago, I would have never imagined the paper value of silver at $12. As I type this right now, the paper price has already shot up $0.50 in the first hour of trading. Lots of talk this week that commodities would break through, but I'm not completely sold on that. I don't know that I can forecast anything, but here is what I am thinking:

~ Commodities on the whole are going to fluctuate for another 6 months. Since most of the major annual reports are still months away, the big player is oil, both domestic and foreign. Hurricane season is the wildcard for domestic, and who the hell knows what October surprise is out there for foreign prices. Either way, I think most major commodities will follow similar patterns for the next 6 months. I DO believe it is possible to see one more "dip", lower than current prices, largely due to currency manipulation. Which leads to number 2.

~ We have not worked our way out of the current dollar rally. I laugh daily when I see people cheering on Wall Street for rallies that do nothing other than set up the next days' lulls. Truly pitiful. We have not begun to realize where the dollar will go in the next 6 months. The ONLY thing that's saving us is that many other major countries and foreign banks are in similar shape to us. RSB, BOE, Germany, Japan...their inflation and $$ value is the only thing that keeps us propped up.

~ The current Freddie/Fannie fun has every financial geek whacking off to the daily news. Let's face it...folks are scared and the majority (i.e. sheeple) don't know where to turn, but to stop spending. While the silver community is busy trying to get as much PM as possible, for the lowest possible price, the trading community is a different bunch of folks. They're not silver bugs. This contributes to the current paper value being ridiculously low.

~ Election years ALWAYS slow things down. While the PM bull has been snorting for a few years, it's been 8 years since a policy change was such the buzz in America. [WARNING: I WILL EXCLUDE ALL PARTISAN OPINION FROM THIS TOPIC. I HATE THREADS THAT GET DERAILED BY PERSONAL POLITICAL OPINION] So...even in a normal election year, the economy rolls to a dull halt and illustrates EXACTLY what we're in now. UP...DOWN...UP...DOWN... DOWN...UP....DOWN...UP...DOWN....DOWN. We've got 60'ish more days until the election, but a few months left with the current administration re: of which party takes office in the new year. All those facts will, in my mind, contribute to a very unsteady PM paper price.

~ I don't truly believe the international community is what is driving down PM paper value right now. There are certainly some global implications, but I think most of what we're dealing with is here (not all...just most), so I'll evade discussion of foreign influences on PM paper price.

So...what I think COULD happen is this:

~ First and foremost, PM value will remain where it's at, and continue to slightly edge up. Ebay prices are not changing any time soon (except to increase), LCS pricing will not be changing any time soon (except to increase), you name it...I don't think there will be anything but increase in PM value going forward. It may be a slow climb, but it will be a climb.

~ Second, PM paper price will continue to fluctuate (even potentially dropping in the near term) until the first part of next year. At that time, I think we could see a more definitive and consistent improvements based on more shorts being called and exposure as a tactic coming in to play.

~ The variations in paper price and PM value will continue to be +/- $5/oz for at least the next 6 months. I'm not exactly sure where this will go. I don't understand (or follow) the paper market well enough to know if it will ever catch up with actual value. When the paper price was $21 earlier this year, 1oz rounds were selling on Ebay for $25. So...all I can conclude at this point is that the value will remain higher than the paper price for at least the next 6 months.

~ I mentioned this somewhere else, but I do see paper trading shifting its fundamentals in the future. I don't think this will be in the timeframe of the next 6 months, but it will change. Initially, I imagined it going away, but as long as PM is in production and industrial use (not to mention currency valuation), there will be a paper market. We are silverbugs, but stockbugs are even more addictive. It's like being in a casino every day- thousands of choices on how to spend your money...only a select few that will make you any. BUT...people still go to Casinos.

So, a long explanation that really says nothing. I do think we'll see improvements in the paper price, which will inevitably increase PM value, but I think the first stage will be a 6 month process. After that, I'm unsure.

But what do I know.

pkrebaum
7th September 2008, 22:46
5 to 10 years in the future is a very long ways off for a prediction. That far from now my first question would be if individuals would be allowed to own Silver bullion at all. The DOD is already beginning to restrict sales of strategic metals from their stockpiles, they have no Silver but if they ever decide to add it to their list it will have to come from somewhere. The ownership of PM bullion could well be the next American freedom sacrificed on security's altar.

skijake
7th September 2008, 23:24
Since IT SEEMS most here will agree we already have a 2 level silver price structure less change up the question a bit (and get off the political stuff):

WHEN and/or HOW will the following year progress?

Please elaborate on unfolding of the price progression, both spot AND Real Value. Will spot continue to go one way and REAL the other?

Whatcha all think about that?
JesterJay

I was as dead wrong about the progression of things as one could be this summer. I was doing pretty good thru the spring. That being said, this summer take down showed me that there is a total disconnect between Paper Spot and Physical pricing [Nod to JJ , Spot is Not}. As long as the "Powers that be" control the paper markets one will not be able to make accurate projections based on any fundamentals. The CHARTISTS were blown out of the water. For the many that play with french curves and rulers ,and receding and rising waves. did it pan out? IF we have the facts straight; the war will continue, battle by battle. Do we have enough troops to aquire all the silver? If the silver is removed from the banks and manipulators{same?} the Paper Spot Price will be reflective of its true value. Question to anyone on the same line. Say the SPOT price of silver is $ 25 next spring. Summer is right around the corner. Do you trust it to stay about there or are you going to unload a %. Lastly, Silver is wildly undervalued at todays Spot price. I do not know the time or the trigger, but it will not remain undervalued.

balou2
8th September 2008, 00:36
I was as dead wrong about the progression of things as one could be this summer. I was doing pretty good thru the spring. That being said, this summer take down showed me that there is a total disconnect between Paper Spot and Physical pricing [Nod to JJ , Spot is Not}. As long as the "Powers that be" control the paper markets one will not be able to make accurate projections based on any fundamentals. The CHARTISTS were blown out of the water. For the many that play with french curves and rulers ,and receding and rising waves. did it pan out? IF we have the facts straight; the war will continue, battle by battle. Do we have enough troops to aquire all the silver? If the silver is removed from the banks and manipulators{same?} the Paper Spot Price will be reflective of its true value. Question to anyone on the same line. Say the SPOT price of silver is $ 25 next spring. Summer is right around the corner. Do you trust it to stay about there or are you going to unload a %. Lastly, Silver is wildly undervalued at todays Spot price. I do not know the time or the trigger, but it will not remain undervalued.

Don't know about anybody else, but I won't be unload ANY amount in the near future. If silver blew up to $300/oz tomorrow, THEN I might think about it. Otherwise, this is a long-term item. There could, of course, be issues that would lead to small sell-offs, but they would not be for financial gain. If my house burned down, or my child wrecked the car, I might rely on a small portion of my holdings for cash. Otherwise, i ain't selling.

pkrebaum
8th September 2008, 03:12
It certainly broke my french curve and burned my ruler...... not rational market action..... the only other time something like this has happened was when a major Silver discovery was made, like the Comstock lode.

They know if they can keep it down long enough all the major investors will sell out and walk away...... but to keep the mines open they will have to keep Silver above $9/Oz. or so.

silver wink
8th September 2008, 05:04
Has anybody seen any articles or media coverage to the comments below that were posted on the SILVERAXIS blog? I mean if a futures market defaulted and had to pay cash (paper) at a premium to settle contracts for delivery of physical (bullion ) , I would think that it would make some canaries fall off the perch !!

"Here’s an interesting reply from a Silver Investor in India replying to one of David Morgan’s Articles:

“Mr Morgan,

I am a investor in silver from India who would like to give you the information regarding the silver contract which expired yesterday. The closing price of silver in indian rupees was 18800 per kg but the exchange over here settled all the contract at 20040. Investors who wanted delivery for their silver contracts are not getting it. The exchange is settling their contracts by giving them a marginal premium to the closing price of the contract.
Implicitly that means there is a DEFAULT OF SILVER IN THE INDIAN EXCHANGE.”

Regards
Sunil

Looks like problems with DELIVERING SILVER is happening in other countries than the United States."

pkrebaum
8th September 2008, 08:25
Silver wink, do you have a link to the info you just posted ? I couldn't find anything on silveraxis or with google. Thanks. If true, this is MAJOR news...the other exchanges can't be far behind.

Argentum
8th September 2008, 09:08
http://silveraxis.com/todayinsilver/2008-09-06/freddie-and-fannie-nationalization/#comments

It's about six or seven comments down....

silver wink
8th September 2008, 09:58
You got the link. Yes , if true it is major news (to us) but don't look for any extensive media coverage. It is, however, another crack in the wall of the dam before it bursts !

nuslvrkwen
8th September 2008, 13:43
I've been enjoying reading the poll and this thread! Sorry I missed the poll! Thanks for not getting off on the political rant, who ever wins this election even if they understand the economic situation - which they don't - will still NOT be able to do ANYTHING about the concept of value which has eroded these past 10 years - during there terms in office! It's up to people like us using our own money to protect ourselves by our own choice. What we want to spend our money ON and choose to financially indebt ourselves to. Or NOT. The concept of economic security and debt are confused.

Think about it; look at the people in your communities. Think about how YOU feel about financial security. And then look at the people in your communities. See a difference? YES. WE don't choose to indebt ourselves to the notion that THAT DEBT will turn into wealth later on. Most of the people on this forum would not indebt themselves in order to simply HAVE something. Or in order to impress others. We are concerned about our own futures because our communities can't give us what we feel we'd need. Others in your community view having things as security and the amount of things is a concept of wealth to them! I figured this out watching how people react to 'advisors' supposedly helping them pay down or off their debts! Are you aware these 'advisors' are there to help people do this WITH NO INTEREST in teaching people they can live well WITHOUT INCURING MORE DEBT? Credit cards and mortgages incur revolving debt. It's usary that's sanctioned by the government. It's how banks make money.

The concept of value, and why we are putting our paper dollars into PMs in the first place is WHY there is backwardation and hording. It's why the two tiered price of PMs exists. Whether the PTB know of its' existance or not. The stuff people go into debt for now is NOT BETTER than having cash for later on! Whether it's paper or PM, having cash for whatever situation later on! People who have physical will NOT sell physical, unless there is no other way to pay their bills. People with paper don't have a good concept of later on! There's really no need for them to save!

People are supposed to buy PAPER concept of metals and commodities because those instruments are supposed grow wealth for the investor! AND be short term. The sales basically work like some sort of pyramid scheme. More investos have to buy in for the process to actually DELIVER physical in any form. Are there any ETF holders out there planning on selling in the near future and requesting physical as payment? NO. It's not feasible.

It's really the concept of value and wealth growth that make for the two tiered price of PMs; and really any commodity. I believe eventually the operation style of futures trading will cause it not to be such a popular instrument in the future. I suspect it's already over valued in volume and true value in currency by 25% anyway. Defaults in futures deliveries are perfect ways to KNOW this to be true.

We ARE at the brink, the parapice of opportunity! Where we'll be able to use paper to buy something of value, grow wealth, and financial security. And the masses will keep struggling with paper. Paper's not going away any time soon, but it's value as a long term financial security holding device are over.