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Gino
23rd November 2009, 13:26
There has been lots of talk about the weakness of the USD and capital flows into other liquid assets, here's a look at the performance of DJIA, Gold, Silver and the USD over the past 200 days. You can clearly see the synchronisation of Gold and the Dow in that period. I reckon we're seeing the Dow rally sucking in spectators from the sidelines while those selling are reinvesting into gold. But look at silver, outperforming both the Dow and Gold.
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Gino
23rd November 2009, 13:35
And if you are wondering why we've seen no real action in the PMs in Australia, it's because the A$ has appreciated almost as much as silver.
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Gen Ripper
23rd November 2009, 15:18
I have seen it an mentioned it but no one really wants to pay it any mind. I have done pretty awesome in the market since it hit bottom. Will silver decouple at some point or will they both go down when the bubble bursts?

JesterJay
23rd November 2009, 19:34
Speaking a new language here:
PM'sian.
In which "SILVER" means "UP".
JesterJay



I have seen it an mentioned it but no one really wants to pay it any mind. I have done pretty awesome in the market since it hit bottom. Will silver decouple at some point or will they both go down when the bubble bursts?

Gen Ripper
24th November 2009, 09:35
I have no idea what you are talking about. I am just saying that you could have picked any stock or fund out of a hat it has likely gained 20-30% since the spring. That being said, when they retreat will silver retreat as well?

Ardent Listener
24th November 2009, 10:43
I am just saying that you could have picked any stock or fund out of a hat it has likely gained 20-30% since the spring. That being said, when they retreat will silver retreat as well?

A fair question IMO. Both stocks and PMs seem to be feeding on the weak dollar. Should we see another massive 'deflationary' (lack of a better word) hit to the economy such as a commercial realestate crash then I would expect silver to take a hit as well as stocks. Perhaps silver and gold wouldn't take such a big hit this time with investors keeping in mind that the Obama money machine would be working over-time again. As I have stated here before, recessions, at least the early parts of them, have not been a friend of high silver prices. If or when we double dip into this one I don't think it would be unreasonable to expect silver to retreat for at least a while.

DaleFromCalgary
24th November 2009, 12:06
True enough that just about any stock has increased as waves of liquidity flow in. When the next downturn comes though, gold and silver will rebound faster. Bear in mind that even with the 2009 rally, stocks are still far below what they were at the peak, while bullion has passed its previous peak.

I'm waiting for a dip in gold and silver, although I still expect a long-term bull market. Yesterday, instead of buying bullion, I bought limited-partnership units from a private-equity junior pete. If you live outside oil-producing areas, you may have trouble finding them because the good deals are never advertised, but they are well worth it. A limited-partnership unit is a share of an actual producing oil/gas well or group of wells. 90% of the initial cash flow goes to the unit holders until they get their money back, and thereafter the income is divided between the company and the investors. I use the income from units, mineral rights, and preferred private-equity shares to buy my bullion.

I do not own any publicly traded stocks. Both the TSX and the DJ are gamed by the banksters, so why play when the house has such an advantage?

Ardent Listener
24th November 2009, 15:28
A fair question IMO. Both stocks and PMs seem to be feeding on the weak dollar. Should we see another massive 'deflationary' (lack of a better word) hit to the economy such as a commercial realestate crash then I would expect silver to take a hit as well as stocks. Perhaps silver and gold wouldn't take such a big hit this time with investors keeping in mind that the Obama money machine would be working over-time again. As I have stated here before, recessions, at least the early parts of them, have not been a friend of high silver prices. If or when we double dip into this one I don't think it would be unreasonable to expect silver to retreat for at least a while.

I should have added that if or when the dollars tanks for good, stocks will too without the good company of gold and silver. After all, stocks are contracts based on payment in dollars. Unless some other means of money replaces the dollar prior to a dollar crash stocks will then be as worthless as the dollar itself.

Argyria
24th November 2009, 22:53
I should have added that if or when the dollars tanks for good, stocks will too without the good company of gold and silver. After all, stocks are contracts based on payment in dollars. Unless some other means of money replaces the dollar prior to a dollar crash stocks will then be as worthless as the dollar itself.

Actually wouldn't the price of the stocks just go through the roof as the dollar tanks? After all, stocks are shares of companies that make or do something, and as the dollar's value falls, the price of those goods and services correspondingly goes up. Over time, all major stock averages have handily outperformed inflation. So unless we're talking about a SHTF scenario where the companies themselves all pack up and quit, I would think diversified portfolios of stocks are not likely to become worthless.

DaBrownsRPhat
24th November 2009, 22:58
Actually wouldn't the price of the stocks just go through the roof as the dollar tanks? After all, stocks are shares of companies that make or do something, and as the dollar's value falls, the price of those goods and services correspondingly goes up. Over time, all major stock averages have handily outperformed inflation. So unless we're talking about a SHTF scenario where the companies themselves all pack up and quit, I would think diversified portfolios of stocks are not likely to become worthless.

If the dollar is worthless, it doesn't matter if your shares are a million dollars. The price measured in dollars would go up, but what is the value of each dollar is the right question to ask.

It really depends on the company, but if the foundation itself crumbles, then it all comes down.

Argyria
24th November 2009, 23:38
If the dollar is worthless, it doesn't matter if your shares are a million dollars. The price measured in dollars would go up, but what is the value of each dollar is the right question to ask.

It really depends on the company, but if the foundation itself crumbles, then it all comes down.

I'm guessing some companies would go down, but others that make or do something essential would remain. If the dollar goes to 0 value, a new currency would take its place, and those stocks would be priced in that new currency. A share of stock is a share in the profits of a company. If the company survives and makes a profit, that profit has to be priced in something that has value.

DaBrownsRPhat
24th November 2009, 23:55
I'm guessing some companies would go down, but others that make or do something essential would remain. If the dollar goes to 0 value, a new currency would take its place, and those stocks would be priced in that new currency. A share of stock is a share in the profits of a company. If the company survives and makes a profit, that profit has to be priced in something that has value.

True, it depends on the real assets. Still, what % of companies rely on, have contracts, in terms of dollars?

LETMYSILVERGO
25th November 2009, 00:32
And if you are wondering why we've seen no real action in the PMs in Australia, it's because the A$ has appreciated almost as much as silver.
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I GOT ME SOME OF THEM THERE AUSSIE DOLLARS. USED TO BE YOU GAVE 3 AU $$ AND GO 2 USA $$---
MY PUZZLE WAS EITHER TO LET THE AU $$ RIDE OR, BUY SILVER WITH IT??

SINCE I THINK I HAVE ENOUGH SILVER, " WHO CAN HAVE TOO MUCH??"

BUT IF THE FRN DO REALLY TANK---?? AMY WAY IT COULD BE INTERESTING..

WE USE TO CALL AUSTRALIA A BANANA REPUPLIC-- AND OVER THERE THEY DID NOT PRODUCE MUCH--

SO WE USED TO SAY WE SURVIVE BY " DOING EACH OTHER LAUNDRY"

THE US MUST HAVE REALLY F--KED UP, TO BE BEHIND THE AUSSIES, THEY OLY HAVE 20 MEG FOLKS THERE, & THE TAXES ARE VERY HIGH, AND THE COST OF LIVING IS UN THINKABLE.

THERE ARE NO BACK YARDS IN THE CITIES, 99 PERCENT OF ALL HOUSES , HAVE A HOUSE OR 2 BUILT IN THEIR ONCE BACK YARD.

AUSIE, ASSIE, ASSIE, OIU OIU OIU !!!!!!!!!!!!!!

Smokey-Seven
25th November 2009, 07:07
Gino said regarding PM's "And if you are wondering why we've seen no real action in the PMs in Australia, it's because the A$ has appreciated almost as much as silver."

Understood Gino, I have a question. If you owned a house there last year and sold it on the market this year, would the price be the same, higher or lower?

To have a currency improve in value by 35% in a year, is confusing to me and I have no info as to what prices of things there have done over that period.

Gino
25th November 2009, 08:23
Gino said regarding PM's "And if you are wondering why we've seen no real action in the PMs in Australia, it's because the A$ has appreciated almost as much as silver."

Understood Gino, I have a question. If you owned a house there last year and sold it on the market this year, would the price be the same, higher or lower?

To have a currency improve in value by 35% in a year, is confusing to me and I have no info as to what prices of things there have done over that period.

LMSG is correct in that the housing market is over priced here and defying gravity. The federal government is sucking new buyers in with $21,000 grants for those who buy a new home. Then when things slow down a little they suggest that the grant may end soon (like December) to spur on a surge of new buyers. All done on debt. The only thing keeping a lid on things is the banks tightening the standards of their loan requirements. So house prices haven't dropped . . . yet. Indeed, there have been reports of growth in some cities, like Melbourne.

In terms of the anticipated deflationary effects of a strengthening currency, there has been no drop in the prices of goods in the stores that I have discerned. If anything, groceries have increased in price. Just having a look at the CPI (http://www.abs.gov.au/ausstats/abs@.nsf/mf/6401.0) and it increased 1% through the September Qtr confirming that prices are rising.

So, in sum, importers are making hay as their costs have decreased due to currency strength, while your average Joe is experiencing a manufactured normalcy with gentle inflation, asset appreciation and job stability. We're not called the lucky country for nothing!

I don't know how long it can last. The Government is active across the board in stimulating demand through infrastructure programmes directly and indirectly, through funding projects in government agencies and state owned corporations. I've even heard their new found spring of wealth actually called Rudd Money (Rudd being the Prime Minister). Apparently they've been given deadlines to use it or loose it and are falling over themselves executing projects. It's not surprising then, that everyone I talk to is experiencing strong demand for their product/service.

So it appears to all be on the up and up downunder at the moment. It will be interesting to see how long it can last.