Can anybody tell me that if the stock market crashed, would SLW shareholders that paid cash for their shares lose all of their investment in SLW? Is Silver Wheaton associated with derrivatives of any kind? I saw that in the 1929 stock market crash that those who held mining stocks were the ones who saw profits! Is this the same story for today? Can anyone answer any of these questions? Your help would be greatly appreciated, thank you.........
I think it's just going to be a long, slow, nasty grind down, not a full-on market crash. Over the next five to ten years the dollars you're saving will be worth less and less, and the precious metals you're holding will buy pretty much what they buy now.
Companies like SLW should do well as precious metals valued in US dollars should continue to rise.
The typical pattern would be for stocks (including mining stocks), precious metals, and pretty much everything else to drop initially. Then the precious metals would diverge and go up. Next, the precious metal stocks would diverge and go up.
I believe homestake mining was the only mining stock during the great depression. It performed very well. What I don't know is whether any of that performance was due to production increases, being able to take advantage of other companies miseries, etc. Precious metal stocks also did very well during the inflationary 1970s. Since the PM stocks did well under deflation and inflation, Bernanke can screw it up either way and I am covered.
Financials can do it. I still believe they will rather create hyper inflation than tighten the money supply thus keep the market moving higher but central bankers could b=very well do the opposite. Up to this point they have been inflating but as more and more institutions need funds from their own stupidity the central bankers can actually tighten the money supply just as they have done prior to the 1929 crash and thus crash the markets.
There are many baby boomers about to retire and that will cause huge problems for the government. A market crash could eliminate a lot of the middle class, consolidate many financial institutions into few mega banks or corporations, eliminate much of middle class and create a society more dependent on government(s) for their livelihood thus allowing the government to pass any law they want.
Either theory holds water but which way the bankers direct things only time will tell and holding physical and investment in PMs is the safest thing at present as there are no solutions to this mess right now - they might prolong it but can't solve it. Let's remember American debt of 9.4 trillion that's still growing <- hyper inflation would solve that ;)
I don't know which will happen, stock market crash or hyper inflation will keep moving the market higher even if the value in real terms drops.
Market crash would most likely be global and you can expect the 1930s depression on a global scale as banks would loose huge sums of money and would tighten the money supply which caused much pain during the 30s. Hyper inflation would depreciate the dollar which would allow US to pay off their debts to foreigners, would break the middle class and create a possible depression. But with US inflating so would other nations which IMO is what is happening at present as no one wants their currency to over shoot. There is no easy answers to problems that the US created. Don't worry about you being down $3/sh at this time, at least you didn't spend $20/sh when slw was, there are some that did! When this thing moves it will move up quickly and within a month they (market makers) can move this stock from 15 to over 20 with no trouble.
I think it would, albeit temporarily. In '29 investors had to liquidate everything to meet margin calls. While the margin requirements are higher today, derivatives may sink all ships. I do think that if it does happen, SLW and other PM stocks would make a much quicker recovery.
Agreed, ALL stocks would get killed, margin calls would sink many boats. PMs would take a hit initially too but then the tidal wave would change and PMs would become the only safe haven for paper money and people would start to buy bullion, PM EFTs, and PM stocks.
If there is a stock market crash it's 1930s style depression guaranteed. If they don't crash the markets the bankers will inflate and create hype inflation, which is worse scenario I don't know but either way it's not good looking.