Increasing price on increasing volume is what we want to see! Look at this:
Fri Jun 15 3.95 318,400
Thu Jun 14 3.83 214,100
Wed Jun 13 3.65 112,600
Tue Jun 12 3.65 276,700
Mon Jun 11 3.45 266,000
Fri Jun 08 3.33 141,800
We're on our way. Money managers are discovering us. Demand above 500,000 shares means price above $5 ... ?????
<< However, would you agree that the securities referred to were intended to be gold backed securities? Remember, the Constitution provides for the coining of money, not the printing of money, and the intent of establishing a PM based currency was specifically to prevent the current situation- i.e., a system where most United States currency resides outside of the United States (and how did that come to pass?), and no man can state how much "money" exists except in terms of prices, which are at least 20-fold greater than in 1900, much less 1776. >>
No, I don't agree to any of this. The intent of the Constitution was that there be common money for the United States. You're reading too much into the word "coin."
Gold is only valued because it's rare and because we are used to valuing it. FRNs are the same way. There is a limited quantity of FRNs, and we are so used to them being value we think nothing of what it really represents.
And printing money on presses makes a lot more sense than going to the expense of mining it from the ground, which wastes a lot of resources and also is damaging to the environment. And unfairly enriches nations rich in gold. And paper money can be better regulated. Right now, the Fed is creating more money to avert a recession. You can't do that with gold.
So if I like FRNs so much, why am I invested in gold and silver stocks? Simply because I think that the price will go up and I'll make a lot of money.
An interesting post. However, would you agree that the securities referred to were intended to be gold backed securities? Remember, the Constitution provides for the coining of money, not the printing of money, and the intent of establishing a PM based currency was specifically to prevent the current situation- i.e., a system where most United States currency resides outside of the United States (and how did that come to pass?), and no man can state how much "money" exists except in terms of prices, which are at least 20-fold greater than in 1900, much less 1776.
<<Clearly Congress can issues paper debts. That's what it means by "Securities">>
Correct. The United States can issue debt securities, for example United States Notes. But they are not MONEY; they are, as you said, SECURITIES. Under the Constitution the only money is COIN. Arguably Silver Certificates and Gold Certificates issued by the United States were a form of money, because they were redeemable for actual money, but that point is moot because such securities are no longer issued, and very few remain in circulation.
Of course United States Notes are no longer issued, either. Our current currency is called Federal Reserve Notes, but, as the trite saying quite correctly recites, they are neither Federal, nor are there any Reserves, nor are they Notes. FRNs are not issued by the United States. The United States' sole role in producing FRNs is to serve as the privately owned banks' printing contractor.
In a practical sense, money is whatever people are willing to accept as money, thus it is indisutable that for the present the FRNs are money. They are not, however, Constituional money, and we have no assurance that they will always be accepted as money.
BTW I have not been smoking the whacky weed, I have bank deposits denomninated in FRNs ("dollars," as the bank calls them) and I routinely engage in commerce with FRNs. After all, we are assured, they are legal tender for all debts, public and private. We don't know what authority is providing that assurance, but hey, we believe what we want to believe.
As I said in my post, I am not a fanatic, and I think that a long silver position is far more attractive as a play on a healthy industrial economy than as a hedge against a gloom and doom scenario. However, it does have value as both.
So for now I consider it a bargain to be able to exchange three and half "dollars" of FRNs for one dollar of actual silver money.
Thanks for the lively debate.
<< ? Under the US Constition, there is only one kind of money; it's made out of metal, and the Congress has the power (and the responsibility) to coin it. >>
I disagree. Article II Section 8 of the Constitution clearly gives the federal government power to make all kinds of money. Note the paragraph that states that Congress has the authority "to provide for the Punishment of conterfeiting of the Securities and current Coin of the United States." Clearly Congress can issues paper debts. That's what it means by "Securities"
Now if you want to say Congress has no power to punish people for smoking marijuana, then I agree 100%. No such power granted by the Constitution.
That is why I decided to not trade my PAAS position even though it looked so prime for a pullback. The silver story is just too compelling to risk trying to trade a position and risk losing the upside.
Long and strong PAAS (and some physical for good measure)
An interesting set of circumstances, to say the least.
Volume and price moving up as you pointed out. However, silver down 6 cents today, and lingering near recent lows. Inflation continuing its acceleration, but we are technically up against overhead resistance right around $4.
Where do we go from here in the short term? I think we have pretty convincingly broken out from the long-term downtrend and successfully tested support on that downtrend line at $3, but wonder what will happen now that we have made it up to $4. As a PAAS long I hope that we can break above $4, but I think it will take a move up in silver to do it convincingly, so my gut tells me we go lower next week. However, we have the whole weekend for some event to change the whole landscape. Hold 'em or trade 'em? That is the question.
Longer term bullish, uncertain in the near term.
Luck to all,
The dollar index looks like it is ending its bull run. It has clearly changed directions, and it ended yesterday pretty much on the low tick for the day (haven't seen today yet).
With the Fed printing paper money faster than ever before and inflation accelerating this is a pretty reasonable development. Perhaps instead of PAAS we all should have invested in a company that makes printing presses. The way Greenspan is going he will probably need many more. Just a thought. In any event the drop in the dollar, if sustained, should be quite bullish for the metals, I would think.