The Fed is worried about deflation because of the havoc it would create for the government and all other big debt holders. The fed has a difficult task as it has to promote inflation while fixing interest rates low. High inflation would normally promote high interest as lenders want a return of their purchasing power. Seldom if ever mentioned is the cascade effect on local governments from school districts to state level if interest rates rise and property values decrease along with associated tax revenues. Also seldom if ever mentioned is the beneficial side of deflation for the wage earner and saver. If the federal reserve board was truly independent and unbiased, interest rates would have never been manipulated and we would not be in this catch 22 that is bound to end real ugly. Since purchasing power or wealth cannot be preserved with dollars, sooner or later people will be turning to hard assets. PM's should do very well in dollar terms and their derivitive, PM stocks should do well also.
$20.72 looks to have been touched three times today for a tripple bottom, which could be support for your calling it a low for the near term.
I wrote a few more weekly $21 puts this morning thinking we are going to hold this weeks gains for the most part. From what I am hearing about the Murray Ryan budget deal, there is only a 1% reduction in the deficit over ten years with increases in spending short term and the cuts are mostly in out years. I believe that only leads to increased federal borrowing and more need for tapering as the treasury cannot sell all their new and roll over debt without federal reserve taking a huge chunk lest interest rates rise. The can kicking continues as the nation implodes on itself while maintaining the impression of health with phony statistics and currency printing into oblivion. It is sad so many reporters and analysts are so blind, stupid, or bought off that they spew the government line without a single pertinent question asked.
Sooner or later, folks are going to wake up to the race to debase and invest in the only money left on earth that is going to hold value, precious metals and those who mine them.
How is it that you know of a large seller being trapped? Is there a link to an information source or are you interpreting data? I would think a large short seller may be trying to cover in an up market or a market long may be trapped needing to cover a short position.
Very bullish calls for the short term, 4% today so far and another 4% plus to come seems a bit much, but I will take it. Last week I sold some SLW for $21 plus and wrote $21 puts. I got a 2.5% bump in cash and got the stock back. I have done the same today. Even if I do not get the stock back, it is good for another 2.5%.
Longer term, I am positive on SLW.
I do not understand what you mean by "How are they gonna pay off the 85 billion in bonds they have been buying every month and all their debt? By PRINTING MONEY thats how." If interest rate on the purchased bonds is constant, then service cost is constant but their value on the open market is lower so the balance sheet is reduced if marked to market. Fed can get all its dollars back by holding to maturity but those dollars will have less purchasing power. Treasury will have to pay more for new borrowing if rates increase.
I believe you are correct on direction of the trend over time for PM's and PM stock, but both could go down in the near term. I too am curious about the thoughts behind your predicted numbers and timing.
The government is no stronger than he tax base it sucks from as the government creates no wealth, only consumes it. As government gets to be a bigger percentage of the economy, the economy's ability to generate wealth is reduced so we ask government to spend more growing in size and reducing the wealth building capability even more. It is a downward spiral we need to change, but I doubt we will.
There is a mining risk for SLW albeit spread among the miners it does business with. If a mine shuts down so does the stream and the metal flow to SLW. The safest investment is the metal held on one's own person. SLW is a good place I believe as it is insulated from some of the cost pressures, but not all of them.
I have no way to evaluate what the price of silver will be in dollars as measuring with dollars over the long term is like measuring with an elastic yard stick. To that end, the heading down hard and fast may be correct in purchasing power, but the price may not fall fast or it may continue to rise a bit. I believe the dollar will be winning the race to debase among the major currencies and anything of intrinsic value will be rising in dollar price. This is the reason that I believe PM's and PM stocks will do well over the longer term measured in dollars.
Because the dollar is not a store of value, it is a currency and not money. There is counter party risk to holding dollars and that counter party is the folks who have control over the quantity they print. Gold and silver make good money because they cannot be printed, therefore the a a good store of value over time.
I hope I did not mess up your analysis Cowboy and Sharpie as I just sold a few weekly $20 puts. Last Friday afternoon I sold weekly $21 puts to get back the shares sold for $21.20. I am thinking the stock goes up from here, but if it does not, I will get a few more shares for the long term.
$21.63 would be a hefty move for a short trading day, but I would take it. I am going to sell half of my shares bought at $21.
Silver futures have been trending down all morning and at $19.76 now yet SLW is up. With the low volume holiday week, I wonder if all the TA is going to get smacked by a manipulation move. Seems like it could be a buy opportunity if it materializes.
Name one company that prefers rail to ship crude without some extenuating circumstance. You can't because they do not. Without doubt and by an order of magnitude, pipeline is the higher volume per unit of time, safest, most environmentally sound, most energy efficient and most economic way to transport oil. Pigs are put in pipelines to prevent blending and blending is not an issue in a dedicated crude line. It is with product pipelines that carry many different products. I will take Enbridge word that it can ship the oil and handle the blending issues. Besides, the Bakken oil is fairly light and would be blended. You are right about the refinery design to the crude, but many US Gulf coast refineries are equipped to handle heavy sour crude. We do have adequate refining capacity for US needs, that is one reason why no new refineries have been built in the last several tens of years. but you are confusing crude feedstock with refined product. Your reasoning would have us ship crude from our enemies half way around the world to feed our refineries rather than purchase from our friendly neighbor. There is no reason not to use the capacity.
Yes it is like a college class, one of the new classes that teach propaganda for fact and do not teach students to critically think for themselves.
Still lomging for thse Jimmy Carter days with the oil embargo and no alternative source of supply?
Pre 80, so you want to go back the the wonderful times of Jimmy Carter? BuSh as you spell it, did some really stupid things, some examples being medacare expansion without fnding it, and fighting a couple wars without funding them. The current POTUS is BuSh on steroids plus he is making decisions in foriegn policy and on domestic issues that are contrary to the citizens' interest and unconstitutional. I have no use for either party or any of the recent presidents. If we do not turn things around soon, the entire US population is going to realize the foolishness of the current political direction as it is going to implode on itself.
Once again FF, you go into a rant spouting what others say without processing their message and do not as you say do the math. The US consumes 18 million barrels per day, your number, and produces about 10 million barrrels a day. Using your logic, we will continue to import 8 million BPD from the same sources and just let he Keystone oil flow through our country to a DW port so we can export it. Can you explain why we would not just buy the Keystone oil? Canada is a friendly source and much of the currently imported oil is from our enemies. Would it not make sense to buy Canadian oil and not buy oil from our enemies, funding their wars against our homeland?
Incrementally, the oil we would get via Keystone would offset oil imported via deepwater port reducing the need for DW port capacity and reduce the associated environmental risk. Transporting oil via pipeline is the cheapest most environmentally safe means.
If you are correct, I am happy Buffett has shares of SU, but that is not relevant. His political funding and their relationship profits via transporting the oil by rail because his funded pupet POTUS is making decisions favorable for Buffett and against the good of the country is relavent.
Not working out like I expected this week so far as I too was looking for something better than $21.00 based mostly on levels of late last week. A couple days of trading left this week that are chopped up by the holiday and a short trading session so the price could be a bit erradict till we get into next week. I mentioned on another thread that there has been an excessive amount of negative print by respected PM analysts. I was thinking that they may be signaling a bottom as a contrarian indicator, but for now they seem to be correct. I had shares of SLW and NEM put to me last weekend that I will hold for the time being. both are underwater about 4% or 5%. SLW seems to be building a base just above $20 this morning which could become support. If not, I think a retest of $17.75 is very possible
The US currently imports crude oil via many of our ports including those on the Gulf Coast. Why would the oil from Canada shipped into the US not displace currently imported oil? Especially imported oil from our muslim enemies? The real reason the Keystone Pipeline decision has been delayed has more to do with political donations than economics or what is good for the country. Oil that would flow in Keystone is now shipped via train, trains owned by Buffet and Buffet is a big supporter of Obama.
Kazansky, do you think there may be some tax loss selling influencing the silver SLW divergence today? If so, when that plays out SLW should base and potentially build in price a bit.
It is bouncing around $20 now so filling a gap at $19.71 is not much of a stretch, albeit very ugly in total for the day so far. Someone mentioned EW works betterin an up market, seems like today is supporting that statement. I am wondering if traders ended up with stock they do not really want as a result of options clearing over the weekend and they are selling just to clear their positions.