Friday, May 6, 2011

Drowning in Silver Fear

Gold in New Zealand dollars: $1877.28 per oz
Previous all time high: $1955.10 per oz

Silver in New Zealand dollars: $44.17 per oz
Previous all time high: $48.58
per oz

It's disturbing what a large retracement in the commodity sector does to people.

Silver has lost around 30% from it's high of $48.50 to be around $34.50 now. It could sink lower still.

I read the blogs with comments from people who have just entered the silver market and some feel like they are drowning as they see their life savings vanish.

But are they really vanishing? Sure, on paper the amount you would get for those ETFs or troy ounces of gold or silver are now less than on Friday night last week, but if you still have those physical troy ounces (and I mean actually have them), then what's to worry about?

Unless you are one of the unfortunate ones who has your money in someone elses fund, and that fund has one of those stupid computer stop-loss breaks. This means you had no control over the big-boys picking your pocket. In this half of the playing field, the rules aren't fair.

Sure, it's not an easy ride, I'll admit to the odd weird doubt, after all we are all human. But the troy ounces are still with me. I know where they are, I can touch and smell them if I travelled there.

Anyway, it seems to me that if I sold now I'd be just gifting those large rat-bag banks a slice of my wealth. Sorry, not into helping them...not even a little bit. It is people like me, not willing to sell now at any price, that they don't like.

Hold onto those precious troy ounces and go out into the bright sun and rest easy. Remember this is a secular bull market and the trends have not changed overnight because some panic sets in.

Remember too that the time to buy may be coming closer. I wish I had some spare cash...

Don't be a trader in this market. You may actually drown.
Quote from
silver analyst Ted Butler, 04 May 2011
Long-time readers may remember a pet theory of mine that I had kind of forgotten about until this week. My theory was that before we get the real blast to the upside, amid the termination of the manipulation or a physical shortage, we would get an unbelievable shakeout to the downside. After that downside shock...and after the last speculator that could be tricked and frightened into selling did sell, the commercial would just put their hands in their pockets and not sell on the upturn. That selling void would create the conditions for the final blast-off. This sell-off sure feels like the big one to me.

Articles of interest:

Commentary from Dan Norcini. 

Well worth the read. See articles here

What's gold really worth? Central banks sure don't want you to find out

See article here

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