Ominous: The US deficit vs the dollar

[Alistar7]

Then you should know silver is mined as a BYPRODUCT of other metal mining primarily. I know exactly what the worldwide available silver stocks are, and the FACT they have been in a SERIOUS supply deficit for over 20 years.


yes I agree traditional film photography accounts for a good 25-30% of all silver use, it also accounts for almost 100% of all silver that is reclaimed. The LESS that is used for film, the less that is relcaimed to make up the deficit.

How do you figure silver is ABUNDANT? Ten times more rare than gold as we speak, and everytime it is used some if not all is LOST. Gold is accumalated, we still have over 99% of all gold mined throughout world history. There isnt even enough silver for China to build a modern semiconductor grid. But they wont need that right, nor will India?

A risky investment? Metals and commodities are in a BULL MARKET and have been for 3+ years with no signs of slowing. Every bull has 3 phases with each succesive bull ALWAYS reaching higher than the previous, silver is still in the beginnings of it's second leg. Last bull market for silver hit $50, it wil AT LEAST excede that, at an entry point today of just over $7 thats plent of profit for me, but it will blow away that $50 mark by a milestone.

Do you know who has made up the suppkly deficit over the last 20 years? It was the US for the longest time, but 4 years ago the US Govt. RAN OUT OF SILVER, they are now one of the worlds largest BUYERS. The last few years China has been making up the deficit from their silver stocks, nothing conrete but there is substantial evidence that China has the options to 75% of the worlds available silver starting in 2005.

If it is so abundant why did it take that Bank in Canada so long to get the paltry millions of ounces they purchased earlier this year? BTW Buffet did not try to "corner" the silver market, he bought based on the market fundamentals you are dismissing, he stated he felt the price would eventually be corrected, and it would NOT BE MINIMAL. Quite frankly, I'll take his analysis over yours.....

 

[Alistar7]

Buffet bought over 100 millions ounces of real silver that is being held (supposedly) in a vault in London, but he never took delivery of more than 90 million ounces, why?


If he wanted to lease silver on paper there are billions of paper ounces out there to play that game, he wanted the real deal. That was 8 years ago, and he still doesnt have it all, sounds abundant to me.....

 

[Alistar7]

While I agree people get in and out precious metals in times of financial distress the market fundamentals of silver will not allow it this time, not even briefly. The supply deficit and industrial NEED will cause the price to go ballistic in that event, Kodak doesnt give a rats ass if you want to convert your moeny into silver for a year until the storm blows over. They and everyone else NEED that silver every year, they dont have the time to wait for people to move back out of the market, and because it's price inelastic they will drive the price beyond what monetary market factors will, only making it a more attractive investment for alot of people.....

Since we both know silver is a byproduct of other metal mining, and you are surely aware metals have been in a bull market for a few years, why is the price of silver going up? If the other metals are going up mine production would increase, causing an increase silver stock supplies. So more silver supplies and dwindling (photographic) demand lead to lower prices in your judgement? Silly me, I had the whole supply/deman thing backwards, funny, the price is up.....


Any manipulated market where a price is artificially being held too low is always a great investment if the forces are there to end the manipulation. Buy low, especially when the LOW is not even realistic....

 

[Alistar7]

Part of the reason the metals market bull will run longer than it should is the fact that it wasnt like this until recently, it was the opposite, metals were CHEAP. That caused production to go down, mines were closed, it will take a good 10 years for them to ramp up to meet the new demand/higher price. It's not like turning on an assembly line, takes time to do the exploratory work, start mining, etc....

I dont expect the price to stay that high for too long, nor do I expect the economic recovery to be swift either. Either way, keep the criticism coming, I have been studying this for over a year and put my $$$ where my mouth is, if I'm wrong, missed something, I sure as hell want to know...

 

[Jhhnn]

One of the things that a huge federal deficit has accomplished is to soak up excess dollars abroad, tending to maintain a false high valuation for the dollar. It also encourages outsourcing of manufacturing and other jobs, as investors hurry to exploit the imbalance, have their investments on the favorable side of the inevitable sharp adjustment.

The Chinese, in particular, have their own set of reasons for maintaining such imbalance, themselves, as their economy is very dependent on American investment and American markets.

 

[rahvin]

Originally posted by: Alistar7
Then you should know silver is mined as a BYPRODUCT of other metal mining primarily. I know exactly what the worldwide available silver stocks are, and the FACT they have been in a SERIOUS supply deficit for over 20 years.

The reason it's currently a byproduct of other mining is the mineral is not valuable enough to facilitate mining for extraction of the silver alone.

Originally posted by: Alistar7
yes I agree traditional film photography accounts for a good 25-30% of all silver use, it also accounts for almost 100% of all silver that is reclaimed. The LESS that is used for film, the less that is relcaimed to make up the deficit.

It's not 100% and photography accounts for a good percentage of the silver lost as at least 10% of the silver in the solution is usually lost in reclaiming it.

Originally posted by: Alistar7
How do you figure silver is ABUNDANT? Ten times more rare than gold as we speak,

http://education.jlab.org/itselemental/ele047.html
http://education.jlab.org/itselemental/ele079.html
AG: Estimated Crustal Abundance: 7.5×10-2 milligrams per kilogram

AU: Estimated Crustal Abundance: 4×10-3 milligrams per kilogram

Originally posted by: Alistar7There isnt even enough silver for China to build a modern semiconductor grid. But they wont need that right, nor will India?

Boy I would like to see you back that claim up with a link other than bibleprophecy.org.

Originally posted by: Alistar7
A risky investment? Metals and commodities are in a BULL MARKET and have been for 3+ years with no signs of slowing. Every bull has 3 phases with each succesive bull ALWAYS reaching higher than the previous, silver is still in the beginnings of it's second leg. Last bull market for silver hit $50, it wil AT LEAST excede that, at an entry point today of just over $7 thats plent of profit for me, but it will blow away that $50 mark by a milestone.

As I said precious metal commodities are a cyclical market with almost direct reverse correlation to the general market trend. As the stock market enters a more bullish phase precious metal prices will drop. This recession began in ernest on Sept01, which as you said is exactly when silver started up. If oil prices continue to rise the pressure on the market will be such that metals will stay elevated but if oil prices reverse (which could happen easily with some political stability in some of the OPEC nations) the prices will drop because the economy will spike. You are in effect advocating betting on oil prices at this point.

Originally posted by: Alistar7
Do you know who has made up the suppkly deficit over the last 20 years? It was the US for the longest time, but 4 years ago the US Govt. RAN OUT OF SILVER, they are now one of the worlds largest BUYERS. The last few years China has been making up the deficit from their silver stocks, nothing conrete but there is substantial evidence that China has the options to 75% of the worlds available silver starting in 2005.

Government Stockpile: The Defense Logistics Agency (DLA) has transferred all of the remaining silver in the National Defense Stockpile to the U.S. Mint for use in the manufacture of numismatic and bullion coins. Under an agreement with the U.S. Department of the Treasury, the metal will continue to be carried as DLA stocks until the metal is consumed by the Mint. The transfer marked the end of silver requirements in the National Defense Stockpile.

The government didn't run out, they sold their stockpile to the Mint. As far as your China speculation, who owns the silver Buffet or China? Make up your mind.

Originally posted by: Alistar7
If it is so abundant why did it take that Bank in Canada so long to get the paltry millions of ounces they purchased earlier this year? BTW Buffet did not try to "corner" the silver market, he bought based on the market fundamentals you are dismissing, he stated he felt the price would eventually be corrected, and it would NOT BE MINIMAL. Quite frankly, I'll take his analysis over yours.....

No one buying a million ounces is going to buy it all in one shot, you price spike it doing that. Buffet bought his stockpile over the course of years so he didn't artificially inflate the price.

PAUL SOLMAN: But is the subsequent price rise simply a self-fulfilling prophecy, that is, is Buffet just driving up demand by his massive buying, thus squeezing the market? Because that's what happened during silver's last great moment in U.S. economic history. It was the late 1970's. Inflation was raging, and buying precious metal was a favorite way for investors to protect themselves against the dollar losing value. A couple of Texas oilmen, the Hunt Brothers, started amassing silver, much of it with borrowed money, trying to corner the market. And they did, driving the price from $10 an ounce in 1979 to $50 an ounce the following year. But at that price people flooded the market with an excess of silver. The price dropped; the Hunts' loans were called; they had to sell; the market crashed; and with inflation ebbing, silver never recovered. By last July, it was down some 95 percent from its peak, adjusting for inflation. Warren Buffet's been accused of trying the same scheme, but, says Jim Grant--

 

[sandorski]

Originally posted by: rahvin
$2000 an ounce for silver? Man that is some good crack you are smoking.

If the dollar collapses as you are predicting in this thread you shouldn't be stocking up on silver you should be stocking up on ammunition.

Just in case, stock up on Silver bullets!

 

[GrGr]

Hmm, it appears that OPEC is prepared to start invoicing crude oil in ?'s. Smart if you think the $ might be in for a rough ride.

Link with CHART

...

We can see from column (4) in the above table that in 2001, each barrel of imported crude oil cost $21.40 on average for that year. But by 2003 the average price of a barrel of crude oil had risen 26.0% to $26.97 per barrel. However, the important point is shown in column (6). Note that the price of crude oil in terms of euros is essentially unchanged throughout this 3-year period.

As the dollar has fallen, the dollar price of crude oil has risen. But the euro price of crude oil remains essentially unchanged throughout this 3-year period. It does not seem logical that this result is pure coincidence. It is more likely the result of purposeful design, namely, that OPEC is mindful of the dollar's decline and increases the dollar price of its crude oil by an amount that offsets the loss in purchasing power OPEC's members would otherwise incur. In short, OPEC is protecting its purchasing power as the dollar declines.

The US also imports oil from non-OPEC countries, but these countries have the same economic interest as OPEC. They too want to preserve their purchasing power of the crude oil they exchange for dollars, so they would logically be amenable to OPEC's apparent pricing scheme.

Thus, it seems clear that OPEC and the other oil exporters are already pricing crude oil in terms of euros, at least tacitly. Whether they start invoicing their crude oil sales in terms of euros remains to be seen.

The above table is also interesting for another reason. Column (3) shows that the import cost of crude oil has risen by approximately $25 billion from 2001 to 2003. This increase has directly added to the trade deficit. Therefore, the dollar has entered a vicious circle. As the dollar declines, the oil exporters raise the cost of their oil to protect them from a loss of purchasing power, and this rise in the price of crude oil further worsens the trade deficit, which causes the dollar to weaken further and the oil exporters to raise prices yet again.

...

In recent years the mantra of numerous Treasury secretaries has been that a strong dollar is in the best interests of the US. This analysis of petroleum imports presents one reason why that truism is correct. The oil exporters will not be cheated by a weaker dollar.

Interesting to contrast the last remark with the OP article that says that Greenspan is thinking a weak dollar.

 

[Alistar7]

Originally posted by: sandorski

Originally posted by: rahvin
$2000 an ounce for silver? Man that is some good crack you are smoking.

If the dollar collapses as you are predicting in this thread you shouldn't be stocking up on silver you should be stocking up on ammunition.

Just in case, stock up on Silver bullets!

BAH, classic sandorski, thanks for the funny bro, missed battling with ya lately, got sucked back into that crappy thing we call life.


I could give you a ton of links other thna Bibleprohecy, lol, but the numbers they used are accurate so I went with them.

Buffet boughit his in basically one swoop, causing the priuce to go from under $5 to over $8, thats a price spike. ALOT of people buy a million ounces at once, the last comex paper contract that was not rolled over, meaning they said fine, GIVE ME MY REAL SILVER, was for 25 mlllion ounces alone. Bueffet owns 120 million or more ounces, China had reserves they have been using to make up the deficit, they have options to purchase in the FUTURE.

Stop relying ONLY on US markets to explain the current bull market, it's a globally driven issue based solely on market fundamentals right now, not currency issues as of yet. Oil was still around $20 a barrel whn this bull started, its not driven by oil nor is it solely driven by the US market.

You need to look at whats there, whats mined every year, and whats consumed overall. Your missing big chunks of the larger picture. What is worldwide annual consumption? What is annual production?

I realize that not 100% of the silver that is reclaimed is from film, but it is the clear majority and might as well be 100%. Your confusing the 10% thats lost in the solution, which is way to high bTW at least in the US which montiors silver waste to stringent levels, with the main point. The point is silver that is reclaimed from film development (no matter what % of which is not reclaimed) is the PRIMARY source of reclaimed silver. There is no other application of silver in which the silver is reclaimed unless the product itself is recylced, unlike film, you still get your pictures/x-rays.

 

[Alistar7]

"Many of these statistics are estimates, but the world is currently consuming through industrial products and processes around 800 million ounces of silver annually. However, annual world silver production is approximately 500 million ounces and annual recycling efforts provide another 150 million ounces, leaving a 150 million ounce deficit that must come from existing inventories. This deficit is not new, but has continued now for the last 10 years, proving that in this very short period, 1.5 Billion ounces of silver have been totally consumed. Compare this cumulative deficit and annual shortfall with the known remaining silver inventories above-ground of 300 million ounces, and what do you have?!! A precious metal that is destined for short-supply, unless the very unlikely event occurs where annual consumption and production both decline by over 50%. Unlikely indeed, since current forecasts call for 1 Billion ounces of silver to be consumed annually by the end of the decade, even with bouts of global recession."

"On the gold side of the ledger, there is approximately 3,000 Million ounces (a.k.a. 3 Billion ounces) known to exist above-ground in bullion form, so this precious metal is currently 10 times more available than silver (gold's 3,000 Million versus silver's 300 Million inventory)........ at least on the surface, no pun intended."

http://www.wexfordcoin.com/SilverBullMarket.htm


"The United States Government had 6 Billion Ounces of Silver in 1942, and thanks partially to the price-depression efforts of the Silver Users Institute and the manipulations on the COMEX over the last 15 years , that historic hoard is down practically to zero."

 

[Alistar7]

The World Spot Price - Asia/Europe/NY markets

MARKET IS OPEN
(Will close in 6 hrs. 51 mins.)
Metals Date Time (EST) Bid Ask Change from NY Close
GOLD 10/25/2004 06:38 429.50 430.00 +5.50
+1.30%

SILVER 10/25/2004 06:37 7.46 7.48 +0.17
+2.33%

PLATINUM
10/25/2004 06:33 855.00 865.00 +12.00
+1.42%

PALLADIUM 10/25/2004 06:17 217.00 232.00 +3.00
+1.40%


USD 84.91
-1.06


Can't wait until the US market opens today......

http://www.kitco.com/market/

 

[IHateMyJob2004]

Originally posted by: ReiAyanami
all the big billionaires are betting that the dollar will collapse (George Soros, Warren Buffett)

Euro appreciated 50% in just a few years (.8 to 1.25 USD)
the Yen i think gained 20-30%

but facing $10 trillion debt 10 years from now, that means we'll also be paying over half a trillion in interest each year ($500 billion).

Half of all US treasuries are bought by foreigners
2/3rds of all US dollars sit in foreign banks so a dollar collapse would send South America and Asia into recession as well

Buffett says one of hte major issues is outsourcing and the difference between good imported/exported. We IMPORT WAY TO MUCH!

 

[sMiLeYz]

You know how many believe Afghanistan War was the start of the collapse of Soviet system? Funny, I think our Afghanistan is going to be Iraq.

Osama is probably in a cave laughing his ass off at us and our stupidity.

 

[Alistar7]

I have said it before and I will say it again, the only people that make money on precious metals are those that sell those precious metals to others.

I remembered this thread, trying to enlighten people on the investment potential for Silver. I suggested you buy when it was at $7.50 an ounce, what's it trading at now btw:

http://www.kitco.com/market/

Well, over $37 an ounce, not a bad return for a <7 year investment. Of course I'm sure rahvin's portfolio outperformed that since 2004, the market has done so well in that period overall.

 

[Alistar7]

Not really, we are exporting our debt, which is why so many americans have purchased homes recently. That doubling of the money supply, alot of it went into mortgages

Bush's answer to stimulate the economy after 911, fire up the presses and lower rates to dump the money into the system, mostly through mortgages. We all see how well that turned out in the end/

 

[bamacre]

Best necro-bump ever! Good call on the silver. I did well with silver, but I didn't get in at 7.50 oz , I got in middle of last year, and mostly out about a month ago.

This is a great thread to read through now that we know what has happened. Thanks for bumping it. Vic's responses here are one reason I wish he'd come back.

 

[theeedude]

We have a 10% unemployment, that is ominous. The deficit should be a non-issue until we get those people back to work.

 

[_GTech]

Don't forget about the Food & Water guys, some forget America is at the TOP of the Food Chain, literally & figuratively, when America raises the price of wheat, rice, and other commodities you can bet some countries feel it and hard! If I'm not mistaken, many of the revolts in the middle east are the poor just being flat tired of high Food Prices, it's no wonder that India & Somalia aren't in this foray of public rebellion... I wonder how long before Venezuela starts to scream...

That's one way to put the oil pigs in check huh?

Global food price monitor - January 2011


Source: Food and Agriculture Organization of the United Nations (FAO)
Date: 14 Jan 2011

Full_Report (pdf* format - 973.8 Kbytes)


Highlights
- The FAO Food Price Index in December slightly surpassed its peak of early summer 2008. The indices of sugar and oils and fats increased the most.
- International rice prices decreased in the first half of January and those of wheat and maize remained firm after increasing in December.
- In Africa, prices of maize, sorghum and millet, the main staples in the region, remained generally low in the past months following bumper 2010 coarse grain harvests.
- In Asia, domestic prices of rice further strengthened in December and are at record levels in several countries.
- Prices of wheat and wheat flour in importing countries of Asia, Latin America and Africa, remained at high levels.
- In Central America, prices of beans declined in December after reaching record highs in November.

Also...

Global food crisis (CE)


Updates on Afghanistan, Algeria, Angola, Armenia, Bahamas (the), Bahrain, Bangladesh, Benin, Bhutan, Bolivia, Bosnia and Herzegovina, Brazil, Burkina Faso, Burundi, Cambodia, Cameroon, Cape Verde, Central African Republic (the), Chad, China, Colombia, Comoros (the), Congo (the), Cook Islands, C&#244;te d'Ivoire, Democratic People's Republic of Korea (the), Democratic Republic of the Congo (the), Djibouti, Egypt, El Salvador, Eritrea, Ethiopia, Fiji, Gambia (the), General, Ghana, Grenada, Guatemala, Guinea, Guinea-Bissau, Haiti, Honduras, India, Indonesia, Iraq, Jamaica, Jordan, Kazakhstan, Kenya, Kiribati, Kyrgyzstan, Lao People's Democratic Republic (the), Lesotho, Liberia, Libyan Arab Jamahiriya (the), Madagascar, Malawi, Maldives, Mali, Marshall Islands (the), Mauritania, Mauritius, Mexico, Micronesia (Federated States of), Moldova, Mongolia, Morocco, Mozambique, Myanmar, Namibia, Nauru, Nepal, Nicaragua, Niger (the), Nigeria, Niue (New Zealand), occupied Palestinian territory, Pakistan, Palau, Papua New Guinea, Peru, Philippines (the), Rwanda, Samoa, Sao Tome and Principe, Senegal, Sierra Leone, Solomon Islands, Somalia, South Africa, Sri Lanka, Sudan (the), Swaziland, Syrian Arab Republic (the), Tajikistan, Thailand, Timor-Leste, Togo, Tonga, Tunisia, Turks and Caicos Islands, Tuvalu, Uganda, United Republic of Tanzania (the), Uzbekistan, Vanuatu, Viet Nam, Western Sahara, Yemen, Zambia, Zimbabwe affected by the Global food crisis emergency.

Food prices have soared most in Venezuela, Bolivia and Argentina


Those are some real eye opening facts, for sure...

I'll let you ascertain what you will from them...

 

[dmcowen674]

Vic's responses here are one reason I wish he'd come back.

What makes you think he left?

 

[dmcowen674]

So the opinion in here is that Americans will be trading lumps of silver or gold like the Wild West Days again soon???

Cool

7 years later and I don't see trading lumps of gold or silver yet.

Many places across the country do resemble old wild west ghost towns however.

 

[_GTech]

7 years later and I don't see trading lumps of gold or silver yet.

Many places across the country do resemble old wild west ghost towns however.

That has to be the most realistic realization I've heard yet, many ghost towns even inside the cities, many businesses have been closing their doors permanently for a solid 2 years now.

With many old people who owned those small businesses retiring, while other larger businesses have been Right-Sizing & Down-Sizing or simply laying off, all which have become a very common, also this has greatly attributed to a weaker economy.

If anyone tells you that the economy is improving is lying. The Dollar was downgraded by China not too long ago, imagine that.

I had to laugh when I heard that, the obvious is right in front of everyone, if they can't see it they are just choosing not to.

 

[bamacre]

What makes you think he left?

Last Activity: 10-23-2010 09:18 PM

:\

 

[bamacre]

7 years later and I don't see trading lumps of gold or silver yet.

Maybe because you don't have any. :biggrin:

 

[Londo_Jowo]

That has to be the most realistic realization I've heard yet, many ghost towns even inside the cities, many businesses have been closing their doors permanently for a solid 2 years now.

With many old people who owned those small businesses retiring, while other larger businesses have been Right-Sizing & Down-Sizing or simply laying off, all which have become a very common, also this has greatly attributed to a weaker economy.

If anyone tells you that the economy is improving is lying. The Dollar was downgraded by China not too long ago, imagine that.

I had to laugh when I heard that, the obvious is right in front of everyone, if they can't see it they are just choosing not to.

Are you Dave's new account by chance?

 

[Jaskalas]

We have a 10% unemployment, that is ominous. The deficit should be a non-issue until we get those people back to work.

Get them back to work, so you're referring to government-debt based jobs? It is no wonder then that you want to ignore the debt. SPEND SPEND SPEND!!!

Debt crisis? SPEND MORE!!!!!