"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Friday, May 11, 2012

Silver Chart and Comments

Silver continues to be the poor poster child for the Deflation or Risk Aversion Trade. It's chart is abysmal at this point as it has steadily retreated since peaking near $50 in what seems a lifetime ago. About the only positive thing that can be said about it is that is had not been below the $26 level for some time now. That level still seems to be bringing in buyers.

Unless something changes rather drastically over the next week, it looks like it is going to once again test the resolve of those buyers that have been busy down there. If it holds, fine; if not, it would get rather ugly for silver.

One thing about it is that it has already seen a rather large exodus of speculative money from the long side of the market. It will take fresh short selling to break it down below $26 therefore. The key question is when will the market psychology shift away from deflation back to inflation? My view is that it will not UNLESS and UNTIL the monetary authorities give a credible hint that the QE punch bowl is going to be brought out soon.


  1. It looks like the possibility of QE3 in the USA is increasing: http://www.inflation-hedge.blogspot.com/2012/05/goldman-sachs-and-bond-king-bill-gross.html. Additional QE is also on the radar screen of the BoE in the UK.
    real asset investments

  2. It is my belief that when QE3 happens, it will not be a long drawn out affair of announcements. It will be delivered like it was to Moses. The commandment will be sent from our 3.5 year old "IDOL" to his "command" "ANT"- German pronounciation please. That is how our new leader will want it. He will summon him to his mountaintop "White House", and deliver his list of many commandments. this one will be part of his resurgence in the polls (MSM help with BS polls). Anyone with a brain does not believe the numbers on employment, growth, How could they witout the constant pounding of BLSBS and the like. How can they (Regime)get out of this other than "inflationary tactics"? .

    Thanks Dan.

  3. I got out of Silver @ $46 on the way down per Eric Janzen's call and I have never looked back.

    Eric issued a buy call at $4 and a sell call the day of the high. He said it is over - kaput. He is not getting back in.

    But he still hasn't issued a gold sell call to match his gold buy call in 2001.

  4. gold drags silver to a new high in the fall as the debt ceiling is raised........along with overt QE hinted then announced for the election.

    thanks Dan.

  5. qe will have to happen in august if it is to effect the election.


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