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Letters by a modern St. Ferdinand III about cults

Gab@StFerdinandIII - Plenty of cults exist - every cult has its 'religious dogma', its idols, its 'prophets', its 'science', its 'proof' and its intolerant liturgy of demands.  Cults everywhere:  Islam, the State, the cult of Gay and Queer, Marxism, Darwin and Evolution, 'Science', Globaloneywarming, Changing Climate, Abortion....a nice variety for the human-hater, amoral, anti-rationalist to choose from.  It is so much fun mocking them isn't it ?

Tempus Fugit Memento Mori - Time Flies Remember Death 

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Friday, May 6, 2011

Gold and Silver - still long term holds.

A shakeout is always [or at least usually] an opportunity.

by StFerdIII

Silver the poor man's gold, and Gold the richer man's inflation hedge should still do very well in the next 5 years, not withstanding this weeks' slaughter. Five short years ago silver was at $10 an oz. It has gone up 250% since that $10 level. Typically the gold to silver ratio is between 15 and 20:1. With gold today at about $1500 and silver at 35 the ratio is now at 42 to 1. We should expect silver to rise faster than gold to get back to historical range patterns. I would not be surprised to see silver at well over $50 in the coming 2 years based on fundamentals, inflation hedging and gold's performance.

Silver's Performance (%) total return, cumulative through prior close as of May 5th.

 SLV

 SP500

 

  1 Day

-6.09

-0.90

 

  1 Week

-22.32

-1.85

 

  4 Weeks

-4.27

0.15

 

  13 Weeks

33.55

2.47

 

  1 Year

113.61

16.12

 

  3 Years

130.31

-0.04

 

  5 Years

162.40

9.15

 

The Wall Street Journal is reporting this morning that some prominent hedge fund managers — led by George Soros — have been dumping the metal. Recall Soros said, "Gold is the ultimate bubble" in January 2010 ... only to have it be revealed in his next fund disclosure that gold was amongst his largest positions. [Feb. 17, 2010: George Soros Calls Gold a Bubble, Then Stocks Up on It]
Not a coincidence as money managers now have to expect Fed induced bubbles, and play them — with everyone assuming they can get out at the door, once the music stops. It appears the parabolic move that silver enjoyed the past few weeks — after a steady climb from August 2010 when Bubble Bernanke declared he is adding inflating asset values as the Fed's third mandate — Soros (and a few others) decided the music was stopping. At least for now.
For silver and gold (GLD) bulls, the news is still positive. John Paulson says gold is headed to $4,000.
Via WSJ

  • Silver prices plunged, suffering their worst one-day drop in dollar terms in three decades, as investors fretted that rising trading costs could cripple a market exhibiting signs of froth. Silver's fall ....came as some major investors have been selling. George Soros's big hedge fund, a firm operated by high-profile investor John Burbank and some other leading firms have been selling gold and silver, according to people close to the matter, after furiously accumulating precious metals for much of the past two years.

Silver and Gold can be bought and held. They should be bought and held on a regular basis if the individual investor can afford such a purchase. This could include coinage. The fiat currency system is broken and real inflation will simply keep reducing the value of paper money.


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