We have a trade deficit

So what? Look at China they hold the biggest surplus of dollars and at least a 1/3 of their population is at hunger level poverty. They've fetishized saving in and of itself into something more meaningful than quality of life for their citizens. The current US trade deficit is only 440 billion dollars. That might seem scary until you realize that's only 2.5% of annual GDP ($17.528 trillion.) In other words I make 50k a year and I owe Mark $1250 for a cabinet he made me. It's time to adopt austere monkish habits in my personal life until he is repaid!

Not arguing with you. But what is your take on this?

http://m.youtube.com/watch?v=3fzA1j7c320

I regret clicking that

Care to elaborate why?

Silver under $17, Wassup.....wassup......wassup. You know it is near the market top in spring of 2011 when I am out to lunch at a casual restaurant and I can hear two middle-aged to older aged ladies at a table about 15 feet away talking about silver...lol. That was right after this thread was started. Price was 45 or so then.

The doom and gloomers like Peter Schiff never quite understood that when economies hit the brick wall, everything goes down, since demand goes down. Their thesis was so wrong that it is laughable. Their initial idea has some merrit, as they said time and time again that the government would print money, but they could not quite make the next logical leap that everyone would chase yield and boost asset prices up, mainly in stocks.

When you give savers zero percent in their money market and savings accounts, they are going to chase stocks if their neighbors are making money. Millions of people were forced into speculation by the psychology of the situation. You buy gold and silver when everyone HATES gold and silver, and after long periods of low prices (like silver at 5 bucks for many moons).

Stocks will fall. And so will "precious" metals. Get out. Stay out. And don't come back. Love these contrarian indicator threads that are all over the Internet. All of these precious metals experts are going to get creamed even more on this next downturn.

Cash will be king again, because that is what you need after the collapse in prices. You can make some great buys at the lows, but you will need cash.

3.5 years later, OP confirmed idiot/market ignorant.

Anyone buying the dip? Silver just hit the 14s.

great time to buy before they announce QE4

Obviously you want to own profitable businesses. Figuring out which ones are going to be profitable over time and are priced at a good value is the challenge.

I don't think anyone is advocating 100 percent exposure to any single commodity. Silver is a speculative play based on what you believe the long term affects of monetary policy will be. I have listened to the arguments of both sides and the logic of those who are bullish in silver make more sense to me.

Sure, silver hasn't worked out the last couple years but my overall portfolio has done pretty well despite this. I continue to own silver because I still believe in the long term fundamentals and think now is a great time to buy more.

No it isn't. There are dozens of them even after a five year runup/bubble.

Silver is a non-exponentiating speculative play, which is why anyone who buys for the long term isn't too bright.

What you rather own? Silver that does nothing and just sits there, or the same silver that produces more silver which also produces silver, just by sitting there? Physical silver is the first; stocks are the second.

If you believe the effects of monetary policy are inflating, then you should buy stocks. Where do you think free money ends up? Tucked inside silver bars? Or in the hands of corporations?

Translation: silver has done crap, but my stocks have done well such that I'm up despite losing lots of money on silver. So I think I should buy more silver!

I've lost $$$ on silver but not selling it -

Just because I own silver doesn't mean I don't invest in the market too - i've made a lot more in the market than I lost in silver - but I still think silver will do fine eventually.

Silver has done crap which sucks but Its probably because people believe in a Broken monetary policy that rewards people at the top and not hard work.

The hardest working person in the company generally makes the least amount of $$$

dj, can you explain to me why silver is a hedge against currency collapse in a way that stocks are not? Precisely what scenario, that hasn't happened since the beginning of stock markets in the 1600s - is silver going to protect against that stocks aren't? Be specific.

Describe what precisely you want to obtain and under what scenario that silver will allow you to obtain, that stocks or cash will not? I don't invest in silver because I don't see any scenario in which in it can:

- Make me rich in the short or long term (especially in the long term)
- Protect my portfolio from collapse
- Get me food or shelter when food or shelter is scarce

Can someone please outline such a scenario?

If it was not challenging to find good companies at a fair value, we'd all be Warren Buffets. The fact is the vast majority of people who try to pick stocks lose out to transaction fees just like most poker players lose to the rake.

Doing a proper stock valuation takes considerable time and effort and most people are going to make mistakes along the way. And this is just to evaluate one specific company. A whole separate analysis and understanding of economics is necessary to determine whether the market as a whole is overvalued and which industries are going to be profitable in the future before you can even start looking at specific companies. If you think all that's not challenging, you are probably a novice investor who has gambled on some companies based on a shallow analysis and gotten lucky.

I believe the stock market is inflated because of the Fed's easy money policy. I think that the economy as a whole is propped up by Fed policy and once the QE ends, the stock market will start to correct, GDP will contract and unemployment will rise. I believe that the Fed's response to this will be what it always has been, another round of QE. When this is announced, I think precious metals will skyrocket.

If I'm wrong about the Fed's response to the contraction, I still think metals do well because people always buy them as a safe haven when there's a contraction.

Mostly, I believe that when 99 percent of wall street and the general public hates an asset class (precious metals) that is usually a great time to own them.

It already ended, did it not?

You don't have to know how to pick stocks to click the buy total stock market button. Silver is and always was a spec play. It's value is production + spec, so I would buy it at ~production, whatever that is.

I told them all to sell their $35-45 silver and $1800-1900 gold fwiw. But they said to infinity. LOL.

I believe November will be the first month without asset purchases. We'll see what 4th quarter GDP is when they release next year and how the market responds.

How is this a fact? Transaction fees are ridiculously low and entirely irrelevant for a long term investor (or smart trader). Also why do people say "the fact is" when it's clear they have no idea what they are talking about?

And so you think silver requires no economic analysis whatsoever and just has to go up?

Two illogical points you made in this one. Firstly the fed just ended its bond buying program. The market went higher. It is not the market that is propped by QE, it is corporate performance. Corporations are producing record earnings, buying back record amounts of shares, distributing record dividends, etc. Secondly, if you think that when the market has a correction the fed will come in announce more QE, you should be buying stocks, not silver. By your logic, the market can't fall because of a fourth QE. Are you starting to understand?

So basically your point above this about more QE being imminent causing silver to go up, has changed to "silver will go up no matter what."

Great point. When nobody likes something, it usually means demand for it is high. That makes sense.

I guess I was more right then I had originally thought.
Why didn't I keep my silver short :/

I don't have a lot of time for such a nasty and bitter person but here is a really simple economics lesson:

low demand = low price = good time to buy

You're welcome.

Thanks!
I am going to go hinge my retirement on radon futures.

Let's do a little science:

Thesis in the OP and in the years following: QE will cause silver to go up.
Results of thesis: Silver lost 60% of its value despite huge amounts of QE.

Thesis: stocks will collapse due to inflation
Result: stocks are up 150% since OP

Thesis: Silver will skyrocket once QE ends
Result: Silver dropped even more

The theses of the silver buyers have failed. The rational thing for the silver proponents is to analyze why they got it wrong, and learn whatever lessons they can.

I'm not incorrect in assuming that at some point, this is going to be an interesting buy/hold, right?

I just did it with corn (granted it turned around much quicker than I imagined it would), had always told myself that eventually some of the metals would have to become a buy. I'm not even starting to suggest it's now, I'm purely long equities as is.

The difference is silver has gone in and out of favor for thousands of years. It has real intrinsic value based on its use in electronics and jewelry. It will someday be in favor again, it is just a question of when.