I have to hand it to silver bugs. I would not have not thought it possible that the bubble could be recreated in all its former glory.
1. Compare and contrast the 1980 (annual) peak to where it stands now.
2. Compare and contrast the steepness of the ascents.
I could be wrong to think this way of course, but I am not even remotely interested in buying silver at these prices.
See Also:
Silver to Aluminum Price Ratio
Silver to Aluminum Price Ratio v.2
Source Data:
USGS: Historical Mineral Prices
Kitco: Spot Silver Price
Kitco: Spot Aluminum Price
Stag,
ReplyDeleteI guess aluminum has some sort of built in immunity to quantitative (dis)easing. What gives?
In all seriousness, why can't people see that they are over-paying? I can respect the fools & their money trade (as pointless as it is) but not the "store of value" meme.
mab,
ReplyDeleteAs a momentum trade? Sure. It's worked many, many times in the past right up to the point it didn't. For example, oil went from $10 to $150 and then back down to $30. That "sure thing" trade worked until it didn't.
As a world is collapsing utterly and completely trade? Maybe, although Mad Max never looked to be hoarding silver. It just doesn't offer that many calories if time turns really tough.
As a "store of value" meme? I'm with you. I don't get it.
This isn't at all about what dollars are worth or what they are not worth. It's about one very useful metal compared to another very useful metal. In my opinion, the ratio between the two is completely out of whack and is therefore prone to give the late-comers a serious hangover at some point.
Clearly, mortgage interest rates that are near 30-year lows are bringing many buyers into the market at the beginning of the traditional home-buying season, ... and we're counting on the Federal Reserve to continue its accommodative interest rate policy to keep housing strong. - David Lereah
Hindsight shows that his theory was incorrect.
However, I'm now told...
Clearly, interest rates that are near 30-year lows are bring many silver buyers into the market and we're counting on the Federal Reserve to continue its accommodative interest rate policy to keep silver prices strong.
Why am I so skeptical?
I just have no idea anymore I guess. The last all time high in the ratio was due to super high inflation and rising interest rates plus a poorly executed silver market corner by the Hunt brothers which was squashed by government intervention. Now we have either deflation or stagflation and fixed all time low interest rates for the next 5 years. I may not be buying anymore, but I am not convinced selling is my plan either. I am going with Netflix and Apple as a hedge!
ReplyDeleteI am going with Netflix and Apple as a hedge!
ReplyDeleteGYSC,
That's the spirit!
GYSC,
ReplyDeleteDon't make me do an Apple stock price to physical apple price ratio chart! I just might if I can find historical apple prices. Don't think I won't look! :)
I still remember when Apple was at the bottom of the barrel and could do no right. Now they are at the top and can do no wrong.
Investors better hope that's not cyclical!
Uh, it's different this time?
ReplyDeleteI'll have to admit that the thought of selling has entered my mind more than once here lately, and if I'm thinking those thoughts I wonder who else is too.
For what it is worth, I actually did do an Apple stock price to apples fruit price comparison. I just posted it. Enjoy! :)
ReplyDeletewatchtower,
ReplyDelete"I'll have to admit that the thought of selling has entered my mind more than once here lately, and if I'm thinking those thoughts I wonder who else is too."
You have been paid well to procrastinate. So far. ;)
http://finance.yahoo.com/q/bc?s=JJU&t=3m&l=on&z=l&q=l&c=slv%2Caa
ReplyDeleteit is interesting that aluminium may be a stick in the mud, but Alcoa has been a high flier--rivaling silver in bubble terms for the last few months. The hedge fund rampers are not choosy.
Anonymous,
ReplyDeleteAlthough aluminum is roughly 8% of the earth's crust I have been assured that once it is gone, it is gone! Oh sure, some might be recycled of course but there is absolutely a finite supply overall (on this planet anyway).
On the other hand, nobody ever went crazy hoarding aluminum (except those using it to make hats in response to government conspiracy theories perhaps).
In all seriousness, I've hoarded a LOT of aluminum foil purchased at Costco. It was cheap. Silver keeps suggesting I should do so. What's the harm? It's not like I plan to resell it. I won't require a greater fool. I won't have to pay tax on any inflationary gains. I know I'll someday need it.