Thursday, January 20, 2011

Silver vs. All Commodities (PPI)

Click to enlarge.

It sure looks like a bubble to me.

Source Data:
USGS: Historical Mineral Prices
Kitco: Silver
St. Louis Fed: PPI: All Commodities


watchtower said...

This is slightly off topic.

I'm a car guy, or more specifically, a musclecar guy.
I read a lot of car forums and came across this recently (actually my brother sent this to me):

"Originally Posted by southside39

Then what are some of the better ways to make money, what are some parts that are in high demand that I can turn a profit on?"

"dude, i, and others are trying to tell you it is a horrible time to try to sell parts, the economy is in the know what i make good money on right now...

I buy any car i can thats D I R T cheap, i part them down to dirt, and recycle...300 to 400 is my limit, but it has to be cool and have some good stuff, the idea is to get the parts for free, and scrap the car for what i paid for it...
...theres more money in scrap right now than parts, i dont understand it, but its true"

Mark I don't see how this commodities boom (not only Au & Ag, but scrap iron, copper, etc.) can keep going on and on and on.

Even this 'gearhead' (and I don't mean that in a derogatory way in the least) above realizes that something is out of the norm.

One day somebody is going to get enough 'stuff' I would think.

Either it's in a bubble, or "it's different this time".

Stagflationary Mark said...


I hear that!

When I turned bearish in 2004 I felt very uneasy when I was buying gold and silver. My main thought was...

"Can I really protect myself from a world in which so much STUFF was bought on credit by buying even more STUFF?"

That's what it felt like. I did it anyway though because I thought that gold and silver were at least reasonably priced.

The thing keeping this boom going is the China story. I'm just not a believer that a billion people in China will be paying $5 per gallon for gasoline.

If I really believed in the China story then I would still be a believer in the gold and silver story. I just don't.