Alan, I appreciate your comments. I was talking about the current silver market, and the effect that Warren Buffet was having on it. You indicate a valid point and of course your scenario is quite plausible. Like anything, differing factors over time will change an analysis. Warren Buffet has a different time frame than we would have and I believe for "us" a shorter term investment may be more profitable and most of all safer. I indicated what factors I was looking at, and clarified that unless a new factor is introduced into the silver market, the price of silver would not be able to sustain the incredible highs that it once did. Sorry if there was a misunderstanding, and perhaps you still disagree which is your choice.
I also indicated that there is a secondary supply of silver and that is in the hands of regular people that continually undermines the price of silver. In other words, many "personal mines" in people's households. When the price of silver goes up, this new supply is "tapped" as regular individuals from all over the world (mostly India, and other Asian countries who have significant amounts of personal silver items) begin to sell their silver possessions into the rising price. Of course, the supply I am talking about can't be measured by market indicators, as these "personal supplies" of silver are introduced outside of mined silver production. In fact, this was the factor that led to the unsuccessful attempt to corner the silver market. So, in conclusion, although the price of silver may go up, it is very difficult to maintain a high price of silver. Most certainly, an investor could ride this upswing and enjoy a good profit.
I hope that this clarifies my original post. I also believe that the above, is a limiting factor on the price of gold. In 1979-1980 when the price of gold skyrocketed, personal gold now became it's own gold mine and played a role in bringing down the price of gold by meeting demand with supply outside of mined gold production. There are other metals that are not "personally held in households" in the above sense, and thus are less likely to be undermined in the way I have described.
Thanks for your comments. |
