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Gold/Mining/Energy : Canadian Warrants Only -- Ignore unavailable to you. Want to Upgrade?

To: koan who wrote (14618)	8/29/2010 3:17:26 PM
From: VisionsOfSugarplums	Read Replies (1) \| Respond to of 23093

Forgot I had that on there, lots of good quotes in the Art of War, funny how some of these truths stand the test of time. Interesting article. His one comment early on "I couldn’t reconcile how there could be greater demand for an item than there was current production with prices not moving higher." My response would be: "it's called inventory". I don't think prices really go higher in any commodity when there's an inventory overhang. Per the stats in his article, it took 70 years (!) for silver inventory to drop from 10 billion ounces to 1. No wonder prices didn't go up. I guess his salient point though is that inventories are getting lower now though, and investment demand is rising. So I would think that would be good for silver. Here's a good summary of the silver market too: cpmgroup.com Yearbook page has gold and PGM too: cpmgroup.com I personally will try to go with whatever the market is doing, will try to keep in mind that there are much larger hands out there than me. Right now it looks to me like it's going up. One of the points in the CPM was that Silver Price increases or decreases are typically driven by Investment demand (which jumped in '08 and '09). The likes of SLV are such a big part of that now (which adds an element of uncertainty to me). I could very easily see the possibility that, given that deliveries only comprise a small portion of contracts, that certain volumes have been levered, something like the fractional banking system, and that any change in demand for physical (such as silver coinage last year, outside of the mainly cash settled futures market) could start to show some of the cracks (sort of like if depositors all requested cash from a bank). But I'm only considering this as a possibility, not as a conspiracy theory. It could just be investment demand for coins/physical, without any leverage, is driving prices. So who knows. It appears from the CPM report as well as Butler's that inventories were up but also that investment demand was up and since that's the thing that usually drives actual price increases (per CPM), sounds good to me as a silver stock holder!