Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Silver prices -- Ignore unavailable to you. Want to Upgrade?

To: Casey who wrote (1163)	5/20/1998 1:44:00 PM
From: Ray Hughes	Read Replies (1) \| Respond to of 8010

Hello Casey, Re: MA's short silver, buy gold. 1. Silver battery technology is a lot more than 5 years old - he doesn't really have facts in order. Lithium batteries do have a singular advantage - they have long (5 years) shelf life and are useful for the retailer who doesn't get stock outdated. However, for defense electronics silver is superior because its voltage remains constant until the very last moment. Hence, missile guidance systems perform better due to constant voltage. Counting electrons gets difficult when the electron flow diminishes in other battery types. 2. With regard to gold MA fails to recognize the very same argument about a large overhanging inventory (silver) also applies in spades to gold. The Fed is very carefully guarding its reputation about defeating inflation. The Fed and CBs can dump huge quantities of gold to damp and gold rally that threatens to undermine faith on the USD as the safe haven. The Fed won't let a decade of work go down the drain. 3. MA sets up a straw man case about financial collapse in Japan and Europe. In any case, if gold could rally in the face of huge overhanging gold inventory and Fed's interest to protect USD, then, too, silver, with much smaller inventory/consumption ratio, could rally. His logic isn't. 4. Gradual rise in the USD is creating a bull market in the USD on which one earns interest. So, therefore, why buy gold even if local currency price of gold rises but gold doesn't pay return. 5. Financial melt down in Japan and Asia, e.g. Indonesia, has caused flight of capital to safety and LIQUIDITY. This is what has driven the DOW on its last steep up-leg. The last few weeks shows that financial insecurity will propel the US equity and treasuries because there is LIQUIDITY in USD. The only event I believe would cause gold rally is crash in USD and that doesn't seem too likely as long as other currencies look uncertain. What you should see in MA's arguments is that he ignores the massive gold inventory overhang while he concentrates on silver inventory overhang. Intellectually biased? Clearly. Why? RH