A very scary chart - Silver at $20 by Jan 1st?

[mts]

Ok... I was looking at the silver chart (SLV ETF) for 2008 and it looked eerily similar to what we are seeing now. So I took the chart of 2008, scaled it on the vertical axis by 2.25 to make the 2008 peak price more in line with the 2011 peak price, and superimposed the picture on the chart from the last four months. The result is a VERY scary similarity. Look at how the chart from the crash of 2008 (blue line) looks almost EXACTLY like what we are going through now (red line). The experts are calling for a crash of the market to come in the next few months. Follow the blue line on this chart to see where the red line would naturally follow. It shows silver at $20 in about two months. Note that I did not change the horizontal time axis at all. I couldn't have created a better match if I was trying to myself.

Take it or leave it. Me? This is a very bad sign. $20 silver could very well be coming. The recent run up to close to $50 is a very close match to the run up in 2007-2008 just before the big crash. What we are experiencing now looks exactly like the crash of 2008. In this case, it sure looks like 2+2=4. Feel free to look at the charts yourself. I think you'll see the same thing I did. Real? I don't know. Scary? Heck yeah!

 

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[jim4silver]

MTS,

I may be wrong but I believe we are in uncharted waters with respect to what is going to happen in the world economies, ie Greece, the US gov debt, etc. If you want to look at history look at how every fiat currency ever created has eventually failed. Most last a couple of hundred years tops. In fact, the US dollar is not the first fiat currency used by the US gov since its inception, check out continental currency and greenbacks for example.

However, gold and silver have been valued for thousands of years and are still going strong. I am not worried if silver drops to 20. I will just be able to convert more of my paper money into a metal that has been valued much longer than any unbacked paper. In fact, if it drops to 20 and I can still buy physical it will be like a gift to me.

Jim

 

[mts]

MTS,

I may be wrong but I believe we are in uncharted waters with respect to what is going to happen in the world economies, ie Greece, the US gov debt, etc. If you want to look at history look at how every fiat currency ever created has eventually failed. Most last a couple of hundred years tops. In fact, the US dollar is not the first fiat currency used by the US gov since its inception, check out continental currency and greenbacks for example.

However, gold and silver have been valued for thousands of years and are still going strong. I am not worried if silver drops to 20. I will just be able to convert more of my paper money into a metal that has been valued much longer than any unbacked paper. In fact, if it drops to 20 and I can still buy physical it will be like a gift to me.

Jim

I've never bought into the "every fiat currency ever created has eventually failed" argument. You are only considering fiat currencies that have indeed failed yet there are hundreds that are still out there that haven't failed yet. It's selective statistics. It's like saying "every pair of jeans has eventually gotten a hole in them and needed to be thrown out". Although it's true that an awful lot of jeans get holes in them, it is not logical to say that all jeans must get holes. Especially since there are millions of pairs of jeans still out there without holes whose destiny is not predetermined. But don't get me wrong. I'm not saying that the US dollar won't or can't fail. I'm just pointing out the flawed logic in that particular argument.

I'm not worried if silver drops to $20 either. In fact, I'm partially looking forward to it. But by doing so I'm being penny wise and pound foolish. If silver tanks, it's likely because the economy tanked too. That means whatever money I make off of silver I'll likely lose in the market.

As we both said earlier, no one can know for sure. My chart above is very unscientific. I'm just trying to put the idea out there that silver does indeed have somewhere to go other than up. Will it crash again? I have no idea. But I'm going to continue holding off on big purchases until after the first of the year. I broke down and bought about $400 worth of silver today off of Provident Metals just in case I'm completely wrong. It's not a lot but at least I can sleep better knowing that I didn't completely miss the buying opportunity should silver skyrocket again. And at the same time, if I'm right and silver crashes, I won't be out too much from this little purchase.

One thing is for sure, it's going to be a wild ride regardless of what happens. And once again, I appreciate all of your insights.

 

[blai745]

MTS,

I may be wrong but I believe we are in uncharted waters with respect to what is going to happen in the world economies, ie Greece, the US gov debt, etc. If you want to look at history look at how every fiat currency ever created has eventually failed. Most last a couple of hundred years tops. In fact, the US dollar is not the first fiat currency used by the US gov since its inception, check out continental currency and greenbacks for example.

However, gold and silver have been valued for thousands of years and are still going strong. I am not worried if silver drops to 20. I will just be able to convert more of my paper money into a metal that has been valued much longer than any unbacked paper. In fact, if it drops to 20 and I can still buy physical it will be like a gift to me.

Jim

I've never bought into the "every fiat currency ever created has eventually failed" argument. You are only considering fiat currencies that have indeed failed yet there are hundreds that are still out there that haven't failed yet. It's selective statistics. It's like saying "every pair of jeans has eventually gotten a hole in them and needed to be thrown out". Although it's true that an awful lot of jeans get holes in them, it is not logical to say that all jeans must get holes. Especially since there are millions of pairs of jeans still out there without holes whose destiny is not predetermined. But don't get me wrong. I'm not saying that the US dollar won't or can't fail. I'm just pointing out the flawed logic in that particular argument.

I'm not worried if silver drops to $20 either. In fact, I'm partially looking forward to it. But by doing so I'm being penny wise and pound foolish. If silver tanks, it's likely because the economy tanked too. That means whatever money I make off of silver I'll likely lose in the market.

As we both said earlier, no one can know for sure. My chart above is very unscientific. I'm just trying to put the idea out there that silver does indeed have somewhere to go other than up. Will it crash again? I have no idea. But I'm going to continue holding off on big purchases until after the first of the year. I broke down and bought about $400 worth of silver today off of Provident Metals just in case I'm completely wrong. It's not a lot but at least I can sleep better knowing that I didn't completely miss the buying opportunity should silver skyrocket again. And at the same time, if I'm right and silver crashes, I won't be out too much from this little purchase.

One thing is for sure, it's going to be a wild ride regardless of what happens. And once again, I appreciate all of your insights.

Hey MTS Im with Jim Pratically every Fiat currency has either failed or has hyperinflated meaning worth super less and left gold and silver real money...You say theres hundreds that havent failed yet but however they have a life span before they get hyper inflated and hence SCREW the People... Im no economist but I know for a fact it has already happen to these nations. Rome, Germany, China, Venizuala, Zimbawea, Yugoslavia, Zaire ,Ukraine ,Turkey, Russia, Romania, Spain, France, ( Basically every country in Europe Hence the Euro..and look how that going), Argintina, Maylaysia, ETC...ETC

so can you give me some nations where there Money hasnt Failed?

 

[mts]

so can you give me some nations where there Money hasnt Failed?

The current currency in the US hasn't failed. And it may never fail. I only need to provide one example to completely blow the argument out of the water. That's the way it works with making arguments that are based on absolutes. Now if the argument was that "most" fiat currencies have failed in the past then I'd agree with you. But that's not the argument that people try to make. Why? Because it doesn't have the same scare factor.

There is nothing inherently evil about fiat currencies. And there is nothing about fiat currencies that automatically doom them to failure. I could take 10 pieces of paper, write an amount on them, and hand them out to my friends as a form of money. If they agree to their worth, there is nothing about those 10 pieces of paper that would ultimately cause them to automatically be worth less than what we originally agreed they are worth. It would be a fiat currency that would never fail.

Now... if I started creating more and more pieces of paper, then suddenly I have changed the situation. You see, it isn't the paper itself that is evil, it is the way governments abuse the system. And that's why the US dollar is in bad shape. It's also why so many fiat currencies have failed over the years. But there is nothing inherently evil or wrong with fiat currency systems. What's wrong is that people are naturally greedy. Yet it is definitely possible to create a fiat currency system that would work forever. The key would be to put in checks and balances to control greed and abuse. Since the US doesn't have that then our currency has suffered.

But that doesn't mean that it is doomed to failure. As I said before, it may indeed fail. But it is not a foregone conclusion by any means.

 

[jim4silver]

so can you give me some nations where there Money hasnt Failed?

The current currency in the US hasn't failed.

YET. The dollar has only been true fiat since 1974. Give it time.

There is nothing inherently evil about fiat currencies. And there is nothing about fiat currencies that automatically doom them to failure.

Yes there is. When a currency has no backing it makes it susceptible to being inflated and misused in other ways--ie printing dollars to pay for unsustainable debt, etc. If you don't think there is anything wrong with high levels of inflation and eroding value of a currency over time, then I guess you are correct. But many don't feel a constantly eroding value of their currency is a good thing.

Even our founding fathers knew this. "Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice".... From George Washington. Smart guy for sure. There is even a clause in the Constitution that mentions gold and silver being money.

I know you are a very smart guy MTS, but with all due respect, you are wrong on this one. Maybe in time you will see the truth. Like Blai and I said, name a fiat currency that has been around a long time that still exists. There are none. Most currencies start out being backed, then over time the backing is removed until it becomes fiat and later hyperinflates. This happened in Rome and some scholars say it helped bring down Rome's mighty empire. For example, in Rome the amount of silver in a silver denarius started out at 100%, by the end it only contained .02% silver-- that is not 2% silver, but 2/100 of a singe percent silver. This is fact and not opinion.

You don't have to agree with me and Blai on this and I respect your opinion. But a fact is a fact, show me even one truly fiat currency that has existed for 100 years that is still going strong today. I don't believe there is one. There are countless examples where fiat currencies have failed. In fact, two failed in the US before the dollar--Continental currency and greenbacks. Probably the dollar will be the third at some point. I hope I am wrong but the way it looks I don't think I will be.

PS Perhaps in a completely abstract, in vitro sense, a fiat currency is not in and of itself bad. But because it is completely open to abuse and history shows us what happens when a nation has a fiat currency, ie inflation, abuse, etc, it is thus not a good thing. I know we will never have another truly backed, redeemable currency ever again, so this whole debate is really moot.

Jim

 

[mts]

Yes there is. When a currency has no backing it makes it susceptible to being inflated and misused in other ways--

You just contradicted yourself. You said that fiat currencies are inherently evil. Then you said they are "susceptible" to be inflated. Being susceptible is not an absolute. That means they don't necessary have to end up being inflated or misused. That's my whole point.

PS Perhaps in a completely abstract, in vitro sense, a fiat currency is not in and of itself bad.

That's my whole point. There are a lot of people who will tell you that it is a FACT that all fiat currencies have failed, that fiat currencies are evil, and that no fiat currency could ever be successful. I'm simply pointing out that this is NOT a fact. Note however that I have NEVER said that our US currency will last forever. And I have NEVER said that most fiat currencies do not fail. I'm arguing in that abstract, in vitro sense to prove a point. And that point is to beware of what you are told about fiat currencies by those that have a vested interest in making you believe that silver is going nowhere but up. I do believe that our currency is in trouble. Why? Not because it is a fiat currency. But because our government has abused it. Does that mean that all governments will naturally abuse their fiat currencies? No it doesn't. Here is how the US government could easily have a fiat currency that lasts forever:

1. Make it illegal for the Fed to inflate the money supply by any more than 2-3% per year.
2. Make it illegal for Congress and the President to allow the nation to have any debt whatsoever.
3. Make the first two laws federal crimes punishable by death or life in prison.

And there you go. A fiat currency that lasts forever. Could it be done? Yes. This proves my point. Will it be done? No. Does this disprove my point? No, because I never said that the US currency wasn't going to eventually fail in the first place. But somehow you believe that I said that.

 

[blai745]

Ok... so I guess we can all agree that in the planet of Care Bears, a fiat currency can thrive. But unfortunately... we're just stuck on earth

 

[hombre_de_plata_flaco]

People who are hoarding silver waiting for the inevitable collapse of the US economy are known in the investing community as "Silver Tards".

 

[Cappy Z.]

Personally I believe that computer trading by large portfolio managers contributes to market direction a lot more than the public knows. Those two graphs tell me someone is manipulating the market, and maybe actually steering the market. Remember the big traders can make money when the prices go down as well as up. Silver is just another commodity. I honestly don't believe it can be held as a currency in case of economic collapse. People will barter with tangibles like flour, gasoline, medicine etc and besides, with all the massive silver mining in the global marketplace, silver really isn't rare at all.

 

[Marchas45]

People who are hoarding silver waiting for the inevitable collapse of the US economy are known in the investing community as "Silver Tards".

I guess all the good things you said about me just flew out the window.

 

[jim4silver]

People who are hoarding silver waiting for the inevitable collapse of the US economy are known in the investing community as "Silver Tards".

I guess all the good things you said about me just flew out the window.

Why do you care what people think about you, when you know you are doing the right thing Charlie?

Also, I wonder what kind of "tards" people are who think PMs are worthless and instead believe "everything is going to be OK", because said people don't know anything about history and how certain cycles reappear over and over throughout time.

I like "debating" with folks about all these issues now and again, but I believe it really is a waste of time anymore.

Jim

 

[Cappy Z.]

People who are hoarding silver waiting for the inevitable collapse of the US economy are known in the investing community as "Silver Tards".

I guess all the good things you said about me just flew out the window.

I hoard anything that has value. There are no 'tards'. Just like a portfolio manager 'diversifies' your assets, so should folks hoarding for the coming social collapse also diversify. You never know what could be traded for needful things like medicine, food, and water purification items. Keep hoarding Marchas45.

 

[Marchas45]

People who are hoarding silver waiting for the inevitable collapse of the US economy are known in the investing community as "Silver Tards".

I guess all the good things you said about me just flew out the window.

Why do you care what people think about you, when you know you are doing the right thing Charlie?

Also, I wonder what kind of "tards" people are who think PMs are worthless and instead believe "everything is going to be OK", because said people don't know anything about history and how certain cycles reappear over and over throughout time.

I like "debating" with folks about all these issues now and again, but I believe it really is a waste of time anymore.

Jim

Hi! Jim I've spoken with Barclay and dealt with him a few times so I'm not taking what he is saying literally just a wee joke between him and me and yes I don't care what people think of me but I sure hope it's nice. Now Let The Hoarding Begin.

 

[mts]

Ok... so I guess we can all agree that in the planet of Care Bears, a fiat currency can thrive. But unfortunately... we're just stuck on earth

The planet of Care Bears? You mean that same planet where you can blindly accept so called "facts" from strangers on the Internet with absolutely no fear of losing money? Hmmmm... maybe your world and the world of Care Bears aren't as different as you may think.

 

[blai745]

Ok... so I guess we can all agree that in the planet of Care Bears, a fiat currency can thrive. But unfortunately... we're just stuck on earth

The planet of Care Bears? You mean that same planet where you can blindly accept so called "facts" from strangers on the Internet with absolutely no fear of losing money? Hmmmm... maybe your world and the world of Care Bears aren't as different as you may think.

I use to blindly accept the fact that when I was first recruited in the Marine Corps, That I was not only going to serve my country but have a kick ass time and get paid for it..... You can now say that I blindly accept that Jesus Christ Is my Personal Saviour and that He died For my sins.. And You can say that I blindly accept the Fact that Gold and Silver are real money. And that I basically have little or no fears now.

 

[Marchas45]

Ok... so I guess we can all agree that in the planet of Care Bears, a fiat currency can thrive. But unfortunately... we're just stuck on earth

The planet of Care Bears? You mean that same planet where you can blindly accept so called "facts" from strangers on the Internet with absolutely no fear of losing money? Hmmmm... maybe your world and the world of Care Bears aren't as different as you may think.

Amen!!
I use to blindly accept the fact that when I was first recruited in the Marine Corps, That I was not only going to serve my country but have a kick ass time and get paid for it..... You can now say that I blindly accept that Jesus Christ Is my Personal Saviour and that He died For my sins.. And You can say that I blindly accept the Fact that Gold and Silver are real money. And that I basically have little or no fears now.

 

[mts]

...And You can say that I blindly accept the Fact that Gold and Silver are real money...

So are shells and wood beads "real money"? No? There are still places in the world where they would throw your gold in the trash in favor of "real money" like shells and beads. Think about it...

Good luck with your blind acceptance. In the end I only wish the best for all of us. Peace.