In a world without "fear", silver has no business being in the $25-$30 range right now, or in the short term future. If it gets to that point then it will be only because of fear. It was fear that took us up to almost $50 and it was a lack of fear that has dropped us down to below $16. So if you want to try and gauge where silver will be in the next few years, think only about fear, not about some of the ridiculous assertions made by silver and gold bugs or the people who misunderstand fiat currencies and quantitative easing.
The ECB quantitative easing will do in Europe exactly what it did in the US: it will stave off the deflationary spiral that we were facing. Although it will take some time, it will eventually help with the problem and reduce fear over the long term. And without fear, silver should be sitting somewhere under $16. Long term, it will be worth more than that. But in the short term it just isn't worth $25-$30 without the fear aspect.
There are a lot of people who really don't understand fiat currencies at all and why they are needed. Suffice it to say that there is not a single country left in the world using a gold or silver standard. And that is because they ALWAYS fail for the same basic reasons. I won't go into those reasons here because I don't want to hijack this thread. Fiat currencies are a necessity and anyone who thinks otherwise really doesn't understand them. I do not proclaim to be an expert either. But I can understand basic logic.
Bradley,
I thought you believed the run up in 2011 was upward "manipulation", do you now feel it was natural supply and demand?
In any event, there are lots of reasons to be afraid nowadays when it comes to nations' debt levels, currencies, etc. Just look at the poor Euro fools losing their a$$e$ re: buying power- gold has made great gains lately in Euros. Actually the US QE was supposed to stimulate the economy and prevent deflation, but I believe the real reason it was designed was to bail out banks- in part to allow banks to dump lowered valued assets to the fed who bought them from said banks at higher levels (this was during one of the QE's, I think the last one), and also to help keep the interest rates near zero. An added benefit was to force the sheeple to yank money out of savings (at 1% interest or less) and play it in the stock market casino where there would presumably be higher yields.
When the stock market is high the sheeple think all is well, so they ignorantly say the economy is doing well simply because the stock market is up, even though the under-employed and unemployed numbers (who no longer get benefits and thus aren't counted) grow and wages stagnate. Even stock bulls have to admit the last few years' run up was in large part due to the various QE programs, even if indirectly.
As far as saying QE was done to prevent deflation is not correct (that might have been the "stated" reason, just like saying we went into Iraq to get nuclear weapons or whatever it was), and one can see today we are having what some call "deflation" all around, so if you assertion is correct, then QE failed because we are seeing deflation pretty much everywhere (except food prices).
I agree we can never have a truly "backed" currency because those in power lack the will and honesty to not spend beyond our means (nor the sheeple disciplined enough to work hard and not want free stuff all the time), because if they aren't promising the US sheeple free stuff all the time, they won't get elected. Any politician of any party that preaches austerity or so here will not get elected. I wonder what our parents' parents' generation would think (those who lived in the 20s, 30s, 40s, etc) if they came back today and saw all the whiny, pi$$y folks who always find a reason to claim they are entitled to something and want the GOVERNMENT to provide it for them or to take it from the "rich".
Funny you say all backed currencies fail, so do all fiat currencies. Go back to Rome and see what happened to them when they reduced the silver content of the denarius from 99% to less than 1%, which is akin to what we do now with printing paper money. Even the british pound was once backed so it has not been a fiat currency the whole time. The US has had past failed fiat currencies like the Continental and Greenback which came before the dollar.
The truth is that everything in life is cyclical. This has played out for thousands of years: Start with a currency with built in value like gold, silver, seashells, etc, then over time dilute it so the government can promise things and pay for things it otherwise cannot afford, in time inflation grows and the value of said currency diminishes, then eventually confidence in said currency crashes and some new currency comes out that is again possessed with built in value- rinse and repeat. We will see that again after some big financial crash if the sheeple wake up. But even then over time those in power will seek to gain and will dilute some more, etc. There will be times when having real assets (silver, gold, seashells) is smart and saves your a$$ and times when it won't.
I love this example: what would you rather own now, a 1920's era US $20 gold coin or a US $20 note from that era (let's assume no numi value in the bill)?
The key now will be having assets that retain value if things start to collapse again. 2008 was not a fluke and from everything I read, the financial institutions as a whole are on shaky ground now even more than then. With the removal of Dodd Frank provisions recently re: derivatives it is not hard to see the writing on the wall.
The only reason the dollar has lasted this long is because due to Bretton Woods agreement (the spoils of winning WW2) where we got the world reserve currency status. There is much going on in BRICS nations (who are teaming up with some of our allies) to start exchanges and such that do not use the dollar anymore for trade. Thus the dollar will fail someday too, but maybe it will be in 5 years or 25 years?
Does anyone really think we or any other country plan to pay off their debts? We are at $18+ trillion and our food stamps use grows daily, etc. I guess if everyone still has confidence in things we can carry on for a while.
Just my opinion.
Jim
