Has anyone been following the gold and silver market? It is unbelievable-especially silver. Everyday it is going up and up and up. On Jan. 1st of this year, silver closed at $14.83 an ounce. On Feb. 1st, it closed at $16.79. Just a week ago, it closed at $17.95. And today it closed at $19.75. This is not the highest silver has been. Back in the 1980s (?-or was it 1970s?) it was up to $50 an ounce. Gold is also going up. it went from $835.60 an ounce on Jan. 1 to $969.50 today. What does all this mean? I have no idea. I just know as a coin collector, the coins I want will probably cost more now.  :\'( :\'(  But, the coins I sell... ;D ;D ;D

http://www.kitco.com/charts/livesilver.html


Cat

It's not just precious metals...

Copper scrap is selling between 0.65$ and 2.40$ a pound here. Today I took to the metalyard 172 lbs of old 25 pair telecom wire and got $112 for it.

All metals are insanely high right now. Matter of fact, you can't sell non-ferrous metals to a scrapyard without an ID here anymore. There have been cases of people stealing copper gutters off of houses, and catalytic converters off of people's vehicles.

It doesn't seem that long ago that silver was 5$ an ounce...

Ant

All commodities are up, not only precious metals such as gold, silver, and platinum but also soft commodities such as soybeans.  And of ccourse oil has been closing over $100 all week.  Basically, the impending recession, slowing housing market, and subprime/default/foreclosure concerns are rattling the market and people are fleeing to safer investments.

Whatever happened to the Hunt Brothers, Billy and Bunky?
???

fudge, i been thinking about buying metals for weeks. but i never did. :-\\

you know when metals go up it's not a good sign, right? i mean it is if you have metals but not in general, it's a "safe haven," as they say.

oh, well. if i wait too long and end up buying into precious metals at the top of the market i can always put together a canned-good-and-gas-mask portfolio.

Has anyone been following the gold and silver market?


Bigtime.  It's like the Hunt brothers are back aga---aaw, crap, Maxwell beat me to it!

It's not so much the recession -- it's the fact that we're printing more dollars than the world has any use for.  We're repaying the interest on our national debt by devaluing the currency.  Short of fiscal responsibility (which is a non-starter in Congress), it's the least painful option for everyone from the foreign bondholder to the domestic exporter.  To hedge against the effects of the devaluation, large investors are exchanging their dollar-based assets for oil and gold.  Although there's some commodity price inflation in oil and base metals due to increased demand from China, most of what we're seeing in the hard side, and specifically within the context of oil and precious metals, is the result of hedging against currency devaluation.

Problem is, oil's handy for lots of things, including running farms, and we're simultaneously turning a large chunk of our corn crop into ethanol, hence the tripling in the price of foodstock such as wheat and corn.  Those price increases drive price increases in both agricultural inputs (particularly potash for fertilizer) and outputs (such as milk and meat).  That's real commodity price inflation; fewer goods being produced, but being chased by the same amount of food dollars.

Once upon a time, we could have had Volcker, who'd jack up interest rates to 80s-era levels and crush the inflationary death spiral by instituting a crippling recession.  Everyone would grumble as they tightened down and lived off their savings for a bit, or delayed a few big purchases for a few months, and then we'd move on. 

That would be decent economics, but it'd be political suicide.  Most people don't have savings, they have debt -- and inflation is great if you're a debtor, and debtors vastly outnumber savers.  That $10000 in credit card debt you've got?  When a loaf of bread or a gallon of gas costs $2.50, and you're making $50000/year, that's a lot of debt.  When a loaf of bread or a gallon of gas costs $10, but everyone's making $150,000 a year, that $10K is easy to pay off!  Woohoo!  Everyone vote for that guy! 

Volcker made people's lives miserable -- 18% interest rates on prime mortgages.  Even if you're making 18% on mortgages, banks themselves started to fail.  When home prices crash and people start sending back the keys, you're not making 18%, you're making zero on the mortgages, but you're still paying 13% interest on one-year CDs.  Grandma did great, but that's because she remembered the Depression and always kept some savings around.

Problem is, the guy who cranks up the printing press and triples your salary to make your current debts manageable, but in so doing, simultaneously quadrulples your cost of living -- isn't doing you any favors either.  It's just that most voters are too dumb to notice what's going on because the numbers on their paychecks are still bigger than they were last year.

The only thing I can say in defense of the current Fed is that inflation is easier to deal with than deflation.  Right now, they're pushing on a string; the more they cut rates and devalue the dollar, the more capital flees America and goes into commodities, the higher inflation gets, and the slower the economy gets.  That's a death spiral, but they still have the option of getting all Volcker-like on inflation if they have to.  The opposite scenario -- a Japan-style deflationary death spiral brought on by crushing out economic activity and letting commodity and asset prices fall back to equilibrium -- is a lot harder to pull out of; it took Japan decades to do it, even with zero (or negative) interest rates.  Everyone just did the carry trade, which was great for the investment banks, but Japan, Inc barely broke even.

also i'm betting the AK and IED markets are gonna be bullish domestically over the next two to three years.

It's not just precious metals...

Copper scrap is selling between 0.65$ and 2.40$ a pound here. Today I took to the metalyard 172 lbs of old 25 pair telecom wire and got $112 for it.

All metals are insanely high right now. Matter of fact, you can't sell non-ferrous metals to a scrapyard without an ID here anymore. There have been cases of people stealing copper gutters off of houses, and catalytic converters off of people's vehicles.

It doesn't seem that long ago that silver was 5$ an ounce...

Ant



A few years ago, there were a couple of guys who went to a transformer in Rutland and stole some copper-and basically knocked out power to half the city. I am really surprised that they didn't get fried in the process. They should have been arrested on stupidity alone.


Cat