Sunday, June 24, 2012
By the SilverBombSquad
After a momentary surge in anticipation of the effect announcements from last week’s FOMC meeting would have, the spot silver price has continued slipping from the $48.00 an ounce peak seen last year. This has made many investors leery of possible further losses if the trend should continue.
The price of silver seemingly cannot even be discussed without the inevitable use of the “v” word. Over and over we hear it as the central theme of the repetitive “silver prices are volatile” litany, particularly from those who are incorrigibly bearish toward the white metal.
Pointing to the swings in silver price, silver bashers have had a great time lately with a healthy dose of “I told you so” smugness. The silver price per ounce is low with Friday’s AM fix coming out of London at just under 27 dollars.
But what is really happening here? Why has the silver price continued to drop for going on a year now? Are we now seeing, as has been suggested, that the “recovery” has strengthened the US Dollar and dollar-based equities? The airwaves fairly bristled with news about how the economy is now getting so robust that the FOMC barely had to tweak it with the extension of TWIST allocations. The USD Dollar has indeed made “apparent” gains recently against some other currencies, particularly the Euro, as large-scale systemic implosion looks to be engulfing the Euro-zone. Capital flight continues from Euros into Dollars as justifiably frightened investors and savers dump Euro-based assets and rush into North American investments, particularly in the U.S.
It is routinely suggested that it is due to investor apathy, as in lack of interest in silver, that the silver price is low and ebbing lower. The teleprompter script-readers repeatedly put forward the skewed idea that as the Dollar has “strengthened”, formerly panic–driven silver safe haven investors have relaxed. It is because these investors have quit buying, that the silver price still drops…or so they keep telling us.
In reality, silver buyers are more encouraged than ever to load up on silver right now, precisely because the price is low. When the price drops, the buying accelerates to the point of revealing how truly scarce the commodity is actually becoming. In reality, there is a current rush to buy silver…but there is not a current rush to sell silver. Even wholesale brokers like Michael MacDonald over at Wholesale Gold Group have begun to see the first signs of shortages of silver available for actual physical delivery. “There was more to be had while higher silver prices were higher” said Mr. MacDonald in a telephone interview Friday, “since at a higher silver price, profit-takers where still willing to part with their silver.”
Back in 1979, for much of the fall of that year there had also been a drop in the silver price that had tested the nerves of some long silver investors. It should not have, as this dip effectively became the “spring-board” from which the silver price spiked upward more than ten-fold the amount it had dropped. It goes without saying…but we will say it anyway…that it paid off quite handsomely for those that hung on to their silver.
An amplified version of this same scenario is taking place right before our eyes. Regardless of what the puppets and pundits say about it, the demand for silver, both as an investment commodity and as an irreplaceable industrial metal, continues to rise. What is again going to happen, only this time in a highly magnified way, can be explained something like this:
Currently, the silver price is just re-loading. The lid is about to blow off of the silver price in a super-spike that can only be called The Silver Bomb.
“Forewarned is forearmed” is the operative phrase for those who will receive the call to action and protect their asset value through strategic investment in both gold and silver. Pass the word.
The SilverBombSquad recommends The Silver BOMB—Beyond the Return of Metal as Money available on amazon.com