Loading ...Debunking false claims made by the Silver bulls
Twitter and other dialog forums on the web are filled with Silver bulls who claim that miners will not mine when Silver prices fall below the cost of production. Unfortunately, many of the claims made by rabid Silver bulls do not stand up to critical examination.
First, global Silver mining production has actually increased despite falling Silver prices, as shown on the graph below. In fact, since 2011, Silver mining production has increased by 8.6% despite a decline in the average annual Silver price of -32.3%. From 2004 through 2011 — a period with booming Silver prices — global mine production increased by an average of 3.0% annually. Global mine production increased by 4.2% annually since the 2011 price top. Read more
Silver bulls may eventually be right, but they are still idiots
By contrast, Gold bulls represent — by and large — a thoughtful group of folks.
As a trader and blogger, I love to have fun at the expense of Silver bulls. No other market I trade has a larger and more obsessed cult following of non-thinking and emotional “investors.”
I tend to be a Bayesian thinker. In my career as a trader dating back to 1976 I have found that most really good traders are Bayesian, whether they even know the term. No way could a logical Bayesian buy into the nonsense believed by Silver bulls. In mean, these are people who believe the Gold/Silver ratio should be 15 to 1 because it was so proclaimed by some Spanish king 500 years ago!
The daily and weekly graphs of Gold and Silver indicate that lower prices are most likely. Key chart levels are giving way, calling for a possible sharp drop from current prices. Let’s review these charts.
The weekly Gold chart is attempting to complete a 15+ month H&S failure pattern. A decisive close below 1240 will complete this chart configuration and indicate a possible target at low as 1040. HERESY! … the Gold bulls proclaim. It must be market manipulation — after all, the destiny for Gold is $5,000 per oz. Read more
oh and by the way I’ve written a few books, please buy them. thanks Peter