Here are the latest news items and commentary on current economics news, market trends, stocks, investing opportunities, and the precious metals markets. We also cover hedges, derivatives, and obscura. Most of these items are from the “tangibles heavy” contrarian perspective of SurvivalBlog’s Founder and Senior Editor, JWR. Today, we look at the thin silver market. (See the Precious Metals section.)
Precious Metals:
Can Reddit’s silver ‘apes’ beat the market? JWR’s Comments: In a market this thin, yes, the Reddit crowd could indeed trigger a large market rally and a lot of short covering! What do I mean by “thin”? A thin market is the opposite of a liquid market. A thin market has just a few traders, and high volatility. Compared to the equities market, the size of the silver market is tiny. COMEX open interest is now over 1 billion Troy ounces. There are large discrepancies between physical silver and paper silver. And the amount of leverage employed (paper versus physical) is huge. This makes the silver market fairly volatile at all times and incredibly susceptible to manipulation. In times of market crisis, silver could easily triple or even quintuple. Be prepared for some big price swings. Buy low and then buckle up, folks. And if silver does ever double quickly, then don’t hesitate to then sell half of your holdings. At that point, your cost on what is left will be zero, and thus you can enjoy the ride, despite the dramatic price swings.
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The recent dip in gold and silver is worth mentioning. This has brought the retail price of physical metals down. For instance, APMEX is now selling $1,000 face value bags of circulated pre-1965 silver for less than $22,000. It is a good time to buy.
Economy & Finance:
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The Economic Cost of Cuban Socialism.
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And over at the CNBC Perpetual Cheering Section: Dow drops nearly 300 points on Friday, snaps 3-week winning streak.
