hum... and you were mocking me when I went short silver and crude...
Pej, Silver is still up 92% since the 52 week lows. On top of that Silver is still up 78.4% since August 27th Jacksons Hole meeting. Crude Oil is still up over 25% since than. Crude Oil was stuck for over a year with a resistance at $88. This area is now a support. Brent Crude is up over 30% in the same time. Brent Crude is still above $100 too, despite all the selling. Why would you short Silver or Crude Oil, when you could have bought back than and you can once again buy now? Why do people short bull markets... Trying to catch corrections, instead of primary trends. I just don't get it mate.
Another point I would like to put forward. Throughout history, you've had paper asset secular bull markets and hard asset secular bull markets. They tend to take turns. Currently we are in a hard assets secular bull market. Typically, the ending of this type of a bull market tends to be when Gold and Dow both come close to a 1:1 ratio. Humans have repeated this pattern many times throughout the last 120 years. So it would be something like Dow at 5,000, Gold at $5,000, as a bearish case scenario - and there are so many bears out there! Inflationists says Dow 10,000 which could send Gold to $10,000. Deflations say Dow is going to 1,000 and therefore this ratio implies Gold at $1,000. I am not in the business of predicting what price wil each asset reach and that is not my point. My point is that historically Silver and Gold tend to be between 16:1 to 20:1 ratio through the last hundreds of years of history. So an inflationist will argue that if Gold goes to $10,000, than Silver should be at $500. Deflation will argue that the Dow is going to 1,000 and if this ratio holds true with Gold at $1,000, Silver should be at $50. A bearish investor would argue that Dow might retest the low at 5,000 points, meaning Gold could finish its bull market at around $5,000, that means Silver should be trading at around $250. Now what I do not understand is the following... why the hell would you be SHORTING Silver? Be it $50 in a huge deflationary bust, or $250 in a bearish scenario or even $750 in a repeat of 1970s inflationary event, Silver is still very very cheap below all of those levels. As a matter of fact, Silver is still 32% below its nominal high that was set in early 1980s and the value of the Dollar has collapsed since than.You will probably say that that historic ratio is bogus, despite of writing on your blog how humans keep repeating history. And you will also argue that Gold will never go that high because its a bubble and it will crash to $400 an ounce and Dow is going to 1,000 points. Unlike other people, I don't doubt that there is a probability of that happening, but if it DOES happen, you won't even get your profit from your short trade, because every single bank in this world will be BUST and every single government will be FINISHED!
Sorry, I just realized now that I forgot to reply to you. I'll do that later tonight (on iPhone now)
Hi Tiho.As I mentioned several times, I do hold gold and silver in a physical safe. It doesn't mean nonetheless that I believe they will reach 15,000$/oz for gold or 1,000 $/oz for silver like crazy megalomanic such as Sprott. I do not believe neither that these markets are manipulated by evil banks. I just believe that when prices get extreme, there's an opportunity for profit. So far, I'm +50% on my put on silver, with very little risk taken, and very poor timing (bout them at silver trading just below 40, guess what happened to those who went short the futures at $40...)You can short on parabolic spikes and go long when prices have fallen dramatically. I just believe that prices for silver and most assets are still way too high. Believe me, I would love to load up on more silver like I did in 2009 at $9. Finally, I am at a collapse of the Dow of about 90% from peak to final bottom. Where would that put your 1:1 with gold? :-)
You're a good laugh mate! ;-)