Segment 1: Between a Rock and a Hard Place SEGMENT BEGINS AT 00:38 Economist Jerry Robinson provides his signature commentary on the momentous news stories that have been making waves in the financial world and shares profitable investment strategies, as well as...
By Paul Mladjenovic – May 03, 2011
The silver market has been very interesting lately but what really rankles me is the various commentaries that have popped up from across the financial media world. It seems that as soon as silver gets near $50, all of a sudden the silver bears come out of the woodwork and even some usually bullish observers are leap-frogging over to the silver bear camp. What are silver investors and speculators to do?
First of all, as we have known for years, silver in the short term can be very volatile and abrupt pullbacks can happen. The leading culprits for recent pullbacks (which resulted on April 26 and May 2) were the moments that the futures exchange raised the margin requirements. The first time was on Monday April 25 and then again on Friday April 29 (a whopping 75% increase). For those that were long in the silver futures market those were exasperating moments. Should we be concerned or pessimistic about silver’s future?
I think that many investors and speculators became very concerned as all the dire warnings of a silver top started being publicly presented, and it didn’t take much for a stampede for the exits to be triggered. What better trigger than the futures exchange pushing margin requirements much higher, practically forcing a sell-off?
I don’t blame folks for being concerned and a little panicky when they see financial experts (both real and alleged) warning about an impending collapse for silver. Have the prospects for silver changed that drastically in recent weeks (days!)? Did China and India suddenly float away from planet Earth? Did all of us stop using cell phones, Apple (AAPL) iPhones and iPads, medical technology, computer screens, etc etc?
I was recently quoted in an article that was ominously titled “The Silver Mania May Come to an Abrupt End.” The piece even quoted a financial authority that I certainly respect that called himself a long-time “raging bull” on silver until it recently flirted with the $50 level and then…BAM…he became bearish and then recommended in his newsletter to sell all silver holdings. Some raging bull!
I think a better headline would have been: “The Silver Mania May Come to an Abrupt…Pause.”
Look, the fundamentals for silver are great and they get better everyday. Look at supply and demand…