Sunday, June 12, 2011

Long Silver

People got caught on the silver trade because they were trading with paper.  This can be done, because silver acts as a currencie, it acts as an asset, it acts as a reserve, but most importantly, it acts as monie.  Its wealth lasts forever, and it is best used as a wealth preserver.  If one is trading it, then it should be known that what is being given up is monie.  The collateral for trading with monie should be highly valuable, but most accept paper.

If people stuck with the monie, the price would turn upwards on a dime.  Yet people ignore it value as monie, and search for yield.  This affects global demand but still demand stays high.  Once supply decreases, it will join the other PMs and oil on the downside of production.  Considering inflation, and the gold/silver ratio, silver remains the best long choice on market, no matter trader sentiment.

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