The silver market has taken a nose dive in recent trading sessions, leaving many of those positioned on the long side underwater.
Taking a deep breath, it may be time to acknowledge the difference between physical and paper
The Problems With Paper
Put simply, paper derivatives do not price in fundamentals. Nevertheless, price movements in paper products are shaping sentiment, and are moving the precious metals far off the radar screen as an attractive investment — except perhaps for the very few that see their intrinsic value.
All paper derivatives markets have ballooned so far from reality, that along with the rapidly expanding money supply, they seem to be gigantic bubbles in and among themselves.
Furthermore, the latest silver market rout indirectly serves to support the metal’s price in the long term by forcing numerous suppliers out of the market, as their production becomes increasingly uneconomic.
Given Falling Silver Prices — Consider the Alternatives
Those considering moving their investment funds out of the paper silver market into other assets, are probably now looking at the available alternatives. Here is a quick overview:
The Ultimate Confiscation
In many ways, paper metal derivatives represent a type of front line, underhanded confiscation since people are duped into holding them instead of the actual metals that their prices are supposedly based on.
After this, the sequence of a more overt confiscation policy looks like it will go after:
Furthermore, the Cyprus bail-in banking debacle looks like the template for future deposit confiscations.
With respect to pensions and 401k plans, the coming market volatility will probably 'convince' the masses that the government knows better. Sadly, the 'government guarantee' seems to be the sacred cow that will be sacrificed to bring about the great “financialization” of everything.
Making paper currency legal tender was the first step in this process, and the ensuing propaganda campaign has effectively steered a generation away from sound money principles. Only by seeking real value can investors see the benefits in continuing to hold silver.Back To Silver Coins Home