Silver - The Good News or Bad News Metal?

silver

Excepting short term price performance, physical silver is often referred to as either the ‘good news metal’ or the ‘bad news metal’. 

It’s the ‘bad news’ metal because, like gold, in times of a currency crisis it behaves more like a hedge against currency debasement or as a monetary asset. 

In times of real economic growth, demand for physical silver expands alongside the modern industrial complex, or among ‘good news’. 

This would be true but for the fact that we are nowhere near free market value - primarily as the result of surreptitious and illegal price controls. 

It’s no coincidence that not many degrees separate precious metals price intervention from the general and pervasive interference across practically all financial assets.

There is no real growth in the real organic economy. All indications - and in particular those used to measure the consensus outlook versus actual economic data - point to severe economic stagnation and decline. One popular economic data point that measures this specifically (signaling red) is the Citigroup Surprise Index for the U.S.

An honest assessment of actual physical silver stockpiles in conjunction with the long-held industry inventory practices suggests that we constantly walk along a thin ice between normalcy and panic. 

However, an equally honest and comprehensive assessment of financial risk, alongside ongoing and blatant price manipulation, leads even more dire potentialities. 

While price suppression fuels the false reality of industrial demand, its inevitable ending will very likely trigger a much larger (monetary) crisis. There has not been a parallel surge in silver fabrication demand - along with the rise in equities. 

The article below got me thinking about the progress - and the so called good news side to silver. 

How Much Money Can You Really Save With A Smart Home?

http://www.zerohedge.com/news/2015-04-16/how-much-money-can-you-really-save-smart-home

It has become conventional wisdom that the wave of the future is “smart home” technology from smart utility meters that read a houses energy usage automatically to smart lights that turn off when not in use. The industry has been in development for years, but moved to the forefront of the start-up world when Google bought Nest Labs last year for more than $3B. 

This quote got me to pondering:

….as the British are discovering, new technology does not always live up to the hype. And if the reality is disappointing for the most promising technologies like smart meters in the smart gird, then how likely are other smart technologies to live up to their own hype?”

Much of the electronica ends up in junk yards, (where we have to leave it until it becomes profitable once again to re-claim the scrap and precious metals).  

Contrary to popular belief, not all technological advance leads to forward progress. 

Much of what we’ve created has led to large scale distraction, modern technological bread, and circuses that keep the masses disenfranchised and subdued. 

Silver has been part of this conversion to a consumer economy — an overextension based on very little real progress. If anything, the toys have led to a dumbing down. That’s not inherently sustainable. Neither is the paper false dawning we’ve see at the current stage this credit cycle.  

Industrial demand continues as a constant stream flowing along the fragile course of just-in-time delivery at severe risk of drying up at any moment. When it stops, it's over. The demand blows sky high in panic and all the paper collapses like confetti around what will, from that point, be a physical market once again as the price goes out of reach for most.

Growth based on overextension eventually contracts. And when it does, the decimation usually swings far to the other extreme. 

Ultimately, though - an industrial user panic could happen in parallel with the greater risk we’ve all become numb to - the monetary crisis. 

It just seems like it can go on and on because it has; and we are going through it. History will look back and tell the story as a brief moment in time and wonder how so many couldn’t see it all unfolding right in front of them.



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