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WTF to do with Silver

May 2, 2011

For the most part I have no silver or gold related stocks in my account. I am however a proud owner of physical, thankfully with a price a few flash crashes down from here. These types of trades are difficult because you attempt to rationalize being long, while at the same time being prudent and responsible. As a result I will sit tight and not add any new purchases in my trading account. Physical is not easy to sell, and at this point I will not initiate new purchases. But Ill sleep soundly tonight after thinking about the following points:

1) The price ROCKETED from $35-50. A break of $35 ultimately leads to a break of trend and a point where its clear there are issues. Long term silver had to come off and digest some of these gains.

2) The fundamental reason for owning silver and gold HAS NOT CHANGED. Monetization is only increasing, and that picture wont change or update until closer to June when QE2 expires. Even if quantitative easing stops, our debt is ever increasing meaning the dollar is still screwed.

3) I cant find anyone with a decent supply of silver bullion. Would you like to buy 25-100 maples or eagles right now? EBAY is the only place that will have it. APMEX as I have said is ~2-4 weeks “delayed” and the silver I ordered 6 weeks ago from a “top 3 broker” still isn’t here. If I decide that I want a solid investment in bullion I don’t think I will be able to do it in the next few weeks. Should that picture change and APMEX seems flush with product then I will reassess.

The point here is this: There is a LOT of very strange crap going on right now, and no one has any clue what is happening. If you bought silver on speculation, then maybe you should get out. If you bought it as an investment then go back to not worrying about it.

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