silversky

9 hours ago, Piperscoins said:

What a big call. 

Baby boomers eldest are 76 -56 so you are correct they are already dying.  esp in the North.  The problem with your theory is the Government will do anything to prop up the housing market.  imo  meaning the down turn will not be as bad as it should be. 

I think you put a good argument with good merits. 

The government of the day always tries to prop up the housing market.  And they always fail.  It doesn't matter if it's left or right politically, they're both committed to private property rights and the ability of banks to create credit.  Therefore, an exuberance always grows followed by a crash.

Between 2007 and 2011, in real terms, houses lost 25% of their value.  That 25% is the portion that most people typically own, with the rest being owned by a bank. 

The theory goes that there's a roughly 18 year cycle peak to peak (min max 17-21) which follows through in most developed western nations.  This means that a new peak should be achieved somewhere around 2024-2028, followed by approximately 4 years of correcting and losses.

This is the reason for my note to self about being out by 2024.  I'd rather miss out on the last couple of years of frenzied rises (and not be susceptible to believing that this time it's different) than be sitting on a 25% loss four years later.  It's always best to leave a bit for the next guy rather than trying to time a top too closely.

The demographics issue will really add fuel to this cycles' downturn.  That's the reason why I think that the crash will be bigger than 2007-2011 or the previous one in the 90's (I remember interest running about 15%).  Next time, there will be a huge oversupply, as grand old properties which have been locked out of the market for the last half century start to flood the market.

Personally I think gold and silver are going to do well.  But property is now in the second half of it's cycle and I think it will therefore outperform gold and silver over the next couple of years.  Who knows, I could be hideously wrong. 

The price in GBP has exceeded yesterdays initial spike in both gold and silver.  This afternoon the price of silver in USD has exceeded yesterday but gold is just resisting.  If gold in USD exceeds yesterdays spike high then it's very likely that this run up is going to continue.  £20 next week?

2 minutes ago, Coverte said:

Yes, a very tough call:

If the boomer generation do it right and the property passes from the first partner dying onto the other survivor, and then onto the children, IHT does not kick in until the total estate value is over £2 million.

With the current and ongoing increase in HMO (house in multiple occupation) applications, maybe, not as many properties will need to be sold - plus if they do get sold, it may well be to landlords for HMO purposes.

The thing is that many of the children of the boomers already now possess their own properties.  They were a lot older before being able to buy them but they do now mostly possess property as well.  When they inherit a second home between siblings, they will either rent it out or sell it.  If it rents out and turns into HMO, it reduces accommodation demand more than a sale.  Either way, it's the sheer amount of under occupied property which is due to come onto the market in the coming years which will act against the current force of artificial population growth.  Some of the immigrants may also start to go home if things get difficult, and combined with the sudden increase in supply, this will create the perfect storm.  All just my opinion of course, but it's based off the land price cycle combined with demographics.

1 minute ago, Gruff said:

What about us poor souls trying to get into property? You saying it's going to be more than 18 months before we get some market corrections to be able to try and get a foot on the ol' property ladder?

I think it's going to rise into a dreadful peak in 2024/5.  Followed by a crash that will make all previous property market crashes look tame.

This is based on the land price cycle that's run repeatedly for nearly a century.  As land values peak, house prices follow.  Different stories propel the moves each time, but between the peaks and crashes there are many similarities.  This first leg off the last crash seemed to go on a bit longer than expected, without a mid market downturn.  But then the coof magically appeared to rescue the cycle, and there was a short sharp midcycle downturn.  The second part of the cycle seems to already have kicked in strongly.  2021 has seen strong growth and my view is that with actual inflation on the rise, there's little chance that there's going to be further midcycle corrections.  The cycle is due to end approx 2025, and I keep a note to self in the back of my mind that I must be living in a caravan by then.

Demographically, there are a lot of reasons why property will start to become available, even as politicians claim at the same time that we need to build hundreds of thousands of new ones each year.  At the moment, we have unchecked immigration which is fuelling enormous demand, but supply is going to start to increase in the coming years as currently occupied property starts to become available.  The boomer generation mostly own their own property.  Many of those properties are under occupied, which means, if rented, they clear a lot more demand than if sold.  There's a large group of people who're going to start to inherit property, and some of them are going to have to sell it to pay the inheritance tax on the estate.  The others that are rented will drive down prices by reducing demand through higher occupancy rates.  This is going to steadily build downwards pressure (despite the story of supply shortages which will be running at the time) as we reach the peak of the boomer generation passing away.  Once this mechanism tips, it will become a self propelling monster.

Buying a property is always a tough call, but I think there's a good chance that the next crash is going to see property worth a lot less than it is currently.  Albeit that's going to be in 3-4 years time from now and prices will have risen stubbornly and against all the odds in this 'transitory' period of inflation.  My opinion for what it's worth is that the time to safely buy a property was over a year ago.  I'd certainly be very cautious now unless it was perfect and was where I wanted to live for the next 20 years.

Seems like the inflation story is starting to gain a bit of traction.  It's just entering the long and strong third wave right now, with mainstream punditry having woken up to it.  It will require some big gains, followed by a messy fourth wave correction (fiddly little nominal rate rises), before a final charge upwards converting all those who don't believe in it.  Only after it becomes self evident to absolutely everyone will it come to an end.

I'm really not sure how well Silver will fare compared to other assets, but houses are certainly on a tear right now.  My view is that they've got another 2-3 years of seemingly unexplainable gains before the next big one hits.  Gold and Silver both look to me like they're due some solid gains over the next few years, but property even more so.  Property is where a lot of people are going to be savagely hurt.  But not before enormous gains made in the face of complete disbelief.  Getting out mid 2024 is my plan.

1 hour ago, DarkChameleon said:

You have to motivate change, if nobody will listen you cut what they get till they change over to solar, here in Florida we have a republican governor who won't let people install solar, the sun state won't allow solar, how stupid is that,

Yeah right... if your people don't believe the climate scam, "you cut what they get till they change".

That sounds a bit ideological to me, but I can't say that I'm particularly surprised given your previous expressions of support for the antifa communists.

BTW, I don't believe for one moment your assertion that you can't install solar panels in Florida.  I'm pretty sure you just made that up to slur the governor and make it sound like the crazy goes both ways.  It's a patently absurd thing to suggest and I simply don't believe it.

I've just checked it right now, and of course it's not true!  The first page I came across is linked below and it's clearly allowed to install solar in Florida.  Dated May this year so not out of date.

I don't know how the details got mixed up wherever you get your news, but perhaps it's that the guvvna won't let you sell electricity to the grid at a subsidised price or something like that?  That would of course be an entirely different matter to not letting you install panels for your own use.  There are places (Spain) where scamsters have been making money through subsidies, selling fake solar energy to the grid and generating it using diesel!!!  Yup.. that's right.. diesel!!!  Now that sort of thing obviously needs to be kept in check, and so there have to be rules and regs about how your power supply is connected to the grid.  That does not mean you're not allowed solar panels.  Perhaps you think there should be more generous state subsidies which pay you for having them?  It certainly seems like there are schemes to write off against tax for the cost of install so I really don't see your argument based in reality at all.

https://www.solarreviews.com/blog/solar-panels-florida-worth-it-expert-savings-guide

As said before (and back towards the point of this thread), the oil price affects the rest of the world deeply.  Deliberate high energy costs will increase inflation everywhere, and this eventually affects the price of silver in pounds.  I don't believe that either the fed or the BOE will be able to keep a lid on this by raising rates.  They don't have any room to do that without crashing everything.  I therefore don't believe that this is 'transitory' and I expect higher prices in gold, silver, houses and just about everything you can touch.

34 minutes ago, Martlet said:

Because it was and remains primarily caused by supply constraint, not demand increase.  

How it plays out is a rate rise and subsequent hit to gold, other markets in reaction. Then when oil prices drop and supply picks up, a risk of sharp reversal. 

Oil prices don't look likely to drop any time soon.  And increasing interest rates isn't going to bring the price of oil down when you cut your own production.  The Brandon administration have been very determined to cause significant self inflicted damage to the USA's energy independence.  Keystone was a massive blunder and the line 5 issue which has upset the Canadians into invoking an old treaty, certainly isn't going to help.  For now they're denying that they ever intended to shut it down, but there was clearly a move towards that which forced the Canadians' hands.  The USA has ideologues in power right now.  That means three more years of energy insanity, and most likely a further significant increase in the money supply.  Hence my view that inflation is far from transitory.

Here in the UK we're playing the same silly game.  There's a lifetimes supply of gas under our feet, and yet we're playing for the most expensive energy option there is.  The cost of energy will necessitate more government largesse and this will drive inflation.  The cost in pounds of anything real is set to rise, regardless of demand.

Everything's transitory if you expand the timescale chaps.   It just depends what timescale you think is appropriate.

If it was 6 months only, then I would agree with you.  Two years, certainly not.  Perhaps we would find more agreement if we flesh out what we mean by the word transitory.  For me, transitory is absolutely categorically less than a year.

When do you see this 'transitory' inflation ending?  And what length of time does the word imply to you?

Just now, Mtaybar said:

It is pretty impressive. I wonder if it'll stay there. 

I thought the price was going to form a rising triangle around the 18 resistance level.  But that resistance level has been completely blasted through instead.

A look at the chart of gold might help to determine where this will settle.  They were a bit out of sink with each other in terms of their structures in time for a move upwards.  But this kind of shakes things up and might have put them both in the same direction for the same timescale.

50p in an hour is a pretty big jump.

Looks like it's set for a rise this week.  Inflation is getting a harder to ignore or deny.

33 minutes ago, Gruff said:

Banksters desperate to teach apes a lesson? 

Odd to see that, I follow the silver spot price more than the gold spot price, mainly because I don't have much gold. Had a quick peak, interesting deviation

It's not normally this divergent from gold.  Interestingly, copper actually rose a bit today as silver fell so it's divergent from being an industrial metal as well as precious metal.  Copper has been in a soft decline since 18th Oct but I have a feeling that's about to change.

Interesting take down of silver today.  Not matched in gold at all.  Thoughts?

4 hours ago, CANV said:

I’ve always found a chartist can make any chart tell you whatever you want , mess around with the X axis to include or exclude what you do or don’t want .

change the scales to add drama or reduce it.  I worked with this mob for 30 years at a bank.  They never had any skin in the game and the stock excuse when it all went tits was  along the lines of  ‘resistance has been broken the uptrend is over and we expect a downward channel to form from (get another graph out with a longer dated X axis).  Blah blah blah.   Or the opposite when the price went up.  

Very true. Charting can only really ever give a little bit of probability guidance and that's all.  Prices and emotions usually don't turn suddenly on a dime, which is why the price doesn't rise or fall in a straight line.  The five waves described in Elliot can be seen as emotional states.  Just like in real life, Things take time to sink in and doubters take time to be converted into believers and ice versa.  This is why I like the elliot wave theory as a guide.  But it's only a very rough guide of course, and unlike the "professionals" you describe, I've actually got skin in the game!  

Sixgun beat me to it with a superior visual explanation!

I'm of the opinion that we reached wave 5 on Thursday and have embarked on an a wave on Friday.  Exceeding £18 strongly will invalidate that opinion.

45 minutes ago, lst65 said:

Apologies if this is a dumb question but what’s a corrective wave please? And what do you think silver will do in the longer term? Thanks very. 🙂

Don't take my advice on anything please.  I'm just engaging in a bit of light hearted fun guessing the price of silver on a weekly basis.   

But regarding the terminology I used, a corrective wave is a phrase that's commonly referred to in elliot wave theory.  It's a wave which runs counter to the direction of a larger trend.  The theory postulates that when a market is either rising or falling in an impulsive move, it happens in 5 waves.  1 forward, 2 backwards a little, 3 forwards strongly, 4 backwards about the same as 2, and 5 forwards to complete.  Waves 1,,3 and 5 are in the direction of the trend, and waves 2 and 4 are against the trend.  After those 5 waves are complete, and the price has moved up or down, a corrective move then takes place, which is in the form of a three wave counter trend move.  This wave is labelled a,b,c with wave a being backwards, b being forwards and c being backwards.  Wave a will be constructed of either 3 or 5 little waves, wave b will be made of 3 little waves, and wave c should be the largest and made up of 5 little waves.

If what we've seen is a new wave 1, wave 2 will downwards will be coming soon and it will be made of 3 little waves.  It is this wave that I envisage to come soon or possibly it started Friday.  After that completes in possibly 1-2 weeks, wave 3 should be long and strong.  By the time wave 5 completes, I can see it taking us well up into the 20's again.

It could of course be argued that this current move over the last 5 weeks is in fact only a corrective wave itself and that the downtrend of the last year will resume.  However.... this recent wave has formed 5 little waves rather than just 3, which lends a little weight to it being a new upward trend.  

Lot's of books on Elliot wave theory. You can get a bit lost in all the different timescales and labelling when you start introducing x waves to make the failures work.

51 minutes ago, GoldStandardPartyUK said:

But great thing about markets, unlike politics or religion is you can put your money where your mouth is and vote with your feet.

Politics is at the root of all man's activities.  From the very first moment that proto man became a social being, politics governed everything.

Markets are hyper aware of politics, they rely on politics to sustain the current path, or to upset the apple cart.  Betting on oil?  Are you betting on the ingenuity of oil companies to find more supply?  The theory of peak oil causing a lack of supply?  Or are you really betting on whether or not politics will block ingenuity and get in the way?  It turns out that an election is all that's required for significant change.

Religion might be a bit harder though.  Not sure if you can bet on who the next pope will be. 

So my guess for next weeks close is flat. I can see it going both up and down (either first) before a close near last weeks.  Possibly a slightly positive flat.

2 hours ago, Gruff said:

So who called Silver to end the week higher? 
I called it flat...

That would be me!  I'm currently on 5/5 but really not sure about next week... A lot of things have changed and need to be reassessed.  Silver looks like it could do with a corrective wave which quite possibly already started on Friday.  My confidence for next week is much lower but I'll have another look tomorrow.

26 minutes ago, Bars said:

32 kg is not heavy in the form of a barbell, Kb or dumbbell. But when its a lump with no handle its quite hard to pick up. 

A bag of cement at 25kg can be a bit clumsy.  It folds up and requires squeezing etc to support.  A woman at 55kg is harder still because she's floppy and needs containing...  But if she assists by going rigid, it's suddenly much easier to carry her.  The same is true of a dense and rigid object.  Less energy and effort is wasted trying to contain it within your grip and you can lock your fingers below it in a way that doesn't require much strain to maintain.

So it's that time of the week again... (actually a little early but hey ho )

What does everyone think about next weeks close?  Up, down or flat?

3 minutes ago, Paul said:

looks like the silver rocket ship is setting off its launch to the moon (again) this week  

Copper is currently testing minor resistance from a little pull back over the last few days.  If it breaks through and resumes it's rise, I can see Silver up at £18 very quickly.  But it's in need of a corrective wave soon though.

43 minutes ago, paulmerton said:

But they aren't pretending to be legal tender - they are legal tender!

Yes this is correct.  They're technically legal tender but that actually means very little other than that they can be used to pay debts in court.

It's the discrepancy between their face value and their intrinsic value where the problem lies.  Essentially "face value" is a state guaranteed minimum value on a coin or note.  For uncirculating bullion (which is legal tender), it's a nominal figure which is always far lower than the actual value of the bullion, so it never becomes an issue where someone might wish to pay a debt to the court in bullion.  The whole process endows bullion with the status of being legal tender, which then has legal implications around tax etc, without it ever having to be in circulation.

On circulating base coins, the guaranteed minimum face value is its value, and this works fine.   If the price of the base metal rises above the face value, it's a crime to melt down circulating currency.  That's not been much of an issue because most of the base coinage is now steel anyway.

But in the case of these special low value, high "face value", "commemorative coins", the mint cleverly used some word salad to imply that they would have their "face value" honoured.  After issues with people trying to spend the £20 versions, it was made clear that they were uncirculating, commemorative coins as opposed to circulating.  Given that they're legal tender, I'd love to see someone use these £100 coins to pay for their parking fines in court!!  The court would lose it I'm sure because where would they get rid of them???

I've no idea what they're selling for on the secondary market but I doubt it's £100.  Most people are probably too embarrassed to put them up for sale at a big loss, so I'm guessing there aren't any for sale.  I can't imagine there are any buyers who want to pay £100 for a common "commemorative" legal tender token.

If the mint had sold them for £120 each, and classed them as circulating commemoratives, I would have bought one for sure.  They would have a minimum value of £100 with the possibility of becoming a collectors item.  Instead, they're an immediate massive loss.  In 100 years time, there will be a whole bunch of them knocking around antique shops for the same price as the current £5 commemorative coins.

Actually it's the Royal Mint who should be in the dock for wasting everyone's time with these face value, legal tender (but of a non legal tier) "commemorative" coins.  They've confused the whole bullion vs circulating vs legal tender system by adding the new high face value commemorative definition.  A useless halfway house that's grossly overvalued if it were described as bullion, and worth absolutely zero as legal tender whilst pretending to be legal tender.  Nice one RM!

I looked into the £50 Britannia coin a couple of years ago, which I thought was a jolly nice design.  It was an ounce of silver but on digging it became clear that it was completely un-spendable anywhere.  Why refer to it as face value in that case??  The mint has massively confused the previously perfectly workable system, where the value in the open market of bullion or special edition coins was always much higher than their face values.  Artificially slapping a £50 or £100 price tag on to something that is non returnable is a deliberate con that's being used to milk the vulnerable through adverts in the back of glossy magazines.  I see it as little more than stealing from those who don't realise that they're just buying an expensive supermarket trolley token.  It might be made by the Royal Mint but it's still a trolley token being presented as if it was something else.

Now, if the mint were forced (through the regular banks) to accept back their commemorative edition coins at face value, it would be a completely different story.  The mint would rarely, if ever, see a single one of them back but if some fool wanted to spend a rare and valuable (mint backed, BU) commemorative coin in tescos, for far less than it was worth, the local manager would no doubt be more than happy to accept them; swapping them out of the till to sell for himself at a profit.  But in this case of course, because the coin is nothing more than a token with a deceptive name, it's never going to be accepted by anyone other than more vulnerable people.  The entire problem is the Royal Mint's making and no nation's mint should be allowed to do such a thing to it's currency.