Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
AI Mega-trend Tech Stocks Buying Levels Q2 2020 - 1st Jun 20
M2 Velocity Collapses – Could A Bottom In Capital Velocity Be Setting Up? - 1st Jun 20
The Inflation–Deflation Conundrum - 1st Jun 20
AMD 3900XT, 3800XT, 3600XT Refresh Means Zen 3 4000 AMD CPU's Delayed for 5nm Until 2021? - 1st Jun 20
Why Multi-Asset Brokers Like are the Future of Trading - 1st Jun 20
Will Fed‘s Cap On Interest Rates Trigger Gold’s Rally? - 30th May
Is Stock Market Setting Up for a Blow-Off Top? - 29th May 20
Strong Signs In The Mobile Gaming Market - 29th May 20
Last Clap for NHS and Carers, Sheffield UK - 29th May 20
The AI Mega-trend Stocks Investing - When to Sell? - 28th May 20
Trump vs. Biden: What’s at Stake for Precious Metals Investors? - 28th May 20
Stocks: What to Make of the Day-Trading Frenzy - 28th May 20
Why You’ll Never Get Another Stimulus Check - 28th May 20
Implications for Gold – 2007-9 Great Recession vs. 2020 Coronavirus Crisis - 28th May 20
Ray Dalio Suggests USA Is Entering A Period Of Economic Decline And New World Order - 28th May 20
Europe’s Coronavirus Pandemic Dilemma - 28th May 20
I Can't Pay My Payday Loans What Will Happen - 28th May 20
Predictive Modeling Suggests US Stock Markets 12% Over Valued - 27th May 20
Why Stocks Bear Market Rallies Are So Tricky - 27th May 20
Precious Metals Hit Resistance - 27th May 20
Crude Oil Cuts Get Another Saudi Boost as Oil Demand Begins to Show Signs of Life - 27th May 20
Where the Markets are heading after COVID-19? - 27th May 20
Silver Springboards Higher – What’s Next? - 26th May 20
Stock Market Key Resistance Breakout Is Where the Rubber Meets the Road - 26th May 20
5 Ways To Amp Up Your CFD Trading Today - 26th May 20
The Anatomy of a Gold Stock Bull Market - 26th May 20
Stock Market Critical Price Level Could Soon Prompt A Big Move - 25th May 20
Will Powell Decouple Gold from the Stock Market? - 25th May 20
How Muslims Celebrated EID in Lockdown Britain 2020 - UK - 25th May 20
Stock Market Topping Behavior - 24th May 20
Fed Action Accelerates Boom-Bust Cycle; Not A Virus Crisis - 23rd May 20
Gold Silver Miners and Stocks (after a quick drop) Ready to Explode - 23rd May 20
3 Ways to Prepare Financially for Retirement - 23rd May 20
4 Essential Car Trade-In Tips To Get The Best Value - 23rd May 20
Budgie Heaven at Bird Land - 23rd May 20
China’s ‘Two Sessions’ herald Rebound of Economy - 22nd May 20
Signs Of Long Term Devaluation US Real Estate - 22nd May 20
Reading the Tea Leaves of Gold’s Upcoming Move - 22nd May 20
Gold, Silver, Mining Stocks Teeter On The Brink Of A Breakout - 21st May 20
Another Bank Bailout Under Cover of a Virus - 21st May 20
Do No Credit Check Loans Online Instant Approval Options Actually Exist? - 21st May 20
An Eye-Opening Perspective: Emerging Markets and Epidemics - 21st May 20
US Housing Market Covid-19 Crisis - 21st May 20
The Coronavirus Just Hit the “Fast-Forward” Button on These Three Industries - 21st May 20
AMD Zen 3 Ryzen 9 4950x Intel Destroying 24 core 48 thread Processor? - 21st May 20
Dow Stock Market Trend Analysis and Forecast - 20th May 20
The Credit Markets Gave Their Nod to the S&P 500 Upswing - 20th May 20
Where to get proper HGH treatment in USA - 20th May 20
Silver Is Ensured A Prosperous 2020 Thanks To The Fed - 20th May 20
It’s Not Only Palladium That You Better Listen To - 20th May 20
DJIA Stock Market Technical Trend Analysis - 19th May 20
US Real Estate Showing Signs Of Covid19 Collateral Damage - 19th May 20
Gold Stocks Fundamental Indicators - 19th May 20
Why This Wave is Usually a Market Downturn's Most Wicked - 19th May 20
Gold Mining Stocks Flip from Losses to 5x Leveraged Gains! - 19th May 20
Silver Price Begins To Accelerate Higher Faster Than Gold - 19th May 20
Gold Will Soar Soon; World Now Faces 'Monetary Armageddon' - 19th May 20

Market Oracle FREE Newsletter


Silver Collapse of 2011 Should Continue

Commodities / Gold and Silver 2011 May 27, 2011 - 11:50 AM GMT

By: Ned_W_Schmidt


Best Financial Markets Analysis ArticleRecent firing of a football coach in my hometown was cause for considerable reflection. Why does someone fire a winning coach? A few years ago the college I attended for graduate work fired their football coach, one with a winning record. In fact, it was a winning record such that most only dream of achieving. His fatal flaw? He could not beat the school's arch rival in a state to the south. Seems some losses are more important all the wins.

While we might ponder why a winning coach is abruptly dispatched, even greater wonder is why a losing coach is retained. Why would any team persist with a coach that cannot win games? Who wants to be managed by a loser? For the answer to that question we need look no further that the United States, and their losing monetary coach. Money coach Bernanke's record is portrayed in the graph below.

Thus far, one would have to grade the Bernanke Federal Reserve at no higher than D-. Grade could be lower, but he has made Gold investors much richer. Since we have been recommending for more than a decade investors shed paper equities in order to invest in Gold, we do appreciate the losing record of the U.S. Federal Reserve. Since we see no hope of enlightenment at this bastion of Keynesian ideology, retaining Gold seems like a wise move.

What, however, might make one coach a winner and one a loser? A good coach probably is able to recognize that, one, a play simply does not work, or, two, the team does not execute a play well. In either case, a winning coach would discard that play. A winning coach has a play book filled with plays that have a high probability of being successfully executed by the team.

As the above chart portrays, the play book of the U.S. central bank is filled with a preponderance of losing plays. Worse than that, their Keynesian mythology prevents them from recognizing that they are not going to have a winning season by repeatedly attempting losing plays. Acceptance of one's failures is perhaps one of the first steps to success, and the Federal Reserve continues to deny the policy failures of the past TWO decades.

Less we become too pessimistic on the prospects of the Federal Reserve ever doing the right thing, some in the U.S. Senate do believe that the Federal Reserve can be reformed. The nomination of Peter Diamond to the Board of the Federal Reserve System continues to be opposed by a sufficient number of insightful Senators as to prevent his nomination being approved by the U.S. Senate. Despite being a recipient of the much touted phony Nobel prize in economics, he would not likely improve the decision making of the Federal Reserve. Wise action by some U.S. Senators means two vacancies now exist on the Board of the Federal Reserve.(Wall Street Journal, 11 May) Two less votes for easy money must be considered a positive.

That the value of the U.S. dollar has suffered during the era of QE-2 is unarguable, as shown in chart below. But like all undesirable experiences created by bad policy, it too may come to an end. Only the Federal Reserve has been able to discover imaginary benefits from QE-2. In reality, all QE-2 accomplished was a distortion of asset values all around the world.

With the end of QE-2 being anticipated by the markets, the U.S. dollar has staged a nice rally. In "Investors wary of a post-QE2 bear trap for dollar," Financial Times, 26 May, we read that the bears are starting to cover their dollar shorts,

"Mr. Thompson [head of valuation and risk strategy at Standard & Poor's], says this could trigger a wave of short covering as investors buy back the dollars they sold, a phenomenon that can signal the bottom of a downtrend. There are signs that this process is already under way." [Emphasis added.]

If the demise of QE-2 does bring about a reversal in the course of the dollar, as suggested by the above chart, then investors may reappraise other values. In doing so, the dual myths of the dollar going to zero and hyperinflation being imminent may be finally jettisoned. In such a period $Gold may complete the consolidation in which it now trades. Great Silver Collapse of 2011 should continue due to the implosion of the bubble, over valuation and collapsing fundamentals.

By Ned W Schmidt CFA, CEBS

Copyright © 2011 Ned W. Schmidt - All Rights Reserved

GOLD THOUGHTS come from Ned W. Schmidt,CFA,CEBS, publisher of The Value View Gold Report , monthly, and Trading Thoughts , weekly. To receive copies of recent reports, go to

Ned W Schmidt Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


28 May 11, 16:40

You stated the fundamentals are not there for silver! WHAT are you talking about? The fundamentals have NEVER been better, you need to go back to you worthless education you received, because you obviously learned and know nothing about silver, you are a short or just plain clueless! Get help, silver will soar in the coming months and years, wake up and do society some good for once, enough said.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules