Long term View of the Gold/Silver ratio

[pmbug]

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If, and this is a big "IF", traders become convinced that deflationary forces have been left behind, then the environment in which the grey metal will outperform the yellow metal is created. In such a case, this ratio will begin trending LOWER as silver outperforms.
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More: http://traderdannorcini.blogspot.com/2012/01/long-term-view-of-goldsilver-ratio.html

Trader Dan posits that the GSR will fall as inflation expectations grow. Essentially, (explicit) QE3 = silver rocket fuel.

Combined with Sprott's buying spree, we may indeed see a replay of early 2011.

 

[ancona]

I don't know Bug, there will be a lot of congressional resistance to more easing, because all it did the last time was bloat out the banks excess reserves, and cost us money in the form of interest paid on those reserves. The public is waking up to the funneling of money through the back door to these banks and they are not happy about it.

While there may indeed be more easing, I think they will fudge numbers and obfuscate the truth for as long as possible. It is an election year after all, and a lot of those people are afr4aid for their career, and will not want to rock the boat.

I have read good arguments on both sides and cannot really make a determination right now based on clearly tweaked numbers. February and March will tell the tale as bottom line numbers for Q4 all come out.

 

[DSAbug]

There wont be congressional resistance from the fed buying MBS. Sort of like how there is no congressional resistance over Obama giving the unemployed a 1 year reprieve from being foreclosed on.

 

[ancona]

DA,
I read on ZH that the Fed sold a big bag of MBS to Credit Suisse3. Is this something they are going to continue? It seems to me that they would havew to either cherry pick the good stuff to sell, or sell the tranches in piece4s with some going for a steep discount. Either way "the taxpayers" take it up the ass.

 

[pmbug]

The GSR fell through 50 convincingly yesterday. It sits at 48.17 as I type this. Has the breakout for silver begun?

 

[Shelby-villian]

Is it misinformed to believe, we are and have been in QE3 since 2011?

 

[kjansen1969]

Honestly, I feel that we will begin to see a rise in silver purchases because of the late-comers to the precious metal investment game. For most, especially blue collar workers and families gold prices are often prohibitive while silver allows a family to purchase regularly instead of saving for a gold purchase. Perhaps it is one part instant gratification and one part instance peace of mind, however I believe this is how it will go.

Although, mind you I don't see gold dropping too low any time in the near future.