It’s known that quantity, in investment form, is far less than what is perceived by the mainstream. And as a direct consequence, orders of magnitude less than the price indicates.

A never-ending flow is demanded from strategic industries, while the demand for physical continues to grow stronger, despite price - a clear indication of its monetary role and a hint at the ultimate separation from its paper tether.

And the whole thing is held together by an overt, blatant pricing mechanism that systematically destroys the flow of new real supply by crushing the economics underlying production.

Real value is based in trust. Collateral is what is needed to back debt. All currency is debt. Debt is an obligation. In the case of the Federal Reserve, each debt coupon has zero interest with an open-ended term that is tied to confidence and belief and force.

It is backed by an amorphous construct - one that it is powerful and hostile. It is mathematically impossible to repay both official and unofficial debt without collapsing the system that manufactures it.

Without any collateral backing it up, the dollar literal floats in relative value with competing currencies that are equally unhinged. True collateral is consistent - easy to use and measure. Notes are debt without collateral. Fiat is used to buy treasuries, and the interest is rebated to the Treasury.

Individuals still have the opportunity to buy traditional and real collateral. What can you hold outside of the system?

But we also have unrealized (shadow) risk in the background. All of these converge on bullishness. But the shadow aspect of all of this has a dark side effect on most investors.

Naturally, we all want to see a return on investment. Counting your wealth in dollars is the number one prescription for failure in this. Is there a way to profit in the short term?

Yes. But the leverage required to make that happen it is out of reach for most. As is the patience and time to execute proper trades; time better spent preparing for the eventual aftermath of system exponentially fragilized.

For the rest of us, it is a long term play. If you want to watch the price action, watch it...but disassociate from it.

You've done all you could. You’ve taken action. Other markets will appear to increase in value. It will seem as if you missed out on unrealized gains. Gains in what? And held where? In whose control?

The problem is that we live in a world of impatience. There is nothing quite like the stoic patience of long term investors in this space. Then it becomes about allocation.

What percentage collateral versus speculative investment? Examined in the context of the recent rally, it is unreal. What is the safest ratio for you?

But the collateral is always there. The trick is to hide it from the people, to disparage it and attack it; to manipulate its price by any all means and completely control it so that the true signal is lost.

The ironic tragedy is that those whose ‘dare’ to hold physical collateral in their portfolios are constantly plagued with worry over the nominal value measured in uncollateralized figments conjured by the financial system itself.

The greater the ability a person has to withstand that truth - the greater is their appreciation for what they have.

For more articles like this, and/or for a breath of fresh silver market reality amidst the stench of denial and technically meaningless short term price obsessed madness, check out http://www.silver-coin-investor.com

By Dr. Jeff Lewis

Dr. Jeffrey Lewis, in addition to running a busy medical practice, is the editor of Silver-Coin-Investor.com

Copyright © 2014 Dr. Jeff Lewis- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Dr. Jeff Lewis Archive

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

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.