George Maniere: Today Europe Promised Us a Profitable Christmas

October 27, 2011

InvestingAdvicebyGeorge – On Wednesday night EST, Euro zone leaders struck a deal with private banks and insurers for them to accept a 50 percent loss on their Greek government bonds under a plan to lower Greece’s debt burden and try to contain the two-year-old euro zone crisis.

The agreement was reached after more than eight hours of hard-nosed negotiations involving bankers, heads of state, central bankers and the International Monetary Fund and aims to draw a line under spiraling debt problems that have threatened to unravel the European single currency project.

Under the deal, the private sector agreed to voluntarily accept a nominal 50 percent cut in its bond investments to reduce Greece’s debt burden by 100 billion Euros, cutting its debts to 120 percent of GDP by 2020, from 160 percent now.

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George Maniere: Silver Waits to Begin Breakout

October 24, 2011

InvestingAdvicebyGeorge – To 250 million people in 51 countries throughout the world, the word for money is the same word as the word for silver.  Silver literally means money. According to Noble Laureate Milton Friedman, the majority of monetary metal throughout history has been silver, not gold. Gold is the money of kings while silver is the money of gentlemen.

Before we make a case for silver being money, let’s take a look at what is money?  I believe money is the grease or oil that lubricates the supply lines that bring goods and services to where they are needed. Without money our economy would be reduced to barter.  The problem with barter is that you would not only have to find someone that has what you want but he would also have to have what you want in return. Let’s face it, in this modern world of infinite goods and services this would be a complete disaster.

So no matter what we use as a medium of exchange be it gold, silver, paper or sea shells we need an unrestricted supply of money to keep the economy lubricated. Money is a unit of storage or a proxy for value that must be something completely different from what is being exchanged. This is why money must float freely in value to coincide with the law of supply and demand.

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George Maniere: Dodd-Frank Act Cleans Up Comex

October 20, 2011

InvestingAdvicebyGeorge – One of the best parts of writing is that I get so many great ideas from my readers. The readers of this site are some of the smartest people I have ever spoken with. Even the people who have never traded bring a fresh and new prospective to the way I see the market.

Yesterday I was proved right and completely blown away by a post from a reader. I did some homework on other sites and the probabilities of his post being accurate are 80%.  So let’s get to it because I think you are going to like his thesis.

The Commodity Futures Trading Commission (The Cartel) on Tuesday approved a much-debated, long-delayed rule designed to curb bets on oil, gold, sugar and in particular silver.

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George Maniere: The European Union & Silver

October 16, 2011

InvestingAdvicebyGeorge – This was an amazing week! Besides the fact that we got to see some green on the board, the week was totally eclipsed by the latest off Broadway version of “The Mouse That Roared” as Slovakia took the world to the brink and for one bright shining moment held the fate of the world in its hands. 

On Thursday, October 13th somewhere in the second act, Slovakia approved Europe’s enhanced bailout fund completing the ratification process across the 17 euro countries and all was right with the world.

There is just one small little baby hic-cup. Europe is toast! The likelihood of Europe surviving grows slimmer every day. Let’s get this straight right away. Europeans are not happy with the Euro and the common citizens feel the whole creation of the European Union was a big mess. The European politicians don’t see this as a political problem but rather as a logistical one because they have to somehow sell the consolidating of the bonds to the public.

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George Maniere: Will Gold and Silver Continue their Run?

October 14, 2011

InvestingAdvicebyGeorge – I had at least six emails today asking if the run in gold and silver were over. The answer is most definitely – Maybe!!!! My regular readers know that I have been predicting silver at $50.00 an ounce by year’s end. I believe that the drivers of gold and silver remain intact. The fact is that there is a sense that gold and silver has moved too far – too fast and as a result, people are not inclined to chase the trade.

For the sake of this article I will use the ETF GLD to represent the move in gold and I will use the ETF SLV to represent the move in silver.

Let’s not forget that silver had its own parabolic move from January until the last week of April and the people who bought in the last week of April will not soon forgive or forget. To add to this Gold experienced a parabolic move of its own from July through September when it ran from $1200.00 an ounce to $1925.00. The average investors see the correlation between the two moves and are not inclined to chase either trade.  The fact is that in September gold was extremely overbought and it needed a pullback to consolidate before the next leg up.

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InvestingAdvicebyGeorge: Own Treasuries or Gold & Silver

October 10, 2011

InvestingAdvicebyGeorge – The drop in price of gold and silver is because they are considered to be in a bubble. In my opinion a bubble is when the underlying asset trades in high volumes at prices that are inflated to their true values. There are economists that assert that asset prices often deviate from their intrinsic values. Because it is often difficult to determine what the intrinsic value of an asset is bubbles are often seen in retrospect like when sudden drops in prices appear. They are seen as a crash or a bubble burst. It is important to recognize that prices of a bubble can fluctuate erratically and make it impossible to predict from supply and demand alone.

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George Maniere: European Debt Crisis and Weaker Dollar Drive Gold, Silver, and the Miners

October 6, 2011

InvestingAdvicebyGeorge – If you want to know future then pay attention to Europe. Pay attention to the policymaker’s decisions regarding the debt. Pay attention to Greece. While many of us have been waiting for ages for Greece to default on its insurmountable debt, it looks like the wait might be over. It’s now been realized that Greece isn’t going to make its deficit targets that were agreed upon when the country took its loans from the IMF and European Central Bank. While the deficit was originally supposed to be only 7.8% of the nation’s GDP, due to slowdowns and poor forecasts, the deficits will now be a whopping 8.5% of GDP. This is putting even more pressure on the already fragile nation, which is even closer to a default as the deficits continue to eat away at the nation’s economy.

In the Europe Union there has been little political will to make the hard choices. The gross domestic product (GDP) is going to slow and I would not rule out a recession. This should really get interesting for the Euro policy makers as they attempt to stave off the inevitable.

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George Maniere: Silver Beaten Down by Strong Dollar

October 5, 2011

InvestingAdvicebyGeorge – Yesterday, I had several readers ask if it was possible that my theories on silver going to $50.00 to $60.00 by year’s end were wrong. I told them yes, It might go to $100.00 by mid March. I have often stated that I believe that silver is incredibly undervalued. While this sounds like an outrageous claim, silver is actually rarer than gold. This is because silver has industrial applications and every day our technologies require more and more silver to operate. Silver that is above the ground has been diminished by 91% since 1980, while the stockpile of gold has grown 600%. Indeed most of the industrial silver that is used ends up in landfills and I believe that one day this will be a source recycled silver.

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George Maniere: Strong Dollar Equals Weak Equities and Weak Commodities

October 3, 2011

InvestingAdviceByGeorge – For the last several weeks I have had readers mailing me asking why gold and silver have been selling off. The answer is very simple. There is a strong correlation between a strong dollar and weak commodities. The dollar is no different than anything on earth – it will always follow the path of least resistance. As the dollar grows stronger commodities sell off or become cheaper. Take a look at the chart of the dollar below.

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George Maniere: Silver is Once Again Beginning a Runup

September 16, 2011

InvestingAdvicebyGeorge – Silver prices are once again enjoying a run-up as they did from January through April. During that period they doubled and briefly touched $50 an ounce before settling back down to the low $30s.

As I write, silver prices are back above $40 an ounce and that may be giving you the urge to sell.  I would advise that you don’t. This recovery is for real, and it has much further to go.

While I have a price target of $50.00 by years end, I anticipate silver prices will peak at $150 an ounce in 18 months.

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