Historically an ounce of platinum has been worth more than an ounce of gold. For example, since the mid-80s the 1:1 price ratio was pretty much a hard stop. But recently (beginning during the inflation scare post-recession), an ounce of platinum has sold for less than silver. The ratio is currently 0.9.
The best part of platinum right now is that it is selling for below marginal cost! And platinum miners are starting to close down mines.
A great way to shed light on the silver bubble is to look at the silver/platinum ratio, as expressed by the physial silver and physical platinum ETFs.
Rather than speculate on the price of silver (or any other commodity) it is helpful to look at the ratio of two things that are at least somewhat substitutable. If platinum can satisfy some or all of the demand for silver - say for investment purposes - then you would expect the price ratio to be mean reverting.
We already know that the gold/platinum ratio is strongly mean reverting once an ounce of gold costs more than an ounce of platinum.
I wonder whether the "cheapness" of silver - not in an valuation sense, but in the sense of an arbitrarily low price per ounce - has led to irrational demand from small investors? That would not bode well for the silver price.
Most of the time, platinum has been worth more per ounce than gold, but gold has suddenly traded through platinum. This is likely to be mean reverting, which would argue for a long platinum, short gold trade. There is a platinum ETF, the ETFS Physical Platinum Shares (PPLT).
The notch in the yield curve.
Most Americans don't have $1,000 saved for emergency.
"On Thursday, AOL moved to help bolster the stock, announcing that its board had approved a plan to buy back $250 million in shares over the next 12 months."
Buffett on Treasuries: "U.S. Treasuries are still triple-A in that there is no question that we will repay the interest and the principal. Every contract will be repaid. So our bonds are triple-A. Our currency, the dollar, is not triple-A. Our bonds are." I would say that I agree with that.
How to play an oversold relief rally: "A better way to play an oversold bounce consist of the following: Wait for the oversold condition; Buy when the market exits the oversold condition."
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