by Steve St. Angelo, SRSrocco:
The debate continues between the SRSrocco Report and CPM Group’s Jeff Christian on the fundamentals of the silver market. After my article, in which I questioned the CPM Group’s exclusion of silver investment demand from their supply and demand analysis, Jeff Christian responded with a comment on my website. I am glad that Mr. Christian responded because it now allows me the opportunity to explain in more detail why I disagree with the CPM Group’s analysis.
As I have mentioned before, this has nothing to do with the individual or the company, but rather what I see as faulty analysis. The whole idea of public writing is to be able to look at all sides of the story. I have the right to disagree with someone else and to explain the reasons in my articles. However, I have seen individuals in our alternative media community call names or ridicule individual’s that they are in disagreement. I don’t believe that is the correct way to provide open debate as it focuses on the messenger, not the message. (photo above left, courtesy of Kitco.com)
Before I get the details on why I disagree with the CPM Group’s analysis on the silver market, I wanted to share a few things. My analysis of the precious metals market has changed since I started writing articles in 2008. Early on, I didn’t consider the impact of energy on the precious metals or the overall market and economy. Furthermore, I stopped putting out price forecasts several years ago because it became apparent to me that it was impossible to do so. Analysts who continue to put out specific price forecasts have been met with a great deal of frustration.
Today, I no longer believe in the fundamental theory that supply and demand forces are the leading factors in determining the price of energy, metals, commodities or most goods. Thus, the analysis that suggests supply-demand forces or investment demand impact price is flawed or is likely overstated to a large degree. Actually, I now believe that PRICE IMPACTS DEMAND, not the other way around.
We can plainly see this taking place in the Bitcoin Market. It isn’t the fundamental demand that is pushing up the price, but rather, the skyrocketing price which is causing massive speculative interest in the Bitcoin Market:
It wasn’t Bitcoin’s blockchain technology that drove investors mad to get involved, maybe a few initially, but the near 2,000% increase in its price since the beginning of the year. Furthermore, the insane Bitcoin price move has led to the following:
While it’s true that increased investor demand has been a partial factor in pushing up the Bitcoin price, its likely that the parabolic move is sucking in most of the demand. I know this sounds like the old saying, “Which came first, the chicken or the egg?” But, when a small handful of investors are controlling a large percentage of the market, the little investor really isn’t pushing up the price, rather… they are fuel for the deadly fire when the market collapses.
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