Silver Info Blog

(interview with Silver Info) -

How did you get involved in blogging about the precious metals markets?

Basically we wanted to share our opinions about precious metals in general and silver in particular, with as many people as somehow possible, and this brought us on the internet.

How has the volatility in the world markets affected gold and silver prices?

Silver and gold can't escape from the kind of market movements we have seen this year. When everything comes crashing down, people stop using their brains and throw away everything they have, stocks, "cheap" stocks and precious metals. They are willing to sell for silly cheap prices, even though the fundamental situation absolutely underlines undervaluations in certain assets. So one can't predict short-term movements in precious metals prices, but anyways, the situation is clear for the long-term: it's bullish!

Do you see a bullish 09 for the precious metals? (Why?)

Yes, we do, especially the second half of the year should boost prices up to new levels, because what we were witnessing during the last couple of months was a deflationary price decline as a result of the aggressive interest rate increase done by the Federal Reserve in 2007. Since then, interest rates were constantly lowered until they reached their temporary bottom in December 2008 (0-0.25%). The effect of these severe cuts should kick in during the second half of 09. We proceed on the assumption to pass over into a long inflationary period which will boost prices of almost everything ,e.g. consumer goods (victuals), stock prices and of course precious metals.

What do you think will have the biggest effect on the price of precious metals in 09 (either positive or negative)?

The worlds central banks will keep interest rates on the current low level in order to not further influence the economy in a negative way. If the FED increased interest rates again, the banks would again stop lending money to other banks, and inter-bank lending would again come back down to almost zero. This would be the absolute core melt accident, so the Fed will at all costs renounce on that step. But low interest rates make cheap money even cheaper, and this will foster inflation, because there aren't produced as many goods as money is printed.so, people will again look for a safe haven in order to protect the purchasing power of their money. Today physical gold and gold mines just have a 2% share of the entire fortune of the world. In 1948 and 1981 this share totaled up to about 25 to 30%. And it's the same with silver. Therefore both metals should make up leeway in the future.

Which companies do you see as the strongest in the precious metals field?

Goldcorp, Silver Wheaton and Silver Standard Resources are our personal favorites. Risk-taking investors also could focus on smaller companies such as Sabina Silver, First Majestic Silver or Premier Gold Mines.

Which companies do you see as the weakest?

Especially small-cap exploration companies with little money will be wiped of the map. It's important to know that just about 5% of all existing exploration companies will finally reach production level. That's why one should underweight these comparatively small companies in a portfolio.

What would you recommend as the best way for an average investor to get involved in the precious metals markets?

Buy real physical precious metals! Start with well-known bullion coins such as the American Eagle and the Canadian Maple Leaf and then think about investing money in bars. We recommend to have more silver than gold, due to the fact that silver is undervalued, considering current prices. In a real crisis it's important to have silver in order to be able to do everyday payments in the supermarket or elsewhere. Would you rather buy a bread with a gold or a silver ounce?

How long have you been blogging?

The website is online since October 2007.

What got your started blogging?

Basically we wanted to share our opinions about precious metals in general and silver in particular, with as many people as somehow possible.

What is the focus of your blog, i.e. how does it set you apart from the other bloggers out there?

The main focus is on making as many people aware of silvers current undervaluation as possible. Though we are not blogging, we can't answer the second question.

What is it you hope a reader will come away with when they visit your website?

I hope that they got to know a bit more about the opportunities to be found in current silver prices. Furthermore I want them to be able to explain to somebody else who doesn't know anything about the topic, why silver might be a good bargain.

Do you like to be edgy in your posts and try and stir up some controversy?

No, investing is a serious topic, so it is not appropriate to be edgy or funny, even though economic happenings or actions taken by politicians are sometimes funny. Stirring up controversy is something we want to concentrate on in the future ;-)

What do you think about bloggers who have this kind of approach?

We respect that.

When did you start to trade?

We started trading two years ago, about mid' 2007

What is your favorite instrument to trade (stocks, options, forex, futures, bonds, etc.)

Mainly stocks and futures.

What is your favorite strategy to trade?

Day-Trading and Swing-Trading.

What time frame do you like to trade?

We prefer mid-term trades with holding periods of 1 day through to some months.

For someone new coming into the markets, what steps would you recommend they use to get started?

Try to soak up as many information as possible, bring them in the right order and learn to make use of them. Search for the quality in your trading!

What is the biggest stumbling block you see for most beginner traders, i.e. where do you see them making the biggest mistakes?

Stop-techniques might be the biggest stumbling block for beginners, as well as for pro traders. When you listen to a discussion between two top traders, it's never about how much money they made, it's always about which specific stop technique they used in a certain trade.

What do you see in store for the markets in 09?

It's going to be another tough year with risks still being unproportionally high. Better keep your cash for a while and invest it when the market has already gone up 500-1000 points. It's not a shame to miss these 1000 points, but it's a lot safer in comparison to investing it now and losing your bucks for nothing. Markets are likely to come down a bit more and then it's obvious that it's time to buy, aggressively!

when do you see that happening?

Proceeding on our inflation scenario a turnaround is likely to happen in the second half of the year. Furthermore we see a bubble being existent in the bond markets. If it explodes, there is a lot of money which is looking for a good investment in the stock market, and the precious metals.

Do you use technical analysis? What are your favorite technical indicators?

Yes, we do use technical analysis for our trading. We prefer using simple indicators such as bollinger bands, macd, rsi and moving averages.

End Interview -

Interview courtesy of Manuel Ernst & Fabian Roth - Authors of Silver-Info.com