I started buying silver shares this week

by JDH on May 7, 2011

Last week I “blinked”. This week I blinked again. It was a tough week. Here’s the thing: nothing has changed.

Physical precious metals are still in short supply. As the U.S. dollar continues it’s inevitable collapse, nations around the world continue to replace their U.S. dollar reserves with physical gold and silver, because, unlike fiat currency, it can’t be created out of thin air.

As the Powers That Be attempt to arrest this inevitable decline, they increase margin requirements on the COMEX, so where two weeks ago you could control a position with $12,000, today you need $24,000. Those increased margin requirements shake out the weak hands, and down goes the price.

Let me be more specific: down goes the price of the paper silver and gold. You still can’t get what you want of the physical stuff; it’s in short supply.

On Thursday, on the assumption that this correction can’t continue forever, I started buying again. At the start of the week I was up to almost 50% in cash. On Thursday I started to deploy that cash, purchasing some SLW.TO – Silver Wheaton Corp. Was that purchase premature? Probably. But you can’t pick the bottom, so I will start to buy on sell off days. We shall see if I’m making the correct choice.

And no, instead of me babbling on, here is a profanity laced video that explains this all in more detail (so if you are sensitive to such things, don’t watch). The weather is good, gardening season is finally starting, I have a vegetable garden to dig (three weeks later than last year) so off I go.

Thanks, and have a good week.

Use this link, or watch the video here: