Prices/ metal market falling hard

Its crazy, I wonder how long until steel drops?

Thing is - precious metals are a store of wealth. The value of the metal isn't changing - what's changing is the value of the dollar. I work both sides of the market - meaning I keep precious metals around as a form of wealth if the SHTF and the dollar collapses. But in escrap, I'm playing the speculator side - should I hold it in hopes it will go up or dump it before it goes too low?

Until Europe, especially the PIIGS (Portugal, Ireland, Italy, Greece, and Spain), particularly Greece get things sorted out we're going to stay on a roller coaster. As the PIIGS bring down the euro, it causes the dollar to strengthen. A strengthening dollar means it takes less dollars to buy precious metals. Once the euro starts getting stronger, the dollar will weaken, causing precious metal prices to go up (relatively speaking that is).

Base metals are another story. Here, it's the BRIC (Brazil, Russia, India, and China), especially China, nations that are hurting the market (although the PIIGS aren't helping - the whole strength of the dollar thing). As the dollars gets stronger, their currencies weaken (although they manipulate their currencies more than most). This is causing them to hold dollars rather than spend them on infrastructure. With infrastructure spending going down, there is less demand for base metals such as copper, aluminum, and steel.

Add to that the instability of oil due to problems in the Middle East and it's a wonder we have a working global economy at all. We certainly don't need $2 billion surprises out of our big banks (you listening Jamie Dimon?).

For everyone with the wherewithal, get a financial advisor. For those of you more dependent upon the price of gold, get advice on how to hedge against losses if the gold market goes down. Done correctly, you can make money whether the price of gold (or any other commodity) goes up or down. Risky play - try to make money when the market goes up or down. Conservative play - limit your losses if the market goes down (this will also limit your gains if the market goes up though).

Want a really scary thought? In just silver alone, there are 10 times as many derivative contracts in existence as there is physical silver. People are playing with a piece of paper that says they own so many ounces of silver - but if everyone tried to cash in those pieces of paper at once...chaos.

http://www.cnbc.com/id/24273207

the grecian mentality is truley fiddler on the roof mentality, they will not accept austerity, they believe tomarrow is a whole new day with a whole new outcome. the euro union were idiots to accept them in the first place, not putting the greeks down, it is just that they have a whole different mentality and out look on life and the world. the euro will crash and it wont be their fault, if the euro union depends on Greek cuts, we have a greek in the white house, he just looks egyption/white/black/hawiian/latino/
Indonisian/and what ever. just my .o2

I wish steel would drop to around $9-$10 a 100. Get all the idiots to slow down on picking stuff up. Went to the yard Monday and saw 3 whole wash. machines and 6 window a/c's whole all with cords attached......man that S*** pisses me off! I'm still at $13 per 100!

bring it to OK scrappernj, we're at $8 here already!

Two yards I deal with down here in TX - the closest is at $7.50 per 100 and the other is at $10 per 100. If I didn't need the room, I would hold it longer.

A lot of that has to do with transportation cost for you guys/gals in the middle of the country. Your stuff probably goes to MS or AL for loading on ships and so on. Both of my yards, ferrous and nf are on the Delaware River across from Philadelphia, Pa. Both yards are getting much needed upgrading right now. new shredders, 14" concrete at both yards, new docks for ship loading (save on trucking for them). That is new for them. New scales

Joe

Originally Posted by waredu

In just silver alone, there are 10 times as many derivative contracts in existence as there is physical silver. People are playing with a piece of paper that says they own so many ounces of silver - but if everyone tried to cash in those pieces of paper at once...chaos.

Excellent post, waredu. I hope all you folks out there heed this information! Hold onto your precious metals! Gas your vehicle and feed your family with steel and aluminum money, use your copper and brass money for bigger bills/expenses/savings, but hold onto that Ag and Au!

How many people who have invested in Gold and Silver actually own the metal compared to certificates worth nothing when they find out the issuer oversold 20x1? I was into coins and stamps at an early age and was lucky to have extra cash when silver was $5 an ounce and gold was $320 and purchased quite a bit of it, sold quite a bit when it peaked too last year. If the economy realy implodes like doomsday people think then Gold will be worthless as well, you will be in a barter economy where real goods and food are all that matter.

The reason the markets jump around when there is any bad news is that all traders know the world is bankrupt and they try to cash out before the end comes so they can buy something with the cash before it is worthless. There is over a trillion dollars just in student loan debt here in the US, good luck getting that paid with temp jobs. Everybody who puts money into their 401K's is just giving wallstreet more money to give themselves a bigger bonus and some money to gamble with. Where do you think the $100B Facebook is going to get with an IPO is going to be long term as an investment (the company only has $1B in income and nothing sellable except their office space).

I expect that the next 2 years will be interesting when the world figures out that the US debt can never be repaid and what is left of the oil i the ground will no longer be paid for with just US dollars (I expect the Saudis to fall to a muslim government and production to drop when US firms are given the boot).

Well.....I went to the yard and steel finally dropped a little since Monday. Monday it was $13.00 a 100. Now it's $12.25 a 100.

Gold and silver down again. http://www.kitco.com/market/

I just unloaded a bunch of Brass 125lbs. Copper is down about .35-40C so I think i'm just going to hang onto it for a while. Once I squash the tubing it doesn't take up much room.