(Editor's Note: Paul Schatz, President of Heritage Capital, LLC, in Woodbridge, will be contributing to Fi$callyFit every Friday. Read his biography here)
In the past few issues of my Street$marts letter and on Facebook and Twitter, silver has been a popular topic.
If you are not following my daily comments and would like to, please click on the Facebook and/or Twitter icons at the bottom of this post. When we left silver not long ago, I showed a series of charts on how bubbles are built and what they look like.
I also explained why they are so difficult to profit from, using Keynes' line that the market can stay irrational longer than you can stay solvent.
It was certainly a back breaker for the bulls as the Chicago Merc, where silver trades, repeatedly raised margin requirements to help put a damper on rampant speculation. And contrary to popular belief, there is no anecdotal evidence that raising margin requirements on commodities causes prices to decline. Volume certainly slows and perhaps volatility recedes, but price is like water. It finds its own level.