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Silver Prices have gone Wild!
Silver Shortages are now being reported world wide amist the crashing of major funds and brokerages. The silver shortages hit just as the paper COMEX silver price dropped, and physical silver prices have gone up! I've followed the principles of Biblical Capitalism and interact daily with other silver investment experts world wide.
I invite you to subscribe to my free email list now to stay on top of current events in the silver market.
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Silver Stock Report is one of the most influential newsletters in the precious metals industry today.
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I sincerely believe that investing in silver, and silver stocks now will be a wise a profitable choice. Silver mining and exploration company stocks will move up as silver is reaching new highs. But let me first show you why gold will go up:
Paper money is fraud, and
paper money growth has been tremendous. In the Spring of 2006, the Fed
stopped publishing numbers for M3 (M3 is the best measure of money in the
banks) when M3 was about $10.3 trillion.
The dollar, which is said
to be a "unit of account", no longer has any accounting!
But
a private company is keeping track of M3, and M3 is soaring past
$13.5 trillion, over a 19% increase per
year.
True inflation, which is the rate of money creation, is over
15% per year!
The Federal Reserve is accountable to you, but only if you do something about it,
such as buy silver and gold!
Central banks are running short
on gold, and are starting to buy gold again. Currently, the U.S. "officially"
has 261 million ounces of gold. (If they have the
gold!)
If U.S. money -
$13.5 trillion in M3 - were backed by "U.S. gold", there
would be over $51,724 dollars for every one ounce of gold!
The total value of all the paper money and bonds in the world is about
$100 trillion, and all the gold ever mined in all of human history is
just under about 5 billion ounces. So, world money, divided by
world gold, gives a figure of $20,000 per ounce!
World central banks are running out of gold, and some are starting
to buy gold, such as Russia, China, South Africa, South Korea, and
more! The central banks claim to have about 30,000 tonnes of
gold, but they may have less than half of that, as most has been lent or leased
into the market over the past ten years.
In sum, at $1000/oz.,
there is about $5 trillion dollars worth of gold in the world, but
there is: $500 trillion in derivatives, $100 trillion worth of bonds and $40
trillion worth of paper money! Therefore, bonds and paper money must go
down, and gold must go up!
Even though the U.S. dollar is no longer backed by gold, any holder of
dollars could wise up at any time and start buying silver or gold. China, for
example, could spend their $1.3 trillion U.S. dollars in bonds and buy gold
anywhere in the world, such as Switzerland, Dubai, Tokyo. They could even send agents
to buy gold at any of the 4,000 or more coin shops in the U.S. The dollar could drop
50% or more overnight, and there's not a single thing the U.S. government, you or
I could do about it.
Annual gold supply from mining is about 2500 tonnes. With 32,151 troy ounces per metric tonne,
that's 80,377,500 ounces of gold. I estimate that if China bought that much gold, the price of gold
would jump up to about $2,000/oz. At $2000/oz., that would cost about $160 billion,
which is just over 10% of China's U.S. dollar bond holdings. A prudent diversification into Gold on
China's part could cause the dollar to lose 50% of its value overnight.
When France redeemed U.S. dollars for gold in 1971, it ended the gold standard. This was not the
fault of France, it was the fault of the U.S. for printing too much paper money, and the U.S. general
public and politicians have not yet learned our lesson.
Gold is the perfect commodity for exchange for the following reasons:
- Gold is liquid and easily traded, with a
narrow spread between the prices to buy and sell (about 1%).
-
- Gold is easily transportable, because it
has a high value for its weight.
-
- Gold is money because it is divisible, you can divide it into coins, or re-melt it into bars, without destroying it.
- Also, gold is interchangeable. It can be substituted for another piece of gold with no hassle.
- Gold is also nearly impossible to counterfeit, as genuine gold is easily recognizable.
- When measured by weight, gold is easily countable, and verifiable.
- Gold is money because it is a great store of value. It is not subject to decay, rot, or rust.
- Gold has an intrinsic value, because it is rare, highly desired by the world over, and is a luxury item.
There is not a single other commodity with those attributes, except,
perhaps, for silver. Since gold
is too valuable to be used for small transactions, there is potentially more monetary
demand for silver. When gold becomes money again, silver will be desperately needed to make change.
Platinum and palladium may come close to gold, but they are not so
easily recognized by the masses, and are used mostly by industry.
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About 10 years ago, M3 was about $4 trillion, and silver was at $5/oz. By
the spring of 2008, M3 is exceeding $13 trillion, and silver is
at $20/oz. Relative
to the recent increase in money supply, silver is as cheap as it ever was!
Silver has all the same monetary
properties of gold, and more!
The historic price ratio of silver to gold shows that about 10 ounces of
silver would buy one ounce of gold, a 10:1 ratio. Recently, the
ratio is about a 50:1 ratio (with silver at $20/oz., and gold at $1000/oz.)
As the silver to gold ratio returns to historic values, from 50:1 to 10:1, you may
make over 5 times more money investing in
silver, than gold!
Silver prices may rise to exceed the 10:1 ratio, for the following
reasons:
More than all of the silver produced by the mines each year is consumed by industry, which leaves little to no room for substantial investment demand. A marginal increase in investment demand will drive prices sky high.
Most silver is produced as a by-product
of mining gold, copper, zinc, or lead. Higher silver prices
might not substantially increase the amount of silver mined
each year. Consider, in 1980, when silver prices
went up to $50/oz., less silver was mined than in 1979!
Higher silver prices may not cause much reduced demand. Why?
Because most silver
consumed by industry is used in tiny quantities in each
application, such as in film or electrical contacts, therefore, rising silver
prices will not easily slow down growing industrial demand.
Additionally, as paper money continues to falter, people will buy silver and gold without regard to price, or they will buy simply because prices are going
up! Because many investors today are momentum investors, and won't be able to ignore the gains!
Each year, silver mines produce about 650 million ounces of silver.
200 million ounces come from recycling and about 100
million ounces come from investor or government
sales. That's a total of about 1000 million ounces. Of that total:
- about 42% is consumed by industrial use
- about 28% consumed by jewelry
- about 20% consumed by photography
- about 5% consumed in coins and medallions
That's 95% of total available silver each year! This implies
either a "surplus", or "investment demand", of about 5% total.
At $20/oz., that's only $1 billion per year of net investment demand.
Since the 1950's, silver use and consumption, has made silver more rare than
gold, in above ground, refined and deliverable forms. Estimates suggest there are 200-300 million ounces of refined,
above ground
silver available to the market at the present time. There are
about 125 million
ounces of silver at the NYMEX, the big commodity
exchange in New York. The ETF SLV has about 180 million ounces.
Each silver contract at the NYMEX is a promise. There are too
many contracts, too many promises to deliver silver that may not
exist. Each contract is for 5000 ounces. There are
often
over 200,000 contracts for 5000 ounces, that's a total of 1000 million
ounces of
silver promised to be delivered.
With recent market trends of defaults and bankruptcies, these contracts are at risk of default.
Yet the exchange has only about a third of that in real silver.
How can they promise to deliver more silver than exists? If
they fail to deliver silver, then confidence in the world's entire financial
system may collapse. Industrial users of silver may have to shut
down their factories. To prevent this, users will bid silver
prices much higher.
Due to the risk of default in silver futures contracts, I suggest
that you
avoid buying futures contracts, avoid options, and avoid storing your
silver with anyone else! Take delivery of your silver, and put
your silver in your own safe!
Despite silver's intrinsic properties as money, silver began to lose
its status as money starting in the late 1800's, as nations stopped
using silver, and started using only gold as money. Over 100
years of this "demonetization" has caused a serious drop in silver's
value, and this trend is about to be reversed as investors re-learn
that silver is a great store of value because of its intrinsic properties.
As paper money continues to waver, the neglect of silver's
use as money will end. Once again, silver will be valued
based on other measures of value, such as a day's wage, or a ratio to
gold. If silver exceeds its historic value - as I expect it will -
due to the scarcity - from its importance in electronics and
photography - then perhaps a silver dime, a silver quarter, or a silver
dollar will be worth far more than a day's wage, as
it once was.
How high will silver prices go? You do the math on what a day's
wage should be, and you tell me!
Will you be hurt if silver and gold prices rise? Not if you own some!
Remember, honest weights and measures in
commerce produce prosperity.
But you must act to benefit from this information.
Don't wait for silver to rise before buying it. Silver prices
could rise by over $20/day to exceed $100/ounce at any time if large
funds or billionaires buy with desperation.
I use my IRA account to buy silver stocks, not silver. However, in my opinion, most large, well-known, major silver
stocks are overvalued.
Stock prices for Small silver exploration companies often rise much faster than silver itself! Some silver stocks have risen as much as five or ten times more
than silver alone! But prices for silver stocks are
volatile, changing often and that creates even more profit opportunities.
To learn which silver stocks are the best at any
given time, you ought to subscribe to my free email newsletter.
Here's an email from a very happy subscriber:
Subject: "Keep up the great work!"
G'day Jason
My name is Michael Campion, an Irishman currently living in Perth
W.Australia. I was raised a catholic but have since broken all ties
with Rome and am now a student of the King James Bible. My study has
taught me to look at everything in this world from a completely
different perspective (to find out truth) especially history, economics
and geopolitics. I have read numerous books, websites, newsletters and
opinions on bible prophecy, I subscribe to many newsletters
including R.Maybury, D. Mcalvany, Dines, Russell, Schultz, Doug Casey
etc I get all of Texe Marrs material ( www.powerofprophecy.com ) and
all of Stewart Best material ( www.truinsight.com ) plus much much
more..(The last two are the best at what they do)
I stumbled across your material about two to three years and have
subscribed to look at your portfolio a couple of times over that
period. You
have a wonderful gift of simplifying an otherwise complicated task of
sifting through all the mining companies out there and listing the ones
that offer the best leverage to the rising silver price.
With your help
I have tripled my overall modest initial investment.
I have been
studying the fundamentals of the gold and silver for four years now and
find that your
analysis of fundamentals is the most outreaching, it incorporates the
most relevant periods in history to the subject and is the most
straight to the point. I believe the bible gives you this most
unique perspective. Please keep up this great service to the lord and
his people. Your material will help me to educate more people in the
days ahead before it is too late. If there is anything that I can do to
help you in your ministry on this side please let me know. I would love
to help!
God bless you and your hard work.
I know how very busy you are but would love to hear from you.
Best Wishes
Michael Campion
After you sign up, I'll immediately send and share with you:
- What kinds of silver bars and coins there are
- The advantages and disadvantages of each
- Which is most liquid
- Which is cheapest
- Which has the narrowest spread
- Which kind of silver is most convenient for you
- Where to get silver at the cheapest published prices
- Current information on national dealer supply!
I'll provide access to a searchable database showing you where you can get silver in your local area (in the United States).
When you subscribe to my free email newsletter, you will also get, for FREE:
- A list of Stock Brokers that can handle Canadian stocks and/or pink sheets!
- A list of internet stock brokers with the lowest fees.
- The names of leading mining industry brokers
that can give you specific advice on mining stocks.
It is my hope you will find investment success and prosperity.
I know that some of you want to stay anonymous. I don't ask for your name, just your email, so I can send you information on the silver
market, & silver stocks, in a timely way. You have everything to gain and nothing to lose. So sign up now.
I'm sure you'll enjoy my free email newsletter, and free archive of past emails!
One more bonus: You also get access to our online database of mining stocks, that currently has listings for over 700 mining stocks. We have market caps listed for over 700 stocks. We have a "resource leverage" calculation for about 200 stocks. This is an invaluable resource; one that I've spent over 1 year to develop, and over $100,000 on programming fees.
You can order risk free, as satisfaction is guaranteed. The real risk is made when you invest your capital. But keep reading to see why I believe that mining stocks are the lowest risk thing you can buy, besides real silver at under $20/oz., and why paper money, bonds, and housing are such high risk investments right now.
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