Posted on 12/13/2009 1:51:49 PM PST by FromLori
We are less than three weeks away from entering the next decade. The most important thing you need to know entering 2010 is that silver is the single best investment for the next decade. In our opinion, investing into silver is the only sure way to tremendously increase your purchasing power over the next ten years.
Throughout world history, only ten times more silver has been mined than gold. If you go back about 1,000 years ago between the years 1000 and 1250, gold was worth ten times more than silver worldwide. From year 1250 to 1792, the gold to silver ratio slowly increased from 10 to 15 and the Coinage Act of 1792 officially defined a gold to silver ratio of 15. The ratio remained at 15 until forty-two years later when the ratio was increased in 1834 to 16, where it remained until silver was demonetized in 1873.
The gold to silver ratio remained between 10 and 16 for 873 years! It is only over the past 100 years that the gold to silver ratio has averaged 50. History will look back at the artificially high gold to silver ratio of the past century as an anomaly, caused by the dollar bubble and the world being deceived into believing that fiat currencies are real money, when in fact they're all an illusion. Next decade, the fiat currency experiment will end badly in a currency crisis. The wealthiest people will be those who bought silver today and were smart enough to research and pick the best silver mining stocks.
While the vast majority of the gold ever produced remains sitting in vaults, 95% of the silver produced has been consumed by industry for thousands of applications in such tiny amounts that most of it will never be recycled and seen on the market again. Nobody knows the exact above ground supply of silver today, but most likely it is somewhere in the neighborhood of 1 billion ounces. That's a total worldwide market value of only $17.4 billion, when the world has over $7 trillion in foreign currency reserves, mostly in fiat currencies that they will need to diversify out of due to rampant inflation.
Besides the fact that the world has been ignoring the monetary value of silver, silver prices are artificially low due to a large concentrated naked short position. It's not a coincidence that the day silver reached its multi-decade high of over $21 per ounce in March of 2008, was the same day Bear Stearns failed. Bear Stearns was a holder of a massive short position in silver. In our opinion, this was likely a naked short position because there is nobody in the world who owns such a large amount of silver for Bear Stearns to have borrowed.
The reason why we believe the Federal Reserve was so eager to orchestrate a bailout of Bear Stearns, is because Bear Stearns was on the verge of being forced to cover their silver short position. Because the silver market is so small and tightly held, if Bear Stearns was forced to cover their short position, silver prices could've potentially rose to $50 per ounce or higher overnight. The world would've seen how economically unstable our country is and confidence in the U.S. dollar would've rapidly deteriorated.
JP Morgan still holds the silver short position they inherited from Bear Stearns. The concentrated naked short position in silver today is the largest short position in the history of all commodities, as a percentage of its market size. Eventually, JP Morgan will have to cover this short position or it could jeopardize their existence.
The best evidence that the short position in silver is naked and not backed by real silver, is the differential between what silver trades for on the Comex and what real people are willing to pay for physical silver on eBay. Every hour on eBay, there are dozens of one ounce silver coins selling for approximately $25. That's about a 43% premium over the current spot price of silver. With so much demand for physical silver, we doubt the silver shorts in the paper market will be able to manipulate prices downward for much longer. A major short squeeze could be right around the corner and silver could take off in a way that shocks even those who are most bullish.
I won’t believe it until G. Gordon Liddy does silver commercials on Fox news! ;-)
although one could argue that lead is a better investment
I just thought it interesting I know Barick had to cover their shorts on Gold and it cost them quite a bit and they were tied to JP Morgan and then the CME started taking Gold as payment and if I’m not mistaken JP Morgan holds that Gold.
But I did recently see an ad that was pushing silver. Because it is used in more industrial processes than Gold, it will end up being more in short supply than Gold.
A quick look at the US Mint site; if you're wanting to buy bullion silver dollars; they're out until they can buy a sufficient number of silver blanks to restart production.
And the price is going up.
Clad in copper/ And copper is another good metal to invest in, for a number of reasons.
National Inflation Association?
Now that is an organization I want to join. Where to I pay dues? How do I join this great and noble cause? Are they fer it or agin it?
One thing, the comstock lode discovery in Nevada pretty much changed the gold to silver ratio and probably doomed bi-metallism as a monetary standard. In those days silver coinage was sort of the “funny money” of the day. Favored by debtors and disfavored by bankers.
Looks as if long silver/short gold might be a good spread.
Who knows that the AG/AU $ ratio won't change by Gold falling?
>> Tungsten? <<
Who needs it anymore, now that everybody is switching over to fluorescent and LCD lightbulbs?
Silver Deep storage inventories (FTO) 7,075,171 from 2007 Market value ($ per FTO) $13.65 Market value ($ in thousands) $96,576 Statutory value ($ in thousnads) $9,148
Silver-working stock: inventories (FTO) 8,924,829 from 2007 Market value ($ per FTO) $13.65 Market value ($ in thousands) $121,824 Statutory value ($ in thousnads) $11,539
Only problem, with Obamalamadingdong and co. in charge, how much "Industrial process" will still be going on?
Silver is the new gold. According to the US Geological Survey, Silver will be the first element on periodic table that we run out of. Twenty years ago there was 10 times as much silver above the ground as gold. Today there is 3 times more gold than silver. Plus uses for silver are exploding. Google silver zinc batteries. These hold a higher charge, charge faster and last longer than lithium ions.
While gold will be a hedge against inflation, silver’s growth will exceed gold and increase in purchasing power.
I see they are going to be selling Gold Coins again
Mint to resume sale of gold bullion coins
Read more: http://www.denverpost.com/business/ci_13981390#ixzz0Zc2VWn1P
This is only marginally true for SOME sales (if you include their inflated shipping costs)!
That said..., the market demand for silver coins, rounds, bars is strong and is firm
Those buying silver bullion on eBay over the past few years now have greatly increased their wealth (far more than those in mutual funds...).
Whatever you "stash" your wealth in, make sure it is widely diversified, both in asset class and geographically!
I agree the reasoning seemed dubious. I’m only relating what they are telling the public.
95% "consumed" because gold is easier and better to keep in vaults. The silver that is "above ground" is way way more than 1 billion ounces. There are many billions of ounces of quarters that were minted and not yet recycled. The way these people are able to make this exaggeration is to compare silver bullion to gold bullion. But if silver pops to $50 an ounce there will be huge lines of people turning in tea sets and silverware and other "consumed" silver (and the aforementioned coins). And then it will drop to $5 / ounce.
For those of you interested in gold and silver i recommend the book, The Power of Gold
I have it on CD and listen to it over and over as I travel (all except the last cd that got trashed)
Today I found it at Google It is excerpted but there is still a lot there. Go to the end and read about WW1 and the depression and money and gold and global banking.
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