THE SILVER OWL

SELL ALL YOUR GOLD INVESTMENTS NOW AND BUY PHYSICAL SILVER!

2011-09-26T23:59:00.000+03:00

Source: Bix Weir

The following is a list of facts and reasons to switch all your Gold investments into Physical Silver:

1) Due to the tiny size of the Silver market and the lack of physical Silver available to the manipulators, the Silver battle is much easier to win than Gold. Ted Butler's discovery of massive Silver market manipulation should highlight the size, scope and importance of Silver to the current financial crisis.

http://www.investmentrarities.com/ted_butler_comentary/08-22-08.html

2) Central banks have NO physical Silver to assist in the manipulation of the Silver market but they still have a lot of physical Gold (although much less than they claim).

3) The majority of Silver mined every year is consumed as an industrial metal in very small amounts and will never return to the market whereas the amount of above ground Gold grows year after year.

4) Silver has developed, due to its low price and superior physical properties, into a vital and necessary industrial commodity that makes it mandatory for modern life. If we woke up tomorrow and gold vanished from the face of the earth, life would continue pretty much as it was the day before. Without silver, modern life would change.

5) Due to the relative very low price of silver and very high price of gold, the man in the street, around the world, is in a position to buy silver in much greater quantities than gold.

6) In various forms there is an estimated 5B oz of above ground Gold and 5B oz of above ground Silver but Gold trades around $1600/oz and Silver trades for about $40/oz. Both metal prices are obviously manipulated but Silver appears to be manipulated more. As for Silver bullion that is "in play" for the manipulators, I estimate that less than 200M oz remain with a current market value less than $8B.

7) Silver has been in a supply deficit for over 50 years! Governments held approximately 10B oz of silver in 1950 and have been supplying that physical stock steadily into the market. Today there is no more of that surplus silver left to sell.

8) At current Silver consumption rates there are only 14 years of known Silver reserves remaining in the world. AFTER THAT SILVER WILL BE GONE FOREVER! Think about it.

http://minerals.usgs.gov/minerals/pubs/commodity/silver/mcs-2010-silve.pdf

9) Demand for Silver is "inelastic" in its industrial applications because it is used in such small quantities per application. An increase in price does not translate into a decrease in consumption.

10) The COMEX Silver short position is the largest concentrated short position of any commodity, on any exchange in the history of financial markets.

11) Throughout human monetary history the Silver to Gold ratio hovered in the 10-1 range until the invention of futures and options trading in metals. After the massive manipulation maneuvers by the Banking Cabal the silver-gold ratio now stands at over 40-1.

12) The US Dollar as defined in the Coinage Act of 1792 is Silver, not Gold, and contains "three hundred and seventy-one grains and four sixteenth parts of a grain of pure, or four hundred and sixteen grains of standard silver."

http://en.wikipedia.org/wiki/United_States_dollar

13) Silver is massively under reported in the media vs. Gold. Even Jim Rogers, the commodity guru, purposefully ignores Silver entirely in his best selling book "Hot Commodities" even though Silver exceeds all other commodities using his metrics on what makes a strong commodity.

14) Very few investors have physical Silver in their possession. Reasoning: because they claim it is "too hard to store". Does that mean when Silver trades at over $1,000 oz people will be more willing to buy and store physical Silver? It is difficult to make up a more bullish argument to take delivery and store physical Silver TODAY...when the Cabal price rigging scam finally fails you can always buy your own Fort Knox to store all that pesky Silver you bought!

15) Gold's strong fundamentals are only exceeded by Silver's so when the gold manipulation stops and the Gold price takes off investors will be looking for the next under-priced investment with similar characteristics.

16) 470M oz of Silver owned by the US Treasury and used in the Manhattan Project for the construction of the atom bomb have all been melted down and sold into the physical market to support the "Strong Dollar Policy"

17) Silver mineral deposits, as opposed to Gold, are usually very shallow in the earth's crust due to the nature of the geology so most of the large deposits of Silver have probably already been found and/or already mined limiting future discoveries.

18) There is a significant problem with counterfeit Gold coins and bars because of its high price. Silver coins and small bars have not, to date, had as much of a counterfeiting issue because its price did not justify the effort. (although there is a problem with counterfeit Silver jewelry which may significantly suppress Silver scrap recovery in the future...oddly bullish by-product of counterfeiting Silver!)

19) The total dollar value of the Silver market is a fraction of the total dollar value of the Gold market.

20) Most flat screen televisions use Silver in their internal electronics/screens and the US transfer from analog to digital signals has increased the demand for flat screen TV's.

21) Retail physical shortages of Silver are already beginning to appear around the world. The list of announced delays/curtailment by Government owned Mints now includes EVERY MAJOR SILVER COIN PRODUCING COUNTRY IN THE WORLD!

22) Hedge funds are bleeding from the credit crunch and they are looking for ways to save themselves. A single hedge fund can scoop up the remaining physical Silver and blow the price sky high.

23) In the US, Gold confiscation laws are still on the books but there are currently no silver confiscation laws.

24) As of mid 2011 the Gold price is hovering around $1,600 or 188% of its historical high. Silver, on the other hand, is hovering around $40 or 80% of it's historical high suggesting that Silver has a long way still to go.

25) Un-backed paper Silver programs such as silver certificates and unallocated pooled accounts are the "industry standard" these days and will be scrambling for metal when redemptions are called in by the investors. The most egregious example of fractional reserve silver is the iShares Silver ETF (SLV).

26) In the past few years the massive global money creation by central banks around the world has created huge reservoirs of cash sloshing around the asset markets looking for a safe haven. Although most mainstream press have discussed Gold as being a likely bucket to fill with this monetary firehouse, SILVER has all the same monetary metal properties as Gold except the Silver market is SO small it would be like FILLING A DIXIE CUP WITH THE FIREHOUSE!

27) The CFTC still has an open investigation into the manipulation of the SILVER market that is being conducted not by their investigative division but by the CFTC "Enforcement Division". Although the final conclusions have been purposefully delayed by the CFTC, the final outcome may finally be the END OF THE 50 YEAR MANIPULATION OF THE SILVER MARKET!

28) During the CFTC hearing on metal position limits, GATA announced that a whistleblower has come forward with specific proof that JP Morgan was rigging the silver market. The next day he and his wife were rammed in their car in an attempted murder. The suspect was caught but the police are not giving out any information about the suspect or others that were involved.

http://www.youtube.com/watch?v=e9bU0r6JP4s

29) The growth of emerging economies in Asia will require more and more industrial silver to build out their electric infrastructure and provide a higher standard of living for their middle class. In a global market that has been in a silver supply deficit for years a silver bidding war will result in order to obtain the significant amounts of silver needed.

30) The truth about gold and silver price manipulation is spreading like wildfire throughout the world with the help of the internet such that the Banksters "shabby secret" is no longer a secret.

31) There are currently multiple class action lawsuits that have been filed against JP Morgan for blatantly rigging the silver market. Given that JP Morgan has previously claimed immunity from legal prosecution because they are an agent of the US Government I doubt the suits will ever be brought to trial...BUT the publicity of them "claiming immunity" AGAIN will be the "silver shot heard around the world".

32) The US Dollar has run it's course as the world's reserve currency. The entire global financial markets know this and are positioning themselves accordingly. The "Dollar End Game" for the United States has never been to transfer economic power to Eastern countries as the dollar dies but rather crash the global markets and start fresh with a new domestically centered economic model. That transition is upon us:

http://www.roadtoroota.com/public/261.cfm

Silver Ready to Breakout

2011-09-01T01:42:00.000+03:00

Silver ....Final Warning!

2011-08-27T21:22:00.001+03:00

The Cartel Caught in the Act

2011-07-22T04:10:00.001+03:00

The cartel sold 250,000,000 paper ounces of silver (1/4th of Global world silver production) in 1 minute to smack down silver, 5 times the volume of all silver mined in the US annually was sold in 1 minute to knock silver below $40!....

Jason Hommel: silver going to US$500/oz

2011-03-05T01:52:00.000+02:00

Here's an excerpt from Jason Hommel's newsletter, where he argues on why the metal is eventually going to hit US$500/oz...

"Recently, I've been hammering the point that there are two major reasons why silver is headed to $500/oz.

First, silver hit $50/oz. in 1980, and money creation has increased 10 times since then, so the true inflation adjusted price of silver will be $500.

Second, when 1% of money in US banks buys silver, it will be 1% of about $18 trillion, which is $180 billion. If you divide that by 700 million, you'd get $257/oz., which would leave no silver for industry or the rest of the world, which implies a silver price of at least about $500.

So, here then is the problem.

How will they prevent silver from going to $500/oz.? They can't. They can only slow down the rise, or let it rise fast. (while increasing volatility, and creating temporary price dips) And how will they prevent the implications of such a massive rise to $500?

See, the problem is twofold.

If they let silver run fast to $500, say over 6 months, the dollar will be perceived as collapsing, and could continue to collapse to zero.

But if they let silver continue to go up "slowly" at only 30% per year, for the next ten years to take us to $500, this would create a worse problem. See, after nearly 20 years of precious metals only going up, people will begin to notice -- more than notice. They will begin to say, "precious metals only go up, they never go down". And that's how price bubbles begin to form, making silver go from fair value to over valued.

And if silver were to become over valued, that would drive the price from $500 to $5000, and could continue and ultimately collapse the dollar to zero value.

So that is quite the problem for the people who are trying to prevent the silver price from rising.

The silver storm is coming. Prepare.

People ask some interesting questions when I point out that silver is headed to $500. They ask, "Gee, who will buy it when it's that expensive?" Did they not comprehend the argument? Only 1% of people will be buying silver when silver is $500/oz., (a hundred times more than today, when only 1% of 1% of people are buying silver) but yet, 99% of people won't have bought any silver in the recent year, at $500/oz.

Some analysts today say that silver is going to go down, because "everybody loves silver". Such analysts don't know anything about the fundamentals, which trump any kind of other analysis! Silver might hit the news due to new highs, but the facts are clear. Only about 1% of 1% of money is buying silver each year. That's one dollar out of 10,000!

Silver's not a popular investment. Not yet. But it will be. IT WILL BE! Prepare for it. Get it now. Anywhere below $50 to $100/oz is cheap..."

For more from Jason Hommel on silver you can visit his web site "Silver Stock report" and subscribe to the newsletter.

James Turk interviews Hugo Salinas Price on silver and sound money

2011-02-16T22:30:00.000+02:00

GoldMoney founder James Turk interviews Hugo Salinas Price, president of the Mexican Civic Association for Silver, about silver's potential to return as money and about sound money generally in a 22-minute video

James Turk: Silver is Approaching Stage Two of its Bull Market

2011-02-15T20:22:00.000+02:00

Back in April 2007, I wrote about the three stages that appear in every bull market, and more to the point, that gold was approaching the end of stage one. Gold back then was still trading around $690, and therefore well below its then record high of $850 reached in January 1980. My view was that “gold looks ready to make a new all-time high. When that happens, stage two begins. There will not yet be widespread excitement about gold in the next stage, because that won't occur until stage three. But when gold makes a new record high, and particularly after it breaks into a 4-digit price, people will begin paying attention.”

I wrote a follow-up article in November 2009 entitled Welcome to Stage Two of Gold's Bull Market, just two months after gold broke above $1,000. Focusing on the change in prevailing sentiment, I noted how differently gold was being treated. "During the first stage of a bull market, the media and most investors alike focus on past issues, rather than future potential. Over the past decade one consequently heard all the reasons not to own the gold…But there is a notable difference in this stage compared to stage one. Look how many people are writing and talking about gold. Gold has moved from apathy and neglect – stage one characteristics – to growing attention. But importantly, instead of embracing gold and analyzing it to determine relative value, today’s attention is one of widespread disbelief and skepticism that gold can climb higher. These are exactly the responses one should expect to emanate from stage two." I concluded by noting that at some unpredictable point in the future, gold will enter stage three "when gold no longer is relatively good value."

I did not make any mention of silver in the above two articles. It too has three stages, but silver is still mired in stage one, which began in February 1991 after silver had collapsed to $3.50. It was an astounding 93% decline from its January 1980 peak of $50. But as we can see on the following chart, $3.50 was silver’s low, and its price has been rising ever since.

This chart shows a massive accumulation pattern, marked by the green lines. This pattern is a story of strong hands and weak hands, specifically, of silver moving to the former from the latter.

From its $50 high in January 1980 to its $3.50 low in February 1991, the weak hands were shaken out. At that point, the accumulation by strong hands – who were buying because the recognized that silver was an exceptional bargain – became the dominant force. Their buying power was stronger than the selling pressure of the weak hands, and the price of silver responded by starting to climb. It was classic stage one action, but here’s the important point.

Silver is still in stage one. It won’t advance into stage two until $50 is exceeded, just like gold did not enter stage two until its previous high of $850 was hurdled.

I expect that silver will exceed $50 this year, which is a point of view I first mentioned in my outlook for 2010.

Admittedly, I was a little early with my forecast about when gold would enter stage two. So perhaps I will again be early by forecasting that silver will enter stage two of its bull market this year. Regardless of the accuracy of my timing, one thing is clear. Because it is still in stage one, silver remains good value.

Crash JP Morgan Buy Silver - The Movie

2010-12-07T09:35:00.000+02:00

Crash J.P. Morgan, Buy Physical Silver!

2010-12-03T09:27:00.000+02:00

James Turk: $400 Silver by 2013 to 2015

2010-11-17T00:08:00.000+02:00

GoldMoney founder and GATA consultant James Turk was interviewed today by Eric King of King World News about the continuing increases in margin requirements for gold and silver futures longs. Turk says he expects a sharp snap back in precious metals prices:

Turk commented, “This may explain why Comex is raising margins a second time so quickly, they aim to put more pressure on the buyers. Obviously the Comex is trying to put more pressure on market participants by forcing them to liquidate their longs.”

Turk continues:

“Eric, here we are at $25.50 which is the price that was identified by your London source last week. So they painted the tape, but the Comex open interest shows that they haven’t driven out any buyers which is very surprising. Normally you would expect to see some longs liquidating on any pullback like the one that we have seen over the past few days, but that hasn’t happened this time around.

The buying pressure in the physical market remains, we are starting to see the industrial buyers coming back in to secure supply. My guess Eric is that the industrial users will be there on any price dip like we have had at present. Up to this point we haven’t seen the boomerang effect that I have been anticipating but I am still expecting a sharp snap back in prices.

As we pointed out in the piece which had Mark Lundeen’s illustration in it, gold is dramatically undervalued and this can only result in much, much higher prices over time. I would just add that I expect the gold/silver ratio to decline over time to under 20 to 1, so silver will be exploding along with the price of gold.

As you know Eric I have been projecting gold to hit $8,000 by 2013 to 2015, so that would equate to silver hitting $400, and that is well within the realm of possibility as silver reverts back to its historical mean.”

This is what happens in bull markets, prices climb to levels that previously seemed unimaginable.

Sprott's Embry on King World News: the fun is just beginning!

2010-10-29T19:43:00.000+03:00

Sprott Asset Management's chief investment strategist, John Embry, covers many topics related to gold and silver in a 14-minute interview today with Eric King of King World News, which you can listen to at the King World News Internet site here:

http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/10/29_John_Embry.html

Or try this abbreviated link:

http://bit.ly/bQKZSR

Silver manipulation lawsuit posted at GATA's Internet site

2010-10-29T09:36:00.001+03:00

A copy of the silver market manipulation lawsuit filed yesterday in U.S. District Court for the Southern District of New York against J.P. Morgan Chase & Co. and HSBC Bank has been posted at GATA's Internet site here:

http://www.gata.org/files/SilverManipulationLawsuit-10-27-2010.pdf

GATA board member Adrian Douglas, who helped publicize London silver trader Andrew Maguire's disregarded silver market manipulation complaint to the U.S. Commodity Futures Trading Commission, said of the lawsuit:

"The Gold Anti-Trust Action Committee has worked tirelessly for more than 10 years to expose the suppression of gold and silver prices. The filing of this lawsuit is a milestone in stopping the fraud that has been occurring in these markets and punishing the bullion banks responsible. The suppression of the monetary metals has facilitated an overvalued dollar and mispriced debt that in turn have caused the massive imbalances at the root of the worldwide financial crisis. This fraud has hurt everyone except those on the inside who have profited at the expense of the public. I applaud the integrity of Andrew Maguire, whose whistleblower testimony has made this lawsuit possible, and the dedication of CFTC Commissioner Bart Chilton, who has had the courage to fight systemic corruption."

SilverManipulationLawsuit-10-27-2010

James Turk: Silver $30 in Less Than 18 Days

2010-10-28T23:32:00.001+03:00

With gold and silver strong today, King World News interviewed James Turk out of London. When asked about silver specifically Turk commented, “I like this flag pattern because when you breakout to the upside you reach your target in half the time it takes the flagpole to form. The flagpole formed over 36 trading days, so the next leg up to $30 will be over in less than 18 trading days.”

Turk continues:

“The other thing Eric is that this time frame is not too far off from the three to four weeks window that I mentioned would take place when silver pierced $21.

We have been saying it is different this time because the ongoing accumulators of physical metal are right underneath the market. This aggressive buying is one of the key reasons why prices are poised to explode.

What I expect to see is a strong close today, and follow through tomorrow. That scenario requires more short covering tomorrow which is likely to happen anyway going into the weekend.

Even though silver is continuing to lead, gold will continue higher as well. Gold will eventually take out the previous high of $1,400. $1,400 is a pit stop on the way to $1,500.”

James Turk sent the above chart to go along with his comments. It shows the flag formation and the corresponding breakout he is discussing in this interview. When silver takes out the previous highs near $25, you should expect to see some serious fireworks to the upside. Gold will be in tow.

Second Highest Close for Silver Ever

2010-10-03T17:30:00.000+03:00

This from the Got Gold Report:

"We believe that today’s (Thursday’s) close for silver is the second highest nominal close at a quarter-end ever. We note remarkably little in the way of quarter-end profit taking. Silver closed in New York at $21.75 on the cash market, about even with Tuesday’s close and down a couple of dimes from Wednesday’s last print in the electronic session. That is after silver tested as high as $22.10 in early Thursday trade. Subscribers to Got Gold Report can look at the linked charts (near the bottom of the last full report) for more on the silver and gold price action."

Please click HERE for the full Report.

James Turk: The battle for $21 silver begins

2010-09-19T19:12:00.000+03:00

GoldMoney founder James Turk, editor of the Freemarket Gold & Money Report and consultant to GATA, says the silver price chart has nearly completed a three-year accumulation pattern with $21 as the crucial resistance level. Turk expects silver to vault higher when $21 is breached. His commentary is headlined "The Battle for $21 Silver Begins" and you can find it here:
James Turk-The Battle for $21 Silver Begins

Gene Arensberg: Something changed in silver market last week

2010-08-30T14:35:00.001+03:00

"Silver turned in an “outside reversal” Tuesday, August 24 (which happened to coincide with COT reporting cutoff day), and in the process it surged up and out of the wide triangular consolidation which, as regular readers know, we have been following here at Got Gold Report all along. An outside reversal occurs when the trading breaks below the previous day’s lows and then reverses to close higher than the previous day’s high. Outside reversals often, but not always, mark significant turning points and technically minded traders view such action as a more bullish event...."

Gene Arensberg's weekly "Got Gold Report" concentrates on silver and he writes that something changed in the silver market last week, starting with silver's "outside reversal" day on Tuesday, and it looks bullish.

Arensberg's commentary is headlined "Focus on Silver" and you can find it at the Got Gold Report Internet site HERE

James Turk: Is silver ready to move higher?

2010-08-09T01:35:00.000+03:00

GoldMoney founder James Turk, editor of the Freemarket Gold & Money Report and consultant to GATA, observes in commentary today that silver has been appreciating just as much as gold has over the last nine years and may be an even better buy now for investors who are prepared to deal with its greater volatility. Turk's commentary is headlined "Is Silver Ready to Move Higher?" and you can find it at the GoldMoney Internet site here:

James Turk: Is silver ready to move higher?

...silver bull still very young!

2010-07-22T00:54:00.000+03:00

...and here's the proof:

Doubts about gold ETFs broadcast today on two major networks

2010-05-15T10:05:00.002+03:00

Within a half hour of each other today the leading business television networks in North America reported doubts that gold exchange-traded funds either have the gold they claim to have or can get enough real gold to meet likely demand.

The first doubt was expressed on CNBC in the United States, where market analyst Rick Santelli comments at 5:30 into this segment:

http://www.cnbc.com/id/15840232?video=1494145732&play=1

The second doubt was expressed on BNN in Canada, where reporter Niall McGee commented at length:

http://watch.bnn.ca/#clip302139

There seems to be growing consensus in favor of what GATA long has been urging gold and silver investors to do: to take possession of their metal or make certain that any custodian has got it in allocated and audited form, especially since the custodians of the largest gold and silver ETFs are also the biggest gold and silver shorts, a grotesque and unacknowledged conflict of interest:

http://www.gata.org/node/8600

CHRIS POWELL, Secretary/Treasurer

Gold Anti-Trust Action Committee Inc.

Ted Butler: Worst is over for gold and silver

2010-04-24T16:47:00.002+03:00

In his weekly interview with Eric King of King World News, silver market analyst Ted Butler remarks that "the worst is behind us" for gold and silver investors dealing with the recent decline in prices; that the big silver short, JPMorgan Chase, is not increasing its short position in silver; and that investors should get out of "pooled" and unallocated gold and silver accounts and shift to accounts that identify their gold and silver bars by hallmark and serial number. The interview is not quite 13 minutes long and you can find it at the King World News Internet site HERE

New York Post: Trader blows whistle on gold, silver price manipulation

2010-04-11T23:23:00.000+03:00

Metal$ Are in the Pits

Trader Blows Whistle on Gold and Silver Price Manipulation

By Michael Gray

New York Post

Sunday, April 11, 2010

There is no silver lining to the activities of JPMorgan Chase and HSBC in the precious-metals market here and in London, says a 40-year veteran of the metal pits.

The banks, which do the Federal Reserve's bidding in the metals markets, have long been the government's lead actors in keeping down the prices of gold and silver, according to a former Goldman Sachs trader working at the London Bullion Market Association.

Maguire was scheduled to testify last week before the Commodities Futures Trade Commission, which is looking into the activities of large banks in the metals market, but was knocked off the list at the last moment. So he went public.

Maguire -- in an exclusive interview with the Post -- explained JPMorgan's role in the metals pits in both London and here, and how they can generate a profit either way the market moves.

"JPMorgan acts as an agent for the Federal Reserve; they act to halt the rise of gold and silver against the US dollar. JPMorgan is insulated from potential losses" on their short positions "by the Fed and/or the US taxpayer," Maguire said.

In the gold pits, Maguire sees HSBC betting against the precious metal's price without having any skin in the game in the form of a naked short.

"HSBC conducts an ongoing manipulative concentrated naked short position in gold. Silver is much easier to manipulate due to its much smaller [market] size," Maguire added.

"No one at JPMorgan is familiar with Andrew Maguire," said Brian Marchiony, a company spokesman. HSBC declined to comment.

Also during the CFTC hearing, Jeff Christian, founder of the commodities firm CPM Group, said that the LBMA, the physical delivery market for gold and silver in the UK, has been using leverage, which is another way to depress the price of gold and silver.

Christian said that the LBMA -- the same market Maguire trades in -- has leverage of about 100-1 on the gold bars settled on the exchange. In layman's terms, that means if 100 clients requested their bullion bars be delivered, the exchange could give only one client the precious metal.

The remaining requests would have to be settled for cash equivalent. "That is tantamount to a default on the trade," says Bill Murphy, chairman of the Gold Anti-Trust Action Committee.

Maguire goes further and calls it a fraud: "If you sell something you do not own, then that is fraud."

Back in 2007, Morgan Stanley agreed to settle a $4.4-million lawsuit brought by precious-metal clients, who alleged that Morgan offered to buy gold and silver and store it for the investors, but never purchased any metal and still charged them storage fees.

Morgan Stanley denied the charges at the time but "settled the case to avoid the cost and distractions of continued litigation," the firm said.

Despite gold's rise each of the last 10 years, Murphy believes the price of gold today would be closer to $2,300 an ounce if the price just moved with inflation.

Maguire believes the price should be even higher given the fear trade that would have sent prices spiking during the financial crisis in 2008-09.

Both precious metals have seen a recent spike since Maguire's e-mails became public. Gold has gained 6.5 percent to close at $1,161.55, while silver has spiked 10 percent to $18.38.

According to the e-mails Maguire sent to CFTC regulators, he was spot-on in his expectations of how the precious metals would trade on release of the January jobs report.

This message is to "confirm that the silver manipulation was a great success and played out exactly to plan as predicted yesterday. How would this be possible if the silver market was not in the full control of the parties we discussed in our phone interview?," Maguire wrote to a staff investigator after the trading day.

CFTC commissioner Bart Chilton said, "I'm appreciative of the information Mr. Maguire provided and I'm glad it was introduced into the investigation."

... High, low silver

The prices of gold and silver have been allegedly suppressed by JPMorgan Chase and HSBC, according to a London whistleblower.

Andrew Maguire, who laid out the banks' plan in e-mails to the CFTC prior to trading on the Comex on Feb. 5.

1.) From: Andrew Maguire

To: Ramirez, Eliud [CFTC]

Cc: BChilton [CFTC]

Sent: Wednesday, February 03, 2010 3:18 PM

Subject: Re: Silver today

Thought it may be helpful to your investigation if I gave you the heads up for a manipulative event signaled for Friday, 5th Feb. Scenario 1. The news is bad (employment is worse). This will have a bullish effect on gold and silver as the US dollar weakens and the precious metals draw bids, spiking them higher. This will be sold into within a very short time (1-5 mins) with thousands of new short contracts being added.

Scenario 2. The news is good (employment is better than expected). This will result in a massive short position being instigated almost immediately with no move up. This will not initially be liquidation of long positions but will result in stops being triggered, again targeting key support levels. Kind regards,

2.) From: Andrew Maguire

To: Ramirez, Eliud [CFTC]

Cc: BChilton [CFTC]; GGensler [CFTC]

Sent: Friday, February 05, 2010 3:37 PM

Subject: Fw: Silver today A final e-mail to confirm that the silver manipulation was a great success and played out EXACTLY to plan as predicted yesterday. How would this be possible if the silver market was not in the full control of the parties we discussed in our phone interview? Kind regards,

3.) Andrew T. Maguire

From: Ramirez, Eliud

To: Andrew Maguire

Sent: Tuesday, February 09, 2010 1:29 PM

Subject: RE: Silver today Good afternoon, Mr. Maguire, I have received and reviewed your email communications. Thank you so very much for your observations.

CFTC whistleblower Maguire, GATA's Douglas interviewed by King World News

2010-03-30T18:31:00.002+03:00

London metals trader and CFTC whistleblower Andrew Maguire was interviewed with GATA board member Adrian Douglas for 40 minutes Tuesday by Eric King of King World News.

Maguire explained how he came to complain to the CFTC about silver market manipulation by JPMorgan Chase traders in London and then to Douglas when the CFTC failed to call him to testify at its hearing last week on futures trading in the metals market.

You can listen to the interview at the King World News Internet site here:

Jon Matonis: Hunt Brothers Demanded Physical Delivery Too

2010-03-22T14:02:00.001+02:00

Jon Matonis, who describes himself as an economist of the Austrian school living in Gibraltar, has written at his blog, The Monetary Future, a fascinating account of the infamous attempt of the Hunt Brothers to get hold of a lot of silver in 1979-80.

The biggest lesson of the story may be that, then as now, position limits in the U.S. commodity markets are to be applied against longs but not against shorts. Of course that's the big issue underlying the U.S. Commodity Futures Trading Commission's hearing on the precious metals futures markets on March 25, and GATA will try to raise it.

Matonis' essay is headlined "Hunt Brothers Demanded Physical Delivery Too" and you can find it at The Monetary Future HERE

The Philosophy of Liberty...

2010-02-21T16:55:00.000+02:00

...in a nutshell!!

Bill Bonner: Investing in Gold is a Move Toward Real Wealth

2010-02-20T21:19:00.001+02:00

"...Gold is inert. Lifeless. Incorruptible. But inherently shiftless. It never gets out of bed in the morning. It has never earned a penny in its entire life.

Gold won’t make you rich. It toils not; neither does it spin. Since it doesn’t hustle, it won’t increase your wealth. That’s why, in the Bible, the slave who kept his master’s wealth safe in gold got beaten. Gold won’t earn a profit. It won’t pay you a salary or give you a company car. All it will do is help keep you from getting poor. We’ve never heard of a man who had 100 ounces of gold who was poor. On the other hand, we’ve read about millions of people with stacks of paper money who couldn’t afford a cup of coffee. In our wallet, for example, is a 10 Trillion Dollar bill from Zimbabwe. A dear reader gave it to us. You could have a stack of those a foot high. You still wouldn’t be able to buy a latte at Starbucks. On the other hand, imagine you had a stack of Krugerrands or maple leafs. Well, you still couldn’t buy a cup of coffee at Starbucks. Because the dumb clerk wouldn’t know what it was. And if he did take the gold coin in exchange for coffee, he’d probably rush over to the mall where some sharp dealer offered to take it off his hands in exchange for PAPER MONEY!

You see, the average person has no idea what real money is. One dollar bill looks the same as another to him. And gold? He’s probably never seen gold, unless it was wrapped around his finger..."

To enjoy Bill Bonner's full article on investing and the wealth preservation aspect of owning gold please click HERE

Murray Pollitt: Farewell to all the emperors

2010-02-18T21:28:00.000+02:00

In his latest market letter, Murray Pollitt of Pollitt & Co. in Toronto, the grand and not that old man of Canadian mine finance, remarks that the world's policy makers lack the courage to accept the discipline necessary to shore up the world's finances. So, Pollitt writes:

"Our best guess is that markets, not policy makers, will determine the next monetary system. And, as much for lack of alternatives as the traditional reasons, gold will be somehow involved. Meanwhile markets will be characterized by volatility, defaults, lots of uncertainty, and a rush for the hard stuff. Before they get around to a monetary system, governments will wake up to the need for wealth creation and, since the quick fix for wealth creation is competitive devaluation, we expect governments to get at it with vigour. Shades of the 1930s."

Pollitt's commentary is headlined "Farewell to All the Emperors" and he has generously consented to GATA's posting it HERE

Financial Crisis: The Second Wave

2010-02-16T09:58:00.003+02:00

National Inflation Association just released a trailer for its next documentary, tentatively titled "The Second Wave".

Sprott Asset Management warns: Beware counterfeiters

2010-01-31T20:49:00.000+02:00

Kevin Bambrough and David Franklin of Sprott Asset Management in Toronto argue in an essay just published that central banks no longer have any interest in maintaining the value of their currencies and that, as a result, gold is the only currency that can safeguard wealth.

Their essay is headlined "Beware Counterfeiters" and you can find it at the Sprott Internet site HERE

John Embry: Why gold will keep going up for years

2010-01-30T01:21:00.000+02:00

Remarks by John Embry Chief Investment Strategist,

Sprott Asset Management,

Toronto Vancouver Resource Investment Conference

Hyatt Regency Hotel

Vancouver, British Columbia, Canada

Monday, January 18, 2010

Good afternoon.

It is once again a great pleasure for me to address a knowledgeable gathering at Joe Martin's always excellent Cambridge Conference.

When I was here last year gold was around $850 and there was the usual angst among mainstream commentators fearing a drop to $600 per ounce or worse. Today the price is roughly $300 higher and the same individuals continue to try to frighten the public with prophesies of vertiginous falls in the gold price. Despite this ongoing aggravation, I am even more bullish on the prospects for gold than I was a year ago.

However, despite my consistent enthusiasm for the yellow metal once termed a "barbarous relic" by Lord Keynes, I still have the strong feeling that the vast majority of investors outside this room still haven't got a clue about gold and they are certainly not aware that gold is experiencing a historic bull market with much, much further to go. What we have seen to date is merely a prelude, and the appreciation we are going to see in future years is going to greatly exceed what we have seen to date. This opinion is based on a number of factors I will expand on, but the predominant theme is that gold is re-establishing itself as money.

It has been money for thousands of years, a reality that was succinctly summed up by J.P. Morgan in 1912 when he said, "Gold is money and nothing else." But we go through periods when that reality is obscured, and the decades of the 80s and 90s represent living proof of that. Gold retreated to commodity status in that era, when disinflation was in vogue and the real returns on financial assets were truly remarkable in historic terms.

Gold fell from a peak of $850 per ounce in January 1980 to a low of $252 in July 1999 in an extended bear market. To be fair to gold, it got a significant push to the downside in the latter part of that period from the central banks that were dumping enormous quantities of gold by leasing it through their bullion bank cronies. I would contend that the gold price overshot its economic value by perhaps $150 on the downside. Contributing to this fiasco was the ludicrous auction of half the British gold reserves within 10 percent of the bottom. Today this egregious error is referred to as "the Brown bottom" in recognition of the idiocy of the current British prime minister, who was then finance minister.

However, this is all water under the bridge and I don't particularly want to dwell on it other than to say that we are now in the phase of the gold market where we are about to benefit mightily from the central bankers' awesome stupidity at that time.

It is important, though, that everyone realize exactly what happened. The Western central banks supplied massive quantities of gold to the market for at least the past 15 years. Initially this facilitated excessive producer hedging. Then it helped to fund a huge carry trade that greatly enriched their bullion bank cronies. Now it occurs in large part to protect existing huge short positions held by those same banks.

You might be inclined to ask why the central banks would do such a thing. The official explanation for the transparent portion of their activities (i.e., direct sales) was to diversify their reserves. Essentially, why hold gold when you can own an interest-bearing piece of paper in its stead?

But that explanation is purely fatuous and a total smokescreen. The whole process, with the clandestine leasing and swapping of huge quantities of gold, was orchestrated by the United States. It was designed to reduce critical scrutiny of the central banks' increasingly reckless monetary policy, to allow interest rates to remain at unrealistically low levels and to maintain the U.S. dollar's supremacy. That this undertaking would inevitably spawn serial financial bubbles, the very same bubbles that brought the world financial system to its knees, was conveniently ignored.

This was all foreshadowed by some remarkable comments by then-Federal Reserve Chairman Alan Greenspan at a Federal Open Market Committee meeting in the early 1990s, remarks that came to light only recently when a transcript of that meeting was scrutinized. Greenspan referred to gold as a "thermometer" and speculated that if the Treasury Department sold a little gold in the market and the price broke as a result, not only would the thermometer no longer be a measuring tool but the lower gold price could affect underlying psychology. Greenspan was unfortunately right in his perverse judgement and shortly thereafter the systematic dumping of gold by the Western central banks moved into high gear.

It really makes you love free markets, doesnβt it?

But what a sorry mess they have created. While in the '90s, their gambit played out spectacularly with gold collapsing and financial assets flourishing, it sowed the seeds for what has happened subsequently: a robust bull market in gold since 2001 and increasing chaos in the stock, debt, and real estate markets worldwide. To this day the central bankers have remained undaunted and have increasingly intervened in all markets, but despite their annoying periodic raids, their influence is waning dramatically in the gold market.

I would suggest that today central banks are discovering to their increasing discomfort what history has always demonstrated -- and that is that manipulation of the free-market process ultimately fails. No amount of government interference and price manipulation can change the reality of the free market over the long term.

In the whole sordid process of the gold suppression scheme for the past 15 years, what has been particularly intriguing to me is that an earlier generation of central bankers unsuccessfully tried to same ploy with gold in the 1960s. Using the considerably more transparent London Gold Pool, they succeeded in holding gold at the then-official price of $35 per ounce for a number of years before being overwhelmed by the reality of the situation. In the following decade of the 1970s, gold rose a mere 2,300 percent.

Armed with the knowledge of that fiasco, one would have surmised that our current central bank geniuses might have considered that their new attempts at price control, albeit considerably more secretive, could meet a similar fate. Alas, the hubris of central bankers is well known, and this just represents another graphic example of their arrogance and awesome incompetence.

However, what remains to play out is the denouement of their current folly. Markets that have been artificially capped tend to catapult upward when the suppression inevitably fails. In my opinion the last experience in the '60s and '70s was a mere bagatelle in comparison to what is unfolding today. It has always been accepted that "the greater and longer the manipulation, the greater the eventual price rise is going to be."

In the latest episode, there has been dramatically more central bank gold expended. Credible estimates suggest that more than 15,000 tonnes, or roughly half of the central banks' supposed reserves, have already hit the market and are long gone, dangling from the wrists and necks of Indian women, filling vaults in the Middle East and Russia, and, in ever-greater quantity, migrating to China.

In the era of the London Gold Pool, only around 3,000 tonnes were sold to maintain the $35 price. This time the exercise has been dramatically larger and has occurred over a much longer time frame against the backdrop of a considerably more fragile financial structure, particularly in the West. So all of you are free to use your imagination to estimate how high gold is going to go this time.

It is critical to understand what the central banks have done because, in the absence of that knowledge, one cannot appreciate the whole gold story and will find it extremely difficult to recognise the investment opportunity being presented.

However, that is only one critical factor, and, as I said at the outset of my remarks, it is gold's return as money that is going to be really instrumental in driving gold to prices that would seem fanciful to most at the present time. In reality, it isn't gold that is changing, because it has been a constant store of value for 6,000 years. It is the value of fiat paper money in which gold is priced that is on the slippery slope to oblivion.

I could talk extensively about what is happening to the value of paper money, but to shorten things up, there is only one expression that you have to know: "quantitative easing." What a joke that is!

The authorities would have you believe it is some sort of magic elixir and a panacea, but all it represents is the monetization of various forms of debt by unfettered printing of money by central banks. Because the inflationary impact has yet to occur, the linear thinkers would assure you that it isn't going to be a problem. However, because of ongoing deleveraging and falling velocity of money in the short term, it is only being delayed.

As sure as death and taxes, continuing excessive money creation by the central banks will lead to accelerating inflation. When it begins to manifest itself, the velocity of money will pick up rapidly as people around the world rush to get rid of their increasingly worthless paper currency. In that event, we will rapidly progress from relatively benign inflation to truly frightening levels in a fairly short time.

At this point, I would like to repeat a quotation I used in a recent Investor's Digest article. It comes from Ludwig Von Mises, the brilliant originator of the Austrian school of economics, which is the only formal economics that makes much sense to me. Long before I was born, which was a long time ago, Von Mises observed:

"There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner, as the result of a voluntary abandonment of further credit expansion, or later, as a final and total catastrophe of the currency system."

That comment is pretty germane to what is unfolding today. Following what was arguably the most abusive credit cycle in history, Fed Chairman Ben Bernanke and his central banking confreres have clearly chosen the latter option, and accordingly, in my opinion, all forms of fiat paper money are headed for a train wreck. Ironically, Bernanke tipped his hand seven years ago in the infamous speech he gave before becoming Fed chairman. He claimed that he could combat deflation by the use of a printing press or, if need be, by dropping money from helicopters to sustain demand. To me his theories were ludicrous at that point and remain so today. Yes, he may avert deflation for a considerable time but at the very probable cost of hyperinflation and the social chaos that inevitably results.

Today the only question in my mind is whether investment demand for gold is going to go berserk as the result of a U.S. dollar collapse or because all the fiat currencies go down the drain together. The U.S. dollar is in its death throes, but will other countries print massive quantities of their own currencies to buy the dollar in an attempt to depress their currencies and keep their economies relatively competitive? To date, I would say that despite the considerable weakness in the dollar, there is abundant evidence that many other countries are printing aggressively to prevent their currencies from rising too much against the dollar.

In any case, I believe we are fated to see a continuing policy of ridiculous monetary ease around the globe, despite rhetoric to the contrary. This will occur because the idea of a double-dip recession or depression, as the case may be, is anathema to the powers that be. Very simply, withdrawing any significant amount of stimulus, be it monetary or fiscal, in the foreseeable future would virtually guarantee another deflationary event, and this time it may be impossible to stop.

Clearly, the United States is the lynchpin of the whole debacle, but most other countries are up their necks in the mess as well.

To begin, let us consider the United States' fiscal quandary, with a federal government deficit currently running above 10 percent of gross domestic product and representing roughly 40 percent of government expenditures. These numbers are horrific for a country that is providing the world's reserve currency. A recent study looked at the 28 examples of hyperinflation in various countries since 1980 and included Argentina, Zimbabwe, and many other banana republics. It noted that one common trait was that when the national government deficit exceeded 40 percent of expenditures, the point of no return had been reached. The U.S. is there as we speak and the $389 billion deficit in the first quarter of the 2010 fiscal year was far from reassuring.

While the preceding information is historical and thus factual, there is the matter of the Obama administration having recently admitted that its budget deficits would total $9 trillion (a number that I believe to be wildly optimistic) over the next 10 years. The question that obviously has to be asked is: What person, institution, or government, for that matter, in its right mind would lend money to the United States for the pathetically low interest rates currently on offer?

In reality, who would really be comfortable lending the United States money at any interest rate in the current circumstances, considering that higher rates would just ensure even higher deficits?

So it seems reasonable to assume that more of the deficits will have to be monetized, the dollar will inexorably decline as a result, and the question of confidence will become paramount. If confidence in the dollar is lost, chaos will ensue and those trapped in dollar-based fixed-income assets will see their wealth destroyed, the same fate that befell those who believed in the system in the Weimar inflation in Germany after World War I.

But the United States is far from the only country that is in serious difficulty. Things are as bad, and in certain cases worse, in many other countries. For example, Great Britain is a basket case, which incidentally looks real good on that hypocritical jerk Gordon Brown, who has led his country to ruin. Britain's central bank has been forced to intensify its quantitative easing program several times to keep the economy barely afloat and its financial system semi-intact.

Japan, with its rapidly aging population, has seen its accumulated public debt reach 200 percent of GDP with no end of that trend in sight.

Europe is no bed of roses either. Despite the soothing words of the head of the European Central Bank, Jean Trichet, and some very vocal comments about current monetary excess from Germany's Angela Merkel, they appear to have little choice but to keep the money flowing to save Club Med, Ireland, and a whole swath of eastern Europe from oblivion.

China, that paragon of all things economic and financial, had to resort to mandating a humongous increase in bank lending in the first half of last year to keep its economy moving. The ultimate outcome of this endeavor remains to be seen, although it certainly had a salutary impact on Chinese share prices and world commodity quotes. Unfortunately, the resulting massive over-capacity throughout the entire Chinese economy may become an issue.

That brings us to the favorite country of everyone in this room, Canada. I suspect that the Canadian authorities will be forced to deal with reality soon. Despite the hedge funds' love affair with the Canadian dollar, the economic and financial fundamentals in this country don't support the current level of the loonie. We are attached at the hip economically to the United States and as our dollar rises, our manufacturing industries or what's left of them are being destroyed. Budget deficits are exploding at all levels of government.

One year ago the feds didn't have one, but now the deficit is annualizing somewhere north of $60 billion. Ontario is homing in on $25 billion and even hydrocarbon power Alberta has ruefully admitted that its deficit forecast has risen to $6.9 billion, as very low natural gas prices, among other things, take their toll.

Bank of Canada head Mark Carney and Finance Minister Jim Flaherty know these problems all too well, although much of the public seems blithely unaware, and I am eagerly awaiting Carney and Flaherty's response. Rumors of aggressive quantitative easing are growing, adding yet another nation to the expanding list practicing this dark art.

Why is all of this significant?

Very simply, it ensures that the demand side of the gold-silver equation is baked in the cake. Investment demand is exploding on a worldwide basis as those with wealth to protect are beginning to comprehend the true extent of the monetary debasement under way. This is only going to intensify as inflation begins to rear its ugly head as the result of the money-printing orgy.

As I mentioned earlier, the velocity of money is going to accelerate as people figure out what is occurring. Why would anyone want to hold a rapidly depreciating monetary asset when it yields next to nothing? At that juncture we will see if the powers that be have the courage to remove significant amounts of stimulus. Since I believe that our debt-logged economies will remain relatively weak and our financial structure exceedingly fragile, I donβt believe they will.

So I find it laughable when people concern themselves with reduced jewellery demand as a factor in the pricing of gold in the current circumstances. Any decline is being dramatically exceeded by rising investment demand, and this phenomenon is only going to intensify. Besides, all great bull markets in precious metals are driven by investment demand as gold reasserts itself in its true role as money. They most certainly don't occur as the result of gold's attraction a bauble or as an adornment.

However, as bullish as I am on the demand side of the equation, an equally compelling case can be made on the supply side, which consists of three primary elements -- mine supply, scrap recovery, and central bank dispositions. The least important is scrap recovery, but it was briefly a negative in early 2009, when a lot of people around the world couldn't wait to get rid of their jewelry and realize a little cash for the gold contained in it. However, that sharply abated in the second half of the year and the focus is now back where it should be, on mine supply and central bank dispositions.

One of the key factors that is going to contribute to the ongoing bull market is mine supply, or more accurately stated, lack thereof. Mine supply has been in a steady decline since early in the new century despite the constant rosy predictions of greater supply from the alleged industry expert GFMS Ltd. I have long been of the mind that the decline will continue for some time irrespective of what the gold price does. I base my opinion on numerous factors, including a dearth of quality projects ready for mining, continuing geopolitical and environmental issues, less high-grading as the gold price rises, ongoing capital constraints, and a chronic shortage of skilled miners and mine builders.

Thus I was fascinated when Aaron Regent, the new head of the world's largest gold company, Barrick Gold, was quoted at RBC's annual gold conference in London lamenting the state of the gold mining business. He went so far as to suggest that global gold production was in terminal decline despite record prices and Herculean efforts by mining companies to discover new orebodies in remote areas. He alluded to "peak gold," implying that production has reached levels that can't be exceeded, an expression that is commonplace in the oil industry, where the subject has been under discussion for some time.

Following this pessimistic assessment, a more horrifying prediction was revealed in the South African Journal of Science. Chris Hartnady, the research and technical director of a Cape Town based consultancy, stated that South Africa's famous and extremely prolific Witwatersrand gold fields are around 95 percent exhausted and predicted that production rates should fall permanently below 100 tonnes per year within the next 10 years.

This is truly shocking in that gold production from the Witwatersrand, the largest gold field ever discovered, peaked at around 1,000 tonnes per annum in 1970 and, though falling steadily since, still contributes around 230 tonnes per year or roughly 10 percent of world production.

In view of these two evaluations by knowledgeable industry players, my negative view on production has been reinforced. Gold mine production is in the neighborhood of 2,350 tonnes per year, and I continue to believe that odds strongly favor it continuing to fall rather than show any meaningful increase for the next several years.

That brings me back to the central banks, and I apologize if I am belaboring the point, but I believe their role in the whole saga is neither widely appreciated nor well understood. Because of the remarkable obfuscation in the area, most observers do not realize how much central bank gold has entered the market in the past 15 years to fill the huge and growing gap between true demand and mine and scrap supply.

This is the direct result of misleading accounting by the central banks -- accounting, incidentally, that has been endorsed by the International Monetary Fund, the very same IMF that has been threatening the gold market with potential massive sales for a number of years. The central banks have been permitted to use a one-line entry on their balance sheets, which does not differentiate between gold in the vault and gold receivables.

There is copious evidence, if you look for it, that supports the contention that gold receivables have grown dramatically as the result of central banks surreptitiously mobilizing their gold through leasing and swaps. This gold has been dumped in the market and has been essential in filling the natural demand- supply gap, which has probably exceeded 1,000 tonnes per year in most of the years since the mid- to late 1990s. That it also served to significantly depress the price wasn't an accident.

The significance of the 1,000-tonne-per-annum number is two-fold. First, it represents in the neighborhood of 25 percent of the physical gold supply during the period, showing how truly deficient real sustainable supply is. Second, it virtually guarantees that Western central banks are getting dangerously short of reserves to continue this activity. Just as importantly a number of Eastern central banks -- including China and Russia, to name but two -- have acknowledged their intentions and are accumulating and will continue to accumulate gold as one avenue to diversify their reserves away from the U.S. dollar.

But India may have stolen a march on all of them when it announced recently that it had purchased 200 tonnes of the well-advertised and long-awaited IMF sale. This was the event that really kicked off the latest leg in the gold bull market, and unquestionably the Indian move drew widespread attention to a historic shift in the attitudes of central banks toward gold. It coincided with a complete cessation of selling by the European central banks, which under the terms of the recently renewed European Central Bank Gold Agreement could sell up to 400 tonnes per year.

Thus just as the Western central banks are being forced to wind down their incessant selling and leasing, the Asians have stepped up as buyers. This is a truly dramatic development and is going to have extremely positive ramifications for the gold price.

In view of the foregoing powerful positive fundamentals for the gold price, I find it almost nauseating that various pundits are referring to gold as overpriced and in a bubble phase. Nothing could be further from the truth, and, in reality, gold continues in its stealth bull market, which has now seen nine consecutive higher year-end closes. Despite this, as I mentioned earlier, it has attracted very little attention from the investing public in general.

The dedicated goldphile has participated throughout, and a number of sophisticated financial players have come on board recently, the latest being the legendary trader Paul Tudor Jones. But the average investor remains uninterested. It is instructive to remember that at the end of the last bull market in 1980, people were lined up around the block outside the Bank of Nova Scotia in downtown Toronto to purchase physical gold. Today the only lines that have formed are outside emporiums set up so the unsuspecting public can unload their gold jewelry for cash. To have a bubble of any significance, there has to be wide public belief, and it certainly isn't on display in the gold market.

More importantly, if gold were overpriced, the gold producers would be experiencing an earnings bonanza. A close examination of the recent earnings statements of most major gold companies reveals that they are earning very little and are certainly not achieving the return on capital necessary to justify their involvement in a very risky and difficult business.

I find sentiment in the sector to be remarkably subdued in the face of compelling fundamentals. Many attractive junior gold stocks are not even keeping up with the rise in the gold price. If history were any guide, these stocks would be rising at three to four times the rate of the gain in the gold price, but investor skepticism is holding them back.

From a media perspective, if we were approaching the end of a bull market, the newspaper articles and television clips would be universally bullish touting the obvious merits of the yellow metal. There is indeed more coverage recently because of the relentless price rise, but it tends to be skeptical with the bearish commentators continuing to get the most exposure despite having been continuously wrong.

There is no better example of this than an individual who my compliance department would prefer that I not identify. However, Iβll give you a broad hint -- he writes virtually daily for a noted Canadian gold Internet site. Dubbed the Tokyo Rose of gold commentators, he is always quoted in articles with a negative slant despite having been consistently wrong since the inception of gold's bull market. In my opinion, as long as he gets any press at all, we are a long way from the end of this bull market in gold.

Finally, it is widely acknowledged that if the peak gold price in the last great bull market ($850 in January 1980) were to be adjusted to reflect the U.S. inflation rate in the intervening period, it would be equivalent to $2,300 today. That the current gold price is approximately half of that should put to rest any suggestion that this is a bubble.

That's not to say there aren't several bubbles forming in other financial markets (most notably in government debt instruments) as a result of a new bout of central bank madness, but gold is not on the list. In fact, I believe that we are many years and several thousands of dollars in price away from the end of this powerful bull market.

In conclusion, I now firmly believe that the chances of gold ever trading below $1,000 per ounce are remote. The only caveat I would offer is that if the world suffered a catastrophic deflationary collapse, an outcome long predicted by the noted Elliot Wave theorist Robert Prechter, gold could briefly be swept under but would then re-emerge with even greater relative strength as the only true safe haven. However, in a world of pure fiat currency, I think that a near-term deflationary outcome is highly unlikely. In fact, I strongly suspect that gold is going to stage a parabolic rise from current levels in the not-too-distant future, a development that will come as a shock to the many detractors of the world's only real money.

Gold is the only real money because it isn't someone else's liability.

This remains one of the best supply-demand imbalance stories I have encountered in my long career and it will only be enhanced by the existence of massive short positions that will be impossible to cover amid myriad paper claims on gold that dwarf the physical supply, which, by the way, is a subject for another day.

Thanks very much for listening. It has been an honor to speak to you.

* * *

Hayek vs. Keynes

2010-01-29T11:36:00.002+02:00

Bill Gross: Business Economics UK economy lies 'on bed of nitroglycerine'..

2010-01-28T10:19:00.000+02:00

This is from UK's The Guardian:

"Bill Gross deals blow to government with warning to his investors that Britain's debt makes it a 'must to avoid'

The government's hopes of claiming credit for reviving the British economy suffered a severe blow today when the world's biggest buyers of bonds warned that the UK was a "must to avoid" for his investors as its debt was "resting on a bed of nitroglycerine".

The intervention by Bill Gross, co-founder of California-based fund managers Pimco, came on the day official figures confirmed that Britain had emerged from the deepest recession since the 1930s – but only by the narrowest of margins.

The economy grew by 0.1% in the final three months of last year, much weaker than even the most cautious expectations in Westminster and the City. The unexpectedly sluggish performance prompted Alastair Darling to warn that Britain could yet fall back into recession, telling the Guardian "there will be hiccups along the way".

The chancellor insisted, however, that he would not be required to revise his forecast growth of 1-1.5% over 2010."You cannot come through a recession of this magnitude, dust yourself down and walk off as if nothing happened," he said. "Things will be steadily improving, but we have got to negotiate some bumps in the road."

But the remarks by Gross, whose pronouncements on bond markets are regarded as highly influential, added to the sense that the economy remained in a dangerously parlous state. "The UK is a must to avoid. Its gilts are resting on a bed of nitroglycerine," he said."High debt with the potential to devalue its currency present high risks for bond investors."

His views are particularly painful for the government as the head of Pimco's European team is Andrew Balls, the brother of cabinet minister Ed Balls. Gross described the UK as posing risks for investors because it has "the highest debt levels and a finance-oriented economy – exposed like London to the cold dark winter nights of deleveraging". He warned that the UK was in Pimco's "ring of fire" where a country's public debt could exceed 90% of GDP in a few years' time. Darling's current projections are for the debt to GDP ratio to peak at 77% in 2014.

Pimco has been trying to attract new clients by sounding the alarm about the UK for some time, most recently earlier this month when it unsettled markets by saying it was cutting back on its bond investments in the UK and the US."

Strike a blow at the market-rigging banks by moving your money

2010-01-22T19:56:00.003+02:00

You can punish the "too big to fail" elite and its banksters by withdrawing deposits from market-manipulating, derivatives-mongering, bailout-receiving, and grotesque bonus-paying money-center banks and moving them to community banks and credit unions.

This idea has been organized into an Internet site by The Huffington Post's Arianna Huffington and a few friends and is being publicized with a clever video you can find HERE

James Turk: A spectacular year for gold and silver

2010-01-02T22:24:00.002+02:00

In his new commentary today, GoldMoney founder, Free Gold Money Report editor, and GATA consultant James Turk celebrates the spectacular performance of gold and silver in 2009.
Turk reports that gold rose in all major currencies except the Australian dollar, and silver beat even that. Turk's commentary is headlined "Gold Shines for the Ninth Consecutive Year" and you can find it at GoldMoney's Internet site HERE

Silver market analyst Ted Butler interviewed by King World News

2009-11-22T18:26:00.001+02:00

Interviewed for 12 minutes today by Eric King of King World News, silver market analyst Ted Butler said he is gaining some confidence about the integrity of the silver exchange-traded fund and believes that big money is not yet being invested in silver but could be soon, exploding the price.

You can listen to the interview at the King World News Internet site HERE

Ted Butler: Warnings ignored

2009-09-05T12:25:00.001+03:00

Silver market analyst Ted Butler speculates in commentary posted today that China's recent threat to repudiate certain commodity derivative contracts may involve the overwhelmingly concentrated short position in silver on the New York Commodities Exchange. Butler's commentary is headlined "Warnings Ignored" and you can find it at GoldSeek's companion site, SilverSeek, here:

http://news.silverseek.com/TedButler/1252075929.php

This May Be The Last Time

2009-07-08T00:52:00.001+03:00

This May Be The Last Time

By Theodore Butler

When I decided on the title of this article, I had the old Rolling Stones tune in mind. But in checking the lyrics on the Internet, I came across this version by the Staple Singers some years earlier, from which the Stones song was derived. I have to say the gospel version was more in line with what I am trying to convey. Click Here

What is this “last time” I refer to? I think we are approaching the final stages of the great silver manipulation. While I can’t give you a date, I’d like to review the reasons why I think that‘s the case. If I’m correct, it means that the days of depressed silver prices will soon be over. It means the price will, at a minimum, reach the true free market price, which is much higher.

It appears that we’re well into the liquidation cycle on the COMEX. The falling price of silver and gold futures has been engineered by the big commercial shorts who use selling by long holders to buy back their short contracts. This is both the rhythm of the market and the manipulation. It’s the premise behind the COT (Commitment of Traders). I started writing about this latest liquidation towards the end of May.

The current liquidation cycle that we appear to be in, is only the latest in a long string of short selling on rising prices and liquidating on declining prices that has been played out on the COMEX, quite literally, for decades. Due to the repetition of this tech fund/dealer tango, and the total market control the big shorts seem to exert, at least in the short term, it is widely assumed this dance will go on forever. So why am I referencing gospel songs depicting that this may be the last time?

History has shown that whenever previous liquidation cycles have exhausted themselves, low-risk entry points have been presented. These sell offs caused the low risk buy points. The coming end to this current liquidation should prove no different. But what will determine whether it is the last one is the behavior of the big shorts on the eventual rally that follows.

The evidence of a silver manipulation grows stronger by the day. Awareness of the silver (and gold) manipulation has never been more widespread. This is unprecedented. We have never had a situation where hundreds of citizens have petitioned the regulators to end a manipulation. If allegations of a silver manipulation are on the mark, as I believe, surely such public petitioning will hasten its end.

When manipulations end, there is a sudden and violent price movement in the opposite direction from which prices were manipulated. Almost all previous manipulations have been to the long side, where prices were artificially elevated. When those manipulations were terminated, prices then collapsed. The silver manipulation is to the downside, and when it is terminated, the price will soar. If the silver manipulators are as smart and powerful as I have suggested, after they buy back as many short contracts as possible on a sell-off, they will likely step aside from selling new contracts short. If anyone can see the silver manipulation, it is the perpetrators. At some point, they will look to protect themselves when they see no hope in continuing. That will mean no new shorting.

Certainly, the data flow from the CFTC is showing an alarming trend towards super-concentration on the short side in silver (and gold). It’s really getting obvious. For almost a year, the four big commercial shorts have held more than 100% of all commercial net short positions. Recently, the 4 big shorts have held 70% and more of all the true net positions of all traders, commercial, non-commercial and non-reporting combined (when all spreads are removed). Such extremes can not continue, and they certainly can’t intensify. This suggests we have hit the limit in concentration levels.

We also have some interesting dynamics evolving at the CFTC, the chief regulator of silver and gold futures trading. In a few months, we will hit the one-year mark in their current silver investigation. This is the third silver investigation since 2004. Never has the CFTC investigated a commodity so frequently. Never has it investigated any commodity for allegations of manipulation based upon public petitions. The CFTC has often been accused of being an industry lap dog, more interested in cozy industry relations (and post-regulatory employment opportunities), than the public welfare and rule of law. There may be signs of change.

The new chairman of the CFTC, Gary Gensler, has more practical market experience than any previous chairman or commissioner. In every speech or in his congressional testimony he has spoken against fraud, abuse and manipulation. He has endorsed the need for legitimate speculative position limits. These are the specific issues in silver. He has yet to publicly acknowledge that banks speculate when they pretend to be hedging and that they need to be limited, both on the long and short side. Certainly he must have made that acknowledgement privately.

In addition, the new general counsel of the CFTC was a principal architect of the recently released Senate report on excessive manipulation in wheat. He surely sees the connection to silver and has discussed this with the chairman. Both of them know they have a limited time to act on the silver manipulation in order to not be blamed for it. Otherwise, they will inherit the responsibility for it. If the CFTC does decide to enforce existing law and move to end the illegal control by the big shorts, COT analysis becomes moot. You want to hold as much silver as possible before that happens.

As this article was about to be published, a new statement was issued by Chairman Gensler concerning new CFTC initiatives on speculative position limits and changes in the COT reporting. These are issues that go to the heart of the silver manipulation. My sense is that this statement is very important and will directly impact silver. I will be writing about this in the near future. Click Here

At this point, I don’t know how deep the silver and gold sell-offs might be. I will look for signs that suggest it may be over. It could be over quickly, there’s no real way to determine that in advance. In the meantime, the price drop has already removed much risk from the market. We are back to prices that are close to the real cost of production for the primary silver miners. Thousands of contracts have already been liquidated. We are now at prices much more attractive for buying than anytime in the past few months. Besides, you want to play it like it could be last one because if it is, there will be no second chance.

If this plays out as usual, the final sell off engineered by the short sellers will take place amidst a price bottom and doubts about silver’s long-term prospects. I can tell you that all such previous capitulation points proved to be remarkable good buy points. This one will as well. In addition, it may be the last one. If I am right, this could very well be your last great opportunity to buy silver at under $20.

(Editors note: When silver was at $4.10 an ounce, Ted Butler called it one of the great buying opportunities of a lifetime. Our customers have made hundreds of millions following his advice. If he is right this time, as he has to often been, this will be the final great buying opportunity.)

Here is a link to a new interview I did with Eric King of King World News on July 2 Click Here

A WORD FROM IZZY
By Israel Friedman

(Israel Friedman is a friend and mentor to Theodore Butler. He has followed silver for many decades.)

It's time that banks close their trading desks which are only a casino and concentrate on real banking. If the traders and their bank officers don't understand the risk they are taking, it's time they should study the articles written by Mr. Butler. After studying the rarity of silver in the world they will stop holding the price of silver down, and they will look to cover their position of 250 million ounces of silver.

It is only a question of time when the shortage of silver will come. The USA and other world countries donate gold to the IMF but not silver. Why? They don't have silver. The USA has enough gold for 1,000 years of future defense needs, and not one day’s worth of silver. There is no extra silver left in the world.

Don't forget for one moment that silver is a very important strategic metal for the defense industry, and in a case of a shortage, and no silver available, the big short sellers will have jeopardized the national security of the USA. We need today for defense more silver that we can mine in the USA. We are going to depend in the future on imports of silver from unreliable sources. Today’s naked short sellers will be facing the courts and will be charged not only with capping the price for years and producing the world shortage, but also for endangering the national security of the USA.

With all the contraction of world economies, silver is still in a deficit when investment demand is counted. How the naked shorts will cover their obligations at the same time the users and the investors want more silver I don’t know. It will not happen with low prices.

If you think like me that silver is in short supply and sooner or later a shortage will come, you should get your silver before it goes up. All these things these big shorts have been doing to keep the price low makes the coming price rise more certain. When it comes, it will go so high the whole world will ask how this could happen.

Ted Butler: The Sting

2009-03-31T12:45:00.003+03:00

The Sting

Stunning new evidence of manipulation in silver and gold has just been published by the Office of the Comptroller of the Currency (OCC), a bureau of the U.S. Treasury Department. The OCC, first established in 1863, charters, regulates and supervises all national banks. Their new data proves the manipulation in unambiguous terms. The report also confirms how the U.S. Government, in partnership with JPMorgan Chase, intentionally cheated silver investors worldwide of many billions of dollars during the fourth quarter of 2008, and longer. This was all outside the futures market I normally write about. It was a scam of historic proportions.

According to the OCC’s latest data release, U.S. banks, led by JPMorgan Chase, caused to be liquidated, under intentional duress, more than $20 billion of gold and as much as $9.5 billion of silver in Over The Counter (OTC) derivatives transactions during the fourth quarter of 2008. These derivatives are highly leveraged transactions mostly held by hedge funds and other large investors on the long side and big banks on the short side. While the OCC declares it is responsible for regulating U.S. banks, there is no regulation of these OTC derivatives by anyone. All the OCC does is compile the statistics. This was the largest amount of gold and silver derivatives ever liquidated in a single quarter in history. In the case of silver, more than 50% of all the OTC silver derivatives held by U.S. banks were liquidated in the fourth quarter. I doubt we will see such a large liquidation ever again.

In terms of ounces, this forced liquidation was the equivalent of 25 million ounces of gold and as much as 960 million ounces of silver, at the prices that prevailed during the quarter. These amounts are equal to 250,000 COMEX gold contracts and 192,000 COMEX silver contracts. Remarkably, in the case of silver, this is double the entire current total current open interest in COMEX silver futures, the largest listed and regulated silver market in the world. It is also much larger than annual mine production, total production (including recycling) and total consumption. As I hope you will see, it is not possible for such amounts to be accidentally liquidated within a three-month period. This was a very intentional liquidation.

You can view the data yourself. Here is the OCC’s Quarterly Report on Bank Derivatives Activities - http://www.occ.gov/deriv/deriv.htm The pertinent gold and silver data can be found in each quarterly report in table 9, on page 30. It will be necessary to compare different quarterly reports to measure changes in holdings. Look at totals for all maturities. Gold is broken out separately, silver is in the precious metals category. (Those that analyze this report consider silver to represent 80% to 100% of the precious metals category).

The OCC reports clearly confirm that total gold derivatives (all maturities) declined from $127.2 billion from September 30, 2008 to $106.9 billion on December 31, a reduction of $20.3 billion. Since the price of gold was slightly higher on December 31st than it was on September 30th, the reduction is marginally understated. Since the average price of gold during the fourth quarter was around $800, the $20.3 billion reduction in derivatives amounted to 25.38 million ounces ($20.3 billion divided by $800). JPMorgan accounted for more than 85% of the reduction in gold derivatives during the fourth quarter.

In silver, there was a decline in total precious metals derivatives from $18.7 billion on September 30th to $9.1 billion on December 31st, a reduction of $9.6 billion. Since the price of silver was 5.5% lower on December 31st than it was on September 30th, the reduction may be somewhat overstated. Since the price of silver averaged around $10 per ounce during the fourth quarter, as many as 960 million ounces of equivalent silver were liquidated. JPMorgan and HSBC accounted for 76% of the total amount liquidated.

During the fourth quarter of 2008, I was repeatedly struck by the viciousness of the sell-off in silver, as we twice plunged below $9 an ounce, down almost 60% from the highs of a year ago. I was puzzled why the manipulators had continued to force the price so low, considering that the bulk of the COMEX liquidation was over by September and October. After all, there was no evidence of physical selling of silver, as all categories and measurements of investor demand for physical silver grew during the quarter. This OCC report explains the exaggerated price sell-off completely, despite strong investor demand for silver.

Quite simply, the amount of paper silver (and gold) transacted in the OTC market dwarfed what took place in the real physical market. Further, since the OTC is so opaque, the transparent paper COMEX market was used to set the price for, and cause, the massive liquidation in the larger OTC market. The price that is disseminated from the COMEX is the price that the world goes by and prices all silver (and gold) transactions. Miners, refiners, industrial consumers, investors and paper hedge fund speculators all price off the COMEX. Control the COMEX price and you control the world of silver (and gold). Hedge funds and other large leveraged speculators holding long positions were faced with increasing margin calls as COMEX silver prices were manipulated lower and they sold to the big banks who were short and bought back their shorts. That’s why the concentrated short position is so illegal and manipulative. In fact, this same concentration exists, in spades, in the OTC market as well. Just read the OCC reports.

Further, the OCC reports prove that JPMorgan not only inherited from Bear Stearns the massive COMEX silver short position in March of 2008 (as well as a COMEX gold short position), it also inherited from Bear Stearns a much larger OTC silver and gold short position. From December 31, 2007 to March 30, 2008, JPMorgan’s OTC silver short position grew from $4.9 billion to $12.5 billion. Adjusting for the 16% price increase in silver between those dates, JPMorgan’s silver short position grew by more than 400 million ounces to as much as 735 million ounces, from 335 million ounces. This is separate and distinct from and in addition to their COMEX silver short position.

I know these numbers are shocking. That’s why you must take some time to study the data for yourself. Even if silver is not 100% of the precious metals category, any reasonable percentage will still result in shocking numbers. More than that, such a large and concentrated short position, on both the COMEX and in the OTC market should explain the motive and stakes involved in the great silver flush out of 2008. This silver short position needed to be reduced by any means necessary, due to the unthinkable exposure that would exist if it were not closed out. But so large was this short exposure that while JPM did succeed in reducing its short silver exposure from the highest level in its history when it took over Bear Stearns, to the lowest level in three years, there still exists a silver short exposure of hundreds of millions of ounces.

That the U.S. Government has aided and abetted JPMorgan in this illegal endeavor you should find as repugnant as I do. U.S. Government agencies, like the Treasury Department and the CFTC are the ones publishing these data. The Treasury Department and the Federal Reserve arranged the JPMorgan/Bear Stearns takeover. How could they not be aware of and have sanctioned this historic silver liquidation? It is sickening. Officials should and must go to jail over this.

All this should reinforce the message to buy real silver. That such blatant and illegal efforts are being made to force investors to sell paper silver, should convince you all the more to buy and hold real silver while you can. That they have forced this much silver liquidation should give you a sense of just how valuable silver is, and to what price levels they expect it to climb to. Don’t listen to me, look at what they have done.

There is too much to write about this week to fit into one article. Therefore, I’m going to do something different. I plan to publish new articles on different (but related) topics tomorrow and the day after. Please check back for those articles.

In closing, I’d like to leave you with a You-Tube video that an inventive reader from Australia, John Christian, created, using Izzy’s last article. I think you’ll enjoy "The Silver War Cry"

Ted Butler: Why the Silver Users will Panic

2008-11-04T23:33:00.002+02:00

WHY THE SILVER USERS WILL PANIC

By Theodore Butler

An integral component of my analysis has been that, as the inevitable shortage of wholesale silver became apparent, the industrial users would panic and attempt to build inventories of physical metal. Faced with prolonged delays of a material that threatened to shut down their production lines, the users would rush to buy enough physical silver to prevent those shut downs. This would provide a bullish price thrust that few comprehend.

Recently, I had an experience that may drive home why the silver users will panic and why that will cause the price of silver to explode. About a month ago, I drove home to Florida from Maine. Normally, I take a slightly longer, but more scenic route, than the straight run down I-95. This year, because I was sensitive to reports of gasoline shortages along the route I normally take, I swung over to I-95 further north than I usually do, to avoid any problems getting fuel. It seemed that Hurricane Ike and pipeline problems were causing gas shortages throughout the Southeast U.S.

Having navigated successfully over to I-95 (over much pouting and resistance from my wife, a strong proponent for the scenic route), I thought I was headed home gas-worry free. However, at a rest stop in South Carolina, a traveler approached me with the warning that gas was now a problem on I-95. He related to me that he just came from a gas station that was sold out and had heard that there "was no gasoline at all in Georgia." Georgia was still 100 miles ahead, and there is no other way to get to Florida.

Since I had less than half a tank of gas, I decided to fill up at the next gas station. Sure enough, that station had long lines and the dreaded plastic bags over many of the fuel nozzles, indicating empty tanks for premium and mid-grade gas. Fortunately, my car only requires regular gas, so I was able to fill up with no great difficulty.

I must tell you that such an experience wakes you up and focuses your attention on something you normally take for granted. I confess that 75 miles down the road, in stopping at a hotel for the evening, I pulled into an empty gas station and topped off my tank with 2 gallons. I wanted to get home.

It occurred to me that it didn’t matter if your vehicle was worth $1000 or a hundred times that amount; without fuel, it was of no use. You need fuel to run your car. Same thing with silver for an industrial consumer - your $100 million factory could grind to a halt without silver.

I related to my wife that the price of a gallon of gas was no longer a concern, only its availability. If there was a way to insure a guaranteed supply of gas for the next year or so, I would sign up. But that’s impossible, as the problem was that there was no practical way of storing such a supply, as we are all limited by the capacity of our vehicles’ fuel tanks. Where would you put 1000 gallons of gasoline?

It occurred to me that there was no practical way for anyone to hedge against a shortage of fuel, save build your own tanks to store the fuel. Even those that had successfully hedged the price of fuel in the past, like Southwest Airlines and others, were hedging against just the price and couldn’t guarantee themselves actual supply in a shortage. For fuel and many other commodities, there was no practical protection against a shortage of the commodity.

That’s when it dawned on me to write this article. Silver is a lot different than fuel in that not only is it a lot easier and less dangerous to store, it is more likely to go into a shortage, given silver’s investment demand. Not only could the silver industrial consumers hedge themselves against the giant silver price increases ahead (buying futures), they could easily guarantee actual supplies before the coming inevitable shortage. All the users have to do is buy actual silver, not paper contracts, but real silver. Just like you do. The users buying actual silver to protect against both price increases and availability is as easy as falling off a log. Plus, it is a very rational act.

The silver industrial users have yet to initiate any type of buying protection program, either with paper contracts or with the actual metal. But, the users are run by people who are human. When they can’t get timely delivery of actual silver, like what has occurred to investors for the past months, they will do what I did in North Carolina; they will top off, and keep topping off. Only they won’t be limited by a 15-gallon gas tank. Because of the physical nature of silver and its ease of storage, the users will be able to buy as much silver as they care to, price permitting. They will buy more silver than they need because they will fear not being able to get it, once the delays in shipments start. This will set off a chain reaction, exacerbating the shortage and causing more silver users to do the same thing. This chain reaction will set off a price spiral that will shock the world.

***

Hugo Salinas Price: New policy on purchase and sale of silver 'Libertad' coins

2008-10-28T20:18:00.006+02:00

Oct 28, 2008

Banco Azteca, with over 800 branches in Mexico, informs us that it will apply a new policy to the purchase and sale of silver "Libertad" ounces at all its branches.

In response to the restriction on supply of silver "Libertad" coins applied last week by the Bank of Mexico, Banco Azteca will proceed as follows:

Banco Azteca will seek to attract the re-sale of silver ounces in order to satisfy, as much as possible, the strong demand forecast for the year-end.

Therefore, Banco Azteca will raise the re-purchase price of silver from the public to where the re-purchased quantities equal the quantities sold to the public, always maintaining the necessary margin to cover costs.

If the price of re-purchased silver is too high, the supply from the selling public will surpass the demand of the silver-purchasing public.

If the price of the re-purchased silver is too low, the supply from the selling public will not be sufficient to cover the demand from the purchasing public.

Banco Azteca will seek to discover the intermediate point, which will balance the supply from the selling public with the demand from the purchasing public.

Banco Azteca had been looking forward to selling 250,000 silver ounces during the Holiday season. With the cutback in supply, current policy would cause Banco Azteca's inventory to fall to zero in the course of next week.

Sales will be much reduced, from here on, but at least the program adopted will have the virtue of demonstrating what the actual market price of silver ounces is in Mexico , independent of any relation to Comex silver prices.

Banco Azteca was informed by a source at Banco de Mexico, that the restriction of supply was due to a "very large foreign order for silver ounces".

***

The Mexican Civic Association Pro Silver does not accept this excuse, even if it were true, because in any case providing the Mexican people with silver ounces would have to be its Number One priority, and not supplying a foreign buyer while depriving Mexicans of silver ounces.

Furthermore, this Association was told years ago by an officer of Banco de Mexico that the Mexican Mint was capable of minting up to 10 million ounces of silver coins a year.

We believe the restriction of supply in silver ounces is meant to deprive the Mexican population of the possibility of seeking refuge in silver as a protection against financial and economic carnage, and to force Mexicans into depositing their savings in the Banking System, with its risks.

Oct 27, 2008
Hugo Salinas Price, President
Asociación Cívica Mexicana Pro Plata, A.C.
Mexico City
email: 254hsp@elektra.com.mx
website: http://www.plata.com.mx

Ted Butler: The Masters of Destruction

2008-10-13T22:18:00.003+03:00

On Friday, October 10, the price of silver crashed, falling almost 25% from its price level 24 hours earlier. It is down roughly 50% from where it traded a few months ago. While a broad array of markets fell sharply in price that day and over the past few months, from oil to gold to grain to just about every commodity, none fell as sharply as silver. As regular market observers know, this is usually the case. I intend to explore why this is usually the case and what I think readers should do about it.

Does the sharp price decline mean that conditions have changed and that silver is no longer a great investment? I know it is human nature to assume that when the price of a commodity drops sharply in price, that there must be more of that commodity coming to market, or less demand. This is what we have all learned. But the facts in silver suggest something else entirely.

In my opinion, if conditions have changed, they have become more compelling and silver is an even better investment as a result of the price markdown. There is no great current or prospective increase in the supply of real metal coming to market. And if industrial demand does fall in the future due to deteriorating world economic conditions, it will be accompanied with falling production at current prices. Certainly, there is no evidence of anything but phenomenal investment demand.

Premiums on virtually every form of real silver have been sky-rocketing recently, especially on Friday’s price collapse. These premiums are the highest they have been in history, reaching 60% for certain items, like Silver Eagles. This is the clearest proof there is no developing glut of silver, as the price declines on the COMEX might otherwise suggest to some. At a minimum, the premiums dictate that none of this silver will be melted into bullion.

The purpose of this article is not primarily intended to encourage you to buy real silver, as it seems obvious to me that you understand that already. I’d rather explain the price decline, and what you can do about it (aside from continuing to buy silver).

The recent price decline was all about forcibly liquidating as many leveraged silver holders as possible, so the big shorts could buy back their short contracts. That is always the cause for major price declines. It has become almost impossible to force those who hold silver on a non-margined basis to sell on these price declines. Instead, investors buy real silver on the declines. The growing premiums prove that. All that’s left for the big shorts is to force those holding silver on margin to sell. That is done by rigging sharp price drops unexpectedly. This is the heart of the manipulation.

Never has there been as wide a disconnect between the price of a commodity traded on a licensed exchange and the products of that commodity in the real world. This raises the issue that no true price discovery is occurring, and that paper trading is setting prices. This violates basic commodity law. All that remains is a contract delivery default and/or disorderly pricing to the upside.

It is one thing to claim manipulation, and quite another to prove it. But the proof in this case lies in common sense and in the government’s own public data. The simplest proof of manipulation is in asking the question, what would the price have been absent the manipulators’ actions? What would the price of silver have been if one or two U.S. banks hadn’t sold a massive amount short in July? The only answer is that the price would be much higher absent that concentrated selling.

Coincident with Friday’s big price smash was the release of the October Bank Participation Report from the CFTC http://www.cftc.gov/marketreports/bankparticipation/index.htm

This is the report I wrote about in "The Smoking Gun" back on August 22, which documented that one or two U.S. banks sold short the equivalent of 20% of the world annual production of silver (and 10% of world gold production) during July, followed by a severe price decline.

The new data indicates that the big US bank(s), over the past two months, bought back 10,500 contracts of the 27,600 sold in July. Since the report was as of Oct 7, more contracts were most likely bought back on Friday. Calculating that the big bank(s) made a $6 oz profit per contract on the closeouts, indicates it realized more than a $315 million profit on the closed sales. In addition, at Friday’s closing price, further realized and unrealized profits on the remaining silver short position, amount to another $600 million for the big bank(s). To those who claim that they see no motive in why someone would manipulate the price of silver lower, here are 900 million reasons. Similar numbers apply to gold.

Since futures trading is a zero-sum equation, this means that the $900+ million made by the big US bank(s) has come from long futures traders’ pockets, dollar for dollar. Whatever some futures traders make, other futures traders must lose. No exceptions. Of course, just because someone makes what someone else loses does not necessarily constitute manipulation, no matter how large the amounts involved. What constitutes manipulation is concentration, intent and control.

That the big U.S. bank(s) had, and has, a concentrated silver short position is beyond question. In fact, the silver short position has been the largest concentrated position in history, by every reasonable measure. The data proves this. It is this concentration and control that is solely responsible for the severe price decline in silver. It is absurd to assume there was no intent to manipulate, not with a billion dollars’ worth of motivation.

There is nothing wrong with an entity making a huge profit, as long as that entity has done it fair and square. But the $900 million profit by the big U.S. bank(s) was not earned fairly or legally. It was theft through market control and dominance. If this wasn’t so obvious and proven by their own data, the CFTC would not be actively investigating a manipulation in silver. But a deliberate and thorough investigation is not enough with a crime in progress.

I have never publicly advocated that anyone buy silver on margin, futures or otherwise, although I do understand the attraction and it is my background. I have been clear that real silver should be bought on a cash basis. If you buy silver (or anything) on margin, you must be prepared for unexpected trouble in the form of sharp sell-offs requiring additional funds. Still, it is not right that margined silver holders should be cheated, by a crooked U.S. bank or anyone else, out of $900 million or any amount. Unfortunately, the problem goes much deeper than futures traders being cheated.

As large as the $900 million that the U.S. bank extracted from COMEX long silver futures holders may be, it is small compared to the total damage inflicted, as a result of this manipulation. After all, it wasn’t just long silver futures holders who were damaged. Far from it. When the total damage is tallied, it should become clear why I would refer to the big U.S. bank(s) that shorted COMEX silver in July, as the Masters of Destruction.

Since there are one billion ounces of silver bullion equivalent in existence, the value of that bullion was approximately $19 billion in July, when the big U.S bank shorted COMEX silver in massive quantities. As a result of that shorting and all the bullying and corrupt market dirty tricks since then, the value of total silver bullion was $10 billion on Friday, down $9 billion in little more than two months. That’s ten times the amount that the Masters of Destruction stole from long futures traders. Talk about collateral damage.

Yes, it’s true that the manipulation has created an incredible further buying opportunity in silver. And it’s also true that those holding silver on a fully paid for basis, still hold their silver and will profit from the certain price gains in the future. But that does not excuse the manipulation, nor minimize the loss of value. Who the heck does this big U.S. bank think it is, that it can inflict that kind of damage on innocent investors in silver?

The collateral damage is not limited to silver bullion investors. Shareholders in silver mining equities have suffered, at least, an additional $10 billion in losses over the past couple of months, as a direct result of the manipulated 50% decline in silver prices by one or two U.S. banks. We’re now up to 20 times the $900 million gained by the futures manipulators so far. Bear with me, as I’m just getting warmed up.

(I’m confining my remarks to silver here, but let me assure you that the equivalent total damage in gold is much greater. Quite literally, where the losses to silver bullion and mining stock investors run to tens of billions of dollars, the losses to gold bullion investors and mining shareholders runs into the many hundreds of billions of dollars. All courtesy of the Masters of Destruction.)

Aside from the damage to shareholders in silver mining stocks, the companies themselves, as ongoing concerns, have been severely damaged. The manipulation has driven the price well below the cost of production for just about all the primary silver producers. Just look at their stock prices. In addition, low base metal prices has meant that the current price of silver is now below the cost of production on a by-product basis as well. This guarantees that if silver prices don’t rise dramatically and soon, significant silver production will be eliminated. I don’t understand how mine management can sit by and tolerate this without fighting back.

Further, the collateral damage being inflicted on silver mining and exploration companies will curtail not only current production. Given the long lead times required to bring a silver mining prospect to production, the artificial low prices are causing unknown delay to future production. Thus, the manipulation promises long-term damage to the production of a vital industrial resource. It may be bullish for prices long term, but it is wrong.

While the industrial silver consumers may be reaping some small advantage in buying silver cheaper today than they would if silver prices weren’t artificially depressed, they stand to lose even more than the miners in the long run. Artificially depressed prices in anything must cause a shortage at some point. That’s supply/demand 101. This can be seen on the retail side of silver presently. When this shortage becomes obvious on the wholesale side, it will be the industrial silver consumers who will feel pain beyond what the producers currently are experiencing. It will be the user panic to buy inventory and keep production lines running that will cause prices to soar beyond reason.

Perhaps the worst collateral damage of the manipulation by the big U.S. bank(s) is not to futures traders, innocent bullion or mining share investors, the miners themselves, or the industrial users. The worst damage inflicted by the Masters of Destruction is to our important institutions, like our licensed exchanges and regulatory institutions, and to our confidence in our markets. Trust is hard to earn and easy to lose.

The CME Group, owners of the Chicago Board of Trade, the Chicago Mercantile Exchange, and now the NYMEX/COMEX, is the largest and most important futures exchange in the world. They stand to lose the most of all in the silver manipulation. If there is any silver delivery default or disorderly pricing event, they would appear to be responsible. Especially since they have been repeatedly warned. They have their reputation and potential massive litigation costs at risk. They are the frontline regulator, as dictated by law. Yet they refuse to respond to public allegations of manipulation in the COMEX silver market, in spite of hundreds of us contacting them. That is deplorable.

The CFTC has bowed to public pressure and has initiated an investigation by their Enforcement Division. Obviously, the Commission sees sufficient evidence to investigate, otherwise they would not waste taxpayer money on a useless investigation. Yet the evidence is their own data, which they and the CME Group refuse to explain. That the alleged manipulation is very much a crime in progress inflicting great collateral damage and neither regulator acts against it results in a loss of confidence in our regulators and markets. It diminishes us all.

That a crooked U.S. bank, in the quest to illegally generate a profit, would poison the water for so many unrelated and innocent parties is unconscionable. We have enough financial problems in the world presently with declining asset values. There is no room for the intentional destruction of values and markets. This blatant silver manipulation must not be allowed to stand.

The great financial crisis that currently impacts us all is the direct result of a regulatory failure to restrain a few wheeler dealers on Wall Street, who went hog wild in concocting crazy derivatives for personal profit. Now, we are left to clean up their mess, at great collective cost, both monetarily and to our faith in our institutions. Admittedly, silver is a much smaller market than the mortgage and credit markets, but the same principle applies, namely, many being damaged by a few. Plus, the damage has already been done in mortgages, while silver is ongoing.

In the great financial credit crisis in which we are presently engulfed, there are no simple solutions. In silver, there is a simple and effective solution. We must pressure the regulators to enforce the law and eliminate what remains of the concentrated short position in silver, never to return. Then we must insist that the short manipulator(s) be punished for the full extent of the damage it has inflicted on everyone.

When the CFTC finally admits what is already common knowledge to most observers, that is, that there has been an ongoing manipulation in silver, it will not be sufficient to base any resultant fines on just the damage in the futures market. All collateral damage must be considered. Don’t fine the big U.S. bank $1 billion for their ill-gotten futures market gains, fine them $20 billion or more for all the collateral damage they caused. And the CFTC shouldn’t remit any fines collected to the Treasury. A special fund should be established to compensate actual victims.

The only reason the CFTC is investigating silver, at all, is because you took the time to write to them. You must write to them again. And keep on writing. I assure you it does have an impact. In addition to the usual addresses of the Commissioners, the Inspector General, and the Chief Regulatory official of the CME Group, I am adding the address of the Acting Director of the Enforcement Division, Mr. Stephen J. Obie. It’s important that you let them know how you feel.

Wlukken@cftc.gov

Mdunn@cftc.goc

Bchilton@cftc.gov

Jsommers@cftc.gov

Alavik@cftc.gov

Sobie@cftc.gov

Dean.payton@cmegroup.com

CFTC relents and probes silver market

2008-09-26T00:58:00.001+03:00

Persistent Complaints of Foul Play Draw the Still-Skeptical Agency to Investigate

By Carolyn Cui
The Wall Street Journal
Thursday, September 25, 2008

With silver prices falling this past summer, silver bugs worldwide set out to prove that their metal was in short supply and market manipulation was at work. They bombarded federal regulators with hundreds of emails crying foul play and demanded answers.

Though such pleas proved futile in the past, this time the rousing chorus grabbed regulators' attention. On Wednesday the Commodity Futures Trading Commission confirmed that there's an investigation into the silver market.

The CFTC isn't yet convinced there's systemic wrongdoing and in May published a report saying as much. But the agency decided to take a fresh look, in part to show critics that it checks out complaints, and also to make sure there isn't something new to uncover.

"We take the threat of manipulation in the futures and options markets very seriously and employ a number of measures to prevent, identify and prosecute it," said Stephen Obie, acting director of the agency's division of enforcement.

Silver investors have argued that a handful of U.S. banks have been controlling a large portion of silver's short positions -- or bets that prices will decline -- on Comex division of the New York Mercantile Exchange. Official data from the CFTC showed that two U.S. banks had increased short positions in the silver futures market between July and August by 450% and controlled 25% of the total open interest.

"The proof that this selloff was criminal lies in public data," wrote Theodore Butler of Cape Elizabeth, Maine, in August in a silver newsletter. "The concentrated sale of such quantities in such a short time" caused silver's fall, wrote Mr. Butler, who for many years has been vocal about purported silver-market manipulation. In September he reiterated to readers that they should email the CFTC.

The CFTC had argued in May that the large banks that people assailed for manipulating the market were instead acting appropriately as market makers, who take on futures positions to offset their exposure in over-the-counter markets. Therefore, these traders aren't "naked shorts" and won't benefit from long-term depressed silver prices. Many analysts agree with the agency's conclusion.

Silver stalwarts weren't persuaded. Jason Hommel, a newsletter writer based in Penn Valley, Calif., directed readers to visit their local coin shops at 2 p.m. on Sept. 2 to size up for themselves whether there was a silver shortage. From Michigan to North Carolina and beyond, he says, investors trekked to coin shops. Many reported no silver for sale.

Bart Chilton, one of the CFTC commissioners, said he has received about 700 emails from silver investors since August, far more than the estimated 100 he received from May to July. Mr. Chilton, a Democrat who has criticized the CFTC as doing a poor job communicating with consumers, says he has spent nights and weekends personally answering emails.

Historically, silver has been a volatile market. This year it saw a near-50% drop and remains down 9.5% on the year. Gold is up 6.5%. The agency has long heard from frustrated silver investors. In 2004, it published an open letter by Michael Gorham, then the agency's director of market oversight, after receiving more than 500 letters and emails from silver investors.

That the enforcement rather than oversight division is taking on the issue marks a difference from the CFTC's previous efforts regarding the silver market. The oversight division performs overall market surveillance. The enforcement division looks at activities in a specific time period.

* * *

Jason Hommel: The World Needs a Free Market in Silver

2008-09-08T14:23:00.003+03:00

The World Needs a Free Market in Silver

(Functioning Markets Solve the Problem and Free Markets Work Best)

Silver Stock Report by Jason Hommel,
September 7th, 2008

This may be the most important article that I will ever write in my lifetime, and it may be the most important you will ever read. I don't know if things will ever be as crucial on the world stage as they are today. The world has a choice to head towards increased freedom and prosperity, or towards shortages and misery.

Typically, stories of inflation and hyperinflation are accompanied by stories of food shortages, misery and pain. During some hyperinflations, people are reported to be so desperate to save their currency that they will buy bed pans or piles of horse manure to preserve the value of their wealth. Thank God we can still buy silver, instead!

The price of Rat Meat in Cambodia has increased 400% as investors flee from inflation!

http://news.yahoo.com/s/nm/20080827/od_uk_nm/oukoe_uk_cambodia_rats

Today, there is a world emergency, a world crisis that is being ignored, because silver is a neglected and forgotten metal and industry, and more eyes are on the banking crisis and on the election than on silver.

The silver markets are failing and breaking down. The COMEX fraud of allowing the sale of excessive and unbacked paper futures contracts is destroying the silver market. Too many silver dealers, refiners, and coin shops have relied on the COMEX price to set their own prices, although nothing was for sale and no silver came to market when those prices were set, and so they mostly all ran out of inventory.

If we do not solve the problem of the broken COMEX market, the world will continue to be plagued with shortages that will extend much further than the silver market, and into all other markets. We could end up with desperate food shortages, as investors who cannot find silver may end up purchasing food to protect their money, instead of silver, and if that happens, starvation on a world-wide scale could result. In fact, it has already begun with rising food prices worldwide as investors pour into grains as a result of inflation driving speculators into all commodities.

Price increases push US soy beyond reach of poor:
http://money.aol.com/news/articles/_a/bbdp/price-increases-push-us-soy-beyond-reach/163191

That is the danger of allowing COMEX fraud to continue unopposed. The best way to oppose COMEX fraud and end it, is not through letter writing campaigns to the CFTC, and not through police crackdowns from the SEC, nor from new regulation by Congress.

We don't need to use force to stop evil. We can overcome evil with good. Where the spirit of the Lord is, there is Liberty! We just need to understand, embrace, and create freedom.

And so, rather, the best way to oppose COMEX fraud and end it is to create an alternative free marketplace or free markets where silver can always be more and more freely bought and sold.

An alternative free market will end the fraud faster than you can imagine, much faster than any CFTC investigation, through the profit incentive to buy from one market to sell into another.

Have no fear. The profit incentive, and the ease of the use of the internet, will create the incentives to create that alternative market where our silver will be fairly valued, and freely traded.

Traders rightfully point out that if the COMEX price is fraudulently too low, then people would buy bars at COMEX, and sell into the free market, and make a killing.

After all, you can make much, much more on a 20% mark-up by quickly flipping silver and selling to investors than you can with a 100% mark up selling jewelry, because the jewelry market has slower turnover of product.

Example: If you can make 20% per transaction, and make 12 such transactions per year, only once a month, you can make 792% in a year!

See
http://www.smartmoney.com/compoundcalc/
for the math.

I might not be willing to risk my money to stand for delivery of a COMEX contract, but others will, if there is another market for them to easily sell into.

You could make even more money, 1200% per year, making a 5% profit spread if you bought in one liquid market and sold into another liquid high volume market once a week. Liquidity is key. Liquidity is crucial to the speed of trading, which aids turnover. Silver, by its nature, should always be extremely liquid.

At COMEX, liquidity in silver is thwarted by having a "delivery month" of an unreliable time frame, and not every month is a major delivery month. The Post Office, as dreaded as it is, is far more reliable than COMEX. COMEX also does not ship out silver, but makes you go there to get it.

Given that silver coins are selling at a $3-4 per ounce premium over the spot price, which is about a 30% premium or profit, then makers of silver coins and bars should be able to make huge profits, if they can find silver bars at COMEX prices to turn into coins!

This is how we know 1000 oz. silver bars are in short supply! Perhaps the recent shortage is at least partly a result of this month, September, being a delivery month.

But there's a bigger problem. A free market in silver with high volumes and low spreads does not exist. So, you can't go and buy silver from COMEX, to sell into a non-existent market.

Today, maybe neither market exists!

There are alternatives to COMEX, but none of them has the capacity to pick up the slack and carry the huge volumes of trade, and allow a trusted and reliable form of price discovery to take place.

For example, Fresnillo, the silver refinery in Mexico that refines about 90% of the silver in Mexico, which produces about 80 million ounces of silver per year, ships out 600,000 ounces of silver at a time, in 1000 oz. bars, 30,000 oz. per pallet at a time.

The world needs a market that can handle and service the needs of refiners such as Fresnillo, so they will ship to the free market or at free market prices; instead of to COMEX or to other places at COMEX prices.

Yes, there are the coin shops and online bullion dealers. But investors typically do not want 1000 oz. bars because they are ugly, not standard size, and too heavy at around 70 pounds. APMEX recently had more than 20 for sale for a few days, and they sold out, but that's not a very large volume, and they didn't sell at a much of a premium, only about 35 cents over spot.

Ebay is good because they only allow people to sell what they have, and there is a rating system in place to allow feedback on sellers reputations, and ebay allows competitive bidding to allow an odd form of price discovery to take place.

But ebay is not useful because we often do not see the final auction price at the last minute. And ebay is bad because fees are excessive with fees ranging from 10-15%! That's not a "free market", it's a rather costly market! Also, it is difficult to buy in volume, because there is limited product available. And fraud levels are still too high, and there are additional penalties on sellers. Another drawback to ebay is that there is no aggregation ability to place large orders over multiple auctions of standardized fungible products that are similar enough to be interchangeable. Nor can you use ebay to sell into anyone's standing bid for a standardized form of product. So ebay is mostly a one way market, not a two way market, like an exchange should be.

There is bulliondirect.com. But it, too, suffers from low volume, lack of product availability, product delivery delays, and difficulty of use.

There is craigslist.com. The advantage is that you can connect with people in your local area anonymously for cash to silver transactions, but there is no volume at all.

Goldmoney.com is another site where you can trade. But there is a restrictive trading limit of 1500 ounces of silver per day.
http://support.goldmoney.com/article.php?id=098

And there are other futures markets and exchanges in Tocom, Dubai, Shanghi, and elsewhere, but their volumes are much lower than at the COMEX, and like the COMEX, futures contracts can be created and sold to excess.

In any reasonable money exchange marketplace, gold should also be able to be traded for silver, and silver for gold, without having to move into fiat currencies. So, although my personal focus is on silver, I'm really talking about a new kind of silver and gold market exchange.

The world desperately needs a better silver market, in multiple locations around the world that cannot be shut down by desperate and dying governments that rely on paper money fraud, if the world is to survive the implosion and end of fraudulent futures contract trading.

I strongly believe that the most important features of a free market are to end fraudulent transactions of promises to deliver silver in the future that may not exist.

The fraud must end. That is the most important.

But also, perhaps next most important is to encourage high volumes by providing the best market structure at the lowest possible cost?

Readers, the world needs your help!

There are people who know how to make things happen, who can design specs, set up markets, hire programmers, set up verification systems, set up storage locations, and handle the logistics much better than I can. I'm merely a thinker, a theorist, and a writer. And I have a family, and I'm located in a small town, far away. I'm a horrible manager, and I don't like working with people as I have little patience for those who cannot understand right away, even though it sometimes takes me years to "get it". Anyone who has ever emailed me probably knows I'm "short tempered" that way.

Please give me feedback and share your thoughts, and I'll collect your emails and share your suggestions to inspire those people who are more people oriented and action oriented who can make this happen. What other features are important in the design of the most optimal and most free, free market for silver?

Topics for thought:

Ease of use? - OR - Verification of users?
Elimination of fraud? - OR - A Reliable and successful transaction history?
Standardization of bars? - OR - Verification of bars?
Bid/Ask trading at all hours? - OR - Once per day auction price setting?
Reduced speculation & Reduced leverage? - OR - Fully paid for trading?
Ability to handle small transaction sizes - OR - ability to handle large volumes through high minimum transaction sizes?
There is also the issue of cross border shipping logistics.

I'm doing my best to end world poverty by educating investors.

There may be limited silver, but there is unlimited wealth in silver. It just needs to be unlocked by a higher price that can be discovered by a functioning and honest free market in silver.

Sincerely,

Jason Hommel
www.find-your-local-coin-shop.com
www.silverstockreport.com
www.miningpedia.com
www.bibleprophesy.org

Jason Hommel: Where's the Abundance of Perth Mint Rounds?

2008-09-07T16:57:00.003+03:00

Where's the Abundance of Perth Mint Rounds?

(No wonder you can't find any!)

Silver Stock Report
by Jason Hommel, September 6, 2008

If the Perth Mint has $880 million worth of silver and gold in inventory from their certificate program, to use as working inventory to make coins, then why aren't they producing many Australian coins that should be flooding the marketplace and available everywhere at close to spot prices?

Let me explain why I hammer Perth so mercilessly. The Perth Mint has issued silver certificates. Investors trust them. Perth has issued those silver certificates for a reason, a reason that silver investors should love.

As they are a mint, they need an "operating pool" of physical metal to use as inventory for operations, to be able to make silver coins to sell to the public in the form of one ounce rounds. This is a fantastic reason, and I would support that 100%, especially if they buy more silver as needed, buying one ounce for every ounce sold. In theory, that would mean that there could never be a silver shortage at the Perth Mint. There is especially no reason for a silver shortage to exist at Perth, given that Australia exports over 400 tonnes of silver each year! The Perth Mint could never run out of silver to sell if that program was run honestly, in stark contrast to the U.S. mint, which is suffering a shortage of blanks.

In fact, the current world-wide shortage of investment silver, such as one ounce coins, means that the world desperately needs a functional mint with plenty of silver for operations.

But Perth does not produce one ounce rounds for the public in bulk form at just above spot prices, as other mints do. Why not? Why can't they?

For example, the Canadian Mint produces silver Maples 3-5 million per year, and the U.S. Mint produces silver Eagles, about 10-20 million per year, and Austria is now producing silver Philharmonics, and France, I hear, may also start producing silver again, too.

http://www.monnaiedeparis.fr/actualite/eurosOrArgent.htm

And all of these are available at between $2-3 per ounce over the spot price, and sometimes now at over $4/oz., due to the shortages of silver.

In stark contrast, Perth produces much less, and they sell their 1 ounce coins at an average price of $61 per ounce!

ttp://www.perthmint.com.au/catalogue/discover-australia-landmarks-silver-coins.aspx

That's $48 over the spot price for Perth 1 oz. rounds! Isn't that a 369% premium over the spot price?!

What's the problem here? Shouldn't they be able to produce silver coins like the U.S., Canada, and Austria? Perhaps Perth doesn't have enough silver in their "working inventory" to produce more?

But they have issued $880 million worth of gold and silver certificates to the public, and therefore, should have plenty of working inventory. In fact, it is so much working inventory, that it amounts to an entire year's worth of investment demand for silver.

Net investment demand for silver is estimated at 60 million oz. by the CPM group, which, at $13/oz. is only $780 million!

Perth has is so much working inventory, that even if the Perth Mint had to wait for a 1 year hold time for delivery to replace their inventory, they would still be able to supply nearly 100% of the silver that the investment world needs, and they could supply it with no delays to the public whatsoever!

It is so much working inventory, that if the Perth Mint had to wait 1 month for supplies of all new silver, they could provide 12 times the world's annual silver demand, and all silver investors everywhere would be buying nothing but Perth Mint Australian one ounce coins, and no other forms of silver whatsoever.

If only 1/10th of the $880 million of gold and silver certificates is in silver (and they don't reveal what percentage it is), then that would be $88 million. Divide by $13 = 6.8 million ounces of silver. If that much were minted monthly, that would come out to 81 million one ounce rounds, which would be 4 times as many coins minted by the U.S. Mint.

Therefore, one would think that if the Perth Mint was honorable, that the Perth Mint should be producing far more silver ounces than the U.S. Mint each year, at a lower cost, and that we would see those in abundance in the marketplace.

But Perth does not issue coins like that. You cannot buy Australian bullion coins in bulk at APMEX, Tulving or any other major wholesaler. Why is that? I think the answer is obvious.

Where is the abundance of Perth Mint rounds? There is no abundance. They are scarce.

It appears to me that Perth's silver in their certificate program, "used for operations" was used to cover unprofitable operations, for years, and that in actual fact, they have no working inventory, or they have less than 1% of the $880 million worth of inventory, barely enough to meet some redemptions and orders on occasion.

Over 50 people have continually complained to me of shortages of silver from the Perth Mint, in my prior emails exposing them. Why are these people complaining to me? Do I have the words "Perth Mint Customer Service Rep" tattooed on my forehead, or in my disclaimer? No.

Sell or redeem your Perth Mint certificates, quickly

Nadler, Kitco, Perth, Matthey; Sold Out! September 3, 2008

Perth Mint Crisis Watch 5 June 6, 2008

Perth Mint Crisis Watch May 23, 2008

Perth Mint Crisis: Solutions and Ramifications May 23, 2008

To the largest newspapers in Australia May 22, 2008

To the government of Western Australia May 21, 2008

Poor Prospects for Kitco/Perth/Matthey May 19, 2008

Kitco / Perth Mint / AGR Matthey / Bullion Bank Connections May 17, 2008

Will Kitco Sue me?! May 16, 2008

Silver Shortage Drives Men Nuts March 31, 2008

Perth Mint and Kitco Scheme Exposed March 26, 2008

See what others are saying about the Nadler/Kitco/Perth/Matthey issues, here:

https://www.kitcomm.com/showpost.php?p=343129&postcount=33

https://www.kitcomm.com/showthread.php?t=22303&page=4

http://goldchat.blogspot.com/2008/09/reply-to-reply.html

http://www.ausbullion.com.au/

Sincerely,

Jason Hommel

www.find-your-local-coin-shop.com

www.silverstockreport.com

www.miningpedia.com

www.bibleprophesy.org

My offer:

For the price of just a few ounces of silver per month, you can look at my silver stock portfolio. Once a month, at the end/beginning of the month, around the 31st or 1st, for paying subscribers, I update the stocks I own and the percent of each stock or position in my portfolio. It's very simple. Very revealing. Very useful. It's not trading advice. It's not a model portfolio. It's my portfolio. Sign up here:

http://silverstockreport.com/customerservice.htm

Paying subscribers also get access to the member's forum where some very, very smart people discuss silver, stocks, economic issues, growth rates, why peak oil & global warming are frauds, and many other things.

Two competing silver prices in Never-Never Land

2008-08-28T08:23:00.004+03:00

Once-upon-a-time, in ‘never-never’ land,
There were two competing silver prices

Peter Degraaf

These two silver prices were at loggerheads with each other. Every time the ‘real’ silver price began to rise, a ‘paper’ silver price would show up in large quantities and scare some of the holders of real silver to dump and run.

Silver miners and coin dealers with ‘real silver’ in inventory, instead of being organized, and using supply and demand to determine the price of silver, would look at a computer screen, check to see what ‘paper silver’ was doing and meekly accept that as the price at which to sell silver.

The Silver Users of America (SUA), is the only ‘user cartel’ in existence. (Cartels are usually comprised of suppliers – OPEC comes to mind). For years the SUA and their willing accomplices have been able to spook the people who deal in ‘real silver’ into coughing up silver at low prices, simply by dumping ‘paper silver’ onto the markets. While there are no manuals available detailing how they do this, we will have to make some assumptions based on observations regarding market action.

Here is my assumption: Assume that I am a member of the SUA, and it is in my interest to keep the price of silver as low as possible. Along with my fellow SUA members, I go about engaging half a dozen large bullion banks that are active in the futures markets. I mention to them that my fellow SUA members and I would like to cap a rally that has just driven silver to a new high. Would it be possible, I ask them, as soon as we see that buying is drying up because of resistance at this new price, for you and your fellow bankers to start selling a large number of futures contracts and options using ‘paper silver’?

Let’s pick a time when there are not too many people active in the marketplace, and volume has slowed right down.

My fellow SUA members and I will do the same, and as soon as we create some momentum, the hedge funds will dump their ‘long’ contracts and join us, since they like to chase a trend. Then, the small and large investors who have bought silver on margin will have to sell, and they will also become our helpmates.

By any chance, do any of you bankers have an inside track to any of the central banks? It would be very helpful if one or more central banker could raise the value of the US dollar at the same time as we start our selling campaign.

It would also be very helpful if you people used your influence with the governing body at the various futures exchanges to tell them that what we are doing is simply ‘normal market behavior.’

If we all work together, then you and your fellow bankers will be able to buy back the contracts you sold high, at a lower price, and my fellow SUA members and I will be able to buy ‘real silver’ cheaply from the mining industry, since these people still have not figured out our game and have not yet banded together to form a suppliers cartel.

A funny thing happened last week. The SUA and its fellow travelers may have pushed ‘paper silver’ too low. Shortages in ‘real silver’ began to appear, and more and more people now are beginning to understand what is happening. My advice to those among you who think you are buying ‘real silver’ when you are trading ‘paper silver’ is this: Make sure you buy ‘real silver’ with the profits you make in ‘paper silver’, just in case it turns out there is a shortage of ‘real silver’ to back the ‘paper silver.’

Featured is the daily silver chart. The blue arrows point to times when the silver price fell below the 200DMA (red line on the chart). Two years ago, at the seasonal low in September, price fell to 2% below the 200D. A year ago during the August seasonal low, price fell to 3.5% below the 200DMA. Last week during the presumed 2008 seasonal lows the price was pushed 37% below the 200D!! Think of this as the sellers of ‘paper silver’ having pushed a beach ball well below the surface of the water in a pool. Think of how rapidly the beach ball can rise when it is released, then go buy some ‘real silver’, just as I have been doing.

Notice the RSI at the top of the chart is already turning positive, and the MACD at the bottom of the chart is also ready to turn up again.

The positive aspect that is impressive about the rise in today’s silver price (Tuesday 08/26)), is the fact that the US dollar is also rising. In 2005, silver, gold and the US dollar all rose in tandem.

Therefore, a decoupling (separating the metals from the movements in the US dollar), would not be unique. The main driver for silver and gold is the fact that ‘real interest rates’ (T-bills less CPI) are currently negative. Whenever rates are negative, silver and gold usually rise, as money in bank accounts is punished.

This is ‘real silver’. It does not fold, crumple or burn, you cannot create it on a computer.

DISCLAIMER:

Please do your own due diligence. I am NOT responsible for your trading decisions.

Peter Degraaf is an online stock trader with over 50 years of investing experience. He issues a weekly alert to his many subscribers. For a free 60 day trial, just send him an E-mail at itiswell@cogeco.net, or visit his website www.pdegraaf.com

Gene Arensberg: Silver sucker-punched by two U.S. banks

2008-08-25T21:37:00.003+03:00

Resource Investor today posted a special "Got Gold Report" by Gene Arensberg in which he credits silver market analyst Ted Butler for exposing the recent vast downward manipulation of the silver market by two unidentified U.S. banks. Arensberg expects the Commodity Futures Trading Commission to take action against these banks. He writes:

"It will not be surprising at all if we learn that these two U.S. banks are taken to task by regulators for their actions. It will be even less surprising to learn that they have become the target of multi-billion-dollar class-action lawsuits by hungry lawyers representing silver investors everywhere."

Maybe U.S. financial market regulators will do their job right for once, but we'd find it easier to believe in the tooth fairy.

You can find Arensberg's commentary, headlined "Silver Investors Sucker-Punched by Two U.S. Banks" complete with some nice charts, at Resource Investor HERE

Jason Hommel: Silver has Run Out, Now!

2008-08-21T20:22:00.003+03:00

Silver has Run Out, Now!

(Just try to find some!)

Silver Stock Report

by Jason Hommel, August 20th, 2008

For a long time, people have been asking me, "When will silver run out?". They know that the world uses up more silver each year (about 850 million ounces) than the world mines (about 600 million ounces), and that existing demand can only be met by selling existing inventory (such as recycling 200 million ounces, or goverments selling 50 million ounces), so it's a natural question to ask. The question is not implying that mankind will be unable to mine any more. Rumor is that there remains at least about 14-16 years of silver in the ground at "current" prices; while at much higher prices, silver mining becomes more economic, and more deposits can be added to that "in ground" reserve number.

So, the question is really just asking, "When will we run out of "excess" above ground silver that can meet the supply/demand gap, so that the price will begin to really take off upwards?" Clearly, the world has silver in supplies above ground, and such silver supplies are dwindling in order to meet the supply/demand gap. About two years ago, the world started adding to above ground silver supplies as silver investors started buying, (and the silver surveys label investor buying as a "surplus". However, silver recycling was still greater than new stockpiling, which continued to deplete overall silver supplies.

Such a question as "When will silver run out?" cannot really be answered in advance, since nobody really knows how much silver there is, and who owns it, and at what price they are willing to sell it. Again, that brings us back to the nature of silver; it's inherantly private wealth, held anonymously. Estimates on "above ground" silver, in refined, deliverable form have ranged from 300 million ounces to 1 billion ounces, to about a high of 4 billion ounces if you include jewelry and flatware, up to 20 billion ounces if you include all forms of silver that have not ended up in landfills, out of the total of 43 billion ounces of silver estimated to have been mined in all of human history. Furthermore, nobody is arguing that the last bit of silver that exists needs to be consumed before the price rises substantially. The question is really about when will all the unwanted silver, in so-called "weak" hands of holders who don't really want it, be sold, to allow the price to rise to meet the majority of the expectations of the remaining wise investors who have planned in advance to actually store up some of the rare stuff.

But finally, I think the answer has arrived. The answer is "NOW!" Silver has run out, now! Or, in other words, most of the cheap silver has run out.

There are two excellent articles on the shortage of Silver that I'd like to bring to your attention if you have not already seen them:

This one is by "seekingalpha", and is very excellent, and very comprehensive.

The Disconnect Between Supply and Demand in Gold & Silver Markets
(August 18th)
http://seekingalpha.com/article/91357-the-disconnect-between-supply-and-demand-in-gold-silver-markets

The article goes over how the silver shortage is also affecting India.
He also covers the paper silver fraud that is commonplace and "standard business practice" in Wall Street brokerage houses.

This next article is short and powerful, and written by a coin dealer:

The Disconnect Between The Physical Gold and 'Paper Contract' Markets
(August 19th)
http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=5093

What's amazing is that last year, net physical silver investment demand was estimated to be about 30-60 million ounces, or about $1 billion worth.

Today, with 90% of the people in the U.S. being concerned about inflation, and a growing awareness of the danger of banks going bankrupt, there ought to be about 90% of the $14,000 billion of money in the banks that should be seeking to buy either some silver, or gold.

So, where do you think silver prices are headed? How can most of $14,000 billion enter a market of $1 billion that is already suffering a shortage, and prices not go up, a lot?

And oh yes, what about that current low price?

There's a short story that goes something like this. A lady wants to buy sausage. There are two butcher shops next to each other, one advertises $1.99/lb., the other advertises $2.99/lb. She goes to the $1.99/lb. shop first. But there's no sausage, they are out. So, she goes across the street, and sees sausage for $2.99/lb., and promptely complains about the price. "Why don't you sell it for $1.99/lb like the other guy?" Butcher answers, "Lady, when I'm out, mine is $1.99/lb, too!"

Price means nothing if you can't get the product. Many people are still sending money to dealers who will take your money, but have no silver, and no idea when they can get it.

Be very, very careful about ordering silver right now. Demand to know exactly when they can deliver. If they can't guarantee delivery within a week or your full money back, then consider that they probably don't have it!

Here's what I suggest. FIND YOUR LOCAL COIN SHOP and go there, in person. Or visit the dealers who are recommended at:
www.find-your-local-coin-shop.com

In fact, now might be a good time to meet up other Silver Stock Report readers.

I suggest that everyone visit their favorite local coin shop on September 1, at 1PM. That's a Monday.

Sincerely,

Jason Hommel

David Bond: Let's be Hunts

2008-08-19T08:43:00.004+03:00

Let's Be Hunts

By: David Bond, Editor The Silver Valley Mining Journal
-- Posted 17 August, 2008

The Wallace Street Journal

Wallace, Idaho – Forgive two rants so close apart, but no sooner had our tirade on the scarcity of retail silver appeared on Goldseek and LeMetropole Cafe – it would have appeared on our own Silverminers.com except we're still rebuilding the site from whoever hacked the hell out of it last month – than the U.S. Mint halted sales of its fabulously popular 1-ounce Gold Eagle coins to the American public.

That was last Thursday night, after we went to bed. Much has happened between Thursday night and this Sunday night. There's no retail 1-ounce silver left on the market; deliveries of 100-ounce Comex-grade bars won't happen until October 15th. The Gold Eagles are gone. GONE!!!!!!!

One would think, as we postulated last Thursday, that the reason the prices for gold and silver were so low was that nobody wanted them. That would be the classic Keynsian explanation. But instead we were told that the reason the prices were so low is that EVERYONE wanted silver and gold 1-ounce coins.

When the market starts talking such gibberish, it's time to start thinking about a Hunt. As in, Nelson Bunker and William Herbert Hunt. We remain amazed, 28 years later, that supposedly sophisticated investors regard the events of 1979 and 1980 as “that time when the Hunts tried to corner the silver market.”

This is one of those monster myths that is so incredible and so false it must be believed by the unwashed masses. Regrettably, detritus of these masses grow up to be Presidents of the United Snakes, or of some branch of the Federal Reserve Bank. Makes them no less idiots, their Ivy League pedigrees notwithstanding.

In 1977, Bunky Hunt surveyed a battlefield much as the one that confronts us: there was paper silver a-plenty for sale, but not a physical ounce in sight. Hunt and his brother, reared in the resource-rich ethic of mid-Texas and Oklahoma, saw a gaping hole in the illusion that is American wealth: a bunch of paper selling a commodity that could not be bought. These things occur from time to time in corn, soybean, and oil commodities, but only temporarily until the market quickly achieves contango – its balance. The only time a gaping imbalance between the paper and the physical market is allowed to persist, the only time the paper price is allowed to be lower, and lower for a long period of time, than the physical price of the commodity, is in the trading of silver and gold.

It is useful for a government like the one that has commandeered the United Snakes, such government and its banks, to permit such an imbalance to exist. If the paper price of silver and gold are severely lower than their actual value, the paper money that the United Snakes and its banks issue is theoretically more valuable – relative to silver and gold – than it really is. Push down the metals, up goes the U$ Dollar. This is our current situation.

And it is profitable for the United Snakes government until some kill-joy comes along and wants delivery. The Brothers Hunt saw that the absurdly-priced silver contract of $3.50 an ounce was a bargain, that $3.50 silver existed nowhere in the real world except in the paper futures pits, but there it was, for sale, on the Comex.

My late friend, Paul Sarnoff, watched the thing unfold from his front-row seat at Paine Weber. The Hunts were a client, as was a Catholic archdiocese and several Arabs, who were getting worried about the quality of the paper they were being paid for their oil. Put yourself back in those times: gas prices were going through the roof; home mortgages, if you could get one and had perfect credit, were going for 18 percent APR; we had a weak President facing unpopular situations in Iran (where there were hostages) and Afghanistan (where the Russians were being adventurous). There was a run on the U.S. dollar in Europe.

And there was no silver. Not since the United Snakes had kicked silver out of the U.S. monetary system had silver been more scarce. Yet there it was, for sale on the Comex, for sale by the likes of the big central banks and bullion banks of the world. But such was no big deal. Between 97 and 99 percent of those 5,000-ounce silver contracts were settled in paper.

But the Hunts and their friends – this was in 1977 – began buying this paper over a period of years. By October 1979, the Hunts and their pals had bought up the bullion dealers' paper positions to the tune of 192 million ounces. Nelson Bunker Hunt owned 79 million ounces of silver – on paper; William Herbert Hunt, another 48 million ounces; their pals, including the Arabs, another 65 million ounces.

Is it too much to ask, if you buy a car from a guy, and you pay him the cash and he signs over the title, that you might get the car? This, ladies and gentlemen, is all the Hunts ever asked. They did not ever “corner” the silver market. All they asked was for the bullion dealers to keep their promises, and deliver.

Chaos ensued. There was then – as there is now – no silver to be had. Not in London or New York warehouses nor in the ground. Not anywhere. And for the simple reason that the Hunts and their pals asked for the delivery of silver they were promised by contract, they were vilified. Driven to ruin. And they provoked their own ruin: Bunky said he'd issue silver certificates in lieu of paper dollars, if people wanted to play. When I was a child, silver certificates were the money of the land.

This writer carries no cross for the Hunts. They were forced to sell the brokerage, Bache, that had carried their contracts but bet against them. But they still have their race-horses in Paris, and I am sure they have not missed a meal.

But there is a monster short position in silver again. It probably exists to prop up the Bush puppetry until the November election. Presidential election years are always hard on metals and easy on mortgage rates, except this year, the mortgage market is done, so new paradigms are in the making. Metals may come back far sooner than is ordered by the Fed and the FDIC. And remember, here is no Jimmy Carter to sell a billion ounces of silver into the market to quiet the Dollar worries. Carter's still around, but those 1 billion ounces are long gone.

The Hunts shook the lying bankers to their boots – to the point where intervention by the Fed, Treasury, and the Defense Department were warranted – merely by asking for delivery of the 192 million ounces of silver they'd been promised. This was not a “cornering” of a market; it was the attempt to enforce a contract, same as you've got with your landlord or bank.

So let's all of us be Hunts. Ask delivery of $12.80 silver and $790 gold, today. There are 300 million of us. A single ounce of physical silver for every man, woman and child in the United Snakes would squeeze these rat-bastards harder than the Hunts could ever do. There were two Hunt brothers in 1979. There are 300 million of us in 2008. Even in this country, there aren't enough jail cells to hold us all. And we could take their pants off, once and for all.

Jason Hommel: Silver shortage causes price disconnect

2008-08-18T01:09:00.003+03:00

In commentary posted this afternoon Silver Stock Report's Jason Hommel elaborates on the shortage of silver. He writes:

"If you have to wait 30, 60, or 90 days for silver from any seller, it means they are selling what they do not have, and hope to get it from someone else who does not have it today either. That means they are short -- they owe you silver they do not have. And if there is a 'regular' 60-day delay, where they have you pay for it all up front, instead of making a tiny 5-percent deposit as down payment, then they are 'floating' on your money, like you gave them an operating loan."

Hommel's commentary is headlined "Silver Shortage Causes Price Disconnect" and you can find it HERE

Jason Hommel: What the Silver Shortages Mean

2008-08-17T21:36:00.005+03:00

Silver Stock Report's Jason Hommel has no doubts or second thoughts regarding the real causes behind the latest silver (and gold, mind you) shortages:

"Silver prices are dropping like a rock, down to $12.50/oz., and yet, none of my trusted, major, regular dealers have any silver to sell...
..So, why are prices crashing when no silver is available?
Manipulation. Lies. Paper games. I've covered this many times before in the last few years..."

Please click HERE to read J. Hommel's missive.

David Bond: Silver Shortage? What, Me Worry?

2008-08-16T18:02:00.004+03:00

Silver Shortage? What, Me Worry?

The Wallace Street Journal

By David Bond, Editor
The Silver Valley Mining Journal

Wallace, Idaho – We received a missive yesterday from the American Precious Metals Exchange, an Oklahoma-based company that retails silver and gold bullion – American Eagles, Canadian Maple Leafs, Krugerrands, bars, coin bags and the like, that immediately raised alarms in our cranial area.

The gist of their missive was: There's a silver shortage because the price ($14.35/oz at this writing) is too low. Particularly hard to find are the 2008 American Silver Eagle 1-ounce coins. Here's what APMEX said yesterday:

“You may have noticed a significant number of products on the APMEX.com website are listed as 'Out of Stock' right now. This stock shortage coincides with a low price for the precious metals we provide investors and collectors across the nation. Most, if not all, dealers are experiencing temporary shortages right now. . .

“When the price of silver, or other precious metals, drops to a low position, everyone who has been waiting to purchase comes in and buys. Whatever silver or gold is in inventory is quickly depleted – not just in our reserves, but also in those of our suppliers. Ultimately, this reduction in supply increases demand, and will eventually increase prices.

“This is basic supply and demand. This effect is felt across the marketplace, from suppliers to dealers to the investors.”

Well, we appreciate the lesson in Economics 101. But it had an eerily familiar quality to it, this particular lesson in Econ 101, a deja vu feeling. Had we not heard this same stuff about five months ago, only in reverse? So we dug through our Platts Metals Week archives, and lo and behold, found that we were writing about a silver shortage back in March – under entirely different circumstances.

Here were the same folks, only this time, they were saying there was a silver shortage because the price was too high! Said Metals Week:

“Silver buyers overwhelmed retailers during the third week of March, when silver was trading above $20/oz. (Retailers) stopped taking orders over the Internet, limiting business to telephone orders of no more than $5,000 -- if buyers could get through. 'Demand is incredible; it seems like there are 5 to 10 times as many people wanting to buy [silver] as opposed to selling,'” said one dealer.

Said another: “'We're running out of metals, and silver in small quantities is extremely difficult to find right now. The largest demand is for silver rounds and for small (100 oz or less) silver bars." The early-year price run from $17/oz to $22/oz sucked outfits like APMEX, Northwest Territorial and others dry.

We find this quite curious. It seems that when the price of silver is low, there is a shortage of silver, because people can't get enough of the white metal. When the price of silver is high, there is a shortage of silver, because folks can't get enough of it. Would it be too much of a reach to surmise that there's just a plain shortage of silver?

Mineweb: While silver ETFs outperform relative to gold, miners continue to suffer

2008-07-30T15:11:00.003+03:00

While silver ETFs outperform relative to gold, miners continue to suffer

Silver ETFs have decoupled from the depressing price movements of increasingly hammered listed silver stocks.

Author: Barry Sergeant
Posted: Tuesday , 29 Jul 2008
JOHANNESBURG -

Amid the hammering of listed resources stocks over the past two months, and the more recent heavy sell off of commodities, silver exchange traded funds (ETFs), represented mainly by the US-listed iShares Silver Trust, stand out as one of the most resistant commodity-linked securities. An investment in the iShares Silver Trust, which currently holds USD 3.4bn in silver bullion, is an easily accessible proxy investment in silver bullion.

Where an investment in silver ETFs would have returned 33% over the past 12 months, a weighted investment in 43 listed silver stocks is now returning a highly dramatic negative -33% over the same period. Gold ETFs, represented mainly by the US-listed SPRD Gold Trust, have also performed well, with a return of 28%, ranking just behind silver ETFs.

Listed gold stocks, however, have far outperformed listed silver stocks, returning a composite 5% over the past 12 months. The disparities in the returns from listed stocks may at least be partially explained by the declines in spot prices: at USD 919 an ounce, gold bullion is currently 11% off its highs, while at USD 17.23 an ounce, silver bullion has fallen by 19%.

Both gold and silver bullion are favoured by certain specialist investors as high beta investments during times of crisis or trouble. The two metals traded at record highs during March this year, when Wall Street's Bear Stearns crisis peaked. While both gold and silver are ranked as precious metals, along with the platinum family, gold has a demonstrable monetary role, something arguably absent from the rest of the precious metals peer group.

Primary silver producers are far less easy to find than primary gold producers. The silver sub-sector is led by Fresnillo, Pan American Silver, Polymetal, Hochschild, Coeur d'Alene and Hecla, and the fast-rising Silver Wheaton. Most of the world's silver is produced as byproduct, typically by the larger mining names...

...to read the remaining article, please click HERE

Silver FAQs galore!

2008-07-13T22:59:00.006+03:00

What's so special about silver, anyway?
Why will silver go up in price?
Where can I buy silver?
What is a good price for silver, how much should I pay?
What kind of silver should I buy?
How much money do I need to buy silver?
How do you know that the silver you buy is real?
What about confiscation?....

You can find the answers to these and many more frequently asked questions (one of the most complete lists on the web!) about Silver investing at Jason Hommell's Silver Stock Report by clicking HERE

Ted Butler: A hidden silver default?

2008-06-18T22:59:00.003+03:00

Silver market analyst Ted Butler reports evidence that the Barclays silver exchanged-traded fund on the American Stock Exchange (SLV) is being short-sold and naked-short-sold in what may be a huge default in the metal. Butler estimates the default at between 25 million and 50 million ounces.
His new commentary is headlined "A Hidden Silver Default?" and you can find it at GoldSeek's companion site, SilverSeek, HERE

U.S. Mint says its silver supply will be cut in half

2008-06-08T18:46:00.001+03:00

June 6, 2008

MEMORANDUM TO ALL AMERICAN EAGLE AUTHORIZED PURCHASERS

FROM: Cathy Laperle
Team Lead, Bullion Program
United States Mint

SUBJECT: American Eagle Silver Bullion Coin Update

The United States Mint has been informed by its silver blank vendors that the volume of blanks they will be shipping to us in the coming weeks will be significantly reduced.

Specifically, the quantities they will ship to us during the week of June 9 are expected to be less than half the quantities they shipped to us during the week of June 2. Our vendors, however, expect to be able to make incremental increases in supplies each week thereafter. In the mean time, the significant reduction in the number of blanks they supply to us will, of course, directly affect the quantity of coins we can make available for allocation to our Authorized Purchasers.

Accordingly, the United States Mint will continue allocating American Eagle Silver Bullion Coins per the process initiated on April 21, 2008.

As you know, in the first six months of 2008 production, the United States Mint produced more American Eagle Silver Bullion Coins (10.07 million) than we did during the entire 12-month period of 2007 (9.03 million). The United States Mint stands ready to continue this high level of production as additional blanks become available from our suppliers.

The United States Mint is making every effort to increase its acquisition of silver bullion blanks that meet the specifications and requirements of the law. In our efforts to meet unprecedented demand, the United States Mint is again preparing a request for proposals for additional silver blank suppliers. Additionally, we are not using incoming supplies of silver blanks to produce numismatic versions of these coins (American Eagle Silver Proof and Uncirculated Coins); all incoming inventory is being used solely for silver bullion coins during this reduced supply period.

Thank you for your patience and your continued support of the United States Mint American Eagle Silver Bullion Coin Program.

* * *

Mint replies to Silver Institute's complaint about shortage of coins

2008-06-06T13:36:00.002+03:00

From Numismatic News, Iola, Wisconsin
Thursday, June 5, 2008

The ongoing supply shortage of 2008 silver American Eagles got the attention of the Silver Institute on May 29 when its executive director, Michael DiRienzo, wrote a letter to Mint Director Ed Moy asking that steps be taken to increase the number being struck.

"It's clear that the Mint misjudged the strength of the current silver market, and we are encouraging the Mint to take immediate steps to increase its production of these popular investment coins and plan accordingly for the balance of 2008 and for 2009," DiRienzo wrote.

The Mint issued a statement in response:

"Since the introduction of the 2008 American Eagle Silver Bullion Coin Program, the United States Mint has issued a record number of coins (about 9.65 million), as demand for them has increased exponentially. That number is almost as high as the United States Mint's production for the entire year of 2007 (about 9.8 million).

"By law, the United States Mint's American Eagle silver bullion coins must meet exacting specifications and must be composed of newly mined silver acquired from domestic sources. The United States Mint will continue to make every effort to increase its acquisition of silver bullion blanks that meet these specifications and requirements to address continuing high demand in the silver bullion coin market."

The Silver Institute notes that over 165 million silver American Eagles have been produced since they were introduced in 1986.

Headquartered in Washington, D.C., the Silver Institute is a nonprofit international silver industry association founded in 1971.

* * *

David Morgan: Silver - is it Yours?

2008-05-31T19:02:00.003+03:00

New commentary by Silver-Investor.com's David Morgan reviews the efforts of silver market analyst Ted Butler and Silver Stock Report editor Jason Hommel to warn the world that there's a big difference between silver in hand and silver held for you by counterparties.
Morgan's commentary is headlined "Silver -- Is It Yours?"

Jason Hommel: To the government of Western Australia

2008-05-22T13:07:00.004+03:00

Jason Hommel's open letter to the Authorities of Western Australia is appended here:

Silver Stock Report
by Jason Hommel, May 21, 2008

To:

wa-government@dpc.wa.gov.au Complaints; Premier Alan Carpenter
eric-ripper@dpc.wa.gov.au Treasurer Eric S Ripper
consumer@docep.wa.gov.au Department of Consumer and Employment Protection
pubaff@justice.wa.gov.au Department of the Attorney General
Customer.Service@dtf.wa.gov.au Department of Treasury and Finance
enquiry@era.wa.gov.au Economic Regulation Authority
enquiries@govhouse.wa.gov.au Governor's Establishment
info@audit.wa.gov.au Office of the Auditor General
mail@ombudsman.wa.gov.au Ombudsman
watc@watc.wa.gov.au Western Australian Treasury Corporation
info@perthmint.com.au Gold Corporation / Perth Mint

To various agencies of the government of Western Australia,

You may have a growing precious metals liability of over $880 million Australian dollars at the Perth Mint, which is backed by you, the government of Western Australia.

I have received about 30-50 complaints about the Perth Mint over the last few months from investors who have tried to purchase silver bullion coins, kilo bars, and 100 ounce bars and 1000 ounce bars who have had their orders refused, or delayed.

I have received these complaints because I have an email list of about 80,000 investors who are interested in the merits of buying silver or silver stocks; and I have refered many investors in Asia to the Perth Mint over the years.

The Perth Mint has a certificate program, and they hold up to $880 million Australian dollars worth of these certificates as a precious metals liability which is used for an operating pool of metal.

I don't understand how a Mint can have that much metal at their disposal to be used as an operating pool, yet can run out of metal for walk-in customers, and also have difficulty in redeeming metal for existing customers. It seems to me that the entire purpose of having an operating pool would be to satisfy such orders, yet they are reportedly having difficulty doing so.

I'm further concerned for the government of Western Australia, because my readers have sent to me two copies of two different emails from Nigel Moffett, the Treasurer and manager of the Perth Mint, who has said that investors in the certificates do not need to worry about the solvency of the Perth Mint, but rather the solvency of the government of Western Australia, which has a surplus of $2 billion/year. This seems to be a particularly alarming statement of over-reliance on a government bailout, and I suggest to you that if there is a problem, the sooner you discover it and deal with it, the cheaper it will be to fix it and to bail them out, especially in a market of rising precious metals prices.

Many of us experts in precious metals expect the prices of silver and gold to double perhaps within a year, and if so, the Perth Mint's liability will double, too, which can be particularly alarming if they do not have the metal, but have consumed it in wasteful operations expenses.

I would suggest that you pay particularly close attention to the following statements by the Perth Mint and AGR Matthey:

"The $880 million of precious metals deposited by Perth Mint Depository clients (note 17) was used in operations by Gold Corporation as inventory ($381 million - Note 8b) with the balance in the refining operations of AGR Matthey (Note 8a).
http://www.perthmint.com.au//documents/Annual%20Report%202007.pdf
p. 81, bottom

"Treasury undertakes a leasing program to either lend or borrow precious metal within the terms of a lease agreement between AGR Matthey and approved counter parties."
http://www.agrmatthey.com.au/wps/wcm/connect/AGRInternet/agr/treasury/services/

As you investigate, I would warn you to not be swayed by slick excuses. Do not be swayed by statements that their precious metals liability is balanced by other liabilities of other entities who also may not have the silver or gold. Ask to see the precious metal that they are supposed to have in their vaults to be used in operations, and don't be deceived, as it can be very costly.

The size of the precious metals liability is particularly alarming to me, in light of the fact that total silver investment demand world wide for 2007 was estimated at 75 million ounces, or about $1.1 billion dollars by the CPM group.

Nobody has reported to me any problem in obtaining any gold, only silver.

But the real reason I'm writing is this:

Please let me know which government agency I should send any information to, and also, let me know so I can direct my readers to complain to the proper agency.

Sincerely,

Jason Hommel

www.silverstockreport.com

Melt the Witch …swap all your Gold for Silver!

2008-05-18T23:27:00.002+03:00

Attention GATA Army:

What would you do to take down the Gold Cabal? What would you sacrifice? How hard would you work if you KNEW that the culmination of your effort would end the long term manipulation of gold? As for me, I am very tired of fighting the Cabal, but I am also tired of watching all that I love about my country get washed out to sea by the Manmade Monsoon of Market Manipulation that is currently sloshing over the United States of America.

LET’S FINISH THIS THING!

I’m going to say it flat out…SELL ALL YOUR GOLD INVESTMENTS NOW AND BUY PHYSICAL SILVER!...

Market analyst Bix Weir, a longtime GATA supporter, thinks the suppression of silver is more vulnerable to market forces right now than the gold market and so he offers a bold idea: Trade all your gold for silver. His commentary is headlined "Melt the Witch" and you can find it at GoldSeek's companion site, SilverSeek, HERE

Jason Hommel: Will Kitco Sue Me?!

2008-05-17T11:34:00.005+03:00

Jason Hommel is determined to put a stop to Precious Metals market manipulation whatever the source and wherever it rears its ugly head.
Now it seems he could be sued by Internet P.M. seller/dealer Kitco because the "...libelous public allegations you published on the Internet on March 26, 2008 and April 1, 2008 have compromised these efforts and have resulted in financial damages. It is my intention to hold you responsible for the damages and loss to our reputation that these false and injurious statements and accusations have resulted in." as Kitco's President Bart D. Kitner puts it in his ultimatum email to Hommel.

This is turning out into a very fascinating dispute and you may read about it HERE.

Jason Hommel: A Further Warning to the CFTC!

2008-05-16T14:03:00.004+03:00

Silver Stock Report editor Jason Hommel has written an open letter to the acting chairman of the U.S. Commodities Futures Trading Commission in reply to the CFTC's latest report denying that the silver market is manipulated. Hommel's reply refutes two central assertions of the CFTC report and mentions GATA's work.

Hommel also notes that the acting chairman of the CFTC is a member of the President's Working Group on Financial Markets. You may recall that this agency meets only in private and keeps no minutes available to the public. Until such agencies conduct their business accountably in public, their denials of impropriety have little credibility; indeed, they are laughable...

A Further Warning to the CFTC!

(I'm so glad I'm not one of the guys in charge of keeping fraud alive today!)

Silver Stock Report

by Jason Hommel, May 16th, 2008

To CFTC Acting Chairman Walt Lukken,

I commend you for your essay/speech of November 27, 2007, titled, "The Keys to Smart Regulation".

In that speech, you argue persuasively about your need to be forward-looking, and to take future risks into account, as you quote Wayne Gretzky who said, "A good hocky player plays where the puck is. A great hockey player plays where the puck is going to be."

Thus, instead of reacting to a crisis, you ought to be able to anticipate industry trends, and prevent any crisis from taking place.

The job of the CFTC is to prevent market manipulation and above all, market default, since a default is usually the end result of a manipulation, since manipulations tend to fail.

A default is to be avoided at all costs, since a default will call into question the integrity of the exchange and perhaps all U.S. financial markets, and could halt trade, which could lead to disastrous consequences for civilization itself that is so dependant upon trade to survive.

Further, you argue that in our increasingly globally competitive world with many futures markets springing up in diverse places, and many market participants originating in locations that may be outside the jurisdiction of the United States, you have particularly difficult challenges in today's interconnected world.

I understand that you want the U.S. futures markets to remain competitive, yet free from manipulative influences from international global financial terrorists.

These can be conflicting goals, since if you raise margin requirements to reduce the risk of default, our markets might not be the most competitive in terms of leverage gained for a given trading amount, and traders may go elsewhere into less regulated markets.

In the silver market, I understand this is particularly troublesome, since I know of many unregulated dealers who offer leverage programs on terms much worse than in the major futures markets, firms such as Monex, and Goldline.

Beyond protecting the futures markets from default, your job is to keep traders honest, and to keep the markets fair.

Further increasing the risk of default, the recent 2002 public offerings of CME stock which has acquired the recent and new NYMEX public offering, creates an additional challenge, since a layer of protection against market default has been removed given that stock holders are granted the benefit of limited liability. In the past, since the exchanges were privately held, the exchanges themselves were ultimately liable, the last ones liable, in the event that a brokerage house could not make good on a trader's trade, and now this protection seems to have been removed.

Since the futures exchanges went public, starting with the CME in late 2002, and later the NYMEX in late 2006, you must have felt that the CFTC was more exposed than ever, and at a higher risk of failing your duty to prevent a market default. But perhaps you were not so worried as CME stock has continued to rise to a market cap of $33 billion, as you noted in your essay. However, I believe the large market cap only provides an illusion of safety, and not real security.

I note that the mighty Bear Stearns went belly up in one day.

So, in sum, I would say that your uniquely difficult challenge is to keep the overall market honest, by keeping market participants honest. And that would include preventing market players from taking on positions and obligations that they cannot keep, and I would imagine that to be a very, very, difficult task.

One would think your job to be the equivalent of making sure that all home mortgage borrowers always pays their mortgage, or that all credit card borrowers always makes their payments; a truly impossible task.

I would think that your challenges become exponentially complex when you discover that a division of the CFTC under you, is found to be lying.

Recently, the Division of Market Oversight lied multiple times in their recent "Report on Large Short Trader Activity in the Silver Futures Market":

It appears they wrote this report because of what I, and others, have been saying, since they note the occasion of their report here:

"Recently, silver commentators and a group of investors that rely upon them have reasserted their allegations that the silver futures market is being manipulated downward by a small group of traders on the short side of the market."

Here is their big lie. On page 3, they reference Michael Gorham's 2004 report, and write:

"In terms of plausibility, the analysis noted that there is unrestricted access to the silver cash and futures markets. If prices of silver were in fact artificially low, there would be nothing to prevent a well-capitalized trader, or even many small traders, from entering the markets to buy cash silver or futures contracts at what they believe to be bargain prices. This openness of the markets tends to render the claim that silver futures prices had been manipulated downward for more than 20 years implausible. In this regard, there is no logical explanation as to what, during those 20 years, has prevented traders from buying cash silver or silver futures and thereby driving prices up to what those making the manipulation argument would regard as a reasonable price."

In truth, there is no "unrestricted access" to the futures market because there are position limits on traders.

They also lied again on page 3, when they wrote:

"In addition to the implausibility of a long-term manipulation, advocates of the manipulation argument have also failed to explain how the alleged manipulators have profited, or will profit, from such a manipulation."

I and the Gold Anti-Trust Action Committee (GATA.ORG) and many others have repeatedly said that the manipulation to keep gold and silver prices low helps keep the value of the dollar higher. By keeping silver and gold low, the Fed is able to print up to $350 billion in one day. Yet the annual investment demand for silver remains a mere $1 billion.

If paper money collapsed, and had to spend silver or gold to prop up failing markets, the Fed would no longer have the kind of power it has today.

Since you are a member of the President's Working Group on Financial Markets, surely you know this, and I just wanted my readers to know it, too.

I also write this to show why I don't expect you to act.

The profit motive of keeping a lid on silver and gold is clear, it keeps the fraud of the dollar alive, and the dollar printing business is very, very profitable.

I could further refute the many lies in the latest CFTC report, but why should I bother refuting their fraudulent response?

Perhaps it would be more productive if you were to review the reasons why the price of silver is poised to skyrocket upwards, instead?

1. The world is no longer using silver and gold as money, and thus the primary demand could not be lower.
2. The world started consuming silver in electronics after World War II, and has continued the pace of silver consumption of about 7 tenths of an ounce of silver per year, per person, in industrialized nations ever since, consuming perhaps over 25 billion ounces of silver.
3. With the rise of inflation beyond 20% per year, many people in the financial world are turning their attention once again to buying gold and silver.
4. With $14 trillion in M3, according to private sources, and with annual silver investment demand at barely $1 billion, and with 60-90% of the U.S. population concerned about inflation and the devaluation of the dollar, we are on the edge of a tidal wave of investment demand for silver.

Given these fundamentals, how can there not be a crisis and default in the silver futures market, as there has been in the past when silver certificates were no longer redeemed for silver in 1968?

The market regulators of the past were very smart. They simply wrote a law providing for the death penalty for anyone who was caught debasing the coinage.

As I reminded the CFTC in 2003: http://www.silverstockreport.com/essays/CFTC_Response_to_Silver_Problem.html

According to the Coin Act of 1792, those who debased the currency, "or otherwise with a fraudulent intent" were to suffer the death penalty:

Penalty of Death for de-basing the coins. Section 19. And be it further enacted, That if any of the gold or silver coins which shall be struck or coined at the said mint shall be debased or made worse as to the proportion of the fine gold or fine silver therein contained, or shall be of less weight or value than the same out to be pursuant to the directions of this act, through the default or with the connivance of any of the officers or persons who shall be employed at the said mint, for the purpose of profit or gain, or otherwise with a fraudulent intent, and if any of the said officers or persons shall embezzle any of the metals which shall at any time be committed to their charge for the purpose of being coined, or any of the coins which shall be struck or coined at the said mint, every such officer or person who shall commit any or either of the said offenses, shall be deemed guilty of felony, and shall suffer death.

I don't think anyone at the U.S. Mint was ever put to death for making debased coinage in 1965, nor will they be likely suffer that for debasing the zinc penny to a steel one again.

But political winds could change to bring such a penalty back in fashion, especially if people are hurt severely by the CFTC's actions or lack of actions. I strongly suggest you do a little history research and see how the public treated officials in France after they debased the currency.

Consider that risk carefully. I'm making no threats. I believe in peaceful resolutions to all problems.

And if the pressures of doing your jobs is too overwhelming and you if you have trouble sleeping at night, perhaps you ought to resign, perhaps for "personal or health reasons" and let someone else take responsibility when the short positions blow up.

(And don't forget to buy silver with the cash if they offer you a severance package.)

May I remind you that Michael Gorham resigned 3 weeks after he penned his letter in May 14th, 2004, that the CFTC is continuing to quote today.

Perhaps he recognized his hypocrisy, that I pointed out just today, which I pointed out again above, that the only way there can be no manipulation is if the markets provide unrestricted access to all longs who could buy silver, but then again, there are many position limits in place that prevent just that.

Limits are evidence of shortages. Shortages are evidence of manipulations. Limits are thus proof of manipulation.

http://www.gold-eagle.com/editorials_08/hommel051408.html
http://news.silverseek.com/GoldIsMoney/1210798485.php

It took Michael Gorham just over a year to write that letter containing that hypocritical admission of manipulation by the existence of position limits, after I publicly rebuked the CFTC in my letters of January, 2003, before I began writing my Silver Stock Reports.

Many of my readers are wondering what they should do about the silver manipulation. All market manipulations are ultimately doomed to fail, and can only be temporary.

I offer three suggestions.

1. Buy silver, while you can, if you can find it. Buying silver is a peaceful action. Many dealers are still reporting delivery delays of over 1 month. Delivery delays are evidence of shortages. Many dealers are still short of silver, since they don't have any. Shortages are evidence of market manipulations, and price fixing of prices too low.

2. Do whatever you can to earn more money, so you can buy more silver. The manipulation of silver to below market prices is a gift. Take advantage of it while it lasts by buying the real thing. Don't be conned by the leverage offered by paper promises of silver that may not exist.

3. Tell other people about the gift of silver at below normal free market prices.

Personally, I have invested in physical silver, and mining stocks, because I do not trust the integrity of the futures markets, nor in the people who oversee them.

Walt Lukken, CFTC Acting Chairman, I expect nothing from you, and need nothing, and no response. Why? Because I have silver. Do you?

And I'm not complaining. I'm very happy with where silver has been.

Resource Investor reports on CFTC denial of silver manipulation

2008-05-16T10:26:00.003+03:00

CFTC Sees No Evidence of Manipulation in Silver Market

By Jon A. Nones
15 May 2008 at 06:04 PM GMT-04:00

SEATTLE (ResourceInvestor.com) -- Much to the chagrin of silver enthusiasts who believe the price has been artificially held back, a second study in four years by the U.S. Commodity Futures Trading Commission (CFTC) revealed no evidence of manipulation in the silver futures market. Silver bugs now question the CFTC.

“The CFTC is criminally negligent. This is an agency that makes it so the big commercial banks can do whatever they want. The public has no faith in the CFTC or FRB anymore,” commented one RI reader.

During the past 25 years, the CFTC has received numerous complaints from silver investors like the one above alleging that the price of silver futures traded on the NYMEX has been manipulated downward. In 2004, the Commission responded to investors' concerns in an open letter that concluded that the existence of a long-term manipulation was not plausible....

Please click HERE for the whole article.

Jason Hommel: Four proofs of silver manipulation

2008-05-15T12:01:00.006+03:00

Jason Hommel of Silver Stock Report may be the first to respond to the Commodities Futures Trading Commission's report denying manipulation in the silver market. As a letter to a Dow Jones Newswires reporter, Hommel has written "Four Proofs of Silver Manipulation"...

(Silver is the Achilles heel of world finance!)

Silver Stock Report:

May 14, 2008
Mr. Hommel:

I’m looking for a silver expert to talk with about a story I’m working on.
Basically, the CFTC has been getting complaints that the silver futures market has been unfairly skewed to the downside. The commission says there’s no evidence for this, and I’m hoping you can help me with some insight into what the other side of this argument might be.
If you have a second to chat about your thoughts on this, please give me a call.
Thanks,

Matt Whittaker
Commodities reporter, metals
Dow Jones Newswires

Mr. Whittaker:

Thank you. I'm probably one of the few world experts on silver, including Ted Butler of butlerresearch.com, David Morgan of silver-investor.com, and Jeffrey Christian of CPM Group. Of all those men, I have a much larger market reach than they do, as my newsletter goes out to about 80,000 email readers now, and my readers keep me informed of many things. But the other experts are certain to know more than me in some areas. Jeff Christian is biased in favor of futures contracts, and I'm biased against.

So, the CFTC says that there is no evidence that the silver futures market has moved silver prices to the downside?

If you are willfully blind, or complicit in the manipulation, you won't see anything, or you will say that.

Here is my proof that there has been manipulation, especially recently.

1. First proof:

Over nineteen major coin shops around the world ran out of silver as the price fell from $21 to $16, as I documented here: http://silverstockreport.com/ssrarchive.htm from March 19th to April 2, and there are many reports even now that it will take a month or longer to get silver! Some of the big name shops included the Canadian Mint, the U.S. Mint, the Perth Mint, Kitco, Amark who is Johnson Matthey's number one silver distributor to the public, and Johnson Matthey is the largest silver refiner in the U.S. Other major online dealers popular with investors who ran out included Tulving, NWT Mint, CNI Numismatics, APMEX, bulliondirect.com and more.

How can the price go down, when there is no silver to buy?

2. Second proof:

On May 14, 2004, the CFTC wrote a report to deny allegations of manipulation in the futures market,

see: www.cftc.gov/files/opa/press04/opasilverletter.pdf

They continue to refer to this letter today. The author of the letter, Michael Gorham, director of the CFTC, resigned from the CFTC 3 weeks after writing the letter.

Shockingly, this letter admits the existence of fraud and manipulation in the silver futures market!

How so? They admit that no manipulation to the downside could exist as long as investors have "unrestricted access" to buy silver, but they admit that there are position limits that prevent that from taking place!

On p. 5, they write:

"Because there is unrestricted access to the market, many knowledgeable and well-capitalized traders would readily buy any silver offered at artificially low prices. The buying by these traders--buying that the alleged manipulators would have no way of preventing--would quickly cause the price to rise to its appropriate level."

However, on p. 8, they contradict that by stating:

"The Commission's guidance on speculative position limits focuses primarily on the spot month because, in our experience, physical delivery futures markets, such as silver, are most susceptible to threats of manipulation during the spot month."

In other words, they admit on page 8 that limits exist that prevent large investors from buying silver as they suggest they could do on page 5!

In other words, they are so twisted, that they believe it is a manipulation to buy physical silver!

3. Third proof:

The actual position limits are 1500 contracts per trader. However, these limits do not apply to the traders on the short side, only the long side. The positions on the short side are too large, and concentrated among too few traders. The 8 or less traders have controlled up to 83% of the market, as recently exposed by Ted Butler, in recent weeks; and this represents over 200 days of world silver production, or over about 50,000 contracts. Concentration is the ultimate evidence of manipulation, and it is ignored.

4. Fourth proof:

The very nature of silver itself is that it is not a promise, it is payment in full. All kinds of paper promises are by nature, a substitute for silver and gold, and hence a manipulation, because their very existence creates a substitute demand for something other than physical silver and gold. Thus, even paper money itself, and T-Bills, Bonds, CD's, savings accounts, are all manipulations that suppress the price of silver. Monetary demand, or investment demand for silver, is as low as it could ever be, since no nation on earth uses silver as money. This reduced demand suppresses the price of silver.

The size of the world paper money market and bond markets probably exceeds $100 trillion, which is $100,000 billion.

The size of the silver market is about 600 million ounces produced each year, and about 75 million ounces purchased by investors each year. At $20/oz., this suggests that the investment demand for silver is only $1.5 billion per year.

Thus, the size of the silver market is about 1 dollar out of 100,000.

In conclusion, I believe I, and now you, have stumbled onto the Achilles’ heel of the world's financial system. I'm somewhat skeptical that dow jones would let you expose this story to the world. I'd suspect that your story will get buried.

Sincerely,

Jason Hommel

www.silverstockreport.com
www.miningpedia.com

Ted Butler: A Critical Point

2008-05-14T10:32:00.003+03:00

Silver market analyst Ted Butler today looked closely at the position of traders in gold and silver on the commodities exchange and discovered that the traders he calls "the raptors" in silver have just taken delivery of a lot of the metal, an unusual move he can construe only as bullish. Gold had its own unusual move, Butler reports, as the largest traders sold even shorter on the recent price decline, instead of covering as they usually do. Butler's analysis follows...

"A Critical Point"

Here are a few brief observations on the current market structure, as depicted in the most recent Commitment of Traders Report (COT), for positions held as of the close of business May 6. On the surface, there were no big surprises, with slight reductions being recorded in the total net commercial short positions in both COMEX silver and gold futures.

As last week’s article predicted, there was some moderation in the true net concentrated position of the largest traders in the silver market, due to actual contract liquidation and the mechanical contract liquidation as a result of deliveries on the May contract. For those keeping score, the true percentage for the 8 largest traders of the entire COMEX silver futures market (after subtracting all spread positions) dropped to 79% from 83%. While I still believe that 83% will prove to be a high-water mark, 79% is just as outrageous for a concentration in any futures market.

Incidentally, the percentage of the entire market for COMEX gold futures (ex-spreads) held by the 8 largest traders was also 79% (up from 77% the week before). In both gold and silver, the true 79% concentration of the 8 largest short traders is some 50% greater than the reported concentration because the reported figure does not remove all spread transactions. I’m starting to think that only the regulators are fooled by this obvious ruse.

Beneath the surface, however, there were some unusual developments. In silver, the most notable development was that the raptors (the 9+ commercials, other than the 8 largest traders) appeared to take delivery of the majority of the first week’s silver deliveries. I hadn’t seen that before, and it does raise the question of why take delivery? Just about any answer to that question would appear to be bullish.

But it was in gold that the most notable developments occurred and also involved the gold raptors. For the first time I can recall, the 4 largest gold traders sold short a significant number of contracts (7,000) on a general price decline during the reporting week. (While gold prices finished flat Tuesday through Tuesday, three successive multi-month price lows were recorded during that period). This raised the big 4’s net short position to a record 180,000+ contracts

Never, in my memory, had the largest gold short traders sold on the downside. This does increase their determination to artificially depress prices. One of the standard lines from the CFTC has always been that the large short traders can’t be manipulating the price because they always buy on sell-offs. I’d like to see the Commission spin this development.

Even more interesting was that the gold raptors (the 9+ commercial traders) bought what the big 4 sold short. In fact, these raptors now hold a near record net long position, against the big 4’s record short position. Talk about a dichotomy - commercial against commercial. Since there is no precedent for this match-up, there is no historical track record to offer guidance on the resolution. But it does suggest we are at a critical point.

Also suggestive that we may be at some type of inflection point is how the market structure has evolved since the highs in gold and silver, both in price and extremes in the commercial net short positions, over the past couple of months.

In silver, on a subsequent peak to trough price decline of more than $5, the total commercial net short position declined about 18,000 contracts (90 million ounces) from the COT for positions held as of February 19. There were commensurate reductions in the concentrated net short positions of the 4 and 8 largest traders, although these concentrations are still obscenely high and provide clear evidence of a manipulative crime in progress. As previously reported, there was no liquidation at all in the big silver ETF, only increases in metal holdings. Near term volatility and today’s jam-job to the downside aside, it feels more and more to me that silver may explode shortly.

In gold, the situation is somewhat different. On a peak to trough price decline of $180, there was significant liquidation both in the total commercial net short position in COMEX futures of 70,000 contracts (7 million ounces), and in the big gold ETF of another 2.6 million ounces. Yet, in spite of such significant gold liquidation, the 4 largest shorts actually increased their net short position, as indicated above, to the largest amount ever. This highlights the issue of concentration in gold like never before. While some gold people appear to be awakening to this clear proof of manipulation, most still overlook it.

Finally, I have reached a critical point in deciding what to do next to attempt to terminate this ongoing manipulation. Many of you have written to me asking what can be done or offering suggestions on what to do. While I still believe that the CFTC may comment on this issue shortly, and I have held back awaiting those comments, I have less belief that there will be any substantive change from their past directives. I do hope I am wrong. Anticipating that the regulators will not move to terminate the clear crime in progress. I will shortly disclose my new attempt and ask for your help in its implementation. While there are no guarantees of success, I don’t think you will be disappointed.

Theodore Butler

Investmentrarities.com

(No one can safely predict the future and it’s possible that Israel Friedman’s Butler’s analysis will prove incorrect. Silver can go up, but silver can go down. It is up to you to read, analyze, and arrive at your own conclusions. Prudence requires we emphasize that precious metals may or may not prove to be suitable for your consideration.)

Jason Hommel: silver shorts must be desperate!

2008-04-29T13:44:00.004+03:00

Silver's "poor fundamentals" refuted!

(Buy silver while it's on sale, now!)

Silver Stock Report

by Jason Hommel, April 29, 2008

The Guardian just wrote a hatchet job on silver, to try to kill the market. Somebody must be very desperate. I will refute this article point by point. My rebuttal will be in italics. If you cannot see the italics, then read this article at my website:
http://www.silverstockreport.com/2008/refutation.html

http://www.guardian.co.uk/feedarticle?id=7489377

Spotlight falls on silver's poor fundamentals

Reuters, Monday April 28 2008

By Pratima Desai

LONDON, April 28 (Reuters) - Investment money flooding into silver has overwhelmed poor fundamentals and helped it to outperform gold, but the tide could be turning for precious metals and the probability of large losses is rising.

Silver has outstanding fundamentals, and silver's downside is minimal, and, in fact, it probably just bottomed, as I will show.

Silver's price falls in percentage terms are likely to dwarf those seen in gold, which some fund managers say has stronger supply/demand fundamentals.

Again, the opposite is true, silver's supply/demand fundamentals are much better than for gold, as all the smart money knows, and as I will show.

"History shows that when you get a substantial correction in precious metals, silver falls more than gold ... It's a more volatile market and smaller in value terms," said Stephen Briggs, analyst at Societe Generale.

That's true, silver is more volatile, and in a bull market for silver, which we are in, silver will clearly outperform gold, as it has outperformed gold, as the silver to gold ratio is narrowing, from 80:1 to 50:1, and we have a long way to go to get to the historic 15:1 ratio, or we will likely exceed it, with silver moving even higher.

One big reason behind surging prices has been the tumbling dollar, making commodities priced in dollars cheaper for holders of other currencies. The weak dollar also prompts producers to raise prices to protect profit margins.

Silver producers do not have the luxury of raising prices. No commodity producer does. All commodities in the world are either sold at the spot price, or under long term contracts that have already been agreed upon, which, in this bull market, are usually at lower prices than today.

Last week the dollar fell to record lows against the Euro, to beyond $1.60, an event which has caused many to question whether further losses can be sustained and whether it has bottomed.

While the excess creation of paper money is one of the best factors for higher silver prices, the dollar's relation to the yen and Euro has almost nothing to do with it's relation to silver and gold prices. All paper money, the yen, Euro, and the dollar, are all falling against silver and gold, generally, since 2001 and that trend will continue.

"The dollar is not going to keep on depreciating forever," Briggs said. He expects gold prices to average around $900 an ounce next year from $1,025 this year and silver to average $15.50 compared with $19.20.

Well, actually, the dollar could keep on depreciating forever, as all paper currencies in all of human history have eventually done just that. It's silver and gold that cannot depreciate forever. Furthermore, these spokesmen from the large banks and brokers are always revising upwards their estimates of silver's future prices, and it's always behind where silver ends up going; I've seen this pattern for the last eight years now. Since when have the large banks or brokers called silver right? When did they advise you to ever get into this market to make several hundred percent since 2001? They never did. And now they want you to sell? They always want you to sell.

Financial uncertainty, which has underpinned precious metals since last August is to some extent becoming less important to investors seeking the higher returns stocks and bonds offer.

Stocks and bonds offering higher returns? Since when? Only if you go back 30 years, but not the last 8. The Dow/Gold ratio topped out in 2001 at about 56 and has narrowed down to about 14 now that gold has hit about $900.

With a weakened case for holding precious metals, prices have started to slip. Spot gold is now around $893 an ounce compared with a record high of $1,030.80 on March 17 and silver at $17 from a 27-year high of $21.24.

Weakened case for holding precious metals? What weakened case? They made no case. They didn't even get the facts right. The current dip in silver is probably the bottom, and now is probably the best time to buy!

Goldman Sachs recently said it expects to see gold prices at $835 an ounce in 12 months and silver at around $15.50.

Here's another investment bank revising their estimates upwards again, but making bearish calls. Hilarious. Pathetic. Bullish!

RECYCLING

From the end of last year to March 17, silver prices surged by more than 40 percent, while gold was up more than 20 percent. Silver's heftier gains were built on investor flows.

Absolutely. Investment demand for silver surged from 5% of annual mine supply to maybe about 8-10% of annual mine supply, we'll see soon.

Barclays iShares silver trust, the biggest silver exchange traded fund listed in the United States, now holds more than 5,770 tonnes of silver, a rise of about 10 percent since the end of last year.

Gold holdings by New York-listed StreetTracks Gold Shares, the world's biggest gold ETF, stand at 591 tonnes, down about 5 percent since end-December.

I agree with those stats, but look at what they mean. With gold trading at about 50 times the price of silver, and the gold ETF holding more than 1/10th of the tonnes of the silver ETF, it means that about 5 times as many investment dollars went into the gold ETF.

"Silver is probably going to fall more than gold in percentage terms," said Wolfgang Wrzesniok-Rossbach, head of sales at German metals trading group Heraeus.

"From an industrial and jewellery point of view, there has clearly been a decline in demand. There has been a lot of additional material coming to the market in the form of scrap."

This "German metals trading group Heraeus" is not said to be either long or short. They could very well have short positions, and just inventing things. They appear to be a silver user, at first glance here: http://en.wikipedia.org/wiki/Heraeus

More than 20,000 tonnes of silver were produced globally last year compared with around 2,500 tonnes of gold.

I agree with those stats. What is not said is that 160% of gold mine supply is purchased by investors each year or about 4000 tonnes of gold. In stark contrast, about .07% of silver mine supply is purchased by investors each year, about 1555 tonnes, or about 50 million ounces.

The surplus in the physical silver market is expected by some analysts to rise to around 2,500 tonnes from a surplus of around 900 tonnes in 2007. The physical gold market could see a surplus this year of 600 tonnes from 500 tonnes last year.

There is no such thing as a "surplus" of precious metal. This is an accounting term, used to designate demand by investors.

"Fundamentals come into play when prices are coming down," said John Reade, analyst at UBS. "Silver doesn't have gold's fundamentals."

Exactly. Silver does not have gold's fundamentals, silver's are much better. With industry consuming more silver than is mined each year, any slight increase in investor demand for silver will continue to drive silver's prices upwards, and make a mockery of all of wall street and all they do and all they have to offer. This is why they must band together, to write lying foolishness against silver as they do. This can only be an indication of them feeling pain in the silver market, not being able to coax out any supply from investors after having bombed the price in the last few weeks. The silver shortage is continuing with many coin shops still very low on silver supplies, as investor selling by the public, which was a large part of recycling supply, has changed since gold hit $1000/oz., and now must be putting the squeeze on all of wall street, who are probably carrying a collective short position in silver.

ONE SOURCE OF DEMAND

Silver is often a byproduct of other metals such as lead, zinc and copper, where miners are trying to ramp up production with some success.

Funny theory. True, about 70% of silver production is as a by-product of the base metals. I just read that Chile, who produces 40% of the world's copper, is ramping down copper production due to a power crisis. And several more trusted analysts in our industry have finally turned bullish on copper recently.

That means more silver on the market and together with scrap recycling, supplies are set to jump this year, while overall demand, including that from ETFs is expected to fall.

Why would they project demand from silver ETFs to fall? That would be quite a change. It's rather hard to predict such changes; it's usually more likely that things will stay the same, with ever increased demand from the silver ETFs.

"Silver is very dependent on one source of demand -- ETFs.

That's not true. Silver prices will go up even without new investor demand, due to the overwhelming fundamentals that there is so little investment demand at all.

You can't get excited about silver in the same way as gold. Silver doesn't really have the same cachet," Briggs said.

Now that's true. Silver has absolutely no cachet. As I wrote above: 160% of gold mine supply is purchased by investors each year or about 4000 tonnes of gold. In stark contrast, about .07% of silver mine supply is purchased by investors each year, about 1555 tonnes, or about 50 million ounces. So, how much money is spent on gold vs. silver each year?

Silver: 50 million oz. x $17/oz. = $850 million.

Gold: 4000 tonnes x 32,151oz/tonne = 128.6 million oz. x $900/oz. = $115,743 million, or $115 billion.

Thus, 136 times as much money is spent on gold, than silver, by investors each year. Silver has absolutely no cachet, true, so true. And yet, the fundamentals are so much better, precisely due to that lower investor demand. When investors get educated about silver, they buy hand over fist, and create shortages at major coin shops around the world.

"Demand from the photographic sector has been falling fast ... It's no longer an important source of demand." For gold, the picture is somewhat different. Mine production is expected to hold steady this year, but analysts expect output in South Africa, a major producer, to fall over coming years because the ore that remains is deep and expensive to access.

Wow. What a totally biased statement, telling half truths that are totally irrelevant to silver vs. gold. These guys must either know nothing, or be intentionally trying to hammer silver prices. Silver's declining photography demand is being offset by rising industrial demand and the tiny increase in the tiny investor demand.

Fabrication demand -- jewellery and coins -- is expected to continue unabated as rising incomes in emerging market countries such as China and India allow people to choose gold over silver.

More hatchet jobs against silver are expected, while they continue to say that silver prices will be expected to fall, while silver prices actually rise. The reason that the establishment will not tell you to buy silver is because they don't have any. The investment demand is so tiny, they hardly have any silver at all, and have never been able to enter the market in any size. How can wall street establishments, who receive bail outs by the Fed, to the tune of $20 billion dollars at a time, buy any silver when the silver market is swamped by less than $1 billion of investor demand annually?

Be fruitful and multiply and you can see through the lies. Buy silver. They lie.

Sincerely,

Jason Hommel

Hugo Salinas Price: Dorothy's silver slippers...

2008-04-23T23:15:00.003+03:00

Hugo Salinas Price, president of the Mexican Civic Association for Silver and the world's foremost advocate of restoring silver's role as a circulating currency, addressed GATA's recent conference in Washington by video. His address, "Dorothy's Silver Slippers," detailed his proposal for the issuance of a circulating silver ounce coin for Mexico -- a coin that, not being imprinted with any particular peso value, would never be at risk of withdrawal from circulation because its melt value had come to exceed its face value.

Salinas Price's address to the GATA conference is 23 minutes long and you can find it in three parts at YouTube

Edwin Vieira Jr: Silver and gold guarantee freedom

2008-04-21T09:59:00.001+03:00

Read the address by Edwin Vieira Jr. at the Gold Anti-Trust Action Committee Inc. conference (GATA Goes to Washington -- Anybody Seen Our Gold?) held at the Hyatt Regency Crystal City Hotel, Arlington, Virginia on Friday, April 18, 2008 here: Edwin Vieira Jr: Silver and gold guarantee freedom

Mineweb: Silver conductive inks market will triple over next 8 years

2008-04-18T00:28:00.002+03:00

A new group of applications is emerging for silver inks, which is capturing the attention of businesses, that have ignored silver for years.

Author: Dorothy Kosich
Posted: Tuesday , 15 Apr 2008

RENO, NV -

The market for silver conductive inks will almost triple over the next eight years to reach $2.4 billion by 2015, industry analysts NanoMarkets predicts.

In their report, "Silver Inks and Pastes for Printable Electronics: 2008-2015," NanoMarkets said businesses "are suddenly sitting up and taking notice of opportunities in the silver ink business, when they haven't paid made attention to this kind of material in years."

The report covers the future of both conventional inks and pastes and new nanosilver inks.

Printed electronics are attracting attention as an opportunity for conductive silver inks, according to the study. "Since silver is the best conductor known to man (especially since its oxide is also conductive), silver conductive inks immediately assume a pre-eminence in the pursuit of PE."

During the past year, the report found there may be immediate ways ahead for silver ink makers in the printable materials market. "One of these is to focus on aligning their inks with the move to flexo and gravure, which is beginning to occur as the printed electronics industry ramps up to a full production model. The other is to focus their marketing on selling inks for RFID antennas and (to a lesser extent), solar panels since these are markets that claim both that they have considerable growth potential and that they are already a real business (unlike many applications in the new PE).

The biggest opportunity in the demand for silver inks "will be found in the RFID space where revenues from silver inks for RFID antennas alone will exceed $880 million by 2015. Based on the current excitement surrounding alternative energy, NanoMarkets expect the use of silver inks for solar panel contacts to grow to almost $250 million by 2015."

However, the report also warns that the "biggest challenge to the future of silver's use in electronics is undoubtedly its high cost. This is one reason that the traditional semiconductor industry has never seriously considered using silver for interconnects. Silver ink sales in the printable electronics business are also hurt by high prices. And with the price of silver almost doubling over the past year, this has really become an issue."

Nevertheless, NanoMarkets also noted that silver prices seem to be on their way down, "so perhaps price issues will not matter as much in the next year or so."

The report forecasts that nanosilver inks will comprise almost 21% of total ink sales by 2012, "driven by their high conductivity and ability to be cured at low temperatures. The latter will be especially important given the growing role of thermally sensitive flexible substrates."

Jason Hommel on Silver Shortage

2008-03-23T21:06:00.001+02:00

Silver Shortage gets Worse, Price Drops Again!

(If you don't hold it, you don't own it)

Silver Stock Report

by Jason Hommel, March 20, 2008

Three more major silver dealers are reported to be out of silver today: The U.S. Mint, Kitco, and Monex. This, on top of the major dealers yesterday, Amark, Perth Mint, CNI Numismatics, and APMEX, all reported sold out. Further, nearly all of Canada is reported to be out of silver, from Vancouver to Toronto.

This is unprecedented, and is a perfect case of market manipulation in the paper market at COMEX and other futures exchanges to see silver prices continue to drop down to below $17/oz. today. Paper promises can be created endlessly, but real silver cannot.

This is NOT a case of the dealers getting spooked, and selling out to the refiners just in time, at peak prices. This is a case of the public buying up the stock at coin shops across the world ever since gold hit $1000/oz.. That event finally sparked a little of the public's buying of silver and gold. Thus, the typical coin shop flow of silver to the refiners just stopped in the last few weeks, and especially the last two days.

This is NOT a case of the public creating a top with 'everyone' in silver, because nobody's in silver yet. In 2006, only $1 billion was spent on investment silver, which is 0.007% of the $13.5 trillion of money in the banks. As I have long reported, the silver market is so small, there is no room for new investor demand, not even 0.1% of money could be spent on silver, because that would be $13 billion, which would push silver prices to $200/oz., and we are seeing only the tiniest beginnings of that.

$13 billion would be almost enough to buy all the silver produced by the mines in one year, which would leave nothing for industry. It would essentially double demand, but supply would remain the same.

Furthermore, this is not a top because the public continues to get to the coin shops, and is now getting on waiting lists for silver. The public is not yet in, so how can the price drop?

This is a case of price fixing and manipulation, like communism. Sausage is reported to cost 1 link per ruble, but there is no sausage. Silver price is quoted, but there is little to no silver.

Shortages are evidence of price fixing. Price fixing results in shortages. They are price fixing silver at a below market price over on the paper exchanges in New York and around the world.

How long can it go on? Until people stop trusting the paper exchanges, which could be after they default and fail to deliver silver. Or we could see a severe backwardation, as people refuse to trust and buy futures contracts, which would thus sell at a discount to real silver. Then, the spot price will really go up, maybe about double or more very quickly.

Regarding Monex and Kitco:

Monex has a shortage of 100 oz bars and silver eagles. They say that they are 5-7 days behind on orders for 100 oz bars and at least 10 days behind on silver eagle orders.

"This message has been placed on KITCO's buying board in large red letters. TT

IMPORTANT: Due to the volatility of the market, we are experiencing a significant increase in the volume of products that are being sold to Kitco. Although Kitco and HSBC Bank are working hard to stay on top of this, you may experience a delay in your package being processed. We apologize for any inconvenience this may cause, and appreciate your patience and understanding."

bulliondirect says:

High Activity Market Alert
The precious metals industry is experiencing a substantial surge in activity which may increase the possibility of logistical delays; including customer service response time and product processing (incoming and outgoing). Our goal is to keep our prices competitive while still delivering an exceptional transaction experience.

I now have 4 pages of reports that I posted to my member's forum, from people saying that dealers around the world are out. Here is a summary of their comments:

Apmex out.
CNI out.
One in the UK.
One in New Port Richy, Florida.
Ebay is selling silver over spot.
Toronto out except overpriced Eagles and Maples.
Kitco in Montreal is out of Silver Maples.
Local shop in Victoria BC is out of all bullion.
Mexico City's "Consultoria casa de cambio" is out of bullion.
There is no silver for sale in eastern Canada.
Perth Mint is out.
A world class gold and silver bullion dealer in Dubai, Lakhoo Jewelry, is almost out.
Most Utah coin shops say there is a critical shortage of silver available for purchase in Utah.
(Johnson Matthey, the largest refiner, is in Utah!)
www.argentarius.de , there where 637 Mexican Libertad still left. Now, two hours later: nothing.
We could not find silver in canada from two days now.
Conejo Coin and Stamp run out of 100 oz silver bars too.
I just cleaned out the last 25 oz. of silver at my local coin shop.
scotia bank told me that they have no silver for about 2 days now.
Camino Coin of Burlingame, CA says, There seems to be a silver shortage.
In the Detroit, Michigan area, very few coin shops have any, I got the last 2 bars at one shop.
Bulliondirect having trouble mostly with Silver Eagles and Canadian Silver Maple Leafs.
The US Mint has said they are out of silver eagles - at least for a few weeks.
Portland, OR, Alder Gold Exchange., just a few bars, bought them out.

The dealers in Vancouver are offering 100 oz bars at $1875 preorder, but we wont get them for months.

==============

Paul Mladjenovic, author of Precious Metals for Dummies, said to me today, the following about the current price manipulation and shortage of real silver:

Outside of Oil, there is no other commodity with more diversified uses. Silver will probably hit $50/oz. within 3 years, and exceed its all time high on an inflation adjusted basis ($150-$350/oz.) and hit tripple digits by the early part of the next decade.
Everything has a natural and artifical price, and an artificial low price stimulates demand, and creates shortages, but the false appearance of plenty, which will blindside those in the paper markets.
Artifical intervention only works in the short term, whereas natural supply and demand forces always triumph in the long term.

==============

I want you to be able to buy on this dip, and not be discouraged by sold out coin shops. This is why I asked people to report to me who had silver in quantity, ready to sell.

"If you don't hold it, you don't own it" (And can't sell it!)

Yesterday, Robert Mish was slammed by my mention of his shop in my report. Next time, he says he can only handle orders for $10,000 or more at one time.

Here are a few more sources:

bulliondirect.com has silver available, up to 400 x 100 oz. bars.
Bulliondirect is like the ebay for large silver orders.
They do have 100 x 100 oz. bars available, in several categories.

But they now post a warning:
High Activity Market Alert
The precious metals industry is experiencing a substantial surge in activity which may increase the possibility of logistical delays; including customer service response time and product processing (incoming and outgoing). Our goal is to keep our prices competitive while still delivering an exceptional transaction experience.

===============

FideliTrade Incorporated in Wilmington, Delaware is reported to have silver inventory available for immediate delivery.
http://www.fidelitrade.com/

===============

http://www.delawaredepository.com/
is an NYMEX/COMEX and CBOT licensed and CFTC approved depository for silver.

===============

Mike of Gulfcoast Coin and Jewelry (239) 939-5636, In Florida
1 800 465 3909
www.gulfcoastcoin.com
Keeps a large inventory of bullion and rare coins. 90% bags, .999 silver, is a market maker.
Sells gold at 1% over costs, silver at 3%.
Self-reported that he has 50 bags of 90% now. -- but others report he "drop ships" from other sources.

===============

Jason, I was forwarded your blog regarding silver. I'm a major precious metal dealer and have sold 25,000 yesterday. I still have plenty left. We have been selling plenty of pure silver dealer to dealer at spot + .50 cents.
Thanks,
Don Herres
Dollartowne
Bellbrook, OH
937-848-6231

I was unable to confirm.

===============

It was reported to me that:
In Austria, Europe, there are plenty of sources where you can get massive amounts of silver:

www.oegussa.at - this is the largest smelter in Austria, with an office for individual, private party walk-in customers in Vienna and they have lots of silver bullion available all the time. Silver bullion is not too interesting for Austrian citizens, because they have to pay V.A.T. on silver bullion purchases - VAT is the European equivalent of sales tax.

But if any American or other non-EU-citizen purchases silver bullion and keeps the receipt, they get the VAT back at the airport when leaving the country.

You can also purchase lots of silver at Austrian banks and coin shops - no shortage here! And if you go for coins, denominated in any current currency and not bullion, there is no VAT to pay for anyone. The Austrian Mint is currently offering the Silver Philharmonic coin, weight is not metric, but in troy ounces, the coin is denominated in Euros, so no VAT to pay - and you can purchase tons of it! They distribute them through all Austrian banks.

Yes, metric tons of these coins are available now. .

Here is the specific page at their website: www.austrian-mint.at/silberphil?l=en

Sources sent by the owner of:
www.alchemianova.com

===============

Ross Hansen of NorthWest Territorial Mint emailed me:

Dear Jason:

We are not out of silver!

Northwest Territorial Mint produces approximately 20,000 ounces of silver per day, and ships 200 orders daily. A quick audit of our vault today showed more than 300,000 ounces of silver in the production pipeline, in finished and raw form. (You are welcome to come up here to conduct your own audit any time.) Contrary to reports, there remains an ample supply of silver coming from mines and refineries. There is no shortage of silver in the world.

What you fail to understand is that, like the U.S. Mint and the Royal Canadian Mint, Northwest Territorial Mint manufactures its own silver products. During times of extreme price fluctuation in the precious metals markets such as we are experiencing now, demand increases substantially. Since November, our sales have increased more than 300%. Because all mints have a finite manufacturing capability, this increase strains every aspect of our business infrastructure, from sales to manufacturing to shipping.

Unlike our smaller competitors who just resell used silver products, Northwest Territorial Mint sells factory-fresh products. While, in your eyes, our products should be shipped quicker (and we agree, and are expanding to meet this increasing demand), no one has ever complained about the quality of our products or any failure to deliver them.

With over 140 employees, Northwest Territorial Mint completed more than 69,000 individual transactions last year. The Governor of Washington named us Medium Private Employer of the Year. With an office in the Pentagon, we are the mint of choice for the U.S. military and numerous other governmental and corporate entities.

Because of the backorders created by current high demand, U.S. Mint and the Royal Canadian Mint have temporarily suspended shipments of their silver coins. Northwest Territorial Mint, while stretching its delivery times, is still shipping every day. Your inaccurate representation has generated numerous calls, taking us away from the important business of serving the people who buy silver from us.

And, yes, we expect that free advertising you are offering.

Very truly yours,

Ross B. Hansen

Northwest Territorial Mint
P.O. Box 2148
Auburn, WA 98071-2148
Direct: (253) 833-7780 | Toll-Free: (800) 344-6468
Fax: (253) 735-2210 | www.nwtmint.com

===============

Ross Hansen, I'm sick of hearing your excuses, and so are many of your firm's clients. I do very well understand that you are running a mint, one of the largest private mints around, you flew me out to see it, remember? I've never reported, and neither has anyone else, that silver is not being mined in sufficient quantity. And I don't care how long you ship, that's not the point.

The point is that you ought to tell people the truth about how long it takes you to ship! If it is going to take you 8-9 weeks, or 12-16 weeks to deliver, then report that at your web site so you are not so bothered by people who freak out about how long it takes. You will be able to keep your customers, have better customer relations, and it will greatly help your business to tell the truth. If you are telling people it will be 30-40 days, and it takes 2-5 months, you have a serious problem. And no surprise, people don't like it.

Furthermore, I will reiterate that the Washington State Attorney General logged 82 complaints against your company.
http://www.thenewstribune.com/news/local/story/276620.html

Furthermore, 26 people complained online here:
http://goldismoney.info/forums/forumdisplay.php?f=150

Furthermore, I received 18 complaints about Northwest Territorial Mint in the last 24 hours, which I posted to my member's forum, summarized below:

1. 1,000 oz of Canadian Maples, it took almost 12 weeks to get here!
I used APMEX.com to order another 1,000 ounces of Canadian Maples about 9 weeks after I ordered my NWT Mint silver, and the APMEX.com silver came before my NWT Mint suff!

2. I wire transfered the money to them on the SAME day I placed my orders. I ordered a 100.00 face bag of dimes on 2-05-08, from NWTM, and received them today. 3-19-08. That's about 6 weeks for delivery.

3. Last year I had LONG delays with my orders. One was delayed at least 2 months. It was ridiculous.

4. They were 3 months getting my order of 50 oz to me. This was about 1 year ago as well.

5. I ordered 500 Pan American silver rounds from NW Territorial Mint on Nov. 30th 2007. I sent them a check for $7,240 the next day. My coins arrived last Friday March 14th!!!!!!!!!!!!!!!!! (3.5 months, or 14 weeks.

6. I have given up hope with NWT Mint. I bought bars and coins from them 5 times, and sometimes I had to wait for many months to get my silver. Once, they simply asked if they could buy it back from me, and send me a check for the difference. I got so upset that I sent them emails for months, and apparently, they've done nothing to sort out their shortage issues. (I have a lot of emails between NWTM and myself, so I can support my claims in writing).

7. Ordered 100 oz. from them early Jan. due to deliver this Friday. Way too long.

8. Dear Mr. Hommel, I can also verify the poor customer service and LATE delivery over 6 months ago. It took them just about 2 months to deliver my silver from the time they received my check.

9. hello jason;
about 3 years ago bot some gold and palladium coins from n w mint....sent them 2 checks--one, 7k check was either lost or stolen.,,,after a number of phone calls to the firm, i got no answers, so i cancelled the check....i did receive my 2nd check coins, but weeks later, and only after repeated phone calls....did some internet investigation, and found one of the owners had a criminal record, so i'm not surprised you're having difficulty in dealing with n w mint

10. They delayed me way past the time alloted. I find them to be full of shit. When I started to complain 5 weeks after I was to be shipped their staff was rude to me. I eventually got the owner invoved. He even screwed up the order. I find them to be incompetent and would not do business with them again. I find most coin dealers that are large shady.

11. I had problems receiving an order about a year ago from NW the order did finally arrive BUT I will never do business with NW again.

12. My friend and I have been waiting on NWT Mint since Jan17th and it suppposedly just shipped out this week. So that's 48 work days or 64 days total and counting so far. So, guess it does average close to plus or minus 60 days. But We couldn't get anyone to answer our emails to them and no one would explain WHY it was taking so long.

13. My last (and I do mean last) order from Northwest Mint took 2 months to receive. I had to make numerous calls to finally get it. Never again.

14. I also had a bad experience, it took several weeks to get my silver (only 200 ozs). I never thought that I would get it at all after waiting a very long time. I was given all kind of excuses, I had paid right away with a certified money order, they still held the transaction to clear my money order. A certified money order should not have to go through a waiting period. I promised myself that I would never deal with them again.

15. Jason, I've been waiting over 60days now for my order. I was told on Monday that they had sent it out. I live in in Ontario Canada and getting more and more worried.

16. I ordered 1200 Oz. Ag from NWT mint on 11/7/07. Paid by wire so it cleared the next day.
Received said silver on 2/20/08. .......... 104 days after the payment cleared.

17. I purchased about 800 ounces from NWT mint about a year ago. It took 4-5 months to get my package. Talked with the owner, who claimed bullion was "only 20% of their business" and most of their production resources were tied up in time-sensitive government contracts (medals) for operation Iraqi Freedom. Well, they should either take down that 30 day delivery claim on their website and replace it with something accurate or stop selling bullion.

18. Jason, I ordered two 100-oz bars last August when it dipped below $12 & didn't get them until late November.

Ross, if you want the names of these people, email me, and I'll provide you with a username and access to my member's forum, so you can check your records, and deliver silver promptly. I hope you can buy all the silver you need on this dip, and I hope the sources I quoted above can help you locate the silver that you need to fill your orders. I'm just trying to help.

Sincerely,

Jason Hommel
www.silverstockreport.com
www.miningpedia.com

Howard Ruff: The Silver Lining

2008-03-08T22:49:00.004+02:00

The Silver Lining: Part II

This continues Chapter 10 of my new book How to Prosper During the Coming Bad Year in the 21st Century. It completes the my last posting on the Kitco website.

Modern Usage

Silver is a ubiquitous and essential industrial metal with literally thousands of uses, many of which are irreplaceable. Jim Cook,President of Investment Rarities (800-328-1860), has recently listed just a few of silver’s thousands of modern uses, many of which are infinitesimal in amounts per unit, but multiplied by many millions of units, it’s thousands of tons of silver. (I can’t vouch for each one of these statements, but at least most of them are true).

Both rechargeable and disposable batteries are manufactured with silver alloys. Billions of silver oxide-zinc batteries are supplied to the world’s market yearly, including batteries for watches,cameras and small electronic devices,tools and TV cameras.

Steel bearings are often electroplated with high-purity silver. Silver solder facilitates the joining of materials. Silver-brazing alloys are used in air conditioning, refrigeration, power distribution, automobiles and airplanes.

Silver is of first importance to plumbers, appliance manufacturers, and electronics.

Chemical reactions use silver as a catalyst; approximately 700 tons of silver are in continuous use in the production of plastics.

Silver is essential for producing a class of plastics which includes adhesives, laminated resins for construction, plywood, particle board finishes, paper and electronic equipment, textiles, surface coating, dinner ware, buttons, casings for appliances, handles and knobs, packaging materials, automotive parts, and electrical insulation materials.

Silver is necessary for producing soft plastics used in polyester textiles. It is used for molded items, for insulating-handles for stoves, and for computers, electrical control knobs and Mylar tape(which makes up 100% of audio, VCR and other types of recording tapes). It is also used to produce antifreeze.

Silver is used in commemorative and proof coins around the world. There is wide silver use in silverware, jewelry and the decorative arts.

Silver is the best electrical conductor of all metals and is used in contacts and fuses and ordinary household wall switches. The use of silver for motor controls is universal in the home, and is even a better conductor of electricity than copper. All of the electrical appliances, timers, thermostats, and some pumps, use silver contacts. A typical washing machine requires 16 silver contacts. A fully-equipped automobile may have more than 40 silver-tipped switches.

Silver relays are used in washing machines, dryers, automobile accessories, vacuum cleaners, electric drills, elevators, escalators, machine tools, locomotives, marine diesel engines and oil-drilling motors. It is also used for circuit breakers. It is widely used in electronics, membrane switches, electrically heated automobile windows and conductive adhesives.

Every time you turn on a microwave oven, a dishwasher, clothes washer or TV set, you have activated a switch with silver contacts. The majority of computers use silver-membrane switches. They are used for cable television, telephones, microwave ovens, learning toys and keyboards of typewriters and computers and in prepaid-toll gizmos. These silver-containing , radio-frequency-identification devices will soon make an appearance, imbedded in credit cards and passports.

Silver is used in circuit boards and is essential to electronics to control the operation of aircraft, car engines, electrical appliances,security systems, telecommunication networks, mobile telephones and TV receivers.

Silver is used in windshields in General Motors all-purpose vehicles because it reflects some 70% of the solar energy. Every automobile produced in America has a silver ceramic line in the rear window to clear the frost and ice.

Silver plating is used in Christmas tree ornaments, cutlery and hollow ware. Because it is virtually 100%-reflective after polishing, it is used in mirrors and coating for glass, cellophane and metals.

A transparent coating of silver is used on double-paned thermal windows.

Silver has a variety of uses in pharmaceuticals. Silver sulfadiazine is the most powerful compound for burn treatment worldwide. Catheters impregnated with silver diazine eliminate bacteria. It’s increasingly being tapped for its bactericidal properties from severe burns to Legionnaire’s Disease to dressings for wounds.

One out of every seven pairs of prescription sunglasses incorporates silver. Silver-based photography has superior definition and low cost; it is still the biggest user of silver.

Digital photography is considered by many to be a threat to old-fashioned film photography, which at one time was the biggest user of silver, as digital cameras are becoming the camera of choice for millions of people. Ergo, physical silver use will decline in the film business, and that is considered by many to be a bearish factor. Kodak was at one time the world’s largest user of silver in manufacturing film. Because they used silver in every roll of film in the ‘70s, silver photographic use was touted as one reason for the silver bull market of the ‘70s.

There is a counter argument, and a counter, counter argument.

It is not generally known, but much of the silver used in film is recycled to be used again by the film companies. That is also true of silver in medical x-rays.

But more than offsetting this is the fact that silver is also used in glossy photographic print paper at Wal-Mart, Kmart and Costco and other supermarkets, for people to print out their digital photos, and that paper is never recycled. One of my daughters informed me that now that she has a digital camera, she takes 12-times as many pictures of the boys as she did with her old-fashioned film camera, and she usually prints them out.

But also, the film companies will still sell one-billion rolls of film this year.

Silver is widely employed as a bactericide and algaecide. A doctor friend of mine told me that when there is an open wound or big burns, a silver compound is used on the dressing. Silver ions have been used to purify drinking water and swimming pools for generations.

Silver ions in house frames help resist mold and mildew. Silver compounds are providing doctors with powerful clinical treatments against antibiotic-resistant bacteria.

I could go on and on, and I guess I already did, but that’s one reason why our silver inventory is under assault, and if Butler is even partly right, that could be one reason why silver is turning into the supply/demand investment of the century.

Will the growing assault on silver inventories trigger a switch to some as-yet-unknown substitutes?In some cases, probably yes. Copper can do some of the things silver can do, but copper is rocketing up in price in a solid bull market, and is becoming a more and more expensive substitute. Usually the thousands of silver uses are so small in each individual unit manufactured, that they are only a small part of the cost of manufacturing the units that incorporate it, so there is not enough incentive to change at these prices, but collectively, they add up to thousands of tons of silver.

Silver as Money

Silver has an important monetary role, according to economic history. One disagreement I have with Butler is that he has discounted the monetary role of silver.

Silver has been consistently used as money throughout history, even more than gold, but as I have said several times before, whenever paper money fails (every 50 to 75 years), the world is subsequently littered with useless paper currencies. That’s when silver is resurrected and comes back into its own.

For example, when the Chinese government fell at the end of World War II, paper currency became distrusted, but almost like magic, U.S. silver and gold coins became the currency of choice all across that huge, primitive country. Everyone knew what an American silver dime was worth. This held true until the Communists imposed a new “fiat currency” (one that is money just because the government says it is) and enforced it with the heavy hand of government.

Could that happen here in America? No one knows for sure, but that remote possibility is becoming less remote every day. That’s why you need some silver for insurance purposes, because the dollar’s fate seems to be sealed and delivered by our present rate of internal monetary inflation. Whether it will take one year, ten years or 30 years, I don’t know, but eventually the world will be littered with worthless paper dollars, and governments will be forced to go back to a gold standard to back a new currency. At some future time, silver coins will be minted again in massive quantities, and silver and gold will both reign triumphant over the world’s monetary system until we have a monetary system we can trust. I don’t know exactly how it will work, and probably nobody else does either, but for that reason, I repeat, you should buy at least ½ bag of junk silver (pre-1965 American dimes, quarters and halves) for your family, just for the silver content. This is not for investment (even though it will go up), but as an insurance policy against a possible inflationary calamity.

Silver always rises during gold bull markets, usually twice as far and fast as gold, but the supply/demand situation (ETFs and jewelry and industrial usage) dwarfs all other reasons why silver will soar in price, perhaps much more than twice as much as gold.

One other supply/demand factor that really matters is that COMEX, (The New York Commodity Exchange), which is by far the biggest commodity exchange in the world, has a monster silver futures exposure. Many of the “longs” have bought a silver contract from the shorts contracting for the silver, in the hopes that silver will be rising, and so will their contract. It can be settled either with a cash payment or by delivery of the physical metal. But a lot of the longs are silver users and need the metal and have only bought the contracts for delivery. They won’t settle for cash, but only for delivery, because they need the metal.

The “shorts” have sold silver they don’t have, assuming they will be able to buy it back at a lower cost in the future and thereby profit handsomely. They are pure speculators, betting that the price will go down so they can buy it cheap. Steadily rising prices are their worst nightmare.

The longs are even more dangerous than the shorts. Remember, for every long contract, there is a corresponding short. As silver has soared, shorting paper losses have mounted to billions of dollars.

I guess the short speculators never learn. That’s exactly what they did back in the 70’s, and when the Hunt brothers tried to corner the silver market and drove the price to $50, most of the governors of the COMEX were short, in effect betting against the Hunts. Their losses mounted day by day, and as they became more and more insolvent, their need to cover their shorts, either with cash or by buying silver to deliver, was way beyond their financial ability to handle. Technically the COMEX should have been shut down, as many of the shorts were governors of the COMEX, but this was unthinkable, as we couldn’t allow the world’s most important commodity exchange to close down.

Eventually they won the battle with the Hunts by, among other things, changing the rules to “liquidation only.” That’s when I decided to tell my subscribers to sell their gold and silver at $35 an ounce, before the $50 top, as when the elephants are fighting, we mice should scurry into the underbrush. Yes, it went to $50, but $2 to $35 is good enough.

This is similar to where COMEX finds itself today. But this time they are short so much silver, that if they had to buy enough silver to cover all their shorts, especially if the longs are silver users who need the physical silver for their industries (many are) and won’t accept just a cash settlement, that this could soak up as much as 100% of all silver production. Also, the short’s cash position is so dire, as their paper losses have mounted as silver has risen, that they won’t have enough money for a cash settlement. Sooner or later they will have to buy silver, and the stability price of silver could soon be above $100 an ounce (my best guess) in order to induce holders (you) to give up yours.

Silver is the investment of the century. It will move with gold, but further, as has already been demonstrated. Gold is up about 200%, and silver is up more than 300% over the last couple of years. We will eventually find that silver at today’s $15 to $20 is the bargain of the century. Silver and silver-mining stocks will be a license to print money.