The Silver Market Manipulation FAQs , courtesy of The Silver Circle
Showing posts with label silver. Show all posts
Showing posts with label silver. Show all posts
August 19, 2012
September 26, 2011
SELL ALL YOUR GOLD INVESTMENTS NOW AND BUY PHYSICAL SILVER!
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.
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.
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."
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.
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:
October 29, 2010
Sprott's Embry on King World News: the fun is just beginning!
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:
Or try this abbreviated link:
Silver manipulation lawsuit posted at GATA's Internet site
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:
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
October 3, 2010
Second Highest Close for Silver Ever
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.
July 22, 2010
April 24, 2010
Ted Butler: Worst is over for gold and silver
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
April 11, 2010
New York Post: Trader blows whistle on gold, silver price manipulation
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.
September 8, 2008
Jason Hommel: The World Needs a Free Market in Silver
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,
May 18, 2008
Melt the Witch …swap all your Gold for Silver!
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
LET’S FINISH THIS THING!
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
May 18, 2007
Mineweb: Esoteric uses keep silver demand flying high
Mineweb: Esoteric uses keep silver demand flying high
Although some traditional uses for silver are declining, a number of newer ones are taking their place and hold out great promise for contributing to good demand in the future.
Author: Lawrence Williams
Posted: Friday , 18 May 2007
LONDON - In an address to the World Mining Investment Congress in London, Silver Standard President and CEO, Robert Quartermain, who also is the Vice President of the Silver Institute, devoted most of his address to factors affecting silver supply and demand rather than promoting his own company - which indeed has much going for it - to the audience of bankers, brokers, fund managers, mining company executives and investors.
Like virtually all the base and precious metals, low prices for many years meant that exploration and new mine openings have been rare and silver supply has been falling short of demand - even though its monetary element has diminished, as has the main industrial usage in the photographic sector. Pure silver mining operations are relatively rare in any case and the metal often is produced as a byproduct to gold, copper or lead and zinc - all of which suffered from the exploration malaise from low metal prices - or with one or more of these metals as a co-product, or at least as a significant revenue contributor. Only now are significant new silver producing operations beginning to come on stream, but these are hardly replacing the declining output from many older and declining producers.
Although the photography market may be diminishing, this was also notable for a substantial recycling element, which brought a high proportion of the photographic supply back to the market as ‘scrap'. As the photographic usage dies, then so will the recycling.
But it is silver's bivalency which is perhaps the key, which makes the metal highly reactive to the extent that, among other things, it is a natural biocide which means growing medical usage - and it is being used in clothing too for people in arduous occupations - like the military. It has uses in combating many viruses like legionella - and in the UK perhaps in the fight against hospital borne diseases like MRSA.
In electronics silver is the most efficient conductor of electricity so is finding increasing usage in this sector. Meanwhile legislation in some countries to remove lead from solders is opening up another big cumulative usage area in terms fo silver-tin solders.
So, Quartermain makes an excellent case for continuing strong demand for silver. He feels that any balanced portfolio should contain an element of silver - either as physical metal, ETF or silver mining stocks, and as far as the latter is concerned he would not argue against Silver Standard being a key part of this.
Although the company has existed for many years without mining metal, the big Pirquitas deposit in Argentina is ready to move to the production phase, while there are then a succession of projects in Peru, Mexico Argentina again and Canada waiting for production decisions.
All are primarily silver deposits except Snowfield in British Columbia, Canada, which is a gold deposit which looks to have potential as a big open pit gold operation with decent grades. So far exploration is in the relatively early stages here, but it looks to have the potential to be a major gold resource should big tonnages be proved up which could be of interest to one of the gold majors - which in turn could make it a finance source to be used to continue development of Silver Standard's silver prime targets.
January 28, 2007
Jason Hommel reports on silver
Silver Stock Report editor Jason Hommel reports on silver, particular silver mining companies, the Vancouver conference, and GATA's growing acceptance...
Review on Vancouver & Silver
Silver Stock Report,
by Jason Hommel, January 26, 2007
I just returned from the Vancouver Gold show, attended by about 8000 investors, and 380 resource companies, and 50 speakers. This was the biggest show by Cambridge House by far. I gave 2 speeches, was on a panel discussion, and did two interviews. Having taken a year off from attending most shows, I decided to revise my old speech, and focus on the most important, non-religious reasons to buy silver. In a nutshell, here's what I presented, and learned, from the show.
I write this free newsletter that goes out to 36,500 opt-in subscribers (increasing at a rate of about 100/day, or 100% per year), and I have about 850 subscribers who pay $40/month to look at my portfolio. I spend the subscription money on advertising, to get the word out. I carefully study the feedback from my readers to help me find the best investments in the industry. In 2003, my portfolio was up about 300% in silver stocks. In 2004, I was up another 100%. In 2005, I was up about 40%. In 2006, my portfolio grew another 100%. That track record is about the best in the world for that time period, on par with the best funds in the business of gold, silver, and resource stocks.
My overall view of silver has grown far more bullish since 1999, when I started investing in silver, and here is how my view has changed.
To really understand silver, you have to first understand gold. You don't understand gold unless you know what GATA knows. GATA has done the research to show that about 15,000 tonnes of about 30,000 tonnes of central bank gold has been lent into the gold market, and this has depressed prices. I'm a big GATA supporter, and for more information, you should see the following video, and order the DVD.
http://www.youtube.com/watch?v=ha-j7fH7sAo
Order here:
http://www.goldrush21.com/
I was attracted to silver, because I thought I could make more money in silver than in gold. I have.
At first, I thought silver was merely "cheap" at $5/oz., thinking that the downside was limited, and that we had a good shot at silver repeating the performance in 1980 of $50/oz. But now, I think $50/oz. will just be the start, and here's why.
In 1980, M3, the measure of money in the banks, was about $1.8 trillion, and today, it's closer to $11.5 trillion. So, a comparable price for silver would be 11.5 divided by 1.8 times $50/oz, which is $319/oz.
But that is just the beginning. The reason why is that the bear market for silver did not last 25 years, it was worse than that. In reality, we are still in the bottom of a 600-year bear market for the value of silver.
You can see the 600-year, inflation-adjusted trend in this graph:
http://goldinfo.net/silver600.html
The primary reason for this trend is the declining use of silver as money around the world. But silver is money, it has the properties of money, and the words for silver and money are the same in many languages. As paper money fails, the return of monetary demand for gold, and especially silver, will be astronomical, and will drive the value up tremendously. It's all about monetary demand.
Next, I used to think that the price of silver would rise a lot due to the excessive paper futures market contract short selling on the NYMEX, that would eventually result in runaway short covering. I do believe that selling paper contracts is manipulative in nature. However, today, I believe that paper money that is supposed to be "as good as gold", or "better than gold" is the far greater manipulation, perhaps 100 or even 1000 times greater. Paper money was originally a receipt for gold or silver on deposit at a bank that you could redeem at any time. Futures contracts for gold and silver, that expire, are, by definition, even less honorable. And if the first gold certificates were not honored, how can today's contracts remain honorable? The point is that it is all about monetary demand, and not futures contracts.
Finally, I used to think that silver would be a good investment because of the current supply and demand dynamics, whereby more silver than is mined each year is consumed by industry, jewelry, and photography, which leaves no room for investment demand. But the nuances of current supply and demand say nothing about the upcoming and future monetary demand. The vast portion of the price and value change of silver will mostly be moved by monetary demand.
So, in sum:
First, silver is not going to "spike again" to $50/oz. Instead, silver will roar past $300/oz. due to monetary demand.
Second, silver may well be manipulated due to the NYMEX futures contracts. However, silver is manipulated far more because of the existence of paper money, and as paper money continues to fail, and monetary demand for silver returns, silver's value will skyrocket.
Third, silver will skyrocket not due to current supply and demand fundamentals, but due to the overwhelming monetary demand in the future.
The trouble is that people have a difficulty in understanding how monetary demand for silver can or will return, and have a difficult time envisioning what that would look like, and what it would mean both in terms of prices, and values for silver.
To help explain, let me explain compound interest or exponential growth rates and decay rates; especially how they are often a function of size.
Small things can grow fast, but big things cannot grow as fast.
Acorns can grow to big oak trees, but oak trees cannot grow to the moon.
Babies grow fast, but adults stop growing, and will one day die.
Silver is the small market. If there are about 4 billion ounces of silver in the world, meaning that only 10% of the 40 billion ounces estimated to have been mined still remain, then the size of the market is about $50 billion.
The Fed often adds $50 billion to the money supply in one week!
So, in contrast, the world paper money market is about $50 trillion in size, about 1000 times bigger. The paper money market is like the mature oak tree that cannot significantly grow any further, but is dying, as branches rot, and fall off.
When paper money dies, the price of an ounce of silver, or gold, will be beyond infinity dollars per ounce. This does not mean that gold or silver will become infinitely valuable; but rather, the dollars become worthless.
It is impossible for any market to grow exponentially forever, but that is not what happens to the silver price as paper money dies. A very high dollar value for silver is really a reflection of the decay rate of paper money. After paper money fails, silver's value may be up to 100 times or even 1000 times greater than today, but probably not more than that, regardless of whether the last quoted price for silver was a million dollars an ounce or a billion, or a trillion.
And when paper money fails, society will need a substitute, such as gold and silver. Monetary demand will return, and force silver's value much higher.
As silver's dollar price continues to gain 30% to 60% to 100% per year, more and more investors will be forced to take a look at silver to see what they have been missing. They will greedily seek after such rates of return. For capital to survive, it must. And as more and more people invest in gold and especially silver, it will continue to push up the price more and more, until paper money fails completely. People cannot be satisfied with 5% returns in bonds if silver is paying 30% to 100% per year.
How can paper money compete? Will they raise bond rates to 50%? And what happens when 50% more money is being created each year to pay to bond holders, wouldn't that cause enormous inflation that would simply drive metal prices that much higher? High interest rates would also cause a high bankruptcy rate, and in such a time of deflation due to bank bankruptcies, gold and silver, which cannot default, would be highly sought after safe havens.
As silver goes up, people will discover most everything that I discovered about silver. That it hit $50/oz., and that the inflation adjusted price of $50/oz. in 1980 is really over $300/oz.
Is silver money? Can it be money again?
Money is at least three things: a medium of exchange, a unit of account, and a store of value.
Silver is my store of value; I'm storing my value in silver, and silver's been great to me. Not that silver cares about me, or even knows my name; silver is an inanimate object.
But silver has provided me with a good rate of return, and the returns are outside of the banking system, and are largely not really taxable, and not easily found or taken by government. By the time I sell my silver, who knows what government will be in power, and who knows what the capital gains tax rates may be?
So, which should one buy, stocks or silver? I currently have about 11% of my portfolio in silver, and about 85% in stocks; mostly silver stocks. I plan to increase my holdings of silver to about 20% very soon, within the next year, and up to 50% as time goes on. I don't like the thought of having to move and store several tonnes of silver, but I'm lazy, and I like to earn money the easy way.
Recently, silverstrategies.com posted the results and performance of many silver stocks. About half of the stocks under-performed silver, and about half over-performed. I've done better than most, and slightly outperformed silver in the last year.
I disagreed with 3 other panelists on the topic of whether we should buy the stocks of the major silver companies. Over a year ago, I predicted that the major silver companies would not outperform silver prices. I was mostly correct. I don't own any of the 6 major silver companies with market caps higher than $500 million: Silver Standard, Pan American, Apex Silver, Silver Wheaton, Hecla, Couer d'Alene. I think they are all overvalued.
I take profits in the form of silver bullion. Silver is my money; it's my unit of account. I feel I have gained only if the dollar value of my portfolio can buy me more ounces of silver, and I only truly gain if I actually go out and buy those extra ounces of silver.
Silver today is as cheap as it was at $5/oz. about 12 years ago. In 1995, M3 stood at about $4 trillion. Today, silver is at $13/oz., and M3 is at $11.5 trillion. So the silver price over the past 12 years, has, on average, kept up with inflation.
But today, we have price action. Today, silver's gains are outpacing the rate of money creation inflation. Silver gained about 40% in 2006, and M3 went up by about 10%. Silver's gains will likely accelerate even faster, with continued volatility, of course. I expect silver prices to hit $20-25/oz. in 2007. Afterwards, I'd expect maybe a drop to as low as $15, before soaring yet again to new highs past $30 to $50 perhaps in 2008.
I really don't think it matters much what kind of silver you buy. Silver is not produced by anyone in the form of the money of the future, which may be 2 gram coins or 1/10th ounce coins, who knows. Today, it may cost 10% to re-melt and refine silver into new forms. But when silver was money, 100 years ago, smelting and minting costs were 1/2 of 1%. This is not because energy costs more today, it's because the price of silver is at least about 1/20th of what it could be.
Just get silver cheap, get the most silver for your money, at the least price, which is typically 90% junk silver, or silver rounds, or 100 oz. bars, and take physical delivery of your silver, and store it in your own safe, the combination to which only you know. Only then, do you truly control, and own, your silver.
If you can afford to invest in silver, then you can afford to spend 1-10% on protection, whether a safe, or home security system.
To get started buying silver:
http://find-your-local-coin-shop.com/
So, what did I learn at the Vancouver show? Many things.
As my email list has tripled in the past year, I'm more well known than I once was.
I spoke to many friends and company managers, too many to list them all here.
I ran after John McPherson of Canadian Zinc (CZN.TO). He's frustrated with the slow pace of permitting; and looking for acquisitions, since they have $35 million in cash, about half the market cap of the company.
I sought John Versfelt of Cabo, and International Millennium, a company that now has Cabo's Cobalt silver properties, and many other silver properties that may get a listing in February. He was wondering if I was going to sell my shares in International Millennium if it becomes free trading (I own about 3% of the company), and I told him that I originally bought Cabo because I was interested in the silver properties, and that it was up to him to convince me to hold on. (My way of encouraging him to provide value.)
I ran into Don P. the man who spent nearly 4 months convincing me to look into Canadian Zinc back in 2003. We sat to chat, but did not have nearly enough time.
I ran into Gene Larabie of Coronado, (CRD.V) market cap about $15 million. I learned that they have a mining permit, and they are dealing with water in their decline ramp to the high grade zone where they hit 60% copper, the highest grade copper in the world, and may have resources worth about $200 million.
I had dinner with Vance Loeber who has been promoting U.S. Silver, (USA.V) (CHRYSALIS CAPITAL III), market cap about $200 million, which recently acquired the Galena mine in Couer d'Alene, the former flagship mine of Couer d'Alene mining company (CDE).
I had dinner with the men of Arian Silver, (AGQ.V) market cap around $40 million, who are hoping to find up to 100 million ounces of high grade silver in Mexico.
I asked nearly every newsletter writer what they thought of Noront, (NOT.V) a $100 million market cap company, that hit 50-30 ounces per tonne of gold over 15 feet on December 4th, which is the highest grade intercept that I've ever heard of. Most had not heard of it. The two that did, did not yet buy shares.
I also asked my peers what they thought of Pacifica (PAX.V) a $100 million company, and their 100 billion dollars of zinc at 5% grade, which is the largest mining project on earth. Most had not heard of Pacifica either.
I was walking past Cathy Fong of Silvercorp, ($800 million market cap) who invited me to lunch on Tuesday. I learned of New Pacific ($50 million market cap) (NUX.V), another company in development by the same management team, but is not focused on silver.
I made a point to attend the workshop by Dennis Gartman, who appeared to have a free market perspective, yet he has scorned GATA's work. Dennis's main points in his speech were that investors ought to buy things moving up, and sell things moving down. I suppose he is a momentum trader then, and I'm a value trader. His other main point is that the trade deficit does not matter, since the Government measures exports by Microsoft in terms of the price per pound of plastic, and not by the value of the software. We export knowledge, was his theme. Dennis also does not trust the GDP growth numbers of 3%, saying that people pay taxes on what they have actually earned, which shows growth more like 10%. (He did not acknowledge or mention that money creation also stands at about 10%).
This was the first time that I heard John Embry speak at the Cambridge House shows. John Embry runs one of the best performing metals funds in the industry. He was very articulate, as he was at GATA's Gold Rush 21 conference, and endorsed GATA's work. I heard that his fund owns 10% of about 100 resource companies in the industry, a virtual monopoly on resource exploration and emerging production. He read a fact-filled well-organized speech that was well received. I noted that at this conference, there was far more awareness and respect for GATA's work than in prior years. John Embry also ended his speech by noting that he was more bullish on silver than on gold!
On a panel discussion, there was a bit of a debate on whether the China boom will continue, and whether it is sustainable. Frank Veneroso said that he has predicted that many third world booms would collapse, and that he feels that China's boom will collapse -- that China's banks are over extended. On the other hand, China's banks have seen fresh capital infusions from Wall Street, and can draw on China's 1 trillion in foreign reserves. Dennis Gartman, who charges $500/month for his newsletter, had the opposite view, and that the rising middle class in China will make many people millionaires. His view was that one should go to China to open up a plumbing distributorship in the 13th largest city in China, because those were the businesses that made the most money in America's boom times. (Even though he does not know what China's 13th largest city actually was!)
My own view is that China has returned economic freedom in a large degree to its people, who are more free than we in the U.S. in many respects. My view is that freedom is generally quite sustainable. Furthermore, when people are earning $300/year, they can grow such incomes at 10% per year for a long, long time, for far more years than the Dow could grow at such rates, and that this will fuel the commodities boom for perhaps decades to come.
I'm not a doom and gloomer. I believe that mankind is progressing through increased trade and increasing economic freedom, and increasing knowledge. More newsletter writers and investors seemed to understand the GATA story on gold lending, and the specific fundamentals that make silver a much better investment.
Although you now know far more than you need to know, many of you have not yet taken action. It is not the knowledge you have, it is whether you act on it, that is most important. Take action, and get some silver for yourself.
Disclaimer: I own silver, CZN.TO, International Millennium (not yet public), CRD.V, USA.V, AGQ.V, NOT.V, PAX.V, NUX.V, and no company has paid me to send out this article. Please do not email me for specific stock picking advice. Instead, if you would like to see which stocks I own the most of in relation to my holdings of silver, you may purchase the “look at my portfolio”. Thank you.
Silver Stock Report,
by Jason Hommel, January 26, 2007
I just returned from the Vancouver Gold show, attended by about 8000 investors, and 380 resource companies, and 50 speakers. This was the biggest show by Cambridge House by far. I gave 2 speeches, was on a panel discussion, and did two interviews. Having taken a year off from attending most shows, I decided to revise my old speech, and focus on the most important, non-religious reasons to buy silver. In a nutshell, here's what I presented, and learned, from the show.
I write this free newsletter that goes out to 36,500 opt-in subscribers (increasing at a rate of about 100/day, or 100% per year), and I have about 850 subscribers who pay $40/month to look at my portfolio. I spend the subscription money on advertising, to get the word out. I carefully study the feedback from my readers to help me find the best investments in the industry. In 2003, my portfolio was up about 300% in silver stocks. In 2004, I was up another 100%. In 2005, I was up about 40%. In 2006, my portfolio grew another 100%. That track record is about the best in the world for that time period, on par with the best funds in the business of gold, silver, and resource stocks.
My overall view of silver has grown far more bullish since 1999, when I started investing in silver, and here is how my view has changed.
To really understand silver, you have to first understand gold. You don't understand gold unless you know what GATA knows. GATA has done the research to show that about 15,000 tonnes of about 30,000 tonnes of central bank gold has been lent into the gold market, and this has depressed prices. I'm a big GATA supporter, and for more information, you should see the following video, and order the DVD.
http://www.youtube.com/watch?v=ha-j7fH7sAo
Order here:
http://www.goldrush21.com/
I was attracted to silver, because I thought I could make more money in silver than in gold. I have.
At first, I thought silver was merely "cheap" at $5/oz., thinking that the downside was limited, and that we had a good shot at silver repeating the performance in 1980 of $50/oz. But now, I think $50/oz. will just be the start, and here's why.
In 1980, M3, the measure of money in the banks, was about $1.8 trillion, and today, it's closer to $11.5 trillion. So, a comparable price for silver would be 11.5 divided by 1.8 times $50/oz, which is $319/oz.
But that is just the beginning. The reason why is that the bear market for silver did not last 25 years, it was worse than that. In reality, we are still in the bottom of a 600-year bear market for the value of silver.
You can see the 600-year, inflation-adjusted trend in this graph:
http://goldinfo.net/silver600.html
The primary reason for this trend is the declining use of silver as money around the world. But silver is money, it has the properties of money, and the words for silver and money are the same in many languages. As paper money fails, the return of monetary demand for gold, and especially silver, will be astronomical, and will drive the value up tremendously. It's all about monetary demand.
Next, I used to think that the price of silver would rise a lot due to the excessive paper futures market contract short selling on the NYMEX, that would eventually result in runaway short covering. I do believe that selling paper contracts is manipulative in nature. However, today, I believe that paper money that is supposed to be "as good as gold", or "better than gold" is the far greater manipulation, perhaps 100 or even 1000 times greater. Paper money was originally a receipt for gold or silver on deposit at a bank that you could redeem at any time. Futures contracts for gold and silver, that expire, are, by definition, even less honorable. And if the first gold certificates were not honored, how can today's contracts remain honorable? The point is that it is all about monetary demand, and not futures contracts.
Finally, I used to think that silver would be a good investment because of the current supply and demand dynamics, whereby more silver than is mined each year is consumed by industry, jewelry, and photography, which leaves no room for investment demand. But the nuances of current supply and demand say nothing about the upcoming and future monetary demand. The vast portion of the price and value change of silver will mostly be moved by monetary demand.
So, in sum:
First, silver is not going to "spike again" to $50/oz. Instead, silver will roar past $300/oz. due to monetary demand.
Second, silver may well be manipulated due to the NYMEX futures contracts. However, silver is manipulated far more because of the existence of paper money, and as paper money continues to fail, and monetary demand for silver returns, silver's value will skyrocket.
Third, silver will skyrocket not due to current supply and demand fundamentals, but due to the overwhelming monetary demand in the future.
The trouble is that people have a difficulty in understanding how monetary demand for silver can or will return, and have a difficult time envisioning what that would look like, and what it would mean both in terms of prices, and values for silver.
To help explain, let me explain compound interest or exponential growth rates and decay rates; especially how they are often a function of size.
Small things can grow fast, but big things cannot grow as fast.
Acorns can grow to big oak trees, but oak trees cannot grow to the moon.
Babies grow fast, but adults stop growing, and will one day die.
Silver is the small market. If there are about 4 billion ounces of silver in the world, meaning that only 10% of the 40 billion ounces estimated to have been mined still remain, then the size of the market is about $50 billion.
The Fed often adds $50 billion to the money supply in one week!
So, in contrast, the world paper money market is about $50 trillion in size, about 1000 times bigger. The paper money market is like the mature oak tree that cannot significantly grow any further, but is dying, as branches rot, and fall off.
When paper money dies, the price of an ounce of silver, or gold, will be beyond infinity dollars per ounce. This does not mean that gold or silver will become infinitely valuable; but rather, the dollars become worthless.
It is impossible for any market to grow exponentially forever, but that is not what happens to the silver price as paper money dies. A very high dollar value for silver is really a reflection of the decay rate of paper money. After paper money fails, silver's value may be up to 100 times or even 1000 times greater than today, but probably not more than that, regardless of whether the last quoted price for silver was a million dollars an ounce or a billion, or a trillion.
And when paper money fails, society will need a substitute, such as gold and silver. Monetary demand will return, and force silver's value much higher.
As silver's dollar price continues to gain 30% to 60% to 100% per year, more and more investors will be forced to take a look at silver to see what they have been missing. They will greedily seek after such rates of return. For capital to survive, it must. And as more and more people invest in gold and especially silver, it will continue to push up the price more and more, until paper money fails completely. People cannot be satisfied with 5% returns in bonds if silver is paying 30% to 100% per year.
How can paper money compete? Will they raise bond rates to 50%? And what happens when 50% more money is being created each year to pay to bond holders, wouldn't that cause enormous inflation that would simply drive metal prices that much higher? High interest rates would also cause a high bankruptcy rate, and in such a time of deflation due to bank bankruptcies, gold and silver, which cannot default, would be highly sought after safe havens.
As silver goes up, people will discover most everything that I discovered about silver. That it hit $50/oz., and that the inflation adjusted price of $50/oz. in 1980 is really over $300/oz.
Is silver money? Can it be money again?
Money is at least three things: a medium of exchange, a unit of account, and a store of value.
Silver is my store of value; I'm storing my value in silver, and silver's been great to me. Not that silver cares about me, or even knows my name; silver is an inanimate object.
But silver has provided me with a good rate of return, and the returns are outside of the banking system, and are largely not really taxable, and not easily found or taken by government. By the time I sell my silver, who knows what government will be in power, and who knows what the capital gains tax rates may be?
So, which should one buy, stocks or silver? I currently have about 11% of my portfolio in silver, and about 85% in stocks; mostly silver stocks. I plan to increase my holdings of silver to about 20% very soon, within the next year, and up to 50% as time goes on. I don't like the thought of having to move and store several tonnes of silver, but I'm lazy, and I like to earn money the easy way.
Recently, silverstrategies.com posted the results and performance of many silver stocks. About half of the stocks under-performed silver, and about half over-performed. I've done better than most, and slightly outperformed silver in the last year.
I disagreed with 3 other panelists on the topic of whether we should buy the stocks of the major silver companies. Over a year ago, I predicted that the major silver companies would not outperform silver prices. I was mostly correct. I don't own any of the 6 major silver companies with market caps higher than $500 million: Silver Standard, Pan American, Apex Silver, Silver Wheaton, Hecla, Couer d'Alene. I think they are all overvalued.
I take profits in the form of silver bullion. Silver is my money; it's my unit of account. I feel I have gained only if the dollar value of my portfolio can buy me more ounces of silver, and I only truly gain if I actually go out and buy those extra ounces of silver.
Silver today is as cheap as it was at $5/oz. about 12 years ago. In 1995, M3 stood at about $4 trillion. Today, silver is at $13/oz., and M3 is at $11.5 trillion. So the silver price over the past 12 years, has, on average, kept up with inflation.
But today, we have price action. Today, silver's gains are outpacing the rate of money creation inflation. Silver gained about 40% in 2006, and M3 went up by about 10%. Silver's gains will likely accelerate even faster, with continued volatility, of course. I expect silver prices to hit $20-25/oz. in 2007. Afterwards, I'd expect maybe a drop to as low as $15, before soaring yet again to new highs past $30 to $50 perhaps in 2008.
I really don't think it matters much what kind of silver you buy. Silver is not produced by anyone in the form of the money of the future, which may be 2 gram coins or 1/10th ounce coins, who knows. Today, it may cost 10% to re-melt and refine silver into new forms. But when silver was money, 100 years ago, smelting and minting costs were 1/2 of 1%. This is not because energy costs more today, it's because the price of silver is at least about 1/20th of what it could be.
Just get silver cheap, get the most silver for your money, at the least price, which is typically 90% junk silver, or silver rounds, or 100 oz. bars, and take physical delivery of your silver, and store it in your own safe, the combination to which only you know. Only then, do you truly control, and own, your silver.
If you can afford to invest in silver, then you can afford to spend 1-10% on protection, whether a safe, or home security system.
To get started buying silver:
http://find-your-local-coin-shop.com/
So, what did I learn at the Vancouver show? Many things.
As my email list has tripled in the past year, I'm more well known than I once was.
I spoke to many friends and company managers, too many to list them all here.
I ran after John McPherson of Canadian Zinc (CZN.TO). He's frustrated with the slow pace of permitting; and looking for acquisitions, since they have $35 million in cash, about half the market cap of the company.
I sought John Versfelt of Cabo, and International Millennium, a company that now has Cabo's Cobalt silver properties, and many other silver properties that may get a listing in February. He was wondering if I was going to sell my shares in International Millennium if it becomes free trading (I own about 3% of the company), and I told him that I originally bought Cabo because I was interested in the silver properties, and that it was up to him to convince me to hold on. (My way of encouraging him to provide value.)
I ran into Don P. the man who spent nearly 4 months convincing me to look into Canadian Zinc back in 2003. We sat to chat, but did not have nearly enough time.
I ran into Gene Larabie of Coronado, (CRD.V) market cap about $15 million. I learned that they have a mining permit, and they are dealing with water in their decline ramp to the high grade zone where they hit 60% copper, the highest grade copper in the world, and may have resources worth about $200 million.
I had dinner with Vance Loeber who has been promoting U.S. Silver, (USA.V) (CHRYSALIS CAPITAL III), market cap about $200 million, which recently acquired the Galena mine in Couer d'Alene, the former flagship mine of Couer d'Alene mining company (CDE).
I had dinner with the men of Arian Silver, (AGQ.V) market cap around $40 million, who are hoping to find up to 100 million ounces of high grade silver in Mexico.
I asked nearly every newsletter writer what they thought of Noront, (NOT.V) a $100 million market cap company, that hit 50-30 ounces per tonne of gold over 15 feet on December 4th, which is the highest grade intercept that I've ever heard of. Most had not heard of it. The two that did, did not yet buy shares.
I also asked my peers what they thought of Pacifica (PAX.V) a $100 million company, and their 100 billion dollars of zinc at 5% grade, which is the largest mining project on earth. Most had not heard of Pacifica either.
I was walking past Cathy Fong of Silvercorp, ($800 million market cap) who invited me to lunch on Tuesday. I learned of New Pacific ($50 million market cap) (NUX.V), another company in development by the same management team, but is not focused on silver.
I made a point to attend the workshop by Dennis Gartman, who appeared to have a free market perspective, yet he has scorned GATA's work. Dennis's main points in his speech were that investors ought to buy things moving up, and sell things moving down. I suppose he is a momentum trader then, and I'm a value trader. His other main point is that the trade deficit does not matter, since the Government measures exports by Microsoft in terms of the price per pound of plastic, and not by the value of the software. We export knowledge, was his theme. Dennis also does not trust the GDP growth numbers of 3%, saying that people pay taxes on what they have actually earned, which shows growth more like 10%. (He did not acknowledge or mention that money creation also stands at about 10%).
This was the first time that I heard John Embry speak at the Cambridge House shows. John Embry runs one of the best performing metals funds in the industry. He was very articulate, as he was at GATA's Gold Rush 21 conference, and endorsed GATA's work. I heard that his fund owns 10% of about 100 resource companies in the industry, a virtual monopoly on resource exploration and emerging production. He read a fact-filled well-organized speech that was well received. I noted that at this conference, there was far more awareness and respect for GATA's work than in prior years. John Embry also ended his speech by noting that he was more bullish on silver than on gold!
On a panel discussion, there was a bit of a debate on whether the China boom will continue, and whether it is sustainable. Frank Veneroso said that he has predicted that many third world booms would collapse, and that he feels that China's boom will collapse -- that China's banks are over extended. On the other hand, China's banks have seen fresh capital infusions from Wall Street, and can draw on China's 1 trillion in foreign reserves. Dennis Gartman, who charges $500/month for his newsletter, had the opposite view, and that the rising middle class in China will make many people millionaires. His view was that one should go to China to open up a plumbing distributorship in the 13th largest city in China, because those were the businesses that made the most money in America's boom times. (Even though he does not know what China's 13th largest city actually was!)
My own view is that China has returned economic freedom in a large degree to its people, who are more free than we in the U.S. in many respects. My view is that freedom is generally quite sustainable. Furthermore, when people are earning $300/year, they can grow such incomes at 10% per year for a long, long time, for far more years than the Dow could grow at such rates, and that this will fuel the commodities boom for perhaps decades to come.
I'm not a doom and gloomer. I believe that mankind is progressing through increased trade and increasing economic freedom, and increasing knowledge. More newsletter writers and investors seemed to understand the GATA story on gold lending, and the specific fundamentals that make silver a much better investment.
Although you now know far more than you need to know, many of you have not yet taken action. It is not the knowledge you have, it is whether you act on it, that is most important. Take action, and get some silver for yourself.
Disclaimer: I own silver, CZN.TO, International Millennium (not yet public), CRD.V, USA.V, AGQ.V, NOT.V, PAX.V, NUX.V, and no company has paid me to send out this article. Please do not email me for specific stock picking advice. Instead, if you would like to see which stocks I own the most of in relation to my holdings of silver, you may purchase the “look at my portfolio”. Thank you.
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