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Guest Post: What The Silver Vigilantes Understand That You Probably Don’t (Arithmetic, Human Nature and other Stuff)
Submitted by Mark McHugh from Across the Street
What The Silver Vigilantes Understand That You Probably Don’t (Arithmetic, Human Nature and other Stuff)
Sorry
about the insulting headline, but every last shred of evidence I can
find suggests that the most people remain utterly clueless about silver,
despite the efforts of the silver vigilantes, led by Max Keiser and
Mike Kreiger. Their brilliantly simple plan (go get some physical
silver) promises to topple the criminally insane fraud that has
become US economy. It doesn’t require politicians or regulators to lift
a finger either, you simply take advantage of what is undoubtedly
an artificially low price. I can completely understand anyone who is
skeptical of that last statement; I’m sure you’ve been burned before,
but that doesn’t mean you should stop seeking truth.
Part 1. A little math.
I’m not sure when performing basic arithmetic made you a conspiracy theorist, but here we are.
The 2009 World’s population was about 6.8 Billion. According to the Silver Institute,
total silver supply in 2009 was 889 million ounces. That means there
was .13 ounces of silver produced for every human being on the planet.
That looks like this:
Yep, your fair share of Worldwide silver production is a little less
than the silver content of two pre-1965 dimes. That’s all. A bargain
at about four bucks when you consider the amazing properties of this
element. FYI: World oil production per capita is 190 gallons.
This….
…represents more than ten years of worldwide silver mining
production divided by 2009 population. Less than $35, and hell of lot
easier to transport than 7,600 quarts of Quaker State. Please note that
so-called “World production” includes government sales and scrap. Government sales and “scrap” have accounted for more than 25% of “World Silver Production” from 2000 to 2009. I’m not sure I believe that one out of every four ounces of silver gets recycled, but understand that without that bonus production, demand exceeds supply by 37%.
Part 2. Who needs silver?
Just about everybody, it turns out. Sadly, another way to get
yourself labeled a conspiracy theorist is by reading government
documents like the Constitution, or the Department of the Interior’s 2009 U.S. Geological Survey which states:
The physical properties of silver include ductility, electrical conductivity, malleability, and reflectivity. The demand for silver in industrial applications continues to increase and includes use of silver in bandages for wound care, batteries, brazing and soldering, in catalytic converters in automobiles, in cell phone covers to reduce the spread of bacteria, in clothing to minimize odor, electronics and circuit boards, electroplating, hardening bearings, inks, mirrors, solar cells, water purification, and wood treatment to resist mold. Silver was used for miniature antennas in Radio Frequency Identification Devices (RFIDs) that were used in casino chips, freeway toll transponders, gasoline speed purchase devices, passports, and on packages to keep track of inventory shipments. Mercury and silver, the main components of dental amalgam, are biocides and their use in amalgam inhibits recurrent decay.
Yet you can actually find dunces out there claiming the digital cameras have made silver obsolete. You should live so long…
Fun Fact: Silver (not gold, copper or anything else) is the element with the highest electrical conductivity.
Part 3. People lie…..
“…I want to make it equally clear that this nation will maintain the dollar as good as gold, freely interchangeable with gold at $35 an ounce, the foundation-stone of the free world’s trade and payments system.”
John F. Kennedy, July 18, 1963
“That we stand ready to use
our gold to meet our international obligations–down to the last bar of
gold, if that be necessary–should be crystal clear to all.”
William McChesney Martin, Jr. (Federal Reserve Chairman) December 9, 1963
And…..
Lesson: When someone says you can exchange paper for precious metals – make the swap before they change the rules.
Since the invention of paper, people have been writing bogus notes,
and if there are two time-tested methods to become wealthy beyond your
wildest dreams, they are: 1)Selling stuff that doesn’t exist and
2) Selling stuff you don’t actually own. Unless you believe there has
been a sudden outbreak of integrity in the banking industry, there’s no
reason to believe these dynamics are not still in play, is there? As
recently as 2007, Morgan Stanley settled a class-action lawsuit with
22,000 clients who bought and paid storage on “phantom” silver (check
out the Ted Butler article Money for Nothing).
At today’s prices, a million dollars in gold weighs less than fifty
pounds, but a million dollars in silver weighs more than 2,300 pounds!
So ask yourself, how many rich people are storing their own silver? How
many hedge funds hold physical silver in their own storage facility?
Or have they entrusted the storage to the big banks?
JP Morgan is the custodian of the ishares Silver Trust (SLV), which
now holds over 350 million ounces of silver, provides sovereign and
corporate investors with precious metals solutions (JP’s website), and is the largest short seller of silver in the history of the world. Berkshire Asset Management’s Eric Fry writes:
Based on some of
the latest conjecture, Morgan’s short position totals a whopping 3.3
billion ounces. If, therefore, the buzz about J.P. Morgan and silver
is even half true, the prestigious investment bank could be cruisin’ for
bruisin’.For perspective, 3.3 billion ounces is roughly equal to:
1) One third of all the world’s known silver deposits;
2) Two times the world’s approximate stockpiles of silver bullion;
3) Four times the annual mined supply of silver;
4) 30 times the inventory of silver at the COMEX.
If you can, forget about the conflict of interest, and ponder the enormity of the explosion.
Part 4. A little more math.
Estimates of total silver production since the dawn of man range
from 46 to 53 billion ounces (roughly 11x gold production), but unlike
gold, we’ve used pretty much all of it (although squandered might be a
better word). It’s in our cemeteries (fillings)
and scattered throughout our landfills. There hasn’t been a significant
surplus since 1990. Ted Butler and others estimate that there is far
less silver bullion in the world than gold bullion and they back up their case with numbers
that the paperbugs have never even bothered to refute. So why does
gold trade at more than 45 times the price of silver? Because JP
Morgan, the US government, and every other psuedo-capitalist
parasite wants it that way. But that’s a truth for another day.
Part 5. Other things you should know.
The Treasury has sold 34 million one ounce American Eagles so far in 2010. Those sales total less than one Billion dollars. Apple (AAPL) trades about that much every hour the market is open. Meanwhile the Treasury has issued more than 1.5 Trillion in
new debt (1,500 times more) in 2010. Just for fun, let’s multiply 1500
by 34 million. A transaction of that size would have equaled every
last bit of silver ever discovered at $30 an ounce. Yet you can
actually find people who believe silver is the bubble.
Treasury doesn’t make it easy to buy silver.
They’ll sell you bills, bonds and notes directly online, but
not precious metals at anything close to market price. The mint only
does business with 11 Authorized Purchasers (a list can be found here), Why the lack of savvy?
China can blow up the COMEXs silver market in the blink of an eye, at
any moment. They can do it with their pocket change, as a goof.
And if we piss them off enough, they will.
Part 6. So what’s silver worth.
The short answer is: more. If silver were priced based on its occurrence relative to gold, it would be over $125/oz. If it were priced on its availability – somewhere
around $2,000. But if you are content to let the likes of Blythe
Masters dictate the value based on truckloads of worthless paper
promises, you can expect ultra-low prices until the whole thing blows
up. Of course at that point, we’ll be so busy killing each other for
food no one will have time to say, “I told you so.”
The silver vigilantes just want you to re-learn what the phrases like, “cold, hard cash,” and “payment in full” are
supposed to mean. There not asking you to sink everything you
have into physical silver, just a little. Silver can’t be printed into
oblivion, or stolen by a cyber attack. Why wouldn’t you want to own
some of your very own?
A paper dollar from 1960 is worth exactly the same as a paper dollar
in 2010, but four quarters from 1960 are worth more than $21. Given
the fiscal insanity of the US government, I can’t imagine the US dollar
surviving another 50 years, but I’m quite sure that silver will still be
useful. Please consider getting some while you still can.
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amen
Step back and view the forest from a far away perspective ...not get caught up in "looking at the trees".
Right now with 0% official short term rates and QE 1, 2, ?.... the Fed desperately trying to reflate. What used to require $Millions/$Billions to get a reflation started is now taking $ Trillions just to tread water.
The "$-drug" is no longer effective.
A question that NO ONE has asked and the Fed surely doesn't want to talk about is "what happens if the reflation works"?
Assume that Bernanke's reflation gamble works and "reflates the entire system", how does he tap on the brakes at a later date to slow inflation?
The current wreck was caused directly from the 2000-2002 lowering of rates and flooding the system with credit by Alan Greenspan, it may have "felt good" during the reflation of 2003-2006 but the ultimate destination was just another bubble. A BIG ONE!
Now, Bernanke proposes to blow another bubble, the BIGGEST ONE EVER! Then what?
Another crisis? Worse than now? Unfortunately THIS is exactly what Bernanke is hoping for. Not the collapse part, just the bubble part. He was on 60 mins. a week ago and said he was 100% confident that he could withdraw the stimulus "within 15 minutes".
He is 100% correct. The Fed can tighten credit in 15 minutes but the problem is in a system as leveraged as this it would only take another 15 minutes for an all out panic of biblical proportions to ensue!
The Fed can NEVER EVER tighten credit again, EVER!
They can only step on the gas with the current stupid amounts of debt, they can only press harder and harder on the accelerator.
Don't believe they will be able to "reflate" and prod the system forward WITHOUT first destroying the currency. But, does it even matter?
Yes and no. Yes to those who haven't exited the paper system because their financial lives depend on it but a resounding NO for those who have exited. In reality, if you own precious metal assets and the Fed is successful in reflating you will "make money" in that cycle until we arrive at another point EXACTLY the same as today except at inflated levels.
Then ANOTHER crisis that is multiples of today with exactly the same policy choices ... printing.
They fail? The Dollar goes the way of the Dodo: extinction. Here and now the Dollar dies. Those holding precious metals and especially the miners will end up with ALL THE MARBLES!
Any new currency system MUST have some type of backing to gain confidence and acceptability, owners of metal and miners will effectively perform the function of the central bank by returning their metal into the system at wildly higher valuations; thus "reflating the new system".
Nothing is a "sure thing" but over the long haul Gold and Silver cannot lose. Either the Fed gets what it wants and Gold and Silver continue their 10+ year bull market or the Fed loses and the precious metals go stupid levels.
Of course times are different ... more dire because "money" is no longer money: "too much debt kills".
This is a topic for a book. History IS repeating itself with too much debt, trade wars, currency wars. This time nearly all sovereign governments are insolvent! The "school of hard knocks" is the only place that common sense and "street smarts" can be learned, an Ivy League business education will soon be rendered as valuable as Dollars.
viva lemet!
Good post DavidP.
Yes, excellent post DP.
I'm very long PMs because I believe, in the medium/long term, they can only go up in value.
BUT... and it's a big but... how do we know that JPM are short 3.3 BILLION ounces? I've seen this figure bandied about, but haven't seen what it's based on.
My other concern is that there are credible rumours that the US seized large quantities of silver and gold from the axis powers at the end of WWII, now held in secret. If they can bring these to bear on the market... it could be a long time before we see our PMs going 'to the moon'.
Has anybody here done research on this?
ORI (Oh regional Indian) has researched the subject:
http://aadivaahan.wordpress.com/2010/10/18/an-opportunity-and-a-golden-warning/
If they put that on the market China will gladly buy cheap PM's on the market. Look how hard of a time Sprott and China have had getting real metal (not an IMF book entry). If there was such a hoard, giving it up would delay the system reset and give China exactly what it needs to come out on top. Better to blow the thing up and reveal you have the most tonnage of anyone and be on top AGAIN. No I think not. Such a hoard, especially of silver, is very unlikely to exist and if it does they would be fools to sell it.
Excellent post. Maybe ticked off homeowners will sell their houses and buy silver with the balance:
http://fedupmontrealer.blogspot.com/2010/12/banks-threatening-homeowners-who-ask.html
even better. if your mortgage is underwater, default on the mortgage. then spend just half of your usual mortgage payment on silver bullion. It is time to stop all the nonsense. no red state, no blue state, no democrat, no republican... no socialist non-citizen president. Only terrorists in suits! Wake up People! Reclaim your Dignity!
...or not.
Cocktails anyone?!
You are overlooking the obvious....when TSHTF, mortgage pricing collapses, and PMs reach fair value you should be able to buy your mortgage from FRE/FNM with a couple of ounces of the shiny stuff. My mortgage is not underwater but that is the real goal and it is not that far off........
In all honesty, it may happen in 2011 or it may take until 2016; but that day will come.
"Nowadays, the Chinese total reserves from diverse accounts totals $2.65 trillion, a center of great power.
The resentment over currency manipulation has a backfire. China is heavily motivated to purchase Gold and to convert reserves to Gold.
Heck, that is almost as much money as has been stolen by past US presidents, and stolen by US defense contractors, which happens to be about $1.5 trillion from Fannie Mae and $2.2 trillion from the Pentagon misappropriations.
One must love the verbiage, as misappropriation sounds better than stolen.
And that does not even address the $2.3 trillion in counterfeit USTBonds sold (over and above issuance) into the market by JPMorgan Chase, whose evidence was in the Building #7 at the World Trade Center, turned into a heap with pervasive thermite residue.
The engine for the global Competing Currency War is clearly the United States, where the asset bubbles were engrained in policy, where the multi-$trillion bond fraud originated for global export, where the criminal prosecution is nowhere, where the multi-$trillion monetary press is hard at work."
Jim Willie
http://news.goldseek.com/GoldenJackass/1292446800.php
Read it! Either learn Mandarin, or buy Gold & Silver -- the choice is yours, folks!
Amen, Jim Willie.
anyone ever wonder why culturally the chinese and indians buy gold as gifts for birthdays, weddings etc. These are VERY old cultures many 1000's of years of history and experience yet PMs still rate highly valued. People can make 10 fold on their money their by speculating in realestate but they save to buy PMs.
These cultures have lived through a lot of shit, seen a lot of very tough times and they all buy PMs in good times and bad. Maybe a little confirmation for all the PM bulls here that a few thousand years of experience also think you're correct....
4x
Great post, David.
Nice piece.
And believe it or not,
so was Jane Fonda 40 years ago.
I like precious metals.
I do remember the Hunt brothers and the absolute collapse of silver prices (two sides to every trade).
What do you see precious metal funds doing? Not ETF's, but mutual funds that invest in precious metal mining companies?
And...can I currently get silver for dollar bills and must it be a Federal Reserve bank?
Thank You.
You want physical delivery - less room for manipulation.
No, you can't get silver from the fed. Paper yes, metal no.
Yes! You must get the physical metal. Pledge your physical deliveries at http://standfordelivery.com ! Over 152,000 ounces pledged so far.
And look at silverkeiser.net. Max's coins are sold out. 125,000 pre-orders in, what, two freaking days!?!
Holy smokes. That's just amazing.
I've done a little business with these folks- recently aquired some Kugg's and Maple Leafs. Told my dad about the JPM bullshit- he just got 100 American Silver Eagle, no problem.
http://www.maguireref.com/index.cfm?Page=CoinsBars
Uh oh, it looks like somebody still needs "to re-learn what the phrases like, “cold, hard cash,” and “payment in full” are supposed to mean."
Regards
A good read on the Hunt Brothers is "Beyond Greed".
BTW. 100 oz are staying with me here.
Thriving market for silver coins, of all places, on eBay. Bidding is very accurate, usually winners are right around spot + or - a few percent. Actually, the sellers there aren't doing themselves any good, IMO, and there are many amateurs (I'm one of them). They pay eBay a 9% commission, so they're usually selling NET at spot -9% more or less.
Great, liquid market, however, if you're buying between $10 and $500 worth of coins or bars. Some bigger auctions from time to time. Lots of Morgans, though they're carrying a collector's premium in most cases.
Shhhhh.
i'm not seein much in the way of spot, seems to be closer to regular retail pricing
Agreed it is rare that a single coin will go under spot but for the past 2 years any multi-ounce purchases are over spot a bit including shipping usually too.
You have to get in early on each auction. Most of the time first bidder sets up the spot level purchase, everyone else has to settle for premium.
That said I watched 40 Seated Liberty Halves close at $225 on Saturday morning. Someone made $200 just laying in the cut.
Silver Bitchez!
+1
Shhhhhh.....be quiet or the sheeple will catch on dude.
25 lbs. here at last count.
good start - keep 'er goin
Say, aren't you related to Biggus Dickus, and his son? You know, the A-team of notoriously incorrect PM top callers trolling ZH.
haha - family resemblance?
Perhaps in your mind.
So, what's the disingenuous game now? Jerk along stroking egos for awhile until you feel you've developed enough of a rapport to start introducing your 'misgivings' with a tone of paternalistic concern?
Or do I have this bass-awkward?
Yeah, pretty much what he said...
YOU CAN'T EAT SILVER!
Bitchez
Nothing is coming... the FED saved the economy, no more recession to come
doomers were wrong
In Argentina and zimbabwe, people are starved for US dollars! They don't even know what gold or silver is!
Even in an hyperinflation, nobody accepts silver as payment
What are you, fucking retarded?
http://www.youtube.com/watch?v=7ubJp6rmUYM
" "Absolutely, cash is king. And US Dollars and Euros are King of Kings. Just don’t display them in public too much or you wont live very long. That is why I recommend you guys to keep some Euros, just in case. Our local paper money lost its value (to USD) when the economy crashed in 2001 (lost 2/3 of its original value)
Quality health services are expensive for most, and they adjusted to the new value of money accordingly, meaning they almost kept to USD prices. You can pay for these with USD.
Gold and Silver did hold their value of course, but they are not used to buy goods and services".
Ferfal
Live with it, doomers!
Bernanke saved the economy! If he has been named Person of the Year by TIME, it's for a good reason
Watch the video, or get you face mangled like the kid in it.
But then, you're just a troll who probably believes the exact opposite of what he says (that is sick).
He's totally a fucking loser troll!!! Who the fuck would invoke the name of Time Magazine? Holy loser!!
Baaaa......baaaaaa......baaaaaaaa
yeah, what tmosley said..... holy shit - I thought the guy was jokin' around with us: hahaha! but I wonder.....man that is tooooo twisted
I only realized later that that wasn't gloomboomdoom. He's just one of those guys who takes other people's avatars and makes fun of them.
I'm starting to see your point. Please contact me and I'll take any useless silver and gold you may have off your hands. No Conch shells or whatever that shit was you were posting elsewhere, but the silver and gold I'll take.
Wait - Harry Reid said HE saved the global economy.......now I'm confused - which was it?
I agree. benanke will be regarded favorably as time passes just as keynes is
...and President Harding...
Judas Iscariot wuz framed!
Thank you for posting that.. was going to do it myself.
I guess that video pretty much disproves the "gold is useless in a shit-hits-the-fan scenario so why even have it"
Unless the world gets hits by a 20km asteroid.. gold and silver will be in demand during hard times for many lifetimes to come.
That's about $5 for a loaf of bread which isn't bad considering its Zimbabwe and they dont invest in infrastructure like America did or farm much like America did.
Of course the Zibabweans have a big advantage over Americans when things go to shit, they can pan for gold, in America gold isn't so prolific, you can go to a known gold bearing area like the East Fork of the San Gabriel River, pan & dredge all day and get nothing while spending $40 on fuel to get there & back, of course when things go to shit in America $40 wouldn't buy you 6 gallons of fuel or a loaf of bread, you'd have to walk to a gold bearing area that was open to the public-which are far & few between and you'd bd lucky to get 1/10th an ounce of gold.
BTW 1/10 an ounce of gold per day puts your income above 1/3 of most African nations.
Baaaaa......baaaaaa.......baaaaaaa
Of course, if the sheeple don't figure it out for a while can still buy at good prices.......
You can eat it, but that's not the point. You can do so much more with it. Didn't you read the post?
Gee, thanks TGP. I hadn't thought of that. What the fuck was I thinking? You've broken the trance. How can I ever thank you?
You have, with your brilliant analysis, opened my cataract glazed eyes to the new paradigm of paper currencies. As I am new to this paper mania, where can I get some? Who sells it? Can I pay you in gold or silver? Can you eat it? Does it go well with rice?
Um, actually you can eat silver; it turns your skin blue.
Then you just have to learn to rock out on PVC instruments...
http://www.davidbarrkirtley.com/blog/?p=1172
I'll take silver for food
@ TheGreatPonzi
lol, ur 2 funi!
I think you've just captured the essence of the silver movement here. Well done.
Thanks very much!
Great stuff Mark. Is it possible that 3.3 billion number was meant to be 330 million ounces instead?
I confess I pulled that info from Eric with less due diligence than usual, but from what I've seen, they're short 300 million ounces month in and month out.
Silver mustn't rise too fast. I have just started looking for a girlfriend and according to my schedule I will get married when silver breaks $50. I don't want a parabolic move because I don't want a "flash marriage"...
Think of it as you CAN get married when silver is OVER $50.
Got an airtight pre-nup?
Don't worry about looking for a girl: when silver hits $50 they'll be looking for you if they know you have silver.
Not something you'll need to worry about for a loooong time.
you're talking about him actually meeting a woman, right?
Here is the answer to the riddle:
The "Cartel" can print an infinite amount of "Short Silver at Market" COMEX order tickets.
Nobody ever stands for delivery of silver, since it is so heavy.
Rumors of a large hedge fund or a foreign central bank demanding delivery circulate regularly. But it never happens.
Therefore, shorting paper can continue indefinitely.
Until "investors" decide to invest in hand trucks and start hauling their silver stash home.
bullshit, nobody stands for delivery.
It's happening now, and it happens every day. Read Harvey Organ, for fucks sake.
I do appreciate Harvey's work. But I think a short squeeze is happening for gold not silver. There's too many Dec contracts there for delivery and too few delivery notices sent. Silver delivery seems OK at the moment.
I'm hoping it is the other way. We'll see soon. I have a small position in gold, but I'm ~95% in silver. A move up in gold first would make it almost impossible for me to move into the ranks of the oligarchs as I had planned.
We'll see.
95% of your money in silver?
That's fucking dumb.
Once again, RNR, you are absolutely correct --- 95% in silver is truly idiotic and reckless.
It should be 98%.
Yes, we understand you're viscerally predjudiced against precious metals; but you've been wrong for 8 years; I suppose you can go on being wrong, "indefinetely" as you say. The infamous short contracts have no effect on the silver price at all; none; to believe otherwise is to admit to a kind of kindergarten level of naivete. Or, let's face it; an internet level of ignorance.
Robo,
you miss the consumers of silver in the industry.
They need the metal delivered.
If silver is that much undervalued, someone will take delivery.
Whether the increasing sale of silver coins is the start of it remains to be seen; the trend in coin sales is up since late 2007 if you look at the coins sold by the US mint.
http://www.usmint.gov/mint_programs/american_eagles/index.cfm?action=sal...
Moreover, physical demand has not to be on the comex but worldwide. For example in India
http://www.mineweb.co.za/mineweb/view/mineweb/en/page32?oid=110148&sn=De...
"Please consider getting some while you still can."
Well, it might be too late. I'm in Mexico (#3 silver producer) right now and tried, but no luck. The Mexican Mint ran out of coins days ago. There were no sales at all yesterday, and apperantly today they sold some medaillons and small bars. They hope to have coins again early 2011.
No silver coins. In Mexico?!? WTF
(I mentioned this yesterday under another silver post, but some might find this anecdotal evidence interesting.)
There is high demand in Germany too. Some standard silver bullion including kilo bars is sold out.
http://westgold.de/html/prizeList.php
Large silver deliveries for industrial uses DO NOT take place on futures markets.
They are negotiated amongst real producers and consumers, just like oil is. At the margins, amounts can be delivered via NYMEX or LME, but the volumes of real production and consumption are FAR too large to use these as some sort of "clearinghouse" for global sales of the respective metals.
If you really need silver, you need to find someone who has access to miners that produce the stuff. Meaning you will have to deal with a sovereign at some point to grease the skids. Futures markets are primarily cash-settlement mechanisms; I don't know why people continually bleat about how little or much supply these exchanges have because they simply don't serve the purpose that people think that they do.
COMEX merely is supposed to net out buyers and sellers. Every short contract has a buyer on the other end; the exchanges are merely that - exchanges, not repositories for dispensation of commodities.
Uhhh, then why do they have warehouses? Why does gold and silver move in and out of those warehouses all the time?
Somehow I don't think you understand the point of a futures market. Here's a hint: it provides price stability for producers and consumers.
To store the commodities that physically back the paper.
It doesn't. The bars stay where they are for the most part. Electronic receipts do all of the moving.
I sounds to me like it is you that does not understand the purpose of a futures market. They are not designed to be a source of supply for real consumers of the physical. The delivery mechanism is designed to be a supply of last resort for consumers. This is clearly demonstrated in how the "cash market" price for a given commodity is usually at a discount to futures. I am NOT talking about the 30% retail markup you will pay a coin dealer, or even an online vendor. Do some research into the REAL cost of the commodity. The price that Eastman Kodak or another end user will pay. I promise that they are not using the futures market to secure their supply of silver
The Government Failed to provide delivery on Proof Coins two years in a row. Not enough in stock. Ehhh Got Silver ?
That wasn't junk, Robo. You're absolutely right.
A couple years ago, I looked very seriously at trying to arrange physical delivery of one contract. Most of the brokers I spoke with wouldn't do it at all. I finally found one that would. There were a bunch of extra fees associated with delivery, you don't know which warehouse you will have to arrange for pick up at (or when it will be released). And it's not like you can just show up with the family truckster....You have to arrange for an armoured car....
...And you have to get your wife on board with all this, too.
I got all the info except the armoured car costs. I contacted two companies, neither ever called back. In the meantime, that much silver rose out of my price range, not that my wife ever agreed.
I know Jason Hommel pulled it off a few years ago, but if memory serves me, he said he had no itention of trying it again.
That's what resellers are for, I guess.
After a few quick inquiries I found that a company that has insurance for common carrier losses can get the common carrier to pick up the sludge from the depository and deliver to the company dock for the regular rates for that sort of weight and package size. None will do it if you tell them what they are delivering, so keep the mouth shut, it seems.
I know of one that paid the fullly discounted rate to a major LTL trucking company for a 5000 oz contract. The buyer did ship the container to whatever depository it was so that it was packed properly and she wouldn't be on the hook for the advertised price on shipping cost to ship it from the depository's dock.
Apparently if one does it through their company that has enough standard insurance for transit of company goods it comes down to regular LTL shipping costs.
Besides, it reads as though some of the bigger dealers like Tulving and others don't seem to care too much about shipping the heaviest precious metal (by weight to cost).
This isn't such a big issue as it was when silver was a quarter of the price of now.
The many that have gotten god in the past year on metals are falling prey to the silliest lies of those that sell them metals at very inflated prices over spot.(which is damned high)
FWIW, US 90% coin bags are higher in price per ounce now than in the fabled spike of the 1980 Hunt Brothers. Many buyers now have lost all sense of purchasing power parity, and are discounting the end of the whirld, although I am truly impressed on just how strong silver is after each smackdown. If there is to be another deleveraging, Argentum seems to be quite extended.
Governments and central banks seem to be doing everything in the book to support aurum and argentum. I have no clue on how it is to end, and nor do you.
Accumulate!
God ,bless the child that got his own. Silver. amen
Great article, though it fails to mention how shiny it is, saying reflective is much too scientific.
It's also the most thermally conductive metal.
And yes, it's shiny...very shiny.
I'm so down with you, puppy head. So down. Pretty shiny!
It's the clinki-ness that gets me more than anything.
But you're absolutely right. The stuff is intoxicatingly beautiful (and clinky).
Sorry for omitting that.
Just wipe it off when you're done, alright?
Hahaha!
Grab yourself a fistful of Benjamins instead!
http://www.coin-rare.com/silver-bullion--2010-100-silver-franklin-bars.aspx
I don't like the final statement. It is the type of statement that is made at tops. The "get in now or be priced out forever" argument. That being said, the other arguments are convincing.
I've been saying for the last 8 years, (no, pleading) to family and friends to study the facts of the silver market. Go back two or so thousand years and study the functions and properties of money and the concepts of payment and settlement. Study the history of money and what credit is as a form of money.
I have tried everything in my power to awaken them. The story remains the same and the message is no different. The price of silver in relation to every other asset class investment, is as cheap now as it was in 2005. They still don't get it, even seeing the price of everything rise around them, they still think of inflation as rising prices. They still think that dollars value gold.
I have gifted them coins, have shown them 1000 oz blocks of silver and 100 oz bars of gold. They oooh and ahhh and eventually turn back to the TV. At the end of my tether with them (as it's too late to educate), I am now resorting to the tactics and strategies of the Great Mogambo Guru.
To wit: STOP SCREWING AROUND AND GO AND GET SOME! DON"T WALK, RUN, YOU MORONS. (!!!!!!)
This has had an indelible effect upon them as I am now invited only to funerals.
Sigh.
(Eric, get in now or be priced out of affordable silver).
I am searching for a persistent, generous, PM-bug uncle/benefactor, in case you're hiring.
Unlike those morons, I'm an excellent listener...
Hey, Happy Days is on! "Aaaaeeeyyy!"
Persistent, charitable? Yes.
Benefactor? No.
Hiring? What have you got to offer?
I can understand you taking exception to that statement, it does have a barker feel to it and that wasn't my intention.
What I meant was more like, "don't expect silver to hover around $30 forever..."
It was an awkward exit.
Erik,
Just wanted you to know I removed "....while you still can." on my blog. I can't edit the post here at ZH.
(I also corrected a typo that was driving me bananas, "the digital cameras..." to "that digital cameras")
There are great fortunes to be made at the beginnings and ends of Empires
Took delivery of a contract of gold and silver off of Comex this year. Moved it out to a safe place. Weighed down the car though, one contract of gold 6lb. 13 oz, one contract of silver 470 lbs. It is prettier then gold too!
That's a nice size IRA you converted to PM, or was it
non-pension funds? Just curious.
I would appreciate some straight talk here tonight
about safe ways to store silver and gold. Any
pragmatic suggestions would be appreciated.
I haven't as much as surfer but am continuing
to accumumate and wondering about
inconspicuous ways to store it so it is safe yet
accessible.
Painted door stop. Wrap in plastic and build a brick bbq. Small coins go in the mortar, big bars go in hollow bricks.
underwear - nobody will touch it
That reminds me of something...have at it TSA:
http://www.youtube.com/watch?v=L9tAQZInm5Q&feature=fvst
please, remember me in you will. Thank you .
Have less than 100 ounces (pops gave these to me) but also have 10 rolls of pre 1964 "war dimes" that I have held onto when I was a kid.
Have a few Kennedy's as well...never really thought of these things as money...until I came here.
A lot of those arguments have been made before.
Like in 1980.
Before you nasty fuckers start flaming, keep in mind that the time to buy was in 2004.
I'm not saying don't own, but to buy now.....?
yes, buy now with both hands, while you can still get it.
And arguments like yours were common in 2006. In fact all through the 2000's the warnings have been of Bunker Hunt etc. Well, guess what. The US isn't half the nation it was in 1980 unless you count our debt in which case we are something like 10x the nation. There are so many differences between 1980 and now it's just rank ignorance to compare 1980 to now. The argument rings more hollow by the day to an informed observer.
China was SUCH a powerhouse in 1980 right? Boy they sure had a lot of devaluing currency reserves they wanted to change into hard assets right? Same with India, they were a juggernaut. And Russia of course and Brazil and on and on. Your argument is utter garbage and ignores VAST differences between then and now.
+14,000,000,000,000
Some good buys on escape land. I have 5 acres in NH. Below worth every penny.
http://www.beangroup.com/real_estate/listings/Land/NH/Dorchester/1025811...
(d)
do right by JFK
http://www.youtube.com/watch?v=DvYUYXpwBcA
God, that sucked.
so does ur mutha
I buy Silver to kill vampires, werewolves, inflation, and worthless currencies. In that order.
Tell you what, fool. Go to your bank, if you have one. Cash out your $400 account and send the 4 hundred dollar bills to me if you think they are worthless.
You can reach me at WWW.youareamoron.com
ADMIT IT- you clicked on that link!
So you ARE Wangers retarded brother
That link was broken. I found the right one though: www.clapham_junctionisatool.com
Blow me! Silver is the 2nd derivitive to BULLSHIT Gold. Your stupid ratios mean nothing now, because they meant nothing EVER. Silver is no better than Pabst Blue Ribbon beer cans dug up when you dig for copper.
(d)
SwingForce,
It is not uncommon to read posted comments here that have little or no value in furthering discussion of the issues, but it is relatively rare to find one, such as yours above, which actually contains negative intellectual content.
Congratulations on your achievement in collapsing your mind into a black hole of the intellect.
Ouch! What's next for you, stepping on baby chickens? :>D
Ha...akak you just made me think of this:
Always learning something new and interesting about pop culture here at ZH...
http://www.youtube.com/watch?v=5hfYJsQAhl0
SwingForce must be illegitimate spawn of Velobabe...
Everyone keeps bringing up the Hunt brothers but no one points out the obvious. The Hunt brothers were trying to corner the market and manipulate the price upwards. JP Morgan is trying to artificially SUPPRESS the price. That is like the difference between night and day and I would think somewhat pertinent.
yeah, and let's hope JPM gets the Hunt's penalty on the inverse
Great post bro's.
Jason Hommel was the guy who produced the figure. It is conjecture but he supports his assumptions with records and evidence. How it works out is the question.
http://silverstockreport.com/2010/shareholders-jpmorgan.html
And JP is also cornering copper to manipulate price upwards.
The sword of Damokles slays both ways. JP is a walking corpse.
Your free ride is over.
and let's review what happened w/ the Hunts. They were PREVENTED from standing for delivery.
JPM's counterparties will be PREVENTED from taking delivery from JPM. NYMEX will force cash settlement, as that is the PRIMARY role of a futures market.
You think silver is bad? Look into the oil futures market. There is WAY more paper oil than real oil. You could buy 10kbpd like a snap in futures, but good luck getting that amount of *real* supply, which would require dealing with refiners, producers, and nation states.
WTF do all of you think the freakin "China inks oil deal with xyz" news blurbs are about? Why doesn't China just go buy the freakin barrels off of COMEX? Answer: because that doesn't work. If you want any significant amount of real commodity, you have to actually go ink deals with producers of it. Futures markets are and always have been CASH settlement mechanisms.
I hate saying this, but you honestly have no idea what you are talking about. Users DO take delivery from COMEX, and always have. It is against the rules (and also illegal, IIRC) to allow either party to settle a futures contract for cash. If you stand for delivery, you HAVE to take the silver, and the short HAS to provide it.
When China "inks oil deal with X" it is to trade without using the dollar, and avoid corrupt American exchanges. Sometimes its about avoiding shipping costs (think "oil pipeline").
Christ, and you piss on everyone else for making "ignorant posts".
Does JPM have VLCC's of silver roaming the oceans as well?
"Based on some of the latest conjecture"...
Now there's a trustworthy source!
Shit I'm so confused. I wish I knew what the fuck Mark Zuckerberg thinks about this.
You could always "poke" his "walls" or something to find out. I guess.
silver as with gold is in backwardation...it is vastly underpriced and is also the tool with which to destroy the corrupt bankster regime....
banksters own you lock stock and barrel with its monopolistic and rapacious control over money....
buy silver early and buy often. physical that is.
but the Ben Bernank won't like that - and he saved the economy don't ya know
Thanks Mark. Really succinct.
On human nature, I might have encouraged you to add in something about the Bernanke inflating away the value of the dollar, because, through out history, they have not resisted the temptation to debase.
Other critique. I think you are right and I will keep buying, however, I think it is possible you and I will be waiting a longish time for this thesis to play out. But play out it will. That is okay. My retirement or my kid's inheritance is good enough for me. Being covered for doom is a plus.
Good job.
Thanks Missy,
I actually try hard to keep these short. There actually was stuff about Bernanke that hit the scrap heap (along with maybe a jab or two at Mish). I don't know about you, but I often find myself scrolling down something I was interested in saying, "Jesus Christ...How long is this f-ing thing!"
And I agree, these things may take quite a while to play out, but I think you'd also agree that the possibility of a HUGE price explosion exists too. I'd encourage anyone to get their feet wet now (maybe 10 ounces?) and wait a while.
My strategy going forward is something like, "If it goes back to $25, I'm gonna cash out this and buy what I can....if it goes to $20, I cash out that...."
And like you said, pass it on to the kids. I'll tell you what, I wish my relatives gave me silver, but nooooooo, I got US Savings Bonds instead.
Silver is insurance for when dollars are pure toilet paper...nuff said!
What if it is determined that the new dollars are not biodegradable?
then buy some fucking Drano and a plunger
oh they'll be degraded, don't worry
Hmmm ... It's hard to say what will happen. The world is awash with debt which must and will be destroyed. This is natural, part of the ebb and flow of business. Unfortunately, there is so much debt that destroying enough to make a difference would trigger a run from the debt. There is no such thing as destroying just a little bit of debt.
The economy/output sets the price of things longer term. Finance can distort prices by adding credit which it is doing in PMs. In this case the large and growing 'paper' analogs are setting the price of PMs and other commodities as well. The scarcity of physical is self- amplifying as the paper alternatives (Gresham's 'bad money') drive out the physical (the 'good money'). Physical scarcity increases physical price which increases demand for paper which drives up the price increasing scarcity, etc.
The PMs are hostage to their paper cousins who grow like monsters. Increasing paper 'value' increasingly weighs on physical as metal becomes the collateral for the paper. PM derivatives are basically PM- backed debt. The derivatives are analogous to hard- money regimes of PM- backed 'convertible currencies'. The paper contracts circulate as debt- claims which continually increase against the physical collateral.
At the same time, the paper iterations of PMs are intertwined with other debt issues in other parts of the world's economies.
When the next deleveraging begins (next week?) the paper empires will collapse and collateral will be dumped onto any markets that appear to offer a bid. Cash will vanish and that will be the only item that anyone in the universe of debt will want or need. People will starve for lack of a dollar or two while businesses that are 'worth' millions will be available for the price of a meal. Nobody will have any cash.
This is simply a continuation of what has been taking place for many years. There is nothing that can change this dynamic ... except the arrival of four or more Saudi Arabias pumping oil ... and a partridge in a pear tree.
For recognizing Gresham's law in practice, I salute you sir! A pleasure to read this post.
Steve, this is the KD argument.
If what you say occurs, do you know what will happen immediately after that? The CB will PRINT. This is the same thing I told KD on his stupid forum. And if they won't, the government will force them to.
See, dollars, unlike oil or gold, can be freely conjured AT WILL. The Fed will liquify and there is NO physical limit to the amount of fiat paper they can conjure.
The Fed *could* buy out the entire Z1 debt base tomorrow. There simply is no theoretical limit to their power to do this.
Cash? LOL. really, I have to laugh my ass off that a business with REAL production worth "millions" will be had for a few fucking FRNs. GTFO of here with that bullshit. It's absurd.
One of the banks would lend itself the "cash" to buy the thing or the Fed would print up enough FRNs for a favored insider to take the business. And if one does it, all do it. And then we get Putin! And they all go bye bye.
The paper notes of a BANKRUPT STATE will *not* become more worthful as a result of the inevitable bankruptcy!
I don't know why Mish and Douchinger and you cannot understand this concept.
I also do not know why people on ZH bitch about QE when BB is merely doing EXACTLY what I said 3 years ago he had to do in order to prevent the Mish/Douchinger/you precious FRN outcome from transpiring!
An economic collapse as a result of starvation for CASH is utterly ridiculous, because cash is something that can be fabricated at a whim. As I am aware, the banks do not like providing cash except at interest (lending), but when shit is hitting fans, people with tanks and attack helicopters have a way of making them see the light.
As an aside, if FRNs ever became as scarce as you imagine, they would actually be useLESS as money and would consequently be worthless. FRNs only have value INSOFAR as they are useful for money. If/when that ceases to exist, so do they. In your situation, the business would default, say screw you to the creditors and the bondholders, and start accepting some OTHER form of money, which would spontaneously manifest as emergent phenomenon.
Why you're so certain that the cash portion of M will disappear?
I thought circulating notes and coins was just a small part of the monetary base.