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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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Because they want to steal as much as they can at that low price from the silver producing countries.
Once the whole thing blows up, expect a massive revolution in REAL wealth...in spades!!
I bow to Blythe Masters as my Satanic Goddess
I don't know why serious people keep repeating that 3.3 billion ounces number. The SLIGHTEST bit of research into that number shows it to be ridiculously inflated. Repeating it makes a reader suspicious of the intentions (or competence) of the author. Did he check his other facts? Is he trying to sell his book? Overall I agree that silver is a good buy, but come on...
Hmmm, yah I was wondering about that too, isn't that supposed to read 330 million ounces, not 3.3 billion?
I mean, just to keep things nice and sparkling clear.
Speaking of 'arithmetic'...
As far as I can tell, that 3.3 billion ounce short number was originally published by Jason Hommell on 11/13/2010.
http://silverstockreport.com/2010/shareholders-jpmorgan.html
Excerpt:
Amazing. I am amazed.
Thanks for taking the time Mark. Much appreciated.
Regards
No book, but I cut a corner by quoting Eric. The COT report hurts my head.
I will clarify that and report back.
Damn good article otherwise!
I see this over and over and nobody gives with the good answer:
"Why would JPM or any other business entity want to suppress the price of an asset?"
The theory is that a rise in some asset price will destroy the dollar.
Howcum Picassos priced @ $20 million don't destroy the dollar? Anyone who buys the Picasso wants to sell it for more.
If there are no Picassos on the market at any given time, the price does not shoot up to a million- gazillion dollars. There can be no Jackson Pollocks available for years and a painting will cost more or less the same as a similar painting by Pollock cost when it was on the market. Why would a market shortage of gold cause the gold market to crash the economy or cause the price to shoot up by orders of magnitude?
People -- farmers -- need wheat, corn and soybeans, economies need crude oil. If all the gold in the world were to vanish tomorrow, it would not be missed. If all the farmers disappeared tomorrow, the human race would probably follow the farmers in a few weeks or months.
Invaluable crude oil is constrained in price by economic output. There is an upper limit to the price of crude; the price where it causes the economy to crash (which drives the crude price lower). $10,000 gold would be a curiosity. $300 oil would not happen as there is not enough output @ anywhere near that price level.
Believe me, the Fed is pimping gold and silver. It is in the cash money business and needs 'hot' asset markets so it can trade other -- worthless -- assets for cash. The 'kill the dollar' propaganda is just that. You can tell by watching other markets; the Fed is pumping cash into these markets to raise the indexes and allow his money- laundering racket to operate.
The world is not on any informal gold standard. The hard currency is the dollar: priced in crude the dollar has real value. To the waste- based economy such as ours a gold standard is death. The world had gold standard in the early 1930's and maintaining it amplified the Depression, destroyed productive business and led to dictatorships.
Gold/silver standards have no better record for inflation/deflation or defaults than the fiat regimes of today. In fact, the fiat dollar has been an essential tool to keep the US out of a greater recession. Unfortunately, the de- facto crude- backed hard dollar will do its dirty work and destroy the US economy as it will destroy all the other 'modern' economies. This is what hard currencies do. Modern economies require increases in liquidity at all times.
So ... tell me again why the banks would want to suppress the price of an asset?
Read!
Rothbard
Fekete
FOFOA
The History Of Money (Google)
Connect the dots!
"I see this over and over and nobody gives with the good answer:"
You can't be looking all that hard then, seriously.
You need to get your head around the fact that gold and silver have been accepted as real money for thousands of years and paper money is scam that benefits only those who can print it at the expense of those who cannot. If you cannot grasp this simple concept, you may be helpless. Why is it that people are willing to pay $1,400 for a small gold coin? Why is it that all of the central banks own gold? Why is it that JPM sits with a huge short silver position? You should read Niall Ferguson's "The Ascent of Money" before asking any more questions. You run the risk of looking like you don't know what you are talking about. Oh, and you're very welcome.
Beck gave a good object lesson on this subject. He had a gold coin and a twenty dollar bill. He went on to explain that in 19XX both would buy two very nice suits. Today, that gold coin would still allow you to buy 2 nice suits.
On the bright side, the $20 bucks can get you 2 clip on ties at Wal Mart.
Actually, it's $22 but you get the shirts too.
http://www.walmart.com/ip/George-Men-s-Shirt-and-Tie-Set/14893434
So you borrow fiat money from them to buy the asset that you think is a bargain. Then they raise interest rates to create recessions, which destroys jobs. When your job gets destroyed, you can't repay the debt. Then they confiscate the asset from you. They get it even cheaper. This really works when you are very highly leverage in the futures market and don't outright have the asset in your possession.
Yes and no.
You borrow fiat PLASTIC money on a credit card. Buy lots of silver. Pay a month or two on the card, then stop. Change your phone number and get a new facebook page. Now you have silver that they can't confiscate or bug you about.
If you do this well enough and often, JPM may contact you and offer you an entry level job dispossessing widows and orphans.
Doc,
That is a blatant manipulation of the system, which I would never-ever officially advocate! Shame on you! ;-)
"The hard currency is the dollar" Thanks for the laugh! Put a match to your "hard" currency and see how long it stays "hard".
Read this you idiot.
http://www.drschoon.com/articles/TheFedsFinalDays.pdf
a picasso is not a competing currency, with no counterparty risk. it's not real money. No state shall make anything but gold and silver coin a tender in payment of debt. art. 1 sec 10 U.S. constitution. the founding fathers knew how important this was, thats why they put it in the constitution. ( notice, it's in article 1. in other words, very important)
Because I can say, "Hey steve, I've got a thousand ounces of silver for sale, and I'll sell it to you for $25,000, and store it for you for $500/yr." Then I call Bob, then Thom, Dick and Harry with the same spiel....
I've now got $125 grand and a $2500 income stream, and you've got a promise. If somebody demands delivery (which they probably never will) I can go out and buy the real thing. If the price goes down, I can cash you out for less than you gave me to start. It's when the price goes up and people want to cash out that I've got to get my plane ticket to South America...
gibsons paradox. thats why.
http://gata.org/node/7553
the dollar is just a vehicle, it has no value. a day may come, where it costs more to print a dollar, than it is worth. currently 2 cents, oh wait, that is what it is worth in 1913 dollars, when the fed infected our monetary system.
Stand For Delivery has just surpassed 200 "silver vigilantes"...
http://standfordelivery.com/stand.php
13 days to go.
http://silver-dollars.com
Provide my email address to make it that much easier to track my purchases when the Gov confescates their databse? No thanks.
Ya but you don't really know that old stars exploded and that some of the remnants became planets that we live on and mine.
Paper bitchez!
I cannot tell if people are being sarcastic about Gold and Silver... All this money printing and there is no inflation... Are you just trying to promote Max Keiser (I am a fan)? I just cannot tell because all these "predictions" people make never happen... (Dead serious... no troll).
I NEED AN ANSWER!
They are operating in a funnel. At the top there is adequate room to negotiate, they are now nearing the bottom and have fewer and fewer options.
No expert here - just a comment. Watch Max Keiser's vid on the collapse of Iceland's Krona. I recall Max was in Iceland in about 2007 speaking with the Natives and one of the local bankers about how the Krona was going to collapse because of the carry trade. I think it was about 18 months later what Keiser predicted came to be. So, the question is, how far in advance can the Tylers Durden predict? How long do you have to wait for the predictions to come true?
I found the link the link to MK's Iceland video http://www.youtube.com/watch?v=JjglR2KYz5o
the money creation, is overfilling a reservoir, with a dam made of increasingly broken promises. when the trust is gone, you got nothing, kinda like when you find out your wife has fucked all your friends, while telling you she loves you. Imagine that feeling X 100 million people
First of all, never say never. More than 3,800 currencies have collapsed, you just haven't witnessed one yet. As long as you allow people to sell things that they don't own and could never produce, you can control prices until the day comes when no one will produce that thing for the price you've tried to dictate.
If you dictate prices to others and print money for yourself you're the master of the Universe, as long as others will accept your money as payment.....
See where I'm going with this?
(Sigh ...) Still no answer as to why JPM or any other business entity would want to suppress the price of an asset?
Not surprising. There is no answer. No bank will suppress an asset because they are in the asset business. Just as the central bank(s) are in the cash business. Higher prices mean more. More means bigger bonuses for bankers. No banker is going to reduce the 'price value' of an asset because doing so will adversely effect his bonus. The only exception is hedging: here, the 'hedge' will have a greater value than the asset being hedged. The net value of the hedge is what matters, not the value of one side of it.
Arguably, the desired net value of a well- designed and executed hedge is zero.
The banks' commodity short positions are offset by equally large long positions on futures markets. The major banks are the bankers for the exchanges, themselves.
There is also a 'volatility premium' (VP) which is behind some kinds of hedges but this is a premium ... higher price. I don't know if there is a volatility premium added to PMs; I don't think JPM or another bank would create a large, naked position in a thinly traded market. Individuals within banks do so and these are uncovered frequently when the naked positions result in huge losses for the bank: the Barings incident comes to mind. The VP does exist in petroleum which is a vastly larger and more important market.
In a perfect world, a currency has negative value, this is inflation in the ordinary sense. What has value is the commerce. Currency enables commerce; increased value of the currency means less value to commerce. When the currency obtains intrinsic value for any reason it ceases to have the ability to enable commerce. It becomes a non- monetary asset, a collectible. Assets are useless as money as they do not circulate, they are hoarded. This is what undermines intrinsic monetary regimes, the intrinsic is hoarded and the outcome is deflation.
"Wealth" and "stores of wealth" are collective suspensions of disbelief. They are -- as one commenter pointed out -- promises. What is taking place in the greater world is the unraveling of promises. The promises made for PMs are no more or less valid that any of the other finance promises.
This is the primary difference between metals and crude. Crude has economic value and is priced by what the economy produces with the oil. PMs are priced by finance and finance promises. The fantastic desires of PM investors gear into the promotion of finance- created Ponzi schemes.
As a Ponzi operator, there is no way JPM will short an asset to the public. This is the real answer to the JPM question. Think about it. Gullible PM investors are up against the JPMs of this world and their marketing departments.
The common error that metals investors make is to confuse monetary devices (currency, credit, coupons, 'money') with assets. Assets have intrinsic value while the money tools do not. The characteristic that PMs have that other assets do not share is accessibility. They are the 'poor man's wealth' in this age when real finance wealth is expressed in $10 billion notational swaps or multi- billion dollar blocks of stock. A gold or silver coin can be had for a few hundred dollars on Ebay. At the same time, the vast majority of the world's citizens do not have silver or gold in any form. This is really not a 'wealth' issue but rather a metallic form of polemic or revolutionary expression. Silver becomes the means to attack an unresponsive institution. So sez Max Keiser on teevee!
But ... this is absurd, using the instruments of 'wealth' (not commerce) against the form that gives value to the instrument in the first place!
Having said all this, a careful investor looks at all sides of an investment without staking a polemical position or becoming emotional about it. The question of why a bank would suppress asset value is crucial. Without the emotional baggage that attaches to the hoped- for demise of a hated institution, PMs have investment utility and nothing more. Adding the baggage makes PMs another currency/liquidity trap that will surely and effectively destroy what (little) wealth the PM investor possesses. Here, the 'JPM silver short' is a comforting rationalization that obscures what is plainly visible to anyone looking out the window:
America is going broke the old fashioned way, it's running out of cash. Whether Americans have gold or silver or not is largely irrelevant.
Your question has probably been answered hundreds of times here. In short, JPM works as the proxy for the Fed to supress the metals to support the USD. There, you got it?
Sigh ...) Still no answer as to why JPM or any other business entity would want to suppress the price of an asset?
Mark himself answered your question at 09:36...
Because I can say, "Hey steve, I've got a thousand ounces of silver for sale, and I'll sell it to you for $25,000, and store it for you for $500/yr." Then I call Bob, then Thom, Dick and Harry with the same spiel....
I've now got $125 grand and a $2500 income stream, and you've got a promise. If somebody demands delivery (which they probably never will) I can go out and buy the real thing. If the price goes down, I can cash you out for less than you gave me to start. It's when the price goes up and people want to cash out that I've got to get my plane ticket to South America...
So. Selling more silver than actually exists helps suppress the price. But if the price starts going up, you're in trouble; if /when Steve, Bob, Thom, Dick and Harry want their silver - or even their money - you have a problem.
In addition to this, the big Arab oil producers love gold. They accepted US $ for oil because the money was convertible to gold, at one thirty-fifth of an ounce per dollar. Once the gold window was shut in 1971, and the price of gold started to rise, so did the price of oil, so the Arabs could keep up their gold purchases. The US $ started losing credibility during the late 1970's, the price of gold rocketed, and so, consequently, did the price of oil.
Once Volker raised interest rates sufficiently high to restore credibility to the $, the price of gold dropped... and so did the price of oil. If you read FOFOA's blog you'll see many, many posts discussing this in great detail.
As for the rest of your paragraph - it contains an admittedly larger than average collection of the usual myths about money, currencies, and PMs. I want to go and do something else now; would someone else please help our poor benighted Steve? I suspect he is a government troll - no one who had read widely on the subject could make his errors, but no one who was uninformed would be familiar with them either.
A physical run on metals is needed to expose the banks.
Bonds / Metals will crush the government which will then kill the banks as it will eliminate bailouts.
ok ok ok ok ok, I have a question - all this fear about the price of silver/gold skyrocketing is realted to the collapse in value of the US $, right? And, if I am uber rich, I really do not need silver or gold cause I can just use my connections with all the international business I own, all the international banks I do business with to transfer my wealth from $ to whatever currency, or basket of currencies, that will maintain their value against the dollar, correct? Only if I am not uber rich, not connected do I need the stash of silver/gold to protect my wealth - is this correct? Otherwise, how can the price of silver/gold increase significantly in all currencies when not all currencies are tied to the western fiat system, and not all currencies will lose the same in value.
OK. Produce a list of countries whose banks and governments aren't heavily invested in USD products.
Short list, huh?
Ok, different question - with the uber rich able to pay the Goldman Sachs and JP Morgue to do look back trades, they can not lose, so could it be true that the uber rich do not need silver/gold they just win every hand no matter which currency is up, down, or newly created? Is it only the "poor" that need the silver/gold to try maintain wealth? Is it Indonesia that is returning to a gold-backed currency, moving away from fiat?
If the rich don't need it, why do they own most of it
Probably for the same reason they own most of the Bentleys. Because they CAN!
Ha ha ha...Priceless..!!
Yeaah...
Short list, indeed. I've also noticed a strong correlation between that list and the "evil regimes we should attack" list.
And, if I am uber rich, I really do not need silver or gold cause I can just use my connections with all the international business I own, all the international banks I do business with to transfer my wealth from $ to whatever currency
If you are uber rich, and have many, many US $, if the $ collapses, you will have lost that proportion of your wealth. You will not be able to just "transfer your wealth from US $ to whatever currency", because the US $ will be worth less. Or, indeed, worthless.
Otherwise, how can the price of silver/gold increase significantly in all currencies when not all currencies are tied to the western fiat system, and not all currencies will lose the same in value.
If the US $ truly collapses, there will be wild see-sawing of currency rates. Remember - oil is priced in US $... if the US $ plummets, oil will rocket in price. This will cause huge dislocations to the US consumer, who will suddenly have to stump up $10 a gallon for gasoline. Result - US economy slumps, and every other economy catches a cold. Furthermore, as the US $ plummets, every other currency's central bank will be attempting to maintain some kind of gradual change vis-a-vis its value vs the dollar.
Every other major currency is tied to the US $. But even if they weren't, it's still possible for the price of PMs to rise in all currencies; they will just rise more in some than in others.
What do Silver and Gold Buy?
http://www.gold-silver.us/what_silver_gold_buys.html
i smell shrimps
Everybody is so smart, and has things figured out so well. Well, there is no need to be so knowledgeable. All you need to know is that it is the policy of our government to deflate the dollar. Everything that is real will be going up in dollar terms, eventually. We also run a serious risk of hyperinflation. Want to take that risk? I have been buying gold since it was 300, and silver since it was 7. I continue to do so. Maybe I wont get rich, but at least I wont get poor holding paper money, which is being purposely devalued, with a real risk of very rapid devaluation. If someone thinks there is a chance the dollar will increase in value, I guess it is possible, but just not bloody likely. Devaluation as is being done is a form of wealth transfer. It is working quite nicely in bold daylight in front of a bunch of morons who think there is a difference in which party they vote for. Besides buying silver, I would recommend moving away from the USA.
cool can you recommend a fallback country?
A major Australian bullion dealer is reporting 6 month delays on ordering silver, their inventory is almost gone. They buy directly from mines, normal delay is ~1 month:
http://www.youtube.com/watch?v=ukjOZq2INOM
Silver's been in backwardation for over a year now, using LBMA numbers:
http://www.fgmr.com/scramble-for-physical-metal-intensifies.html
I have been accumulating Silver from November 2008. As a tiny investor I have tried hard not to influence my investment decision going by the conspiracy theory. Anyway happy to be sitting on a decent profit. As an Indian I cannot hope to cash in all my holdings as I am compelled by our culture to pass on our precious metal holdings to my kids. Irrespective of the price of Gold and Silver we have got to pass on atleast a decent share of our wealth to our kids in precious metals. So we Indians would be huge losers if this conspiracy theory proves to be true and unravels. One bullish factor for Silver is a huge percentage of Indians who are low income people hardly possess atleast one gram of Silver, but the very same people have an average holding of atleast 20gm of Gold per family. If the concept of Silver catches on then we are of to the races.
I have been writing to many people about this conspiracy in Silver. I would be obliged if someone could in layman's terms explain to me this, 'Would it not be far more lucrative for these big banks to create an upward price pressure in Gold and Silver to create a bubble to suck in the man on the street and then burst it'. That would be far more lucrative for these guys and less risky too.
'Would it not be far more lucrative for these big banks to create an upward price pressure in Gold and Silver to create a bubble to suck in the man on the street and then burst it'.
You are probably right, but profit isn't the (sole) motive of PM price suppression. JPM is working as a proxy for the US Federal Reserve to maintain confidence in the paper dollar by instilling fear/contempt of gold and silver money. By allowing the price of PMs to run riot, huge profits could be made but faith in fiat could be fatally undermined. This could mean the end of the Fed and the likes of JPM.
Srinath,
I think you misunderstand the nature of the conspiracy. For decades, banks have been selling silver to customers and storing it for them, so the silver in their posession does not belong to them and their customers never request delivery. What is to stop them from selling the same pile of silver over and over and over again?
It works out just fine as long as the value stays low and few people request delivery...if the value goes up and people request delivery, it's GAME OVER.
So if you want to figure out whether or not to be a conspiracy theorist, decide which of these statements you believe:
I think I've made it clear which I believe.
But Mr. Tetas, you told us to sell when silver was 20, you said it would never go up this high, you promised us, so if nobody is taking delivery why is it going up so much.
The jig is up. I was minding my own business accumulating silver at $15 per ounce, plus or minus, and blam, the price doubled.
Palladium has had a nice run too, although I bought more platinum in the form of US bullion coins.
Gold I spent the most on, but, I'm shifting more toward silver and palladium.
+1
Good advice, re: palladium. Same here with gold.
Unfortunately I haven't bought any silver at all - I live in Britain with 17.5% VAT on silver. I'm too old, respectable and law abiding to do what most people in Britain and Ireland seem to be doing these days: Smuggling in silver ingots in the boot of their cars from Switzerland.
you can get it sent to you from sarniasilver in the channel islands VAT free and its sent individually to escape the vat customs threshold. good price too, cheaper than ebay.
+1
I'll try that, although I have a feeling it'll take a long time to get the q'ty I want, especially with Royal Mail being the way they are. :)
Many thanks for your kind advice - I hope I can return the favour.
One question - when was the last time GC/SI ratio TRADED at 14?
Around 1860, I think.
"Please consider getting some while you still can." - said the person who is trying to get to the top of the pyramid.
Paper money is worthless but the shiny silver is valueble because is weighs more and by getting thousands of people to buy it up (to store it of course) we will create demand that will drive the price up. So the banks are manipulating the market, hey Mr. Pot the Kettle is calling. Let's not get into Max Keiser the shameless Gilbert Godfrey clone who is trying to sell coins with his ugly mug at a rediculous premium. Boys and Girls, by now you must see the signs of a bubble and the religious preatchers that peddle the virutes of their crap. By the way, I am clueless...not about the value of silver but as to how these ass-clowns sleep at night after trying to rip off the faceless masses.
Then again, Costanza said it best, "It's not a lie, if you believe it."
Let me break it down for you. All these folks are buying up silver coins and storing it, which means at some point in the near future it will be dumped onto the market for redemtion and look out below. Play it safe, invest in Condoms.
Let me break it down for you. All these folks are buying up silver coins and storing it, which means at some point in the near future it will be dumped onto the market for redemtion and look out below
Actually, no. Let me break it down for you.
Coin and bullion buyers tend to keep it for years, if not decades.
The biggest market for Silver is India, where gold and silver are passed down from one generation to the next.
Silver recovery from photographic industry is falling. Govt sales are miniscule.
Industrial demand is increasing, especially in electronics: batteries, solar panels, solder. All the solder joints in every electronics product you buy now have silver in them for technical reasons (to prevent catastrophic failures due to tin whiskering since Lead is banned by EUs RoHS program).
Investment demand is increasing globally. See above.
China has launched a physically backed Gold ETF and Silver ETFs are next.
India - the biggest market - will launch physically backed Silver ETFs when various bureaucrats stop fighting each other (but who knows when).
What does this mean? Massive pent-up demand, with only a slowly rising supply.
...So they are going to keep it, even if they see the price start falling. You expect too much from the masses, especially the poor souls in the third world countries. Solder joints, that's the increased industrial demand you're using...Compare that increase to the decrease in demand for silver in DC Motor connections which has been all but eliminated. One motor used the equivalent of tens of thousands of solder joints. Silver Recovery from the photographic industry is falling, yes, but that's peanuts due to the Silver Demand in the Photographic industry which has disappeared. Your argument is cute but its Salesman logic, used to sell investments and drive up price. Industrial demand, I'm sorry to say, has dropped off the proverbial cliff.
Actually, this poster's full name is "Sofa King We Todd It".
Nice Troll-smackdown, Sumo!
"Zero Hedge Silver Vigilante" - would look great on a T-shirt.
LOL: No one mentioned Ted Butler.
lol!
common sense says something is brewing and it's not good. So being safe and holding some metal is wise. If it drops you just hold it and pass it on to the kids. If your banking on hitting the jackpot, then pinch yourself and make sure your awake. Those of us who hold metals are fighting the most powerful gov't's in the world. If we win then yes you'll have lot's of wealth, but remember the world will look a lot different. Maybe be worse, maybe better no one knows, but manipulation is everywhere so keep your eyes open and stay calm, greed is what got us into this situation in the first place, so don't substitute your greed for theirs.
Couldn't say it better. There are alot of variables (Ron Paul Revolution) that can bring this gravy train (for them) to a hault real quick. Let's not forget Nicholas Biddle of the Second Bank of The United States threatened to plunge the United States into a horrible depression when Andrew Jackson vetoed the banks renewal for it's charter.
That’s the real dilemma as I see it. When investing in Wall Street’s captive commodity markets, even when you win you lose. Nonetheless, I’m planning to buy and take physical possession of a couple 1000 oz. silver bars ASAP. Only problem is, I’ve got to sell my rental home to raise the cash. Anyone interested in a nice condo in Northern New Jersey? I’ll give you 90% seller financing on a 30 year fixed mortgage at 4.75% if you make the down payment in silver.
Question:
Looking at AMPEX's site, there are numerous options (bars, shot, coins, etc.). Are there any advantages to taking silver in one form over another?
If you regard it as becoming currency in the future, buy in small form exchangable amounts. As investment just get the most ounces for your dollar regardless of form.
Would seem like common sense approach to me; sure some bug will come along and correct me shortly though.
:)
Personally I want to know who owns the three largest (active) mines for gold and silver.
Hi, this is my first post on ZH. I love this site!
I follow you guys as much as I can, and was convinced to buy my first silver. I found some at a local pawn shop who traded his coins and some small ingots for some of my colourful european paper. I got the Italian 500 lire for 5 euros each, but not the ones with the backwards facing flags on the ship, that have numismatic value of 3000+.
I will humbly continue to follow you guys. There is so much I've learned so far. Especially new curse words.
Thank you Bahamas. That's the best post all day. I can only hope I can personally help with some new curse words when the situation is right.
I hate reading these stories when I've got a big position in ZSL. I think we're in a pullback for the near term.
You could be right Doug,
This really isn't about the online casino, it's about taking a little of your money and buying something you can touch that is valuable for what it is.
If things work out for you, maybe you can take some of your profits and buy a couple coins.
I'm not so poor anymore after investing in poor man's gold. The last pie-in-the-sky numbers I got was that there are 500 million ounces of Silver in the world. Yeah right. I believe those bankers could have screwed up though for once. That's why I'm all in. I will continue to procure Silver in my neck of the woods until the cows come home.