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Is Silver The New Gold?
Some perspectives on the oft-ignored "other" precious metal from David Rosenberg
SILVER LININGS
Below we show the latest Commitment of Traders report and we show the net noncommercial long and short positions for a variety of asset classes. It struck us, especially as long-time gold bulls, what little attention silver gets even though the two precious metals are driven by similar developments over time.
The reality is that bullish sentiment on gold right now is infinitely higher than it is for silver; and keep in mind that while gold is the most malleable metal of all (the only metal that will look the same 1,000 years from now as it does today), silver pieces going all the way back to pre-biblical times were the primary medium-of-exchange (fiat paper currency, in the overall scheme of things, is a relatively new phenomenon and a convenient one for politically sensitive central banks). How well known is that up until 1968, silver certificates were redeemable for an equivalent amount of silver?
Since that time, these have been replaced by the Federal Reserve Notes declared as being official Legal Tender and backed by a printing press (now operated by none other than Ben Bernanke, who in four years has managed to create out of thin air 60% of the entire monetary base of the country since the United States was established 233 years ago). And how well known is it that the Coinage Act of 1965 removed all the silver from newly-minted quarters and dimes?
The difference between precious metals and fiat money is that the latter is not backed by any physical asset and as such has no intrinsic value whatsoever – a medium of exchange, perhaps, but backed by nothing except its ‘legal tender’ status. Keep that in mind when you flip through your wallet (the term 'dollar', as an aside, was not a made-in-U.S.A. development but in fact was adopted from the Spanish dollar which itself was a silver coin from a Bohemian mine).
Silver also is very likely the metal that has the most industrial uses from batteries to mirrors to video equipment, so it is more than just a store of value as gold is. The silver price is more tan 60% below its prior peaks even after the impressive rally of the past year. And when you take a look at where silver trades to gold, which is still flirting near record highs, it would have to triple to get to where gold was in relative terms at the peak back in January 1980 (gold was trading near $740/oz – more than 30% below where it is today – when silver was trading at its record peak back in January 1980 at $45/oz).
Relative to oil, silver could surge 4x from here and it still wouldn’t match the prior high in this relationship over three decades ago. Considering the problems that plague every major currency in the world, from the U.S. dollar, to the Yen, to the Euro, to sterling, and knowing from the McKinsey report that the need to monetize the surge in public debt will be required to cushion the economic blow from what will likely be another 5-6 years of deleveraging in the private sector, and given the much more stable supply outlook for silver (all the low-cost shallow mines on the planet have already been gutted) and where it trades relative to gold, not to mention what little attention the metals grabs and how under-owned it still appears to be, exposure to silver, whether it be in bars, coins, ETFs or mining companies, is likely going to be prove to be a very attractive investment in coming years.
So in a nutshell you can have hard assets, or you can just try to front-run robots. The latter still continues to be the winning strategy ever since Obama told Atari 2600 to buy, buy, buy back in March.
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With that logic, you can also say that Oil is due for a collapse.
Correlation does not equal causation.
Is Rosie completely oblivious to the attempt by the Hunt brothers in the 1970's to corner the silver market, how that attempt affected prices, and to what happened to prices when that attempt failed?
Maybe he thinks oil prices rose in 2009 for the same reason they rose in 1973 (OPEC embargo? What embargo?).
I like your ideas and thoughts. While chat and sohbet with my friends talking about it.
So, with all due respect to Rosie who I generally find insightful, and exceptional respect to Tyler, I have to point out that using the 1980's peak in gold to support any argument for any price of anything is just an indication that said individual needs to seriously check their reasoning. The average height in inches of major league home runs during the 1980 season would be equally valid. I find that citing the 80's peak is the first step to sorting the gold nuts from the valid observers of precious metals (which , for example, see Jim Sinclair). Gold is a highly imprecise form of insurance against monetary debasement. But it is insurance nonetheless.
Rosie, always lookin sharp. I will have to say this makes an excellent case for it getting shanked harder than Gold (which Silver's always been more volatile, notwithstanding the Hunt's, etc) when we see P3 to scare the Sheeple™ into accepting annuities! Wake me when Silver looks like July 4th, 2008 and I'll ride it both ways!
With much respect for Rosie, the popularity
of precious metals suggests we may see $4
silver before $40 silver.
Anyone old enough to remember Curtis Carlson
and his $20 B a year Gold Bond Trading Stamp
empire also knows bonds, gold and silver go
down as well as up, and fewer people are
prepared for that possibility with adequate
cash in hand...
http://www.jubileeprosperity.com/
How can you be serious ATG? You've missed one of the larger points. The popularity of precious metals is zip, zilch, and almost NADA! Almost nobody owns the stuff, and even though it's being talked about a lot, it's popularity again is so low it could win the national limbo championship! Wake me up when Silver hits between $45 and $50, and I'll hope that I'll wake up refreshed with so few months to sleep!
THANK YOU Tyler...
Thank you too Tyler, but silver is not the new gold it's still the old silver and is behaving like the old silver. It may be in vogue for a while, but it remains in the zeugmatic relationship to gold + or -
No disrespect to you or ZH.
My guess is that percentage-wise silver is a better speculation than gold. Historical ratios do not mean all that much, because of technology change, mine suppies, etc.
I have many more ounces of silver than gold.
The value of my gold is much more than my silver.
I wish them both well!
+1
I think Silver will outperform gold just because it is still way undervalued. Silver, is way lagging in terms of value. Both will go up huge no doubt in my mind. At the end of the day, anything that is real, that can't just be created by a printing press or out of thin air will have value. It reminds me of my old piece of crap car, I drove it till 220,000 Miles but by 120,000 everyone said its junk, only worth $100 bucks. But in terms of real value, it was worth so much more. Just something to think about, I think stuff will be of a value in the future, especially with inflation.. You think your goods are going to be cheaper because less demand, don't count on it. Ok just my 2 cents.
ok lets just see production numbers: AG=20,000mt AU=2,500mt PT=PD=200mt.. So who give a rat ass about silver? its not rare, its not good looking, its precious metal by historic association only
Everyone cares about Silver, U can't pick up one thing that doesn't use silver in your house. Ex. Computers, Mouse, Speakers, TV, Radio, Lights, Outlets, Microwave... Silver is even better due to the fact its not only precious metal but also useable. Gold is just as good, Either way Both Silver and Gold are the way to go.
if you want something we can use - go for CU, if you want something precious and useable - go for PD and PT, and if you want something cute, get yourself some astatine... if you have just 30gr of it - you OWN IT ALL...
Haha, I agree with you total. Copper is another excellent choice, Palidum / Platium , all good. Any Metal / Object it doesn't really matter it will have real value. Gold is the best just because of it known standard and its much more rare, kinda like the other 2 metals.
+1 to both of you! Hahaha.
I also have (and want more) Pt and Pd. But, both are hard to find at the retail level.
Copper is very bulky, but I do save my NICKELS and pre-1982 pennies... It's an ATTITUDE thing!
Hey - I have an idea! I'm going to start an ETF for astatine! I'll name it "AS*". Each share represents a 1gr interest. I think the IPO could be around 10 million shares or so. Do you want to invest?
would give all new meaning to "decay"
Yeah, but, Gold is gold. You can like, make a crown out of gold, and it'd be like pretty and stuff.
yeh.. at least dental crown for sure :) they can be made only from gold...
not true, while you can still have crowns made in gold predominately they are now porcelain.
But the good ones (crowns) are still gold on the inside.
Either way, I only need one reason to go grave robbing. Unless undertakers remove crowns before burials? For the record, I meant royal crowns initially, I mean what else would be the purpose of gold bars? to make robots? HA!
The purpose? To stare at it in AWE.
I think the industrial use of silver can be more of a liability than a help in this instance. It is not a question of silver being a precious metal with an industrial use plus...it really is an industrial metal with a precious metal plus.
Surely some folk will disagree, but IMHO silver is not money...gold is, but silver no.
I was watching a show on how they get the silver out of like electronics... I know its dated and there is better technology but, Like a large appliance they got out like a few oz of silver because most was burnt off, wasted too hard to get too, just people smashing boards...... So I see, the available like coins / Bullion / bars becoming very valuable because its already ready to be used. Who knows
in our economy, silver is only going to be allowed to go up when JPM says it can go up. in paper that is....those of us who own stashes aren't going to sell and aren't selling the real stuff for JPM's price.
that's the rub with silver. unless you are goign to buy and hold the real thing, you get caught up in JPM's capture of that market.
If you are more speculative palladium has even better supply/demand fundamentals than silver. With either one the market is so tight, with more investor interest they could become a bubble.
Though personally I am hoarding nickels since melt value is 5 cents. It is sound money just like pre-1982 pennies. Nickel and copper prices will beat CD rates at the bank and keep up with inflation.
In Earth's crust there is 15 parts siver to every part gold; however every oz of gold ever mined is still around in some form. the same cannot be said for silver, it is used up as an ingredent in chemicals it is even in clothing in very small amounts. Silver has a natural anti bacterial property that helps in the medical field.
Thousands of tonnes of silver are consumed never to be seen again and more and more uses are found all the time.
Get Your facts stright Gold may look pritty but Silver has many more uses and that is why the value will go up.
Silver also goes down with the economy...
http://www.jubileeprosperity.com/
STOP SPAMMING US.
http://www.FUCKOFFANDGOTOHELL.COM
Did you follow your link? It goes somewhere at least mildly interesting. (Yes, I did read what the link said before I clicked.)
I thought it was pretty funny someone made those, uh, connections! My process was one of discovery more than creativity. The original thought was sincere, that spammer comes around spamming their book from time to time. I welcome discussion, but they are not paying Tyler and Marla to advertise here, every damn post. One link posted is fine in my book, the rest is in poor taste.
I'm so overwrought right now, I actually clicked that link.
silver is mostly produced as a secondary metal, @ gold, copper mines etc. production has been in decline, consumptiom is increasing. if it costs $500 to mine and refine 1 oz of gold, how can it cost $10 to mine and refine 1 oz of silver. remove the gold from the equation, and it costs more per oz of silver, than its spot price, to mine
The high price of silver in 1980 was due to the Hunt Bros. trying to corner the market! Not a good value to use in the analysis.
Good point and too often ignored. Even as a silver bug, I hate to see that spike used in historical comparisons.
Hunt's did no such thing. They had 10% concentration at the peak.
Between the Comex and OTC, someone is short hundreds of percent of annual mine output. That is cornering.
The Big4 are short and they are usually right...
http://www.jubileeprosperity.com/
except when they are wrong over the multiyear period from 2000 to now. They have done nothing but increase their short position continually. Yet the price of gold has advanced nicely from the 200's to todays price in the 1,100's.
If you want to take the position that eventually its going to go down because nothing can go up forever...
Well, the sun will die out from not having any more material to fuse at some point in the future. Or the moon will be locked in orbit changing the tide action. Better start warning about that too.
There's unlimited supply of dollars thanks to Shalom, however limited supply of au&ag. Gold and silver are the money that God has given us, FRNs are printed by Shalom, you do the math
Well, actually it was supernovas that gave us all the heavy elements including the silver and gold. And since the Romans and others before them used gold and silver wouldnt it be appropriate to say that the pantheon of gods gave us gold and silver as money?
silver is the high grade component in old tech, and old tech suddenly becomes fasionable in an extended economic downturn. the Chinese are hoarding rare earths. gold will function as currency when diamonds function as currency. there simply isn't enough gold available to make it a feasible currency in a world with 8 billion people. for those of the archiac mindset, consider that seashells will be currency before gold is currency. the industrial component serves the archaic mindset much better than gold's non intrinsic value, relative rarity, and need to be alloyed in order to form a useful coin.
someday they will talking about the problem with adding to the global gold reserve is that gold is only the byproduct of silver mining.
Gold and silver are just mediums of exchange, money. Even if there was only one ounce of gold on earth, theoretically it could still function as money. It's not a question of how much gold there is, it's a question of how much it's worth. This current paper money experiment is only 40 years old, and my guess is it won't survive another 40 years. Archaic relics may be useful in modern currency crises.
As for silver being "old tech", consider that the computer you used to type that comment has silver in it. The cell phone in your pocket does too. The refrigerator in your kitchen, the fabric of US soldiers clothing, batteries, medicine, radio, photography, etc. Nanotechnology is giving silver more industrial applications every day. I wouldn't call that old technology.
Hope you're taking delivery of those sea shells, I'd hate to see you get stuck with a worthless IOU.
The Chinese invented paper Flying Money around
800 AD. Let us know when Safeway or Tesco
give you change for your gold or silver coins...
http://www.jubileeprosperity.com/
If Tesco died in a fire tomorrow the world would not weep.
Don't forget that 10 years of future silver production have been sold by JPM (as per the BIS statistics on bank derivative positions). Most of that was done druing the last 12 months,unless of course JPM took on its books what AIG had all along on an undisclosed basis. Anyway you slice it, 10 years is 10 years and it lays the foundation of a Hunt type squeeze with no bad guy to blame this time. Nor can they change the rules on Comex to screw the longs because its the shorts who fessed up this time.
This exactly why everyone should have some silver exposure. By artificially keeping it low it gets used up and creates the very shortage crises and rise in price they are selling short to try and prevent.
Countries used to have stockpiles of the stuff. Not any more, except maybe China. The explosion in silver , when it comes, will be orgasmic.
I really wish it had been MsCreant or Marla saying that.
They can settle in cash
as they have done before.
Those that make the rules
can change them and do...
http://www.jubileeprosperity.com/
jpm got a large silver short book from bear stearns BK, but they've added to it since. they are short, because it's part of their method to suppress. take away all those shorts, and silver will rise to the occasion
Hi Ho Silver! Silver slippers got Dorathy home. Get the fuck out of OZ, people.
You do know the idea of Oz being an allegory for the gold/silver standard?
http://www.secretofoz.com/
Talleysticks are real money
The allogory is that Oz gets off the standard, fills his green-ass baloon with hot air and skips town. She had to walk on a "golden" road to get there. There was no gold in OZ, and in fact, the glasses made everything appear to be green, though it was not. She gets home because of her SILVER slippers. Oz was not on the gold standard, it was on the BS standard. The Ben Shalom Bernanke standard.
Dude, the slippers were ruby. Not silver. And pay no attention to that man behind the printing press...er..curtain. Everything is well in the land of Oz!
Sorry, only in the movie. The adaptation from the book changed from silver slippers to red/ruby.
A gold bitch?
http://www.taxfreegold.co.uk/images/2006goldbeagledog2ouncerev400.jpg
Gold bitches?
http://www.taxfreegold.co.uk/images/2006australiachineselunardog5coinset...
Damn! I need me some of those
Ruuby...they were ruuby.....braains.....uhhh.
Great. After that above discussion of whether silver will rise or fall, go up or down, hit the moon or be worthless, I'm a whole a bunch more informed than I was before I opened the thread.
Alas,though, even more befuddled.
I'll stick with long covered calls, but thanks anyroad.
Silver had topped from the deflationary period, and as we enter the stagflation period, it looks to once again be a leader. What is most interesting is that it had such a strong run during the deflationary period. It pulled the market out of the dregs for sure. If the market crashes it will go with it, but it will stay on the high side of trades even then. If the stag party moves into the backroom, and Ben continues to play with his "fun press", then SiLVer will crush the lowly equities. When they bring out the "new kid on the block" (Liesman!), the Ioer, then we can see if they got some magic left. The balancing act is tiresome however, and it would be easier to dump the Doe into the market. Really it is there, but the short trades are accelerating, and the leverage is going up. Inflating the market is the win/win anyway. Buy Silver.
I've been buying about 50/50 silver/palladium over the last 8 months and I expect to continue to do well.
such great history and such a wonderful note, yet even Mr. Rosenberg himself completely misses the point of examining silver relative to gold.
silver's massive negative divergence & non-confirmation of not only its own price action but also (much more importantly) of the price action within gold itself is a huge nugget of technically-oriented fundamental data that cannot be overlooked.
just because one is bullish on gold, to simply overlook the price action within silver itself and say "buy" for years down the road is not only lazy but is also wrong for damn near every reason under the sun since 'that' is no reason to buy anything. imho, silver has 70% down coming but that is neither here nor there.
my own point is that to discuss silver in the context of gold as a medium of 'value' is great but to do so without providing the proper context of silver in terms of actual relevance to the PM space as it relates to gold or even to note the gold:silver ratio via a chart is either lazy or misleading.
sexy headline / use as a modicum of exchange aside: silver is NOT the new gold. period. and for those goldbugs looking for anything else to grasp upon as gold gets really to roll the F over ... take a look at a chart or two and do please look at that of Silver (@SI / SIH10) cause it's got a whole lot to say about where gold (@GC / GCG10) be going.
so you're long governments and central banks?
long kindleberger / prechter / schumpeter and uncle buck.
see ya on the other side.
Right on. Not one person in a million
understands deflation.
Straight and narrow is the gate and road
to salvation, with few who profit from it...
http://www.jubileeprosperity.com/
Good luck with those FRN's...
We love our charts, our ratios, anything we hope can predict an unpredictable future but, as Heraclitis said, we never step into the same river twice. There are dozens of articles with convincing arguments that silver is undervalued and, given the demonstrated manipulation of silver and gold, I wouldnt take your charts as seriously as you do. And, as someone observed, who has silver reserves except China. Silver could be, I think, a gray swan.
Bubba ain't gonna plop down $1k+ for some gold, but he sure as hell can buy some silver. Thus the ignorant investor looking to purchase on the cheap comes in after the fact (after gold has topped) supporting the blow off suckers rally top that silver has displayed everytime gold has topped since the rally began in early 2000. The charts show it plain as day.
Yes they do.
Gold, platinum and silver were a great buy
in 1999, almost 20 years after the top.
Expensive hope springs eternal...
http://www.jubileeprosperity.com/
Silver looks cheap here. Gold price has central banks purchases propping it up. Stay away from central bank manipulation and buy silver.
Correct, Buy anything u can get at theses prices. Even if the prices goes down, its only short term.
Silver bitches.
on Tue, 01/19/2010 - 12:06
#198400
silver is the high grade component in old tech, and old tech suddenly becomes fasionable in an extended economic downturn. the Chinese are hoarding rare earths. gold will function as currency when diamonds function as currency. there simply isn't enough gold available to make it a feasible currency in a world with 8 billion people. for those of the archiac mindset, consider that seashells will be currency before gold is currency"
That's as as limp as Master Bates after 3 rounds--
"Not enough Gold"
Gold "is divisable" so how could there not be enough? FFS
Silver is the "poor mans gold" --always has been and will be again--
There can be no question,using the POG rise in the last 10 years as proof--that people are moving out of paper and into tangibles,mainly gold--
When one of these major currency's get dumped and one of them will--likely the Yen first--
Central Banks will have no choice,but buy gold,in order to restore faith in paper--
When J6P sees the panic,they will run to gold as well--but--
It will be seen as too expensive--so--he does what his ancestors did--
Buy silver--in a panic--
That is why it makes sense. Whether you look at this as an eventual "insurance policy" against a devalued dollar or as the next hot way for Bubba to make money, it has huge upside potential in both directions.
As we keep racking up deficits and trashing the dollar, the masses will want something to pile into in terms of hard assets, and for now, silver is something everyone can still afford and is comfortable with exchanging world-wide. The whole short position by JPM is confounding, but the heat is on the CFCT to get off their asses and do something about it soon-- they cant hold out much longer at status quo. Meanwhile, millions of Americans are quietly accumulating as much as they can. Even on Ebay, there are multiple, multiple bids on every American Eagle coin(s), and pretty much every other quality name brand silver bar or coin listed. Fine by me that silver has been pretty much under the radar till now.
There is a lot more down side risk with gold, silver is just insanely undervalued considering all the angles. I would absolutely like to hold more physical bars and coins because with the path we are on, sooner or later, CASH will be TRASH.
The ebay market for rounds and bars is way over spot and premium. You're actually better just buying retail.
The only place you can find margin is in 90% quarters, dimes, and halves. You can buy UNDER spot including shipping if you are disciplined and patient. I can buy $50 worth of silver for slightly under spot on ebay vs spot + pretty hefty premium anywhere else. If not for ebay the femto-investor has a very hard time even entering the silver market for delivery. $50 gets you 2.7-2.9 oz on ebay today(I just checked) $50 gets you 1.4-1.5 oz at say ampex.
But then wtf do I know.
shh... i do the same thing. dont tell too many or that trick will get harder :)
There are approx 5.32 billion ounces of gold in a world approaching 800 billion people, or 6.6/1000's of an ounce. this is why we have paper money.
money must function as a commodity, in order to have enough to satisfy the needs of more people than the number which live in a small New England state for instance.
and its more like .75 ounces per person based on estimated pop for jan 2010
Palladium more scarce than gold, Chinese are running auto plants 24/7, can not fulfill demand.
And you can do cold fusion in your garage...
Palladium more scarce than gold, Chinese are running auto plants 24/7, can not fulfill demand.
And you can do cold fusion in your garage...
Silver will surprise many! Just wait and watch...bitches!
Right! Silver, a grey swan on the wing, arriving soon.
I enjoy electronics as a hobby, and silver is wonderful.It is great for soldering with, for building low RF loss components, etc.I have made UHF antennas out of it...when it was cheaper.
So, I like silver.And Gold.To me, they are remarkable metals that are useful..and money.
I guess we will see if Silver really runs amok.25 to 30 an ounce seems fair to me.
Silver bars in a vault box are like pennies in a 5 gallon water jug of loose change. Both represent 15% of the value but make up 75% of the weight of the box or jug.
Long silver coins.
Industrial use.
Precious metal.
Numismatic value.
Barterable.
Enough said.
$100 an ounce is entirely reasonable--
Buy and HOLD.
If you are tired of being used like cannon fodder by your government, who is devaluing the dollar fast and furious, buying and holding physical gold or silver is a great way to say FUUUUCKKKKKKKKKKKK YOUUUUUU!!
Both are a way better store of value than dollar bills, which are well on their way to being toilet paper.
Look at our debt, look at the path we are on, and do the math! Where do you think this nation will truly be in 5-10 years?
Ted Butler claims that there are 5 times more ounces of gold bullion above-ground in the world than there are of silver. He also says that only one in a million people know that. Here is a link to a fascinating article he wrote in 2006, about silver being undervalued compared to gold. http://news.silverseek.com/TedButler/1161705933.php
Extrapolating out some of his data to today, the "market cap" for all the bullion gold in the world is approximately $5.5 trillion (5 billion ounces at $1130 an ounce). The market cap for all the silver bullion in the world is about $18.5 billion (1 billion ounces x $18.50 per ounce). So, all the gold in the world is presently valued at 297 times the value of all the silver in the world. Holy sh*iite I gotta go buy some more silver....
Hey, dont tell too much .... we will have to pay more for our silver.
Interesting notes on JP Morgan's manipulation of the SILVER MARKET----
CFTC!!! When are you going to do something?!!!
"I am going to speculate based upon the known facts. Maybe I will be proven correct, maybe not. However, the nature of this speculation is so disturbing, that I hope I am wrong. But I need to state it because if I am close to the mark, the implications for the silver market are profound.
I think the data in the COT and the Bank Participation Reports indicate that the U.S. Government may have bailed out the biggest COMEX silver short by arranging for a U.S. bank to take over their position. This coincides with JP Morgan’s takeover of Bear Stearns. In fact, it would not surprise me if the bailout was JP Morgan taking over Bear Stearns‘ short silver position, at the government‘s request. While this silver bailout (if it happened) was no doubt undertaken with financial system stability in mind, it has disturbing implications of legality and equity"
This is the relevant quote from the CFTC’s Oct 8 letter.
"In effect the increase [in the short position] reflected a one time acquisition of positions that were acquired through a merger in the industry, and not new trading by a bank. Thus, the assertion that there was new activity undertaken by the banks that led to a fall in silver prices is not correct since the "new" activity reflected in the CFTC’s report was in essence positions that had already existed in the market prior to July 1st."
The CFTC clearly confirms, in effect, that the big silver short position was related to JP Morgan’s takeover of Bear Stearns, since no other merger provides a plausible explanation. However, the Commission is not speaking truthfully about an increase in the concentrated short position. The CFTC’s own data, in weekly Commitment of Traders Reports (COT), show a sizable increase in concentrated short positions of some 12,000 contracts (60 million ounces) from levels before July 1st to the August Bank Participation Report.
More importantly, the real issue is not about when the one or two U.S. banks increased their short position, but how large that short position grew in the August Bank Participation Report. The CFTC is deceiving a U.S. Congressman by attempting to reduce the argument to when the short position was increased, not the obscene and manipulative size of the position. This is deception through omission and misrepresentation. What difference does it make when the manipulative position was established? The issue is how can a short position of 25% of the world production of any commodity, held by one or two U.S. banks, not be manipulative?
Bear Stearns held the largest concentrated short position in COMEX silver (and gold) futures at the time of its forced merger with JP Morgan in March. That position was not discovered until the publishing of the August Bank Participation Report followed by the October 8 letter from the CFTC to Congressman Miller. Furthermore, Bear Stearns had no legitimate backing to the short silver position, either in actual metal or cash. Otherwise it could have been delivered against or bought back, just as would have happened were it a long position.
The price of silver at the time of Bear Stearns implosion was $20 to $21 an ounce. A free market covering of a concentrated short position of this size would have driven silver prices to the $50 or $100 level and would have exposed the long-term manipulation. Rather than let the free market deal with the required short covering of such an uneconomic and unbacked short position, government authorities arranged to have the short position transferred to JP Morgan. This was undertaken by the U.S. Treasury Department, along with taxpayer guarantees against loss to Morgan worth billions of dollars. This was done, no doubt, to save the financial system from imploding. This was also patently illegal, as it aided and abetted the silver manipulation.
I’m sure the motive behind the illegal transfer of the silver short position was the mistaken assumption by Treasury that an explosion in the price of silver (and gold) would threaten overall financial stability. Well guess what - they succeeded in crushing the price of gold and silver, but to no avail, as financial stability has been shattered.
JP Morgan was not just an accommodative good corporate citizen in the illegal transfer of the manipulative silver (and gold) COMEX short position. In addition to undisclosed government guarantees against loss, JP Morgan was given free reign to liquidate the COMEX short position at their discretion, knowing full-well the regulators would look the other way, no matter what dirty tricks were necessary to cause the price to collapse. Nor was JP Morgan a neutral agent in the silver price collapse. Data from the Office of the Comptroller of the Currency (OCC) http://www.occ.gov/deriv/deriv.htm indicates that JP Morgan held a much larger Over The Counter (OTC) derivatives position in silver and gold than was transferred to them from Bear Stearns.
My analysis shows that Morgan has made many billions of dollars, perhaps tens of billions, from their downward engineering of silver and gold prices from their combined COMEX and OTC short positions. They have used that engineered price decline to buy back as many short positions as possible. If investors are wondering what caused the destruction of billions of dollars in gold and silver values, metal and share price alike, look no further than JP Morgan, and the government officials who enabled them.
There can be no question that the CFTC is complicit in all these illegal activities. Same with the CME Group, owner of the NYMEX/COMEX. It is not possible that they are not privy and an active party to this successful downward manipulation. To think that officials at the CFTC, from the top of the agency, to staffers and even the Inspector General, have taken oaths of office to uphold commodity law and then have allowed that law to be repeatedly violated is beyond repugnant. That they have knowingly participated in an organized cover-up of this manipulation and have taken to lying to a Congressman calls for criminal prosecution.
Both gold and silver look better with each passing day and each passing headline--
If someone would have told me 2 years ago that we would be seeing such unbelievable amount of manipulation in the banking system, and in our political system, where rules are changed on a whim, and earnings reports are quite simply MADE UP on the fly, I never would have believed them!
WE DONT HAVE CAPITALIM ANYMORE, PEOPLE!! Profits are privatized and the losses of private companies are dumped on our backs! IT IS SIMPLY SURREAL!
I honestly will not be surprised when the whole house of cards that is our ponzi economy fails overnight. The lies, fraud and leverage that have been used to decieve the people and prop up the scheme are unprecedented.
on Tue, 01/19/2010 - 16:51
#198765
There are approx 5.32 billion ounces of gold in a world approaching 800 billion people, or 6.6/1000's of an ounce. this is why we have paper money.
We would have "paper money" just backed by gold--
Gold is divisable--which means it can multiplied--as in using a multiplier--
And not every country has to have gold,they could easily lock their currency to a gold backed currency--
Same as China etc.does now--with the USD--
Another example--price every ounce at a trillion $
Enough money for you?
The key facts are all laid out here for all to see (in between the nonsense about oz,slippers and the yellow brick road).
1) Ratio of gold to silver is less than 20 to 1 in the earths crust. The price ratio may retun close to these ratios.
2) At current values it does not make any economic sense to mine it except in exceptional circumstances (i.e. a big fat vein).
3) The short position on the comex. This equates to at least years mine output and possibly many multiples of this.
4) Severe depletion of above ground stocks due to its industrial use.
5) It can not be printed.
6) It was money for at least a thousands years.
7) Gold is to precious and rare to be used in every day transactions.
In an effort to present a fair and unbiased opinion, the only downside I see is the possibility of forgeries using electro plating.
Obviously I own some silver. I got in at $10 and I'm looking for a reason to sell at a nice profit, but I can not see any.
Please Help !
Irish Silver
One thing you might consider is the price differential in gold/silver/platinum/pladium. Of the four, the only one that is close to being able to pay for your meal is Silver. The average person doesn't care about palladium or is even able to differentiate it from platinum.
Silver on the otherhand, was widely used as a means of payment as late as 1964 and many of those silver coins still exist (although horded away at the moment). Gold coins will buy your house, silver will buy your day to day needs.
Outside of silver coins, the current batch of silver rounds are not divisible (they only make 1 oz and larger), although at least one company is now offering 1/2 oz coins. It is possible that 1/4 oz coins may be in the future if demand is there.
The old spanish dollar was also called a piece of eight because it was sometimes cut up into eight pieces which were referred to as "bits". Thus the old phrase "two bits, four bits, six bits a dollar" and the reference to the quarter dollar as "two bits".
In the scheme of things, silver could once again fulfill a monetary role, even if the gold/silver ratio returns to the historic 15:1 rather than the current 60:1. that doesn't mean that Gold will collapse, but rather that silver will appreciate.
The COMEX commercial short position reflects nearly an entire years world production of silver. The depositories backing that only have enough silver to cover slightly more than 11% of the existing silver under COMEX contract, without taking silver that belongs to someone else. The more people that learn about the scheme in paper silver, the more people are going to want, and be able to afford, real silver. You might not be able to eat precious metals, but at least with silver you can help purify your water.
One last thought, ever wonder why we are not as healthy as we used to be? After 1965, the silver in our pockets was exchanged for cupronickel markers or worse, dirty paper. We no longer handled silver coins on a daily basis, instead we exchange paper or plastic. Think about it.
price differential is only in relation to the amount of one to another in fixed terms. All of them can be made to be equal 'value' by using different amounts for the same thing. A gram of gold would get you a decent meal at a restaurant. If the demand is there from buyers refiners will make gold in whatever weight amount the public wants.
The antinomy between the relative merits of gold and silver in economic terms has been with us since the coinage act of 1792 in varying degrees culminating in the virulent struggles before the turn of the last century which resulted in the final establishment of the Gold Standard. The present article is but a pale reflection of the rich historical record delineating these struggles which is given full voice in Martin Armstrong's latest "Creating the Floating Exchange Rate System-the Fate of the Dollar- 2010 and Beyond". This is a must read for anyone seriously interested in the subject and its implications for our immediate future. Of course silver is and never will be any substitute for gold. Such thinking is ridiculous and obscures the dynamics of the crucial polar interplay of bi-metallism in the history of world currency. W.J. Bryan's Cross of Gold speech immediately comes to mind as most typifying this ongoing dialectic which is expressive of not only economics, but partakes of cultural, historical, and metaphysical dimensions as well. As one of those posting has correctly stated the origins of the precious metals in the supernovas of distant galaxies points also to the inherent cosmological significance of our fascination with Gold and Silver, or as the Aztecs called them "the sweat of the Sun" and "the tears of the Moon".
Junior silver miners are going to be huge percentage gainers in 2010, as they were in 2009.
A few of my favorites are Impact Silver, Fortuna Silver, Great Panther Silver and Orko Silver.
http://www.goldstockbull.com
Where's the clown that wrote this today?
ATG said, "With much respect for Rosie, the popularity of precious metals suggests we may see $4 silver before $40 silver."
How can you be serious ATG? You've missed one of the larger points. The popularity of precious metals is zip, zilch, and almost NADA! Almost nobody owns the stuff, and even though it's being talked about a lot, it's popularity again is so low it could win the national limbo championship! Wake me up when Silver hits between $45 and $50, and I'll hope that I'll wake up refreshed with so few months to sleep!
I read the ZeroHedge RSS feed but this article is excluded, is this an error or deliberate?
Thanks
Mark
Lets set this straight, Silver Is the New Gold.. Its a fact. Its been consumed for the past few decades, its rate of consumption is growing every day, its above ground supply is 5 times less then gold, making it 5 times more rare. (in above ground supplies, which is all that maters for this bull run because it takes up to ten years for a new mine to hit production)... You can buy gold at spot, silver has a premium, and the premium is much higher then most people think,,, if you live in the US you are blessed with low premiums,, if you research any of the other silver markets in the world you will find the fallowing. In Germany silver caries a 29% premium. In china, I read a source that reported he was unable to find the silver at the banks like it has been reported,, the only silver that he was able to find was 50% to 100% over spot.. In Taiwan you find that kilo bars are selling for a low premium of 44%, 10 ounce bars carry a 50% premium and 1 ouncers are fetching a 98% premium... if silver isn't rare or in more demand then gold why does it hold such a high premium? Oh and here are some stats,, In 1900 the gold market was $20B silver was $8B.. Ratio of 2.5 ... in 2006 golds market had a $3T value,,, silver had a $12B value,,, ratio is 250.. a Ratio on market cap has gone from 2.5 to 250 .. is gold expensive or is silver cheap?? This ratio will not last,, silver will correct,, and when it does,, like always it will over correct.. which suggests that silver has a possibility to someday be worth more then gold... making silver the NEW GOLD..... If you havn't researched the markets this probably doesn't seem possible,, but it is.. do some research....
Lets set this straight, Silver Is the New Gold.. Its a fact. Its been consumed for the past few decades, its rate of consumption is growing every day, its above ground supply is 5 times less then gold, making it 5 times more rare. (in above ground supplies, which is all that maters for this bull run because it takes up to ten years for a new mine to hit production)... You can buy gold at spot, silver has a premium, and the premium is much higher then most people think,,, if you live in the US you are blessed with low premiums,, if you research any of the other silver markets in the world you will find the fallowing. In Germany silver caries a 29% premium. In china, I read a source that reported he was unable to find the silver at the banks like it has been reported,, the only silver that he was able to find was 50% to 100% over spot.. In Taiwan you find that kilo bars are selling for a low premium of 44%, 10 ounce bars carry a 50% premium and 1 ouncers are fetching a 98% premium... if silver isn't rare or in more demand then gold why does it hold such a high premium? Oh and here are some stats,, In 1900 the gold market was $20B silver was $8B.. Ratio of 2.5 ... in 2006 golds market had a $3T value,,, silver had a $12B value,,, ratio is 250.. a Ratio on market cap has gone from 2.5 to 250 .. is gold expensive or is silver cheap?? This ratio will not last,, silver will correct,, and when it does,, like always it will over correct.. which suggests that silver has a possibility to someday be worth more then gold... making silver the NEW GOLD..... If you havn't researched the markets this probably doesn't seem possible,, but it is.. do some research....
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