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Guest Post: Top 7 Reasons To Buy Silver Now

Tyler Durden's picture




 

Submitted by Jeff Clark via Casey Research,

I remember my first drug high.

No, it wasn’t from a shady deal made with a seedy character in a bad part of town. I was in the hospital, recovering from surgery, and while I wasn’t in a lot of pain, the nurse suggested something to help me sleep better. I didn’t really think I needed it—but within seconds of that needle puncturing my skin, I WAS IN HEAVEN.

The euphoria that struck my brain was indescribable. The fluid coursing through my veins was so powerful I’ve never forgotten it. I can easily see why people get hooked on drugs.

And that’s why I think silver, purchased at current prices, could be a life-changing investment.

The connection? Well, it’s not the metal’s ever-increasing number of industrial uses… or exploding photovoltaic (solar) demand… nor even that the 2014 supply is projected to be stagnant and only reach 2010’s level. No, the connection is…

Financial Heroin

The drugs of choice for governments—money printing, deficit spending, and nonstop debt increases—have proved too addictive for world leaders to break their habits. At this point, the US and other governments around the world have toked, snorted, and mainlined their way into an addictive corner; they are completely hooked. The Fed and their international central-bank peers are the drug pushers, providing the easy money to keep the high going. And despite the Fed’s latest taper of bond purchases, past actions will not be consequence-free.

At first, drug-induced highs feel euphoric, but eventually the body breaks down from the abuse. Similarly, artificial stimuli and sub-rosa manipulations by central banks have delivered their special effects—but addiction always leads to a systemic breakdown.

When government financial heroin addicts are finally forced into cold-turkey withdrawal, the ensuing crisis will spark a rush into precious metals. The situation will be exacerbated when assets perceived as “safe” today—like bonds and the almighty greenback—enter bear markets or crash entirely.

As a result, the rise in silver prices from current levels won’t be 10% or 20%—but a double, triple, or more.

If inflation picks up steam, $100 silver is not a fantasy but a distinct possibility. Gold will benefit, too, of course, but due to silver’s higher volatility, we expect it will hand us a higher percentage return, just as it has many times in the past.

Eventually, all markets correct excesses. The global economy is near a tipping point, and we must prepare our portfolios now, ahead of that chaos, which includes owning a meaningful amount of physical silver along with our gold.

It’s time to build for a big payday.

Why I’m Excited About Silver

When considering the catalysts for silver, let’s first ignore short-term factors such as net short/long positions, fluctuations in weekly ETF holdings, or the latest open interest. Data like these fluctuate regularly and rarely have long-term bearing on the price of silver.

I’m more interested in the big-picture forces that could impact silver over the next several years. The most significant force, of course, is what I stated above: governments’ abuse of “financial heroin” that will inevitably lead to a currency crisis in many countries around the world, pushing silver and gold to record levels.

At no time in history have governments printed this much money.

And not one currency in the world is anchored to gold or any other tangible standard. This unprecedented setup means that whatever fallout results, it will be of historic proportions and affect each of us personally.

Specific to silver itself, here are the data that tell me “something big this way comes”…

1. Inflation-Adjusted Price Has a Long Way to Go

One hint of silver’s potential is its inflation-adjusted price. I asked John Williams of Shadow Stats to calculate the silver price in June 2014 dollars (July data is not yet available).

Shown below is the silver price adjusted for both the CPI-U, as calculated by the Bureau of Labor Statistics, and the price adjusted using ShadowStats data based on the CPI-U formula from 1980 (the formula has since been adjusted multiple times to keep the inflation number as low as possible).

The $48 peak in April 2011 was less than half the inflation-adjusted price of January 1980, based on the current CPI-U calculation. If we use the 1980 formula to measure inflation, silver would need to top $470 to beat that peak.

I’m not counting on silver going that high (at least I hope not, because I think there will be literal blood in the streets if it does), but clearly, the odds are skewed to the upside—and there’s a lot of room to run.

2. Silver Price vs. Production Costs

Producers have been forced to reduce costs in light of last year’s crash in the silver price. Some have done a better job at this than others, but check out how margins have narrowed.

Relative to the cost of production, the silver price is at its lowest level since 2005. Keep in mind that cash costs are only a portion of all-in expenses, and the silver price has historically traded well above this figure (all-in costs are just now being widely reported). That margins have tightened so dramatically is not sustainable on a long-term basis without affecting the industry. It also makes it likely that prices have bottomed, since producers can only cut expenses so much.

Although roughly 75% of silver is produced as a by-product, prices are determined at the margin; if a mine can’t operate profitably or a new project won’t earn a profit at low prices, the resulting drop in output would serve as a catalyst for higher prices. Further, much of the current cost-cutting has come from reduced exploration budgets, which will curtail future supply.

3. Low Inventories

Various entities hold inventories of silver bullion, and these levels were high when US coinage contained silver. As all US coins intended for circulation have been minted from base metals for decades, the need for high inventories is thus lower today. But this chart shows how little is available.

You can see how low current inventories are on a historical basis, most of which are held in exchange-traded products. This is important because these investors have been net buyers since 2005 and thus have kept that metal off the market. The remaining amount of inventory is 241 million ounces, only 25% of one year’s supply—whereas in 1990 it represented roughly eight times supply. If demand were to suddenly surge, those needs could not be met by existing inventories. In fact, ETP investors would likely take more metal off the market. (The “implied unreported stocks” refers to private and other unreported depositories around the world, another strikingly smaller number.)

If investment demand were to repeat the surge it saw from 2005 to 2009, this would leave little room for error on the supply side.

4. Conclusion of the Bear Market

This updated snapshot of six decades of bear markets signals that ours is near exhaustion. The black line represents silver’s decline from April 2011 through August 8, 2014.

The historical record suggests that buying silver now is a low-risk investment.

5. Cheap Compared to Other Commodities

Here’s how the silver price compares to other precious metals, along with the most common base metals.

 

Percent Change From…
  1 Year Ago 5 Years Ago 10 Years
Ago
All-Time
High
Gold -2% 38% 234% -31%
Silver -6% 35% 239% -60%
Platinum 3% 20% 83% -35%
Palladium 14% 252% 238% -21%
Copper -4% 37% 146% -32%
Nickel 32% 26% 17% -64%
Zinc 26% 49% 128% -47%

 

Only nickel is further away from its all-time high than silver.

6. Low Mainstream Participation

Another indicator of silver’s potential is how much it represents of global financial wealth, compared to its percentage when silver hit $50 in 1980.

In spite of ongoing strong demand for physical metal, silver currently represents only 0.01% of the world’s financial wealth. This is one-twenty-fifth its 1980 level. Even that big price spike we saw in 2011 pales in comparison.

There’s an enormous amount of room for silver to become a greater part of mainstream investment portfolios.

7. Watch Out for China!

It’s not just gold that is moving from West to East…

Don’t look now, but the SHFE has overtaken the Comex and become the world’s largest futures silver exchange. In fact, the SHFE accounted for 48.6% of all volume last year. The Comex, meanwhile, is in sharp decline, falling from 93.4% market share as recently as 2001 to less than half that amount today.

And all that trading has led to a sharp decrease in silver inventories at the exchange. While most silver (and gold) contracts are settled in cash at the COMEX, the majority of contracts on the Shanghai exchanges are settled in physical metal. Which has led to a huge drain of silver stocks…

Since January 2013, silver inventories at the Shanghai Futures Exchange have fallen a remarkable 84% to a record low 148 tonnes. If this trend continues, the Chinese exchanges will experience a serious supply crunch in the not-too-distant future.

There’s more…

  • Domestic silver supply in China is expected to hit an all-time high and exceed 250 million ounces this year (between mine production, imports, and scrap). By comparison, it was less than 70 million ounces in 2000. However, virtually none of this is exported and is thus unavailable to the world market.
  • Chinese investors are estimated to have purchased 22 million ounces of silver in 2013, the second-largest amount behind India. It was zero in 1999.
  • The biggest percentage growth in silver applications comes from China. Photography, jewelry, silverware, electronics, batteries, solar panels, brazing alloys, and biocides uses are all growing at a faster clip in China than any other country in the world.

These are my top reasons for buying silver now.

Based on this review of big-picture data, what conclusion would you draw? If you’re like me, you’re forced to acknowledge that the next few years could be a very exciting time for silver investors.

Just like gold, our stash of silver will help us maintain our standard of living—but may be even more practical to use for small purchases. And in a high-inflation/decaying-dollar scenario, the silver price is likely to exceed consumer price inflation, giving us further purchasing power protection.

The bottom line is that the current silver price should be seen as a long-term buying opportunity. This may or may not be our last chance to buy at these levels for this cycle, but if you like bargains, silver’s neon “Sale!” sign is flashing like a disco ball.

What am I buying? The silver bullion that’s offered at a discount in the current issue of BIG GOLD. You can even earn a free ounce of silver at another recommended dealer by signing up for their auto accumulation program, an easy way to build your portfolio while prices are low. Check out the low-cost, no-risk BIG GOLD to capitalize on this opportune time in silver.

 

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Thu, 08/14/2014 - 19:22 | 5094779 Ol Man
Ol Man's picture

My number one reason is that the historical ratio of silver to gold is 15:1.

We are a long way away from that and reversion to the mean is the "law"...

Thu, 08/14/2014 - 19:24 | 5094786 r00t61
r00t61's picture

The last Jeff Clark article that I saved:

http://archive.lewrockwell.com/clark-j/clark-j41.1.html

It predicted gold at $2,300 / oz by 1/2014.

Thu, 08/14/2014 - 19:40 | 5094838 J Pancreas
J Pancreas's picture

Thank you for referencing another failed call by one of these yahoos. With any type of investment, use sense and perform due diligence. I vowed to never get burned again after my life's fortune was squandered searching flyover country for the rarest of Ty Beanie Babies. After that I learned to play it safe with surefire winners such as ANGI, LNKD, TWTR, ZNGA and a huge stash of highly barter-able and in season Banana Republic men's skinny capris.

Thu, 08/14/2014 - 19:51 | 5094896 whotookmyalias
whotookmyalias's picture

Pretty sure you can barter those capris for some tungsten and a stack of Obama campaign bumper stickers.

Thu, 08/14/2014 - 19:55 | 5094913 Handyman
Handyman's picture

It's ALWAYS a good time to buy silver.

Thu, 08/14/2014 - 20:16 | 5095000 TeamDepends
TeamDepends's picture

Financial heroin, the richest kind.

Thu, 08/14/2014 - 20:21 | 5095019 Elvis the Pelvis
Elvis the Pelvis's picture

For the love of God, stay away from silver and gold.  They've peaked--along with the DOW.  Go long on the dollar.  Bitchez.

Thu, 08/14/2014 - 20:41 | 5095114 TeamDepends
TeamDepends's picture

Oh man, thanks for the good belly laugh Elvis. The dollar has never looked stronger!

Thu, 08/14/2014 - 21:01 | 5095202 MalteseFalcon
MalteseFalcon's picture

The only thing that matters is the Silver Pricing Committee.  When they say 'up' silver moves 'up'.  When they say 'down', silver moves down.

Thu, 08/14/2014 - 21:35 | 5095374 chumbawamba
chumbawamba's picture

blah blah blah blah blah blah blah hyperbole blah blah blah blah blah blah blah blah blah blah blah blah blah blah charts blah blah blah blah blah blah blah statistics blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah unrealistic expectations blah blah blah blah blah blah blah blah blah blah blah blah blah blah smoke blowing blah blah blah blah blah blah blah blah blah blah blah blah blah blah fantasy correlations blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah blah nonsense blah blah blah blah blah blah blah blah blah blah blah blah blah blah wishful thinking blah blah blah blah blah blah blah.

I am Chumbawamba.

Fri, 08/15/2014 - 12:56 | 5098322 TheRedScourge
TheRedScourge's picture

If there's anything that can be determined from those charts, its that the one that starts in 1980 is deliberately made to be misleading, given the massive spike in the 80s, and that it appears that there's going to need to be yet another year or two in silver capitulation before it becomes a true bargain.

Thu, 08/14/2014 - 23:03 | 5095775 BeanusCountus
BeanusCountus's picture

Well, i doubt anything that has fallen 50% or so is "peaking". That said, I remember the article/free report when I signed up with these folks titled something like "gold and silver stocks you can buy for your grandma". Sorry grandma, your portfolio is down a ton. Oh well, you're probably dead by now.

Thu, 08/14/2014 - 23:52 | 5095929 orez65
orez65's picture

"Go long on the dollar.  Bitchez."

Please show us by example.

You go long on the dollar.

Fri, 08/15/2014 - 06:50 | 5096468 CHX
CHX's picture

If you think on a long enough time-frame and in ounces, not in fiat terms, for ease of mind and system transit.

Fri, 08/15/2014 - 06:46 | 5096463 spieslikeus
spieslikeus's picture

.....and maybe a nice pair of mom jeans

Thu, 08/14/2014 - 22:42 | 5095685 Moustache Rides
Moustache Rides's picture

Thank you.. your post made my day .. lol

Fri, 08/15/2014 - 00:57 | 5096106 Larry Dallas
Larry Dallas's picture

This author s a great copywriter.

Compelling story at the beginning.

Makes a point.

Easy for retail folks to understand.

Not sure if any of this will function in a vacuum we have as market.

Fri, 08/15/2014 - 04:49 | 5096377 Mr. Ed
Mr. Ed's picture

Yeah... but silver has spent most of it's time lollygagging between $19 and $22 for more than a year now and if this article (everything but the kitchen sink) doesn't get it moving --- then I don't know what will.

On the other hand, I don't give a crap because trading spot PM's w/leverage was outlawed a few years ago!

Thu, 08/14/2014 - 19:40 | 5094842 r00t61
r00t61's picture

I like PMs as much as the next guy, but with the paper market dwarfing the physical market by something like 5 orders of magnitude, I think it's absurd to talk about price movements based on fundamentals or charts or technical indicators.

Thu, 08/14/2014 - 23:47 | 5095918 Rentier88
Rentier88's picture

As long as there is a paper market for silver the price can be manipulated down and controlled...price isn't going anywhere unless they want it to.

Thu, 08/14/2014 - 19:25 | 5094785 Stanley Kubrick
Stanley Kubrick's picture

Psstt....

You don't own silver if you don't have the phyisical silver.....and the lead to keep it.

Fri, 08/15/2014 - 00:34 | 5096029 Implied Violins
Implied Violins's picture

I've got a 15:1 ratio. 7.62 x 39's are a bargain at $.30 apiece...

Thu, 08/14/2014 - 19:26 | 5094791 Dennisen
Dennisen's picture

Preaching. To. The. Choir.

Thu, 08/14/2014 - 19:28 | 5094798 Hugh_Jass
Hugh_Jass's picture

Back up the truck!

Thu, 08/14/2014 - 19:29 | 5094799 orangegeek
orangegeek's picture

This chart shows silver on its way to 19 - was 20.90 at time of issue

 

http://bullandbearmash.com/chart/spot-silver-daily-breaks-bull-channel-d...

 

Silver is now 19.80-ish and heading lower - wait for some sign of bottoming - key support near 18

Thu, 08/14/2014 - 19:49 | 5094887 whotookmyalias
whotookmyalias's picture

Within the next 2 weeks I will walk into my local PM dealer with a wad of cash and buy 20-25 OZ (depending on if I have to get a tube of Eagles or if they have Maple Leaf's in stock) and walk out, whether it's 20.90, 19.80, or 18.  I will then put it in the back of my safe and forget about it.  Silver is like the lead I stack, the day I actually need it will be a very bad day indeed.

Thu, 08/14/2014 - 19:56 | 5094911 Recognizer
Recognizer's picture

Biggest discount is on the Austiran Philharmonic coins.  Not sure why.

Thu, 08/14/2014 - 20:24 | 5095038 Its_the_economy...
Its_the_economy_stupid's picture

Hint: No demand.

Thu, 08/14/2014 - 21:39 | 5095394 chumbawamba
chumbawamba's picture

Telly Savalas?  lol.

-Chumblez.

Fri, 08/15/2014 - 00:48 | 5096081 RockyRacoon
RockyRacoon's picture

Who loves ya, baby?

Fri, 08/15/2014 - 03:27 | 5096306 BrosephStiglitz
BrosephStiglitz's picture

Hint: Insolvent government liquidating physical assets at firesale prices in attempt to keep the status quo.

I do not know about this article, but I suspect that the demand is still there, though it might not be accelerating.  A glut of supply from central bank vaults has arisen, most likely.

Funny thing about high levels of debt and interest repayments.. the most liquid assets get shunted off first.

Fri, 08/15/2014 - 13:57 | 5098682 Recognizer
Recognizer's picture

Implications are implied.

Thu, 08/14/2014 - 19:58 | 5094918 Bendromeda Strain
Bendromeda Strain's picture

Tell it brutha - don't care what the so-called "price" is, it is still on sale to me. I have been taking advantage of the Phils lately. Some folks don't appreciate the design but I think they are works of art.

Thu, 08/14/2014 - 22:33 | 5095655 Greenskeeper_Carl
Greenskeeper_Carl's picture

just curious, but why is everyone determined to buy eagles/maples? I have some of both, but i still like the lowest premiums, which are generic rounds and bars. When your goal is accumulation of physical silver, is it really worth the extra money to have something particular stamped on it? Where i go, I pay another 8-9% for those vs generics. Wouldnt you rather have 110 buffalos instead of 100 eagles?

Thu, 08/14/2014 - 22:48 | 5095707 Calmyourself
Calmyourself's picture

Yes +100

Thu, 08/14/2014 - 23:57 | 5095935 orez65
orez65's picture

"... why is everyone determined to buy eagles/maples? "

Because they are more liquid than generic rounds and bars.

If you try to trade generic rounds or bars there is more suspicion of counterfeiting.

Fri, 08/15/2014 - 12:58 | 5098340 Calmyourself
Calmyourself's picture

Wrong, no one counterfeits $5 dollar bills or paint by numbers canvases, think again gentlemen..  However they still maintain their $5 value ( in a world wi/o CB's) and or utility if grandma painted it..

Fri, 08/15/2014 - 00:51 | 5096091 RockyRacoon
RockyRacoon's picture

Yo, Carl.  The comment by orez65 is correct.  In a pinch I'd take an Eagle any day. Too many "generic" silver rounds, ingots and all that to have to keep track of for authenticity.

Note:  The premium you are agonizing over does not go away.  It's not like a new car that depreciates when you drive it off the lot.  You get to keep the premium.  And, with any appreciation in the price of silver the premium advances as well.  Great leverage on that relatively small premium.

That's why.

Fri, 08/15/2014 - 08:36 | 5096655 N2OJoe
N2OJoe's picture

I have more faith in a private mint to not "inflate" their coinage with base metal than any .gov mint.

At least the private mint has the consequence of going out of business if they get caught.

As for independant counterfitters, there ARE fake eagles out there already http://marketdailynews.com/2013/05/07/silver-coin-dealers-are-reporting-...

Thu, 08/14/2014 - 19:31 | 5094806 Stanley Kubrick
Stanley Kubrick's picture

This topic's been replayed as much as an I Love Lucy re-run anyways....the 'back-up-the-truck' strategy's been out of vogue for awhile, it's now simply a long-term stacking process...

Thu, 08/14/2014 - 19:41 | 5094847 SHEEPFUKKER
SHEEPFUKKER's picture

My truck seems to always be stuck in reverse. I'll have to get my transmission checked. 

Fri, 08/15/2014 - 03:23 | 5096308 The Navigator
The Navigator's picture

One of these days...

Stacking will pay off, and silver's my baby. Been buying right after the Hunt Bro's crashed it in the early 80's at below $5.

Don't ask me when - my crystal ball been broken since forever and has served me well in most shitty buys of stocks and other prognostications.

Still, consider the the fundamentals, and when you take in the points above, silver (and gold) are a great insurance policy against the 'herion-addicted-central banks' and the monopoly-money-fiat that's in your wallet 

One of these days, real money will be worth a lot more than you paid for it today.

If money and currency are not clear, Mike Maloney has some great vids at http://hiddensecretsofmoney.com/

Fri, 08/15/2014 - 05:27 | 5096409 Mr. Ed
Mr. Ed's picture

What would you do if TPTB held an armageddon and refused to ration scarce supplies (that they previously stocked up on like MRE's, gasoline, and other emergency items) for anything other than fiat and PM's at a rate of exchange imposed by THEM ?  You know, something "fair" like $4/oz for silver and $60/oz for gold...?

Or, if TPTB got a stranglehold on some critical (read inescapable) transaction, and uses their power to IMPOSE rates of exchange...

Just curious.

Fri, 08/15/2014 - 08:39 | 5096684 N2OJoe
N2OJoe's picture

Easy, I won't run myself bankrupt by destroying my safety cushion of cash and dumping every last penny I have into PM's. Use the fiat you earn or the cushion for those gov purchases and PM's for anything else.

Thu, 08/14/2014 - 19:32 | 5094812 mayhem_korner
mayhem_korner's picture

 

 

Silver is good to own.  Period.  So the time to acquire is not "now", it's continuously.

Thu, 08/14/2014 - 19:48 | 5094854 sixsigma cygnus...
sixsigma cygnusatratus's picture

Exactly, PMs are part of long-term financial planning.  If one uses short term money for long term purposes (or vice versa), they will get screwed.

Thu, 08/14/2014 - 19:49 | 5094884 mayhem_korner
mayhem_korner's picture

 

 

And if you try to time the "market" on something you simply should accumulate physically, you are playing a fool's game.  If a day comes that you really need silver, what you paid for it will matter little; how much of it you possess will matter much.

Fri, 08/15/2014 - 01:49 | 5096179 Theosebes Goodfellow
Theosebes Goodfellow's picture

I'm fond of the adage that says that a Mercury dime will always buy a loaf of bread, all things being the same, (availability of wheat, etc.). A silver quarter has historically always bought a pound of butter. Very lately butter is through the roof locally. Is this a sign silver is going to explode upward?

The price of a pound of butter in So. Cal. yesterday was on average $4.50-$5.50. It had been until very recently about $3.50 a pond. A silver quarter is currently $3.58 melt value. For it to re-correlate to butter, (and I don't believe they can't not correlate for long), then silver would have to climb to somewhere between $24.90 to $30.45 in the near future, (from yesterday's price of $19.82).

I'd be curious if the local price for butter is a fluke or are folks out there in the rest of the country seeing butter spike as well. I do though a agree with Mayhem. The day you need to spend your silver, (for that aforementioned loaf of bread), you won't remember or care what you paid for it with "paper money".

One last thought: If you become a baker of bread when the only money is silver, you will do very nicely too. And wheat berries store well for a really, really long time. All you would need, apart from the whole wheat is a flour mill, (about $400), and an oven. (The yeast, if done right, is self-replicating, just like in the old days.) And water falls from the sky.

 

Fri, 08/15/2014 - 03:02 | 5096284 RichardParker
RichardParker's picture

Price of butter has been stable in the south, northeast, and midwest at $2.00/lb for at least the past 3 years at discount supermarkets such as Aldi and Save-A-Lot.  I've lived in all three of those areas for work and shopped at both stores.

Fri, 08/15/2014 - 03:41 | 5096328 The Navigator
The Navigator's picture

TG

Your pricing is about right.

Pre-65 dimes and quarters are a great way to have small denominations of 'spendable' silver. AND these are verifiable units of silver - as far as I know, there have never been any fake dimes or quarters made (as opposed to some fake $1 Moragns being made in China).

My strategy in silver has been, own everything - bars, junk silver (pre '65 coins), bars, collectibles, ASE, Canadians, Aussies (Perth Mints - beauties).... diversity is key, when one version isn't acceptable by a seller, another version may be. And that seller (of whatever) may be your key to getting "off the island" or "out on the last plane" or "through the border".

The only down side to silver is, after you've accumulated all the beauties, they start to weigh more then your ammo, and then it's a choice of which do you take - and thus the advantage of gold.

Hard choices, but you have to consider all.

Just my 2 (copper, with a lot of zinc) cents.

Thu, 08/14/2014 - 19:36 | 5094814 koncaswatch
koncaswatch's picture

Damn... can't find the link. I read yesterday that Mexico was rumored to have a plan to go to silver backed Peso. Anybody else pick that up?

Edit: http://www.shtfplan.com/headline-news/mexico-looks-to-back-peso-with-silver-would-unleash-a-global-power-shift_07112014

Thu, 08/14/2014 - 19:38 | 5094833 fonzannoon
fonzannoon's picture

Did anyone else laugh hysterically out loud at that inflation adjusted chart? That looks like the worst inflation protection I have ever seen. Overlay that chart against the dow or spy. I double dare you Casey.

Thu, 08/14/2014 - 19:45 | 5094866 mayhem_korner
mayhem_korner's picture

 

 

Worst inflation protection, or most effective price suppression? 

Thu, 08/14/2014 - 19:47 | 5094876 fonzannoon
fonzannoon's picture

prob both eh?

Thu, 08/14/2014 - 19:41 | 5094850 Tinky
Tinky's picture

Hugo Salinas-Price, who knows a thing or two about Mexico and money, in a response to Jesse on the topic: "wishful thinking by someone".

Thu, 08/14/2014 - 20:21 | 5095023 Bossman1967
Bossman1967's picture

Yes I read the article but then Obama would have to nuke them and say it was the cartels and they know it.

Thu, 08/14/2014 - 19:37 | 5094824 bentaxle
bentaxle's picture

So how are they fixing silver from now on? Reuters was rumoured to be in the frame.

Thu, 08/14/2014 - 19:40 | 5094841 TheRideNeverEnds
TheRideNeverEnds's picture

Those are all valid reasons but the one reason I am not buying any now is because I am waiting to buy it under $10 next year.

Thu, 08/14/2014 - 19:59 | 5094936 Bendromeda Strain
Bendromeda Strain's picture

Pfft - speculator...

Thu, 08/14/2014 - 21:24 | 5095320 Keyser
Keyser's picture

If it goes to $10 then all silver mining will cease... I wonder what that will do to demand?

Fri, 08/15/2014 - 00:40 | 5096039 Implied Violins
Implied Violins's picture

I'm more worried about lead mining ceasing...

*looks around at the world*

Um, forget that...where can I buy shares in lead mines??!

Thu, 08/14/2014 - 19:41 | 5094846 homebody
homebody's picture

I agree with most of your comments but my greatest problem with silver is that there is no easy market here to sell it.  I will not take it to a pawn shop or some clipo jewelry store - any suggestions?

Thu, 08/14/2014 - 19:51 | 5094900 fonzannoon
fonzannoon's picture

yeah, don't buy it to sell it. This place is littered with people who have had to sell. They all got crushed.

Thu, 08/14/2014 - 19:58 | 5094927 brown_hornet
brown_hornet's picture

Black Market

Thu, 08/14/2014 - 20:05 | 5094960 Bendromeda Strain
Bendromeda Strain's picture

I "traded" some at a gun shop - got a good price too based on daily spot. This was back when it was in the mid-30s. I won't part with any until it returns >$30 again, which I expect circa 2015.75

Thu, 08/14/2014 - 20:24 | 5095036 Bossman1967
Bossman1967's picture

Ebay only 13 percent if you use paypal for the pay maethod so one ounce sell for 23-24 and youll net 21

Fri, 08/15/2014 - 02:26 | 5096227 deflator
Thu, 08/14/2014 - 19:42 | 5094856 Dr. Gonzo
Dr. Gonzo's picture

All that just occured to me last night so I ordered 360 Eagles. 

Thu, 08/14/2014 - 19:43 | 5094859 Ban KKiller
Ban KKiller's picture

I like it because it is shiny. It balances well with the dull color of lead. 
Biggest investment is in land...farm land.  

Thu, 08/14/2014 - 20:25 | 5095043 Bossman1967
Bossman1967's picture

But during marshal law Obumer takes the land

Thu, 08/14/2014 - 22:50 | 5095717 Calmyourself
Calmyourself's picture

Who farms it, surplus zimbabweans??

Fri, 08/15/2014 - 05:14 | 5096398 Lanka
Lanka's picture

FEMA-District 12.

Thu, 08/14/2014 - 19:45 | 5094863 Dr. Gonzo
Dr. Gonzo's picture

If you're not sure about the value of silver get your hands on a sterling cup. Put some ice in it and fix yourself a drink. You'll figure it out. Friggin magic and stuff happens.

Thu, 08/14/2014 - 20:09 | 5094973 Bendromeda Strain
Bendromeda Strain's picture

According to Pawn Stars, one of the slowest moving items in the store are sterling sets. If you want to get a good deal on some silver do your homework and make an offer on some vintage dinnerware. I love eating off of my Manchester Doric set.

Thu, 08/14/2014 - 20:22 | 5095027 Dr. Gonzo
Dr. Gonzo's picture

I don't know about utensils but a decent cup to drink out of on Ebay is not cheap. I bought a 42 year old thin sterling golf trophy cup that will hold 3/4 of beer for $90 and I had to fight for it. Cost me $20 above spot and was getting tired of loosing auctions. If you don't have a silver cup I reccomend getting one. It's the best. 

Thu, 08/14/2014 - 22:20 | 5095592 Mr Pink
Mr Pink's picture

You probably bought a mint julep cup. I have some that go for $500 each. Goblets can also fetch a nice premium. I have many of both and just about everyhting else including thousands of pieces of flatware and hollowware. Then again I buy and sell sterling for a living. I also like to keep a lot for myself. A cocktail in a sterling cup will give you frostbite on your hand. Lol. You might not want to keep a sterling fork in a plate of hot food for more than 30 seconds. Ouch!

Thu, 08/14/2014 - 22:22 | 5095603 Bemused Observer
Bemused Observer's picture

Gorham Fontainebleu is mine. And yes, you can get sterling flatware and holloware for next to nothing if you shop...

Thu, 08/14/2014 - 21:03 | 5095213 creeko
creeko's picture

Okay... now I'm interested.  I like magic, and I like silver.  What kind of magic are we talking about?

Thu, 08/14/2014 - 19:46 | 5094874 SuperVinci
SuperVinci's picture

blah blah blah pump silver. (again).

all your silver is going to be worth so little once gold is revalued.

Silver is for the chumps and muppets.

Only 1 stores value the best. Only 1 is being aquired by CBs around the world.Only 1 is on line 1 on ECB balance sheet and MTM every Q.

Gold, get you some.

Thu, 08/14/2014 - 20:17 | 5095004 Bendromeda Strain
Bendromeda Strain's picture

Dear FOFOA douche, we have heard it all before. The panic to divest from paper will lead to a massive rush into silver as the majority of people will be in that market, vice gold. The "accumulating CBs around the world" just so happen not to include the Luciferian puppet masters you pin your hopes on. But carry on, I'm sure your smarminess will take you far in a collapse. 

Fri, 08/15/2014 - 04:23 | 5096355 CHX
CHX's picture

FOFOA is nice (but heavy) to read and lots of interesting thoughts. Clearly, the monetary giants are in gold. So what should we shrimps do? Bet on either or do both? The latter is less of a gamble IMHO. 

Fri, 08/15/2014 - 08:32 | 5096664 SuperVinci
SuperVinci's picture

Bet on neither. read. understand. do.

Thu, 08/14/2014 - 21:16 | 5095279 SilverIsMoney
SilverIsMoney's picture

LOL... I love how you gold snobs believe yourself to be such rebels when you're stacking the central banks metal. I could afford much more gold than silver but I prefer to stack roughly 200oz of silver to every OZ of gold in large part because the central banks have no control over silver because they take the same ignorant approach you do that Silver is not money even though it's historically been used as money more times in more places than gold ever has. It is the people's money and totally within our control and your gold will only be used against you in the next system by the people who currently control the majority of it. Silver is the truly revolutionary buy.

You're using central bank security as the foundation for your argument for gold while at the same time betting against said central banks by stacking physical. Hello? If you have so much confidence in central banks go back to buying stocks. Silver is the real achilles heel to the system: 

https://www.youtube.com/watch?v=QHc4Vp4I9_I

 

Thu, 08/14/2014 - 21:48 | 5095436 chumbawamba
chumbawamba's picture

You go on believing that, player.

I am Chumbawamba.

Thu, 08/14/2014 - 22:52 | 5095726 HamFistedIdiot
HamFistedIdiot's picture

My investment/insurance is almost entirely silver, and I continue to add whenever I can. Attitude aside, the poster could be right. The GSR is pushing 67:1 again, and for all I now it's going to 70, 80, and higher. I am VERY concerned that if there is a revluation of gold to back international settlements, as Jim Rickards states is a possibility, there is a chance that silver will not "go to the moon" as so many predict. The controllers on this planet HATE silver, as far as I can tell. I think the CBs are very much in charge. It pains me to be betting against them all the time. I could easily see a situation where gold is $10,000 and silver just $100, or a GSR of 100. Gold may be the better bet, I hope to not have to sell any silver until the GSR is back under 30 somewhere. At that point I may trade for gold or buy real estate. Another indicator to watch is how many ounces of gold it takes to buy the DOW. Franklin Sanders is looking for 2 oz gold to buy the DOW. For today's DOW gold will have to be $8400 per oz. When it hits that 2:1 ratio, he will go back into equities. (Or DOW crashes to 7000 and gold rises to $3500 -- same ratio)

Fri, 08/15/2014 - 04:14 | 5096351 CHX
CHX's picture

Do both, they have different underlying market mechanics / fundamentals, but what they share is that the paper market sets the physical price (for now) and that paper gold/silver is in excess of 2 orders of magnitude of the available physical metal. If gold is revalued first, say by a factor 10 (20, 50, 100, whatever) sell some and get silver with the proceeds (or vice versa, but that is unlikely)... that will get you a double rocket launch... But my guess is when the paper market crumbles, all PMs will be revalued after a bank holiday, and all paper claims (and outstanding derivatives) will be settled in cash in the previous "old" price. The elite (banks and CB) will have plenty of metal and are off the hook for their fraudent paper shorts (with very nice paper gains pre- and post- crisis), and the system will be reliquified.

Thu, 08/14/2014 - 19:48 | 5094882 Dr. Gonzo
Dr. Gonzo's picture

Rhodium up about 50% the past 6 months...Could be silver's turn next.

Fri, 08/15/2014 - 00:18 | 5095996 stacking12321
stacking12321's picture

palladium up 20% since beginning of year...could be praesodynium's turn next.

Fri, 08/15/2014 - 04:04 | 5096346 CHX
CHX's picture

Obamium got re-elected, and Hillarium might be next.

Thu, 08/14/2014 - 19:51 | 5094898 Recognizer
Recognizer's picture

So... you are pointing out that silver has the highest percent change among metals from 10 years ago and then you go on to tell us that it is undervalued relative to other metals.

I guess whatever sure.

Thu, 08/14/2014 - 19:58 | 5094921 Caveman93
Caveman93's picture

Deflate this shit to $8.50/oz, I will be on it like white on rice! Too BAD there will not be any available physical to get at that point I'm afraid!

Thu, 08/14/2014 - 20:32 | 5095081 Its_the_economy...
Its_the_economy_stupid's picture

$8.50 paper will still be $20-30 PHYSICAL when you factor premium.

Thu, 08/14/2014 - 20:02 | 5094946 Seize Mars
Seize Mars's picture

It's the most epic mispricing ever. Someday, after the fucking credit wars, when we're all eating bugs or ancient ketchup packets or whatever, people will say, "wait: you had the chance to trade debt for equity?"

 

Thu, 08/14/2014 - 20:10 | 5094969 Dr. Gonzo
Dr. Gonzo's picture

But if you don't like silver you can always put your money in the stock market, or a bank, or invest in real estate...and they are all being supported by the govennment's printing money so you'll have that going for you...Ha. Ha. Just kidding. You're fucked if you do thoses things. 

Thu, 08/14/2014 - 20:13 | 5094989 quietdude
quietdude's picture

FUCK SILVER AND GOLD - Cut out the middleman and get non perishable food. After you have not eaten for a week, you will trade the shiny for a bowl of rice. Sooooo store rice :-)

Thu, 08/14/2014 - 20:26 | 5095049 Dr. Gonzo
Dr. Gonzo's picture

No offense but some people have money left over after they buy supplies.

Sat, 08/16/2014 - 18:12 | 5103117 quietdude
quietdude's picture

OK Doc - You have a valid point about surplus funds. What blows me away are folks who do not store food and think metals or weapons will save them. You need food, water, and shelter every day.

Thu, 08/14/2014 - 21:50 | 5095452 RaiZH
RaiZH's picture

Rice takes up too much space in my mum's basement. 

Thu, 08/14/2014 - 20:28 | 5095059 gorilla biscuit
gorilla biscuit's picture

I've been hearing this shit for years. There is no inflation and QE is getting cut back so what will be the catalyst, an economic meltdown like we had in 2008. When the stock market crashed gold and siver crashed along with it to help pay off the losses and if inflation really kicks in they will raise interest rates which will support the dollor not PM. So what could be the catalyst inquring minds would like to know.   

Thu, 08/14/2014 - 21:00 | 5095184 messymerry
messymerry's picture

@Gorilla Biscuit:

WAR!,,,orrr, Domestic Unrest. 

See Fergusion.

Thu, 08/14/2014 - 21:32 | 5095358 Keyser
Keyser's picture

If there is no demand for gold, then why is it migrating to the east by the tonne? 

Fri, 08/15/2014 - 04:35 | 5096279 CHX
CHX's picture

They CANNOT raise interest rates, else the bond ponzi scheme (and the interest rates derivative bomb) in the 100+T) blow and all the world governments are bankrupt over night. This is what's different this time, they can't pull a volker.

Thu, 08/14/2014 - 21:27 | 5095344 alexcojones
alexcojones's picture

7 Good Reasons to BUY Silver.

1. ETFs hold less silver than they claim, bitchez

2. The PTB don't want you to own silver.

3. Your friends laugh at you for mentioning silver.

4. The Media talks down owning gold & silver, (Putin, 9-11 Conspiracies, Bundy Ranch etc)

5. Silver is the choice of pirates and priests and Jesus and Judas

6. Silver is antibacterial, keeps zombies and germs and central banks at bay

7. Silver, like SEX, just feels Goooooooooooooooooooooooooood

Alex Casey CoJones

Thu, 08/14/2014 - 22:03 | 5095507 espirit
espirit's picture

...and if you have a bad case of werewolves, it will take the place of Pb.

Thu, 08/14/2014 - 23:38 | 5095886 metaStable
metaStable's picture

8. metaStable sold his digital camera and is now exclusively shooting film.

Fri, 08/15/2014 - 04:03 | 5096344 The Navigator
The Navigator's picture

Thanks for posting #3 - your friends laugh at you foe mentioning silver.

A book I read a while ago titled "blood in the streets" could have been boiled down to 2 sentences:

Buy when everyone else wants to sell

and

sell when everyone wants to buy

And looking at silver at $20 (+/-) - I'd say there's blood in the streets.......... bloody good time to buy.

But please, consult your own broken crystal ball.

 

Thu, 08/14/2014 - 21:43 | 5095411 Izznogood
Izznogood's picture

Take away the anomaly of 1980 when the market was cornered in an illegal way and the picture looks somewhat different.

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

Thu, 08/14/2014 - 22:11 | 5095543 espirit
espirit's picture

Nice.

Another rollback to 8 would be a wonderful thing.

Dollah cost averaging, Bitchez.

Fri, 08/15/2014 - 00:14 | 5095978 Boxed Merlot
Boxed Merlot's picture

1980 when the market was cornered in an illegal way...

 

 

Uh, not exactly.  There was nothing illegal in what the Hunts were doing.  If anything, the response of the entities that currently continue to exert their fraudulent paper promises only then realized their need to double / triple / etc. down their own efforts and the world is now a tinderbox of multi-color inked cellulose and algo driven electronic cyphers being held together with a notion of trust.

The dominoes keep getting stood up but the funny thing is, they don't have to start falling from the end, it could happen anywhere along the line.

 

jmo.

Fri, 08/15/2014 - 07:17 | 5096218 CHX
CHX's picture

Take away the anomaly of the market being currently cornered in an illegal way by naked shorts and the picture would look somewhat different. It will be interesting what'll happen to the Shanghai exchange where in the last 18 or so months the silver stocks have been reduced by ~90% to below a 150 tonnes now (Hat tip to Steve SRSrocco ! ). Few weeks/months and  they should have a major shortage (and seemingly are in backwardation there with a ~8% premium on phyzz to the paper CONeX fraud prices. The heat is turning up, for sure.

Thu, 08/14/2014 - 21:56 | 5095472 swanpoint
swanpoint's picture

My PSLV is down 50%, PSLV is down 16% since lifetime. I worry.

Thu, 08/14/2014 - 22:06 | 5095522 espirit
espirit's picture

What part of "if you don't hold it, you don't own it" don't you understand?

My Ase's are just fine.

Thu, 08/14/2014 - 22:14 | 5095561 edifice
edifice's picture

You're trotting this stuff out, again? Don't you and Mike Baloney ever give up?

Thu, 08/14/2014 - 23:52 | 5095932 Hongcha
Hongcha's picture

Figure out the all-in mining cost average and buy physical when it gets there.  Pay cash and no margin and don't be in a hurry.  Make the manipulation work for you, we may have to live with it a good while longer with the vermin in office in DC.

Fri, 08/15/2014 - 00:54 | 5096101 Conax
Conax's picture

Best reason to buy silver is

the assholes hate it when you do that.

This is all I need to know. 

Fri, 08/15/2014 - 01:03 | 5096116 Son of Loki
Son of Loki's picture

I buy physical because my gf loves Hard Assets .....

Fri, 08/15/2014 - 02:20 | 5096215 CHX
CHX's picture

I think I read about the silver derivatives being 5 T dollars, and that is for a global yearly silver production (including scrap) of ~1 billion ounces, at current prices a roughly 20 bln market (a few weeks of current official QE). "Some entity/ies" already pay a high price to keep the price this low. Physical silver (just like gold) have to be kept down for as long as they can. Yes these are probably the most undervalued 2 assets (for different reasons though) on the face of the earth. Good luck to all, we'll all need it.

Fri, 08/15/2014 - 06:48 | 5096465 Notsobadwlad
Notsobadwlad's picture

Maybe you should do the same analysis on something people actually need or use ... dumbass, like food or fuel.

As for #2... think of it logically. In an era of greater automation and efficiencies, how on earth can the chart you show be accurate?

A. It cannot possibly be and so it is a lie designed to look like the truth by using selective data
B. The costs shown there do not relate to the actual cost of production, but something else, like the effects of finacialization.

Inventories are not actually low, they have simply been redistributed ,,, think about it. The actual amount of silver used has declined.

Fri, 08/15/2014 - 08:11 | 5096605 Bendromeda Strain
Bendromeda Strain's picture

I thought you were an idiot until I checked your links - great research!

Fri, 08/15/2014 - 07:01 | 5096470 honestann
honestann's picture

I find the data for nickel to be interesting but confusing.  How can the price of nickel is only 17% higher than the price 10 years ago, given inflation?  That is such a low increase in price compared to the other metals.

Why is this?  Can anyone explain this to me?  Thanks.

-----

Also, when the economic SHTF, the dynamics for silver will be very chaotic and perhaps difficult to predict.  On the one hand, demand for industrial purposes may collapse.  But on the other hand, demand for an alternative to the endless fiat the central banksters will flood the world with will be substantial.

Which will dominate?  In contrast, the collapse in demand for industrial consumption of gold will be small, while the demand for an alternative to fiat will be huge.  Might gold therefore perform better?  I'm not sure.

Fri, 08/15/2014 - 08:17 | 5096624 Bendromeda Strain
Bendromeda Strain's picture

Ann - think of it this way. If people are actually in a period and mindset where "physical" is desired and fiat prices have dramatically increased, which would be easier to negotiate - a few hundred dollars worth of microgold, or silver you can still weigh and fraction? Of course, if you think that the transition (digital gold blah blah) will be seamless then by all means continue to speculate.

Fri, 08/15/2014 - 07:29 | 5096515 fukidontknow
fukidontknow's picture

Once again Bloomberg call silver a $5 trillion market - WOW!!!!

 

http://www.bloomberg.com/news/2014-08-14/silver-price-going-electronic-i...

Fri, 08/15/2014 - 07:50 | 5096557 Fred C Dobbs
Fred C Dobbs's picture

I own both silver and gold.  I would be buying more silver now but I'm in the process of moving it overseas.  My last trip I took 360 ounces carrying it on my person, not the easiest thing to do.  When I get all of my silver out of the USA I will be buying more if prices are like they are today. 

Fri, 08/15/2014 - 15:37 | 5096803 CHX
CHX's picture

End-year sell-off in silver came a bit early today, no? Let's all welcome the new silver fix !

Fri, 08/15/2014 - 09:34 | 5096946 messystateofaffairs
messystateofaffairs's picture

When our Luciferian masters decide what will be money then that will be money, none of you are members of the club that makes those decisions so don't waste too much time reading tea leaves. In the meantime all who want to try and be as free as possible should spread their bets around. Buy valuable and tradeable stuff. Gold, silver, other PM's, rentable or farmable real estate, ammunition of popular calibers, rice packed in nitrogen, art?, and everybodies favorite, bitcoin. Whatever it is hold the actual stuff yourself. Don't buy anything whose value is determined by that elaborate ponzi scheme called fiat. Stay clear of tulips and seashells (except maybe rare valuable collectable ones). Invest in diversified real stuff, some of which MIGHT become mainstream money and some which folks are likely to need to use. Wish I could opine on stawks but I just don't have a clue, except brokers are con artists. Thing is though how you going to buy all that stuff when finding stuff to trade to that increasing pool of increasingly brokeass customers is making money earning a big ordeal?

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