Silver is scarce.
Shortages in physical silver have pushed silver up more than 674% from January 2, 2001 to January 2, 2013
Silver is cheap.
Short sellers have provided the opportunity to buy silver at an artificially low price.
(1) NUMBER ONE REASON TO BUY SILVER (& GOLD) NOW:
Capital controls are coming. I believe capital controls will be imposed within the next 24 months.
What are capital controls? Capital controls regulate the flow of money. They are measures to restrict the flow of capital. These protectionist restrictions can include taxes on financial transactions -and- regulations on the sale or purchase of equities and bonds. Capital controls can require mandatory approval from authorities before money is spent on competing currencies such as gold and silver.
(2) MORE QUANTITATIVE EASING JUST ANNOUNCED.
September 13, 2012, the Fed announced open-ended QEIII. With this open-ended arrangement -coupled with the June arrangement- the Fed will be directly monetizing the United States deficit by printing more than $1 trillion per year. (Read up on Weimar, Germany)
September 13, the Fed’s Committee in charge of buying and selling U. S. Treasury securities directed the New York Fed to purchase $40 billion per month of mortgage-backed securities (MBS) and to continue the purchase of longer term securities (announced in June). These actions together will increase the Committee’s holding of longer-term securities by about $85 billion per month, which amounts to more than $1 trillion per year.
Since 2008, the Fed has purchased extraordinary amounts of long-term U. S. Treasury Bonds. With purchases known as Quantitative Easing I & II, the central bank injected $2.3 trillion into the financial system after the collapse of Lehman Brothers and Bear Stearns.
When a country monetizes its own debt, it eventually produces economic chaos by destroying the value of its currency. There is no mystery here. Creation of money out of thin air –monetary inflation- leads to price inflation of goods, services and commodities. The Invisible Tax
The FED will continue to create mind-boggling amounts of money and credit to stave off a market collapse. The U. S. is no longer able to finance its debt by selling Treasuries to foreigners; countries such as China and Russia are transitioning out of dollars. Asia is purchasing fewer long-term U.S. Treasury Bonds and quadrupling their gold and silver purchases.
At around $35 per ounce, silver is cheap! Are you ready for $75, $100, $150 silver?
(3) HISTORICAL GOLD to SILVER RATIO OUT OF WHACK! The age-old ratio of the price of one ounce of gold to the price of silver was about 15 to 1. Today (September 27, 2012) an ounce of gold sells for 51 times the price of an ounce of silver. Silver is under-priced, compared to gold. Silver will catch up to gold when the average American finally realizes he needs silver—real money he’ll be able to afford.
(4) AMERICA’S NATIONAL DEFENSE SILVER STOCKPILE IS GONE!
In 1942, the U.S. silver stockpile equaled 2 billion ounces. Today, the U. S. Mint must buy silver on the open market to fill Silver Eagle orders. Private supplies of small bars and coins are also dwindling.
Where did all the silver go?
(5) SILVER IS INDISPENSABLE.
Because of its unique properties, silver is required increasingly in industry. As the best conductor of electricity, it is used in switches, high-tech, medicine, automobiles, batteries, cameras, jet engines, plastics, insulation, air conditioning, appliances, photography, antifreeze, solar cells, water purification, computers, weaponry, etc. In addition, silver -increasingly- will be used as money for barter.
(6) WORLDWIDE INDUSTRIAL DEMAND OUTSTRIPS SUPPLY. All known stored silver in the world is estimated to be only 350 million oz. Worldwide silver demand is about 900 million oz. a year. The amount of physical silver left for investors -after subtracting manufacturing demand- is about 100 million ounces per year ($3.5 billion). Stockpiles have been swallowed up by countries such as the U.S., China and India, pushing the price up more than 500% in the last ten years.
(7) CHINA WANTS MORE. China is the world’s largest investor in copper/silver mining operations. The Chinese government – besides acquiring silver for itself – is encouraging its citizens to buy silver (and gold). That means we will have increased demand for limited supplies. London metals traders report Asia is vacuuming up all available physical gold and silver at the exchanges.
(8) PAPER SILVER PRICES DO NOT REFLECT PHYSICAL SILVER SCARCITY. Brokersare trading contracts representing millions of ounces of silver on commodity exchanges like the COMEX and through ETF’s (Exchange Traded Funds). The commodity exchanges are currently short the physical silver needed to cover their positions. Research supports fears that physical silver and gold bars in storage facilities have been rehypothecated as much as 100 to 1 or more. We could see a price explosion resulting from a financial run on the exchanges at any time. When nervous investors demand physical delivery of their gold and silver contracts, they will be offered cash rather than precious metals.
(9) THE NEW WALL STREET REFORM ACT WILL REGULATE YOU. It will be too late for privacy when most investors realize that hidden in the new 2,300-page bill are new rules that allow the government to violate consumer privacy and monitor all transactions. The new law allows government to use personal financial data to regulate consumer choices. Don’t wait for the law to be repealed or until such a law goes into effect.
(10) HIGHER TAXES? Congress has tossed around the idea of imposing a Financial Transaction Tax, and a Value Added Tax on all purchases. VATS around the world are used to collect up to 20% additional taxes on purchases. As the financial mess worsens, politicians will desperately seek new ways to tax.
WHEN SHOULD YOU BUY? Buy when you have the wherewithal to do it. Buy while physical gold and silver is still available. Buy before government restricts you with capital controls. Buy before government imposes a financial transaction tax or a VAT (Value Added Tax). Buy while it is still legal to buy gold and silver. A desperate government could restrict transactions on competing currencies – such as gold and silver.
Throughout history – in times of price inflation or price deflation – silver and gold function as “real money.” Act now.
WHAT TO BUY Own the actual physical metals / coins. Buy U. S. 1 oz. Silver Eagles (100 at a time, or 500 in a sealed box from the U.S. Mint). Also, buy bags of pre-1965 90% U. S. silver dimes, quarters and half-dollars (1/4, 1/2 or full bags). (My minimum is $3,000 and my rates are competitive nationally.)