When silver moves, silver moves like a freight train. The last time silver took off extraordinarily (2011), it climbed 160% in 9 months, supplies dried up overnight, and world mints had no silver to deliver for months.
Global financial markets are tied together. Investors look ahead and trade on anticipation. It is now extremely bullish for silver! Silver will make new, all-time highs. Just be sure to buy PHYSICAL silver.
SILVER IS IDEAL MONEY — It is very easy to trade, portable, divisible, easy to recognize, and rare.
(1) PHYSICAL SILVER IS IDEAL FOR BARTERING, and it is PORTFOLIO INSURANCE. Actual silver will give you liquidity and tradability, no matter what happens. Throughout history –in times of inflation or deflation– silver has always functioned as a store of value. And when the dollar declines precipitously, you will want small silver coins (or small bars or rounds) to barter for necessities, such as food and water. Example: You would want some old silver dimes or quarters to barter for a loaf of bread; a gold coin would be overkill for such a small transaction.
(2) THE PRICE OF SILVER WILL SKY-ROCKET BECAUSE OF MONEY PRINTING. The Federal Reserve is directly monetizing the lion’s share of U.S. Treasury Bonds. Debt monetization eventually produces economic chaos. There is no mystery here. Massive credit creation destroys the value of paper currency and the result is price inflation. As the Fed continues to create mind-boggling amounts of credit (new debt), people will run to silver for value.
(3) SILVER IS UNDER-PRICED COMPARED TO THE PRICE OF GOLD: THE GOLD-to-SILVER RATIO IS OUT OF WHACK. The historical norm for the relationship of gold to silver is a ratio of 15 to 1. Traditionally, fifteen ounces of silver equaled the value of one ounce of gold. Today (8/24/2017), the price gold is $1,286 and silver is $16.99 per ounce. So one ounce of gold is more than 75 times the price of 1 ounce of silver – a ratio of 75 to 1. The silver price will catch up to the gold price when average Americans turn to silver because it is more affordable than gold. And when the precious metals markets move dramatically, silver goes up faster because it’s much easier for silver to double or triple than for gold because you are starting at such a lower price.
(4) AMERICA’S NATIONAL DEFENSE SILVER STOCKPILE IS GONE! It is estimated the U.S. silver stockpiled 6 billion oz 100 years ago. In 1942, the silver stockpile was 2 billion oz. Today there is no stockpile at all. The U.S. Mint now purchases silver on the open market to mint Silver Eagle coins.
Where did all the silver go? Industry. The overall properties of silver have led to new, high-tech applications every year. Much of the silver used in industry is not recovered. The silver is difficult to recycle because it is applied in such small, per-unit amounts.
(5) SILVER IS INDISPENSABLE. Because of its unique properties, silver is required increasingly in industry – at least 10,000 uses. Silver is not harmful to people, but it works as a biocide; it eliminates mold, mildew, bacteria, and odors in textiles, shoes, socks, and sports equipment. As the best conductor of electricity, silver is used in switches, automobiles, batteries, photography, cameras, jet engines, plastics, insulation, air conditioning, solar cells, appliances (practically every device in your kitchen has silver in it), water purification, antifreeze, all types of computers, mobile phone glass, weaponry, medical devices, hand-held computers, tablets, and high-tech everything.
(6) WORLDWIDE INDUSTRIAL DEMAND OUTSTRIPS MINE PRODUCTION. All known stored silver in the world is estimated to be only 350 million oz. Worldwide silver production was 877.5 million oz in 2014. Demand for silver climbed to nearly 1.1 BILLION oz, including jewelry, silverware and coins and bars. After subtracting the silver needed by industry, the amount of physical silver left for investors all around the world was 196 million oz in 2014. With 2015 production to be about the same as 2014, this means there is only about $3 billion of physical silver for investors (with silver at $15 per oz).
Every year, trillions of newly printed dollars flood the U.S. economy. When global debt dominoes start falling, TRILLIONS of newly created dollars (and Euros, etc.) will be chasing only $3 billion of PHYSICAL silver! Indeed, the silver market is tiny when compared to the stock market and the amount of paper money that has been printed.
(7) CHINA & INDIA WANT MORE. China is the world’s largest investor in copper/ silver mining operations. The Chinese government – besides acquiring silver for the central bank– is encouraging its citizens to buy silver. That means a significant increase in demand for limited supplies. London metals traders report China and India are vacuuming available silver bullion on the exchanges.
(8) PAPER SILVER PRICES DO NOT REFLECT PHYSICAL SILVER SCARCITY. The price of silver is cheap. Brokers are trading contracts representing millions of ounces of silver on commodity exchanges such as the COMEX- through ETF’s (Exchange Traded Funds) and futures contracts. Exchanges are currently short the physical silver needed to cover delivery orders. Research supports fears that physical silver bars in storage facilities have been “rehypothecated” 350 to 1. The exchanges sell the same physical ounce of silver over and over – three hundred fifty times!
Silver has been scarce since 2007. Every year, we have experienced supply chain disruptions when just a few mega buyers have taken delivery of coins and bars. The supply chain has been overwhelmed, with deliveries delayed as much as two months. When something spooks the markets there won’t be enough silver to go around.
(9) WALL STREET REGULATIONS AND CAPITAL CONTROLS ARE UPON US. The new 2,300-page Dodd/ Frank bill includes 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. Do not wait for all aspects of the law to go into effect. Also, the war on cash is heating up – with more controls in place at banks and plans. Further, governments are notorious for adopting restrictions on the movement of capital when their currency falters.
(10) HIGHER TAXES. Congress has tossed around the idea of imposing a Financial Transaction Tax, and a Value Added Tax on precious metal 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, and while physical silver is still available. PAPER silver short-sellers have provided an opportunity for you to buy silver at an artificially low price. We could see a price explosion resulting from a run on the exchanges at any time. When nervous investors demand physical delivery of silver contracts, they will be offered cash, rather than bars of silver.
Buy silver while it is still legal to buy it. Take delivery before government imposes a financial transaction tax or capital controls. Bankrupt governments always end up trying to restrict, tax, and control gold and silver. Convert at least 10%, possibly up to 25%, of your assets into precious metals now.
By Denise Rhyne
WHAT TO BUY? Own the actual silver. If you have physical coins in your possession, you are not dependent on a third party.
1 oz American Silver Eagles
100 at a time, or
500 in a “Monster Box” from the U.S. Mint
U.S. silver 90% silver coins – dimes, quarters, & halves
A full bag is $1,000 face value: 10,000 dimes, or 4,000 quarters, or 2,000 half dollars. One full bag contains approximately 715 ounces of pure silver.
The gross weight of a full bag is 55 lbs. Full bags are delivered in ½ bags for convenience. “Junk silver” coins (circulated condition, pre-1965 silver coins) are delivered in canvas bags of one denomination. Smaller bags are available: 1/10 bag = $100 face; 1/4 bag= $250 face value; 1/2 bag= $500 face value.