Thursday, 7 April 2011

Investors Pile Into Physical Silver

Investors Pile Into Physical Silver



People do not want eroding dollars in their account. Coupled with low interest earned, they are therefore piling into SILVER.

Investors Pile Into Physical Silver
Posted by Adam Sharp - Monday, April 4th, 2011

The Financial Times put out a nice piece on silver mania today. Here's an excerpt, along with a very informative infographic. Emphasis added.
"Silver’s hot. People want it. People don’t want to have money in the bank," says Eric Streiner, the shop’s manager. Buyers include everyone from “business executives to lunatics", he adds.
Why would people want constantly-eroding dollars in their bank account? When you account for inflation and taxes on the pitiful interest earned, the appeal of precious metals is obvious. More on that here.
Nowhere is the unbridled enthusiasm for silver clearer than at the level of coins and small bars – the type of product most accessible to smaller investors. All the world’s top mints are selling silver coins at record pace: the US Mint has sold 12.4m ounces of silver American Eagles in the first three months of the year – equivalent to about 6 per cent of quarterly global mine output.
In Q1, US Mint sales accounted for 6% of total global mine output. That is a staggering amount of investor demand. It should serve as a warning to the Fed and Treasury. Rest assured, they'll ignore it and continue on with business as usual.
The FT also put together this excellent infographic. The bottom-left chart shows sales of U.S. Silver Eagles. Talk about a ramp...
silver outlook

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Why There Is No Upside Limit for Gold and Silver Prices

Why There Is No Upside Limit for Gold and Silver Prices

Why There Is No Upside Limit for Gold and Silver Prices

March 31, 2011
The past decade has seen a virtually nonstop advance in the price of gold.  Silver, which lagged gold until last year,  recently hit a 31 year price high.  Gold and silver, both used as currency for thousands of years, have gained broad investor appeal as a hedge against paper currencies.
The increase in the value of gold and silver is due to the fiscal and monetary policies of nations struggling to deal with massive levels of debt - policies that virtually guarantee a continued rise in the price of gold and silver.
Central banks, having exhausted all conventional means of monetary easing, have moved on to the last resort option of quantitative easing and currency debasement.  Federal Reserve Chairman Bernanke has twice resorted to the printing presses, and then shamelessly explained the "virtues" of his money printing policy (in convoluted terms) to a gullible public on national television.  The subsequent absence of broad public opposition to a policy that is certain to ultimately destroy the financial well being of most Americans seems based on ignorance and/or indifference.
One American who is not ignorant or indifferent to the Fed's policy of printing money issued a dire warning this week on the dangerous path the Federal Reserve has taken.  The reason we should all pay great attention to this warning is because it was issued by a powerful policy maker at the Federal Reserve.
According to Reuters, Richard Fisher, President of the Dallas Federal Reserve stated in a speech that the debt situation in the U.S. is at a "tipping point." He is quoted as saying, "If we continue down on the path on which the fiscal authorities put us, we will become insolvent.  The question is when".   Bank President Fisher further said that no additional extraordinary measures should be taken when the current round of money printing ends in June of this year.
We shall see what happens comes mid year when QE2 is scheduled to end.  The problem facing the Fed is that they are out of conventional policy bullets to ease credit conditions with rates already at zero.  The ease and apparent lack of consequences in printing money has made additional quantitative easing a very seductive method of  allowing huge deficit spending by the government.  QE2 is a thinly disguised monetization of the Federal deficit in which the Federal Reserve purchases government debt from the primary dealers after they purchase the debt at Treasury auctions.
Government officials argue that unprecedented deficit spending and quantitative easing are necessary to stimulate economic  growth, but this theory has not worked in the real world.  Despite trillions in stimulus spending,  job creation and economic growth have been extremely weak and are likely to remain so according to economists Kenneth Rogoff and Carmen Reinhart who wrote This Time Is Different: Eight Centuries of Financial Folly.  According to Rogoff and Reinhart, economic growth is subpar when public sector debt exceeds 90% of GPD which the U.S. and many other developed nations have already surpassed.  In addition, a recovery of the job and housing markets after a financial crisis take many years due to the burden of excessive levels of debt.  Ultimately, Rogoff and Reinhart predict that austerity measures will need to be imposed along with some type of debt restructuring.
Is the U.S. capable of reducing spending and  instituting austerity measures? Cutting deficits means cutting payments to a long list of incomeless recipients who really don't care where the entitlement money comes from.  Those still actually paying taxes will object strongly to any proposed tax increase to fund government spending.  Unable to cut spending or raise taxes leaves the Government with one bad option - print more money.
Politicians, who value getting elected above all else, are likely to strong arm the reliably compliant Federal Reserve Chairman Ben Bernanke to "come to the rescue" again with QE3.   In the minds of politicians and Federal Reserve officials, there will always be very compelling reasons to continue borrowing and money printing.  With the expected retirement of Federal Reserve Bank of Kansas President Thomas Hoenig this October, the Federal Reserve will be dominated by dovish members who favor the easy money policies of Fed Chairman Bernanke.  President Hoenig is one of the few Fed members who oppose continued zero interest rates and quantitative easing.
The correlation between parabolic increases in government debt and the price of gold is clear.   Since 2000 both government borrowing and the price of gold have been closely correlated as seen below.  The increased value of gold directly reflects the decreasing value of paper money.
A nation that has reached the limits on taxation and borrowing has few viable policy options other than a continuing series of quantitative easing programs.  Current government policies, if left unchanged, virtually guarantee a continued increase in the price of precious metals.
TOTAL PUBLIC DEBT
GOLD PRICE - COURTESY KITCO.COM
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Silver Could Actually Make You Rich !

Silver could actually make you rich !


Welcome to Silver-Investor.com 
Home of the Morgan Report: #1 Resource
for Serious Metals Investors

Because the economy and the market have changed so much in the past 6 to 12 months, I wanted to call your attention to an exclusive video presentation that explains 11 Critical Factors that are affecting the price of silver right now.
You see, there’s one thing I’ve learned during times of economic crisis: The silver market goes largely unnoticed while gold gets all the glory.
But what investors don’t realize is that although gold is a great way to preserve your wealth… it’s silver that could actually make you rich!
Gold’s price has already risen dramatically, but silver is just beginning its climb. Experts believe gold could at least double to $2,000…$2,500…and some say even $5,000! But I believe the price of silver could rise 7 to 8 times its value before hitting its peak thanks to 11 Critical Factors.
To find out all about them in this exclusive video, click to play now.
 
11 Critical Factors
Below, I’ve also included a sneak peek at some silver investing strategies that you absolutely must know…

What you don’t know about the 
Great Gold Boom taking place right now

It’s no secret that we’re in the early stages of a precious metals bull market—and I’m shouting it from the rooftops so my subscribers will be fully prepared to profit in the months ahead.
But with the price of gold so unbelievably high, silver is a more affordable way for you to take profitable advantage of the precious metals boom.
Because it’s going to rocket skyward for all of the same reasons gold will. Here’s why…
Right now we are approaching a monetary crisis of epic proportions.
Since this economic crisis picked up speed in 2008, our government has shunned all sense of fiscal responsibility with:
  • Out-of-control stimulus spending
  • Record-setting deficits in the trillions
  • Job-depleting taxes and regulations
Right under our noses, the bungling Obama Administration and the Federal Reserve continue to create money out of thin air…which dramatically erodes the value of our dollar.
Shockingly, the Fed has more thandoubled the money supply in just the last 2 years.
Economists, monetary analysts and investment experts agree with me that there will be one undeniable consequence…

Hyperinflation will rock the U.S. 
in the coming months

And what happens in times of hyperinflation?
  • Our fiat dollar—which is backed by nothing except our government’s word—becomes virtually worthless
  • Your retirement portfolio of dollar-denominated stocks will be obliterated
  • Your savings account will dwindle to nothing
It’s only a matter of time.
Unless of course you own hard money assets: Silver and gold…the only true stores of wealth in times of crisis.
But notice that I said “silver and gold”—
not just gold.
It’s true that gold has long been considered a reliable hedge against inflation…a time-tested way to preserve your wealth in an economic crisis.
It’s also true that as the value of the dollar declines, the value of gold increases. And as the price of gold continues to climb…gold fever sweeps the globe.
And it’s not just individual investors who are turning to gold in droves.
Central banks all over the world are shoring up their reserves as well: India, China, Russia, and the Philippines, to name just a few. And as more central banks make the shift into gold, others will follow.
Economic analysts believe gold could go as high as $2,000… $2,500…and even $5,000 an ounce.
But silver has broken its share of records too.

Here’s the real reason silver could 
make or break your financial future…

There’s one surprising reason I believe silver is the best money metal to have…and it’s all about supply and demand.
You see, the dynamics for silver have never been better. For starters, there is far less silver than gold available. For every 3 ounces of investment-grade gold on the market, there’s only about 1 ounce of investment-grade silver…
Even though there’s about 8 times more silver mined each year than gold.
Historically, silver demand has significantly outstripped supply. And since the last bull market for precious metals—the 1970s through 1980—one very important thing has changed: There’s a lot more industrial demand today due to advances in technology.
Silver remains the best electrical conductor known to man, and it is an excellent thermal conductor as well. You’ll find a small amount of silver in practically every electronic device being made today—from mobile phones to laptop computers to digital cameras to MP3 players to the next Kindle or iPad sensation.
The demand for these portable devices in insatiable and they are going to drive the demand for silver through the roof. This is a real game changer.
In 2000, industrial demand for silver accounted for 35% of the total market. By 2010, that number climbed to 54% according to the Silver Institute.
As industrial demand continues to rise and more and more investors turn to hard money investments and buy up silver…very few will be selling it. So every new purchase helps drive the price up further.

How high can silver go? 7 to 8 times higher

And as we brace ourselves for the return of hyperinflation…silver has a long way to go.
Let’s take a look at history. In 1980, as the nation was still reeling from the Carter-era inflation and investors were buying up precious metals…silver peaked at $52 an ounce. Adjusted for inflation, that’s about $143 today!
Those who get in now will be richly rewarded…and can get a lot more for their money.
I believe silver will trade at a ratio of 1/16 to 1/10 the price of gold at the top of this bull market.
If gold soars to at least $2,500—as industry experts like UBS, Peter Schiff and James Dines all believe—silver could rise to $156!
So while other investors are doubling their money in gold…you could be making 7 or 8 times your money with silver!
The secret is knowing which investment is an opportunity and which is a dead end.

Find opportunity in the
precious metals bull market

If you are really serious about making money in this market, there’s The Morgan Report. It’s my membership-based investment newsletter devoted to uncovering the world’s most profitable opportunities in money, metals and mining.
You’ll discover little-known strategies to help you safeguard your money and grow your wealth even as hyperinflation takes hold and our dollar takes a nose-dive.
I’ll also reveal exclusive mining and natural resource stock recommendations you won’t find anywhere else.
Over the past several years, I’ve led my subscribers to some spectacular profits, including…
  • Silver Standard soared from $0.65 to more than $20—a gain of 2,976%
     
  • Pan American rocketed upwards from $1 to more than $20—a 1,900% return
     
  • Western Copper—later known as Western Silver—shot up 900%
     
  • Hecla Mining, recommended at $0.50, soared to $5 for a 10-bagger
I’d hate for you to miss out on the next big winner in money, metals and mining…and that’s why I’m inviting you to join now.
With The Morgan Report in hand…
  • You could lock in double- and triple-digit profitsthanks to my carefully selected investment recommendations. I regularly search out little-known and undervalued junior natural resource and mining stocks with the potential to make you 3 to 10 times your money…
  • You’ll get monthly updates on my recommended portfolio, plus my recommended asset allocations, to protect and grow your wealth no matter what the economy brings…
  • You’ll know what to expect from the economy and the markets—weeks and even months in advance—thanks to my exclusive market commentary and forecasts. Plus, you’ll get valuable advice for profiting from the megatrends and big changes ahead.
And best of all, you can get started through this money-saving introductory offer…

Best Deal: Join The Morgan Report today for 1 year
and get 3 FREE Special Reports!

A Basic Plus membership to The Morgan Report starts at just $149.99.
Better yet, when you become a member now, you’ll receive my monthly newsletter, marketing timing updates, and all my investment services, plus you’ll get 3 FREE Special Reports (valued at $141)…
 
3 FREE Special Reports
  • FREE Special Report #1:Harvesting Green on the Pink Sheets (a $99 value). You’ll discover practical strategies for navigating the world of penny stocks—and the surprising factors that separate the potential superstars from the inevitable losers.
  • FREE Special Report #2: 3 Top Natural Resource Stocks for 2010–2011 (a $21 value). Find out which 3 little-knownnatural resource stocks are headed for a banner year in this economy…and just how much you could stand to make.
  • FREE Special Report #3: 10 Rules of Silver Investing (a $21 value). In this classic Special Report, I’ve written the fundamental rules every silver investor must know. Step by step, you’ll see how easy and important it is to add the security of silver to your portfolio.
That’s a total value of $410.99—all yours for as little as $149.99!
Click here to start your membership now and claim your 3 FREE Special Reports.
Don’t wait! Click here to start your membership in The Morgan Report and to download your FREE Special Reports now. After all, you’ve got nothing to lose because regardless of which membership term you choose, you’re fully protected by…

My 30-day 100% Money-Back Double Guarantee

I stand behind my investment services and monthly newsletter.
  1. You must be completely satisfied with your membership in The Morgan Report. If not, let me know within the first 30 days and I’ll refund every penny you paid—with no questions asked.
  2. And if you cancel, you may keep all the issues you’ve received and the Special Reports for your trouble.
To join—and to download your 3 FREE Special Reports immediately—just click here.

Make 7 to 8 times your money
in the precious metals boom

I’ve dedicated my life to educating investors like you about the importance of owning precious metals…and this bull market is the opportunity of a lifetime.
Members in The Morgan Report have made great profits in gold and silver stocks over the past few years, but they’ve also been making money with rare earth metals and other resources.
Join us as we profit in this booming sector…and take advantage of my most treasured investment strategies.
Click here to begin your membership in The Morgan Report now and download your FREE Special Reports today.
But please don’t delay. The sooner you prepare your portfolio, the more potential you have to grow your wealth as silver begins its historic climb.
Yours in more profitable investing,

David Morgan
Editor, The Morgan Report
P.S. As I said at the beginning, it’s gold that preserves your wealth… but silver that can make you wealthy. Get an inside look at the precious metals market, refine your asset allocation strategy and position yourself to potentially make 7 to 8 times your money—all by joining The Morgan Report. Click here now.
P.P.S. Remember, How to Trade Silver and Other Futures Like a Pro (valued at $21) is yours FREE when you join us today. Click here to join and download your FREE copy.
___________________________________________________________
Then here's 2 ways you can gain the edge:
You can thrive in down markets, if you know where to look and when to move. It's what David Morgan does every day, loves to do, and why heshares his insights through the Morgan Report.
And that's why you should become a member 
of The Morgan Report today.
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Join today and receive the Silver Fundamentals, Why silver-Why Now video and Ten Rules of Silver Investing which were only available to paid subscribers but we have decided to make it available for free to anyone that joins our free email list. Plus, as a bonus if you join today, you will receive "Riding The Silver Bull" absolutely FREE!
 
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Why Silver Will Always Beat Gold

Why Silver will Always Beat Gold

Wealth Wire (images are being blocked)
Special Report

Why Silver will Always Beat Gold

Why Silver over Gold?
Actually, there’re a few reasons why right now — more than ever before — silver is not just the superior hedge against inflation… But a serious profit vehicle in its own right.
And today I'm going to tell you why.
Gold is the most common method of storing and transferring wealth.
But there’s a reason why men like George Soros, Warren Buffett, and Bill Gates are heavily invested in its slightly less glamorous cousin…
I'm talking about silver, of course.
The Magic Ratio
If you average out the price ratio between gold and silver throughout history, you land on a single magical proportion: 16 to 1. This chart is a little outdated, but gets the point across nicely.
silver versus gold
And even experts who do not subscribe to fixed pricing relationships generally agree that a price ratio of around 20 to 1 should be considered normal. What is not normal is the current ratio of — wait for it — 40 to 1!
We've been screaming about silver for a while (since $6 levels). Just last year, when silver was around $18, we noted that we could see a major squeeze. Today, with silver trading above $30, we're happy with the call.
To investors, this should mean two things:
1.) That silver is undervalued historically; and

3.) When combined with mad Federal Reserve printing, prices can go much higher, as we highlight in Silver Going to $100?
Any way you look at it, silver’s price cannot be predicted to drop in any of these scenarios.
And since these same experts are continuing to predict gold’s rise towards $2,000, a realistic target price for silver could be between $100-$175/ ounce range.
Silver’s Two Faces
Silver isn’t just a precious metal and (unofficial) currency; it is also one of our main industrial metals. One of the most conductive substances known to man, it’s used in everything from photography, to compact discs, to semi-conductors, to medical equipment. Basically, if something is high-tech, it contains silver.
Here's a breakdown of silver usage by sector:
silver industry
The metal’s so heavily used, in fact, that for the last several decades, the world’s total silver supply has barely been able to keep up with demand — even though the 20th century saw historic production increases.
Demand ramped up in the last quarter of the 20th century to the point where, for almost two decades (between 1998 and 2007), silver was in a fully-fledged global deficit.
It wasn’t until the worst economic disaster in three generations that supply finally dropped to below production levels.
However, with photography alone consuming 128 million ounces of silver annually as of 2007 (that’s more than 3 times the US’s total Silver reserve), and other industrial processes accounting for another 312 million ounces, the world’s total available silver (both produced and hypothetical) is steadily — and irretrievably — decreasing.
So while gold is constantly being transferred based on price fluctuations and demand alone... silver, as an element, is actually vanishing.
The Broadest Options
With China and India buying up silver at unheard-of rates (Chinese silver demand tripled between 2004 and 2007), the industry has had no choice but to create new ways to own the metal.
There’s never been so much variety in the way you can own silver as there is today.
For those looking for that wealth-saving hedge, there are a number of silver bullion producers that are minting high-quality, high-purity coins for minimal premiums. A perfect example of this is the 1 ounce Mexican Libertad.
silver coins
Physical coins can be purchased at a number of dealers online, though we have found the cheapest prices through www.apmex.com (no, we don't get paid for this link, it's just the best source we've found).
However, for those interested in riding silver’s imminent rise will look for something less tangible, like silver ETFs, or, the most aggressive option: silver mining stocks.
And it’s that last option that I wanted to talk to you the most about.
Because with so many people piling into gold exploration companies for all of the reasons mentioned above, the case for silver is just that much stronger.
With the magic ratio currently at such a disparity — 40 to 1 vs. 16 to 1 — those moving into silver exploration today stand to make about three times what their counterparts can expect to cash in investing similarly in gold.
Sounds nice, I know... And the fact is that investing in silver mining right now may not just be the most profitable angle to take with this most consumed of precious metals — but also the easiest.
Stay tuned to Wealth Wire for daily updates on precious metals, oil, stocks, and bonds.
Good investing,
Luke Burgess
Contributor, Wealth Wire
Editor, Underground Profits


You can download the PDF version here: Why Silver will Always Beat Gold


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Posted by Jessie at 5:37 PM  
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