Hold on to that silver....

In case you have not noticed silver has finally topped $30. And gold is working its way back up. Who knows what it will be tomorrow as erratic as the market is?

Silver's ratio (to gold)...is improperly too low. Isn't there a QE-3 meeting/release this week?

Something is afoot.

Your right Tom, the normal gold /silver ratio is 15 /1 ....... So silver should be about $90 an ounce today. It has some catching up to do. Since most bull market s last about 17 years, we still have 5-6 years left.
What is really interesting is there is now estimated to be the same amount of silver above ground, as gold, The price in theory should be equel to gold. Many analysts feel silver is the investment of this decade.

Silver to Soar in 2011, says Investment Guru

By: Marc Davis



-- Posted 7 February, 2011 | Share this article| Discuss This Article - Comments: 0 Source: SilverSeek.com



Silver promises to become the next big buzzword among investors in 2011 and beyond, according to one of the investment industry’s most prescient and successful experts on precious metals.

Eric Sprott is the founder of the Toronto-based investment firm, Sprott Asset Management LP. His renowned hedge fund, Sprott Hedge Fund LP, is heavily weighted in precious metals and has generated an estimated 23% annualized return over the past decade. Other similarly oriented funds under his stewardship have also been stellar performers in recent years.

He’s now so bullish on silver that he launched the $575 million Sprott Physical Silver Trust in November of last year as he believes that: “Silver will be the investment of the decade.”

“I think that silver could easily get to $50 this year,” he tells BNWnews.ca.

This all bodes especially well for publicly traded companies that are already mining silver, he says. Likewise for ones that are developing primary silver deposits or gold deposits with plenty of silver as a byproduct.

“If the price of silver continues to go up, silver stocks are going to perform even better,” Sprott adds.

Meanwhile, Sprott says the big catalyst for surging silver prices in the coming years will be exponentially increasing investment demand, which is already beginning to overwhelm existing silver supplies. The mining industry only produces around 800 tonnes of silver per annum. This is a relatively inelastic supply, regardless of silver prices, he adds.

As household investors are becoming increasingly jittery about the debasement of the U.S. dollar and other major currencies, they are loading up in record numbers on silver bars, coins and silver-denominated exchange traded funds, Sprott says.

However, there’s also a quantum shift in investment demand taking place among big players in the precious metals market, including India (which is aiming to increase its imports by about 77 million ounces per annum), and of course China.

“China’s net imports of silver were 112 million ounces last year. In 2005, they were net exporters of 100 million ounces,” he says.

“That’s a 200 million ounce shift in an 800 million ounce annual market that seldom ever grows because production hardly ever goes up. So where’s it all going to come from? We don’t know.”

In fact, silver promises to outshine gold over the coming years, Sprott says. “Silver is the poor man’s gold. Gold has had a great run for the past 11 years. But I absolutely believe that silver will outperform gold this year. Currently, there’s more investment dollars going into silver than into gold.”

Such a game-changing scenario should recalibrate the gold to silver pricing ratio in silver’s favor, thereby eventually restoring it to its traditional level of about 16 to 1, he says. “It’s the easiest call of all time.”

“Silver as a currency always traded in a ratio of around 16 to 1 compared to gold, when it was a currency in the U.S. and the U.K. The current ratio is 48 to 1. If we go back to a 16 to 1 ratio, the implied price for silver would be $85.62 (per ounce).” he adds.

“On that basis, if gold goes to $1,600, then that would value silver at $100. And we certainly think that gold is going to $1,600. In fact, I’m willing to bet that this ratio will overshoot on the downside. It might even get to 10 to one.”

The only reason why silver is still trading at a 48 to 1 ratio to bullion’s spot price is that its price is being “manipulated” by big banks, Sprott says. That’s because they don’t want precious metals to become a popular alternative currency to Fiat money (currencies that are not backed by hard assets).

“Then there’s also a huge short position out there on silver,” he adds.

But time is on silver’s side, he says, as the sovereignty debt crisis deepens in Europe and a continued policy of qquantitative easing in the U.S. continues to undermine the value of the greenback.

Just try to find any coin silver or "scrap ninety" as they call it in any coin store, they're almost always sold out. You have a better chance goin out diggin for it. Even the small US gold coins are hard to find. My huntin partner told me today if you go on Craigs List dealers are buyin up anything silver like crazy.
I certainly do believe silver is undervalued, and I believe it will go even higher than the former high of $60. a ounce.

[www.kingworldnews.com]
check it out daily, excellent broadcasts.
The guys Eric King Interviews are very knowledgeable.

Need to buy silver?

[www.firstmajestic.com]

I just placed another order this week.

buy it right from the silver mine, about $2 over spot.

World wide, 100 oz silver bars have vanished.

The price of silver will soar into the 100's of dollars per oz, in my opinion.

If you buy stocks, consider a few silver miners as well. PAAS, SLW,HL, EXK, AG, etc.

They are sold out of the big silver, they only have 1 oz , 5 oz, and 10 oz in stock.

Daaaang! Thanks for the tip!

Some thoughts to consider.....

Part of the reason we have seen the price of precious metals rising is due to the ease of investors in choosing an ETF fund such as the GLD to invest in. The fund is required to actually HOLD the metal physically and therefore must purchase it on the open market...thus raising both the price of the metal and the price of the ETF. Silver is now following suit. The "risk on" "risk off" trade is what adds to the volatility of the precious metal on a daily basis. Add to that the fact that high frequency traders are now accounting for approximately 60% of the days action and you can see why we are a bit skeptical as the market marches onward. If possible, hold your metal physically.....not on paper. If you believe that someday the sky will fall I ask you to think through how in the world you will go to your local grocery store and try to buy bread and milk with a paper statement that says you own X shares of some precious metals fund.

In my opinion, physical precious metals will never be worth $0.00...paper money and stock certificates however have the opportunity to be worthless. Silver also has a strong presence in the industrial world, more so than gold. If you believe that the global economy is on the rise, then the need for silver will follow along.

One last thought.....if you adjust today's price of gold based on the inflation of the US Dollar over the past 100 years you might be VERY surprised at the answer.........its a worthwhile homework assignment and will cause you to think the "why" of what you are doing.........

Homework assignment #1:

[inflationdata.com]

Pay particular attention to the graphs.

Florida Bob

Point(s) WELL made...Bob!

The Gold and silver etf's are run by the major banks. Many feel their main intent is to get people to invest in their paper fund, rather than the physical metal.
Many analysts feel that the etf shares are not totally backed up by physical metal, but other paper comex contracts, and derivitives. We should soon find out, as China is currently
buying the shares, then requesting physical metal from the funds by trading in their shares. They are able to get their metal faster , and are not limited by quanity of withdrawl like the comex. The comex places limits on how much metal can be taken each month. The Chinese are not stupid. They have been telling their citizens to buy gold and silver as well. Too bad our politicians are not as bright.

continued reports of booming sales and tightness in the silver market, today King World News interviewed Dave Madge director of sales at the Royal Canadian Mint. When asked if the RCM is having trouble acquiring silver Madge responded, “Demand right now for silver is through the roof and it shows no signs of slowing at this point. Sourcing silver is becoming very difficult. We are competing with a great many players when it comes to purchasing silver and many of these players are bidding the price higher.”
February 24, 2011




Royal Canadian Mint Now Saying It’s Difficult Securing Silver


Dave Madge of the Canadian Royal Miint Continues,























“Our advantage is that we have had long-term relationships with our suppliers and that has helped us in this situation. We have been able to leverage off of those relationships to get supply, but it still remains a big challenge sourcing material. We’re looking at ways of mitigating our risk regarding supply of silver.





We are anticipating it to become even more difficult to secure supplies in the future. This is based on what we are seeing firsthand and what our suppliers are telling us. We work closely with these banks to secure silver and they tell us there is a lot of competition.”





When asked what this means for the price of silver and how long this condition is expected to persist Madge stated, “I think you are going to see the premiums go up in order to secure silver. At some point some players will be priced out of the market. I don’t think this is a short-term situation, I think there are a lot of issues going forward and this may be the new norm.”





The key here from Dave Madge is that he expects it to become even more difficult in the future to secure supplies of silver. In my mind this is an extremely important testimonial regarding how tight the silver market is because the information is coming directly from the Royal Canadian Mint itself.





The Royal Canadian Mint is known as a world-class provider of minted products and KWN is thankful to both the RCM and Dave Madge for this interview.





Eric

The bulk of physical silver is being acquired by a handful of banks/financial institutions. And they are not U.S. institutions. Its really quite simple, control a commodity, manipulate the price. The outrageous profits are divided between a handful of mega-wealthy co-conspirators. In the early days it was referred to as a monopoly. Yeah, they are alive, well and thriving today.
Give ya an investment tip for the really long term (10-30 years). Start buying copper ingots. The big 80 lb jobs. Copper hasn't even begun to peak. Gold is more of a ancient human mindset/perception of its value, than a needed industrial metal. Silver/copper can substitute for gold in many technological applications Remember that silver and copper are necessary heavily used industrial metals in our technological societies. Don't you see the rapidly accelerating trend in essential commodities today....oil, certain metals,food and arable agricultural land. It's easy to see......rapidly expanding human population and finite resources.
Do the copper thing though. Its not over-exposed to the public's investment mentality........yet!!!! The other commodities mentioned are not really attainable by most private citizens.
And for our Michigan forum members, if I was you, I would be pounding the hell out of the Upper Peninsula for float copper, instead of looking for coins.



Edited 2 time(s). Last edit at 02/25/2011 06:33AM by TerraDigger.