Posts Tagged ‘Silver’
Gold, silver and rare earth; which is right for you?
Gold, silver & rare earth
Which has the strongest trend right now?
In today’s video we will be looking at the gold market, analyzing the silver market, and finally, checking into the rare earth market.
Before you look at the video, you may want to consider doing this as an exercise: Write down which market has the strongest trend – up or down. Then rate the markets. Number 1 ……..Number 2 …….Number 3 ……. Once you see the video it will become clear to you how we rate these markets. It might surprise you.
http://www.ino.com/info/670/CD3336/&dp=0&l=0&campaignid=3
If you’re using MarketClub’s “Trade Triangle” technology the answer is simple and you’ll discover it in a matter of seconds. If you haven’t used our “Trade Triangle” technology, this will be a good exercise for you to look and see just how powerful this technology is and how it can help your trading.
http://www.ino.com/info/670/CD3336/&dp=0&l=0&campaignid=3
We all know that gold has had a big move, but so have silver and rare earth stocks. So what’s next?
I hope this video helps outline some ideas that you can put to good use in the future.
As always our videos are free to watch and there are no registration requirements. All we ask in return is that you Tweet about us and share this video with your friends. Also, please feel free to comment on our blog.
http://www.ino.com/info/670/CD3336/&dp=0&l=0&campaignid=3
Enjoy the video and every success in trading,
Adam Hewison
President of INO.com
Co-founder of MarketClub
Silver Stock Report: Frequently Asked Questions from Silver Buyers
(There are no dumb questions!)
Silver Stock Report
by Jason Hommel, November 19th, 2010
Which is better, gold or silver?
I like silver better because it’s being consumed by industry. It’s a much smaller market, by far, and thus, will move up far more than gold.
If the silver to gold ratio returns to the historic value ratio of 15 oz. of silver for every 1 oz. of gold, you’d make far more on silver, since the current ratio is about 53:1.
But I think silver might exceed the historic ratio, since that ratio was last seen nearly 100 years ago, except for briefly in 1980.
Over the last 100 years, two major things have happened to silver. First, silver was demonetized, meaning, no nations on earth are using silver as money, or as a circulating currency today. Second, since the age of electronics began at the end of WWII, developed nations have been consuming about 6/10ths of an oz. of silver per person, per year, which has consumed most of the silver ever mined in history.
In contrast, only 5% of the annual gold market production is consumed by industry.
So if the silver to gold ratio just returns to historic norms, you’d make over 3 times as much in silver than in gold.
But silver should dramatically outperform gold as the bull market in precious metals continues.
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How do I keep my purchases and sales anonymous? After all, I don’t want the government to know what I’m doing.
Well, your bank account will keep a record of you taking out cash, but they won’t know what you spend it on. They also track cash deposits, but won’t know the source.
But if you try to sell precious metals for US money, and end up depositing that cash into the bank, and if you want to borrow money to buy a home, you will likely have to declare the source of that cash, by providing the sales receipt of the bullion you sold. We have had quite a few people run into that problem already.
It may be illegal for me to even tell you what the exact reporting requirements on cash transactions are! However, it might not yet be illegal for me to direct you to the government website itself!
If you would like to look up the reporting limit requirements for cash, you can find it at fincen.gov, specifically, click on “Statutes and Regulations”. Posted clearly, there is a daily transaction limit of $10,000 on physical paper cash, among other regulations.
It’s sad that in the land of the free and the home of the brave that the government expects businesses to work for the government and fill out paperwork for free, and only under threat of punishment for non-compliance. Sounds a bit like slavery to me.
There is no reporting by us if you do a wire transfer, and thus, no limit to what you can buy via wire transfers.
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What is the tax on gold and silver?
There is sales tax in California if you buy less than $1500; over that, there is no tax.
But people are often wondering if they will have to pay taxes when they sell it. And this question is often asked right on the heels of the previous question about reporting requirements.
Well, in the land of the free today, it is also illegal for me to give tax advice since I’m not a licensed tax attorney. It is also illegal for Suze Orman; but it does not seem to stop her.
So let me play it on the safe side, and talk philosophy, instead of taxes. So, I’ll tell you about a debate I learned in college. The question is, “If a tree falls in the forest, and if nobody is around to hear it, does it make a sound?” And more importantly, is that a taxable event, and does the tree have to file a 1040? Well, of course not, trees don’t have filing requirements.
In other nations, they’d just shoot the tree. Here in America, we are still allowed (in some places) to turn the fallen tree into firewood, but then you have to declare the “income” of wood if you want to be insanely and overly compliant with how they apply tax laws. But if you didn’t tell the government that you turned a tree into firewood, how would they know that for income purposes?
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Why can’t I buy gold or silver at spot, instead of over spot?
Almost all of the products that we sell have a manufacturing cost to them. We typically have to buy raw bullion over spot, and then pay an additional cost to manufacture it into coins or bars. We sell 20 times more bullion to the public than we buy, in recent weeks!
So, you can buy bullion under spot if you spend the money to start up a coin shop, and wait for gold and silver to be sold to you. But customers only sell us 1/20th of the metals that we are selling.
All markets have a bid and an ask. The bid is the price a potential buyer is bidding. The ask is the price that a seller is asking.
Those bids and asks are from the large COMEX paper market that trade in lots of 5000 oz. of silver, and rarely result in any real delivery, because most of the buyers are only buying to gamble on short term price changes, and pay only a small deposit.
As a real shop, with real silver, we have real expenses; rent, ads, workers, electricity, phone, internet, insurance. And all of that must be paid monthly, regardless of if we make any sales.
The physical market is also very tiny, with low volume, only about $2.5 billion per year. With 1% average profit after all expenses, that’s barely $25 million for all physical silver sellers, worldwide. With 4000 coin shops nationwide, if that $25 million were divided equally, that’s $6,250 profit per shop, per year, on silver sales. (We do a bit better than average, but still!)
We also have risks; default risk from our suppliers, theft risk from workers, theft risk from the public. Risks must be offset by potential profits.
We also have trading volatility risk; we might sell silver to someone early in the day, and later in the day, if the price moves up, we might end up buying back that silver from our wholesalers at a loss, and thus, losing money.
We also have inventory composition risk and losses: we must keep cash to run the shop, and cash loses value in terms of silver as silver goes up; the cash always buys less and less silver.
We also have replacement delay risk and loss. Cash can’t be used immediately to buy back silver, there is always a delay between when it can be deposited into the bank.
We also have cash deposit charges that range from 1/2 of 1% to 1% on cash, because we deposit high volumes of cash; the bank charges us this just for counting the cash.
We also have a risk that the silver that we re-order gets delayed, and then, we risk running out of inventory sooner. If that happens, we must raise prices to ration product availability. It does no good to have low prices if we are sold out.
I’ve said numerous times that there is only about $1-2 out of every $10,000 that is in the banking system that is going into silver on an annual basis. As that increases, it will cause enormous pressure on everyone in the trade: miners, concentrators, refiners, mints, dealers, and coin shops. My goal is to make sure that bullion is available, at some price, because when no bullion is available, that’s much worse; that’s what happens under communism, and price fixing.
Sometimes, we can negotiate lower prices for larger orders. But not always. It never hurts to ask.
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Where do you think silver prices are going in the next 3-6 months?
Generally, I tend to think silver prices are too volatile, changing, and unpredictable to make any guesses for the short term. Nevertheless, my gut tells me that silver is headed to about $35/oz. within this time frame, by July, 2011. That guess is based on my observation of the Fibonacci number sequence for silver’s peak prices in this bull market. Silver started at around $5/oz. Then, the successive peak prices were right on the Fibonacci sequence, 8, 13, 21, and the next number is 34. Each number is the additive of the prior two, which shows an average increase of about 66% over the prior peak. I would not bet on that kind of prediction though, and I would not buy any options on that either. The reason is that it might also take as long as 2 years to get there, because we have a manipulated market, whereby 99% of silver buyers are content with paper silver and don’t know they are being deceived, primarily by JP Morgan.
Also, with options, price increases are built in. Generally, since silver is expected to go up by about 30% per year, since that’s the trend, silver has to do significantly better than that in order for you to make money on options, so they are generally a waste of money. Just buy physical silver, and earn the 30% or more per year continually over the next few decades. Remember, the world cannot make 30% per year on paper phantom silver that does not exist — so all of that will default during this bull market, and you have to get out of that kind of bad silver before this bull market finishes if you ever hope to have any major gains at all. Also the options market is very illiquid and very small beyond 6 months away, so the entire paper game seems quite ridiculous to me.
Think of it like this. Let’s say there were two silver shops right next door to each other. Mine, and the “paper market” next door. You go into my shop, see all the bullion, and see my prices. Then, you go next door to the paper shop, and they have no bullion available, only a bunch of traders standing around holding paper tickets. You read up on their open interest, and you can instantly see that they are bankrupt, having sold up to 800 million ounces while their published warehouse inventories are a mere 50 million ounces. You see that they only offer silver for delivery “in a month” and the delivery day can be any day in the entire month. And, the only product you can buy, and the minimum order size is 5 large 1000 oz. bars that nearly nobody wants. Where would you shop? Hint, not even our largest wholesaler shops there; instead, they buy directly from refiners, or mints, as do we. Please note, not all refiners are honorable or have good products. Be careful out there.
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Where do you think silver prices are going in the next year then?
On average, over the last ten years of this bull market in precious metals, silver has gone from a low of $4.15/oz in the spring of 2003, to $29 or so last week. Over seven years, that’s an average of 32% per year. But I think silver will tend to go up in greater percentage numbers per year, on average, as the bull market continues. The trouble with averages, is that they can be misleading. In 2008, silver hit $21.50 or so, and bottomed around $9.50 or so in 2009. That’s a loss of 55% in one year, which led many to speculate that silver prices had “crashed” and that the bull market was over. Of course, such “advisors” did not tell anyone to buy silver at $9.50 in 2009 either.
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Gold, Silver, Platinum…W.T.F.?
Brad Stafford here in place of Adam Hewison and I have a great new video for you. I’m sure many of you read that title and your mind went in the gutter, but today I’m going to show you a whole new meaning for this acronym and how it applies to gold, silver, and platinum.
These three markets have a lot of volume, government implications, and technicals lining up for potentially great trades. Gold makes a record high, then pulls back. Silver is inching towards an all-time high level and platinum is making people rethink their decision to go with a white gold wedding band.
Where do you stand in these markets and maybe more importantly, where should you stand?
Click here to find out what W.T.F. really stands for and what does it have to do with gold, silver, and platinum?
You’ve got to watch the video to find out.
http://www.ino.com/info/503/CD3336/&dp=0&l=0&campaignid=3
Brad Stafford
Director of Marketing
INO.com & MarketClub
Silver Stock Report: World Government Lurches Forward
(How to Resist it!)
Silver Stock Report
by Jason Hommel, October 21st, 2009
People continually ask me about the plans for a North American Currency, or Amero. They ask, “Will the Amero devalue the dollar, will it be silver?” I’ve read the news on it for years, but nobody knows, it’s only theoretical and in discussions at this point.
But I do have several solid and well founded opinions.
1. A North American Currency will NOT be planned to be gold or silver. Silver’s price (and gold’s) is way too low still.
2. A North American Currency will probably not be accompanied by a rapid or massive 50-75% devaluation of dollars. That’s not how they introduced the Euro, it was smooth, well planned, and prices were quoted in both Euros and national currency for two years during the transition.
However, The introduction of the Euro, if any guide, also marked the bottom of the gold market, and the start of the bull market in gold, around the year 2000. Thus, a common currency will probably boost gold’s appeal. Why? When multiple nations each have the power to print the same currency, he who prints fastest, benefits the most! Thus, it stimulates inflation, and the devaluation of the currency. Also, with fewer currencies to trade one for another, gold looks like a more viable option, or the only other option (and silver, of course).
If you think the Amero is a fantasy, or a hoax, please be aware of the following news reports calling for a common currency for South America.
News Reports begin to mention the plans of a new Currency for all of, and to unite, South America.
ALBA sanctions Honduras, moves towards new currency
10/18/2009
http://www.ww4report.com/node/7840
Leftist Regimes Agree to New Currency
20 October 2009
http://www.thenewamerican.com/index.php/world-mainmenu-26/south-america-mainmenu-37/2123-leftist-regimes-agree-to-new-currency
South American Union Will Also Have Common Currency
June 21, 2008
http://www.naturalnews.com/023480_America_South_America_North_American_Union.html
But that’s not all this week.
I’ve warned of the fraud and dangers of global warming, saying it will be used as a convenient excuse for a global government.
See some of my warnings:
http://www.google.com/cse?cx=001032847424902327838%3A7dcj3rzkht0&ie=UTF-8&q=global+warming&sa=Search
Other more respected people, are now warning: Obama is set to give up US Sovereignty, by signing a treaty in December, over false fears of “Global Warming”.
http://www.globalclimatescam.com/
http://atlasshrugs2000.typepad.com/atlas_shrugs/2009/10/action-alert-obama-to-cede-us-sovereignty-in-december.html
Now here’s a potential solution that may help to halt this development.
The reason why a foreigner is not supposed to be elected President, is because he may be a traitor to US interests, and favor foreign interests, such as the globalist agenda.
News came out last week that Obama was openly reported to be born in Kenya!
AP declared Obama “Kenyan-Born”
The Post & Email
October 16, 2009
http://www.infowars.com/ap-declared-obama-kenyan-born/
Here’s the web archive of the AP article:
http://web.archive.org/web/20040627142700/eastandard.net/headlines/news26060403.htm
Many AP articles on Obama were scrubbed entirely off of the internet, some claim, as history is being revised before our eyes, Orwellian-style, as in the book, 1984. Looks like they missed a few.
President Obama Admitted He Was “Kenyan-Born”.
http://naturalborncitizen.wordpress.com/2009/10/16/president-Obama-admitted-he-waskenyan-born/
I read that one Federal Judge will hear one case over Obama’s birthplace, sometime in January. I told this news to a friend, who used to be in the military. He replied, “They’ll just kill the judge.” Please pray for his protection, and for Orly Taitz. It tends to frustrate the plans of the enemy, when the ones exposing them are protected by God, and the prayers of righteous people can do a lot!
James 5:16 Therefore confess your sins to each other and pray for each other so that you may be healed. The prayer of a righteous man is powerful and effective.
After you pray, consider following it up with action. I did.
The key person fighting this battle against Obama’s birthplace is a woman named Orly Taitz.
To donate to her cause, see
http://www.orlytaitzesq.com/
Silver investors have a unique sense of integrity. We are perhaps some of the only people around who will make an investment into something like silver, and then work to prevent its rise. After all, I have to give Obama credit, he is the silver salesman of the year now, for two years running. As an investor in silver, it works against my benefit to do what is right, and to fight Obama and his highly inflationary, wild spending policies, and globalist agenda, which will only push people more into silver and gold. But I do what is right anyway, regardless of the personal cost. I suppose that’s why they call it “standing up” for what is right, rather than “lying down” for what is right. Doing what is right always comes at a personal cost.
People tell me to not talk politics. It angers people, polarizes people, and reduces the size of the potential audience.
But it’s not always important to “reach out” to those who are not listening! I think it’s more important to continue to inform those who are listening! If I anger a few readers, that’s part of the “cost” of doing what is right.
Besides, the best way to fight the global socialists is to buy silver! It reduces the power of their printing presses to buy anything in the world that they want, which funds their agenda. It exposes their games of fraud, and helps to bring it to an end.
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I strongly advise you to get real gold and silver, at anywhere near today’s prices, while you still can.
The Federal Reserve Is Openly Telling You to Buy Gold and Silver
At the end of last year, I began writing about what I saw happening as the Federal Reserve started assuming the liabilities of the investment banks and the federal government began deficit spending at an unprecedented pace.
I’ve been calling these changes the “End of America” because I believe the fiscal policies of the U.S. will result in a massive devaluation of the dollar and the end of the U.S. dollar as the world’s reserve currency
To get an idea of why I’m concerned, have a look at a chart James Bullard, president of the Federal Reserve Bank of St. Louis, included in a recent presentation to the National Association for Business Economics.
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What you see here is Bullard’s estimate of the future growth of Federal Reserve assets.
A lot of people seem to have forgotten something that is very much on Bullard’s mind: The growth of the Fed’s balance sheet isn’t nearly finished. In fact, the Fed has only completed purchasing about half of the $1.75 trillion worth of assets it has promised to buy. The assets are mostly mortgages and mortgage-related securities.
Even though these direct purchases are unprecedented, that’s only about 10% of the story. Since the beginning of the crisis, the Fed has lent, spent, or guaranteed $11.6 trillion.
That includes providing a backstop on the entire system of mortgage finance in the United States, a system that currently shows nearly a $1 trillion loss.
Since the expansion of its balance sheet got started in earnest last fall, the trade-weighed value of the dollar has fallen -15%. Keep in mind, the Fed’s assets form the base of our monetary system. The more it grows, the more money and credit become available to the banking system. And the faster the money supply grows, the more likely the value of the dollar will continue to fall.
As Bullard points out, a doubling of the monetary base won’t necessarily cause an immediate doubling of inflation… But suppose it takes 10 years? The average inflation rate would still be 7% a year. If inflation does grow to this average level, at least a few of those years will see inflation running at or near double digits.
Nothing in our financial markets is prepared for this kind of inflation. Inflation at these rates would cause the average multiple of earnings for equities to fall by at least -50%. Likewise, we would see high-yield corporate bonds yielding at least 20% — double what they are now. And U.S. Treasuries would probably see their yields triple. The destruction of wealth in the bond markets would be unprecedented in modern finance.
It’s going to happen. I guarantee it.
My forecast only assumes the Fed’s actions don’t continue past what’s been announced so far. My bigger concern is what happens if Congress decides the Fed did such a good job fixing the housing bubble that perhaps it should lend a hand on health care or the entitlement time bomb? Although a small handful of people have been writing about the enormous fiscal challenges that all the Western democracies face over the next decade, I’m sure most of today’s equity investors don’t really understand what lies ahead.
Consider these numbers: Right now, today, without counting any of the unfunded liabilities of our government (which are very real obligations, by the way), our national debt is $12 trillion. There are roughly 100 million American households. So that’s a national debt of roughly $120,000 per family. That’s more than the average American owes on his mortgage.
Think about what this means in terms of interest payments. Even with interest rates at all-time lows around the world, the U.S. will spend almost $400 billion on interest to service our existing national debt — that’s a 3.3% interest rate. Currently, the U.S. takes in roughly $2 trillion in taxes, half of which come from income taxes. So the interest on our debt is already consuming 20% of all tax receipts, or 40% of all income taxes.
It seems obvious to me this money will never be repaid — could never be repaid. The only real question is how much of a “haircut” our creditors are willing to accept in terms of the loss of purchasing power of the U.S. dollar. So far, inflation remains relatively benign. Our creditors don’t seem to be losing very much. But we know this will change and could change rapidly, as the Fed continues to expand its balance sheet with less and less creditworthy assets. At what point will our creditors finally decide they can’t finance any more of our deficit spending because we’re simply not worth the risk?
No one in Washington realizes you can’t borrow money endlessly. By the time Barack Obama leaves office (assuming he is reelected), the national debt will likely exceed $20 trillion. What will our creditors charge us to finance this debt? How will our debts compare to the value of our economy? It is impossible to know what will happen. But here’s the one thing that seems most obvious: Our borrowing costs will go up, a lot.
At some point in the next few years, our creditors are going to stop believing in our ability to pay our debts in honest money. I don’t know what will break first, but we can’t go on printing money to prop up our banks and spending money we don’t have to prop up our culture of entitlement.
And I don’t believe there’s any way to avoid it — certainly not with the political system we have in place right now. To protect yourself, you’ll have to be very good at managing your assets. You also need to make sure to take the advice we’ve been issuing for years: Buy and hold plenty of real, honest money that cannot be debased by the government. Buy and hold plenty of gold and silver.
– Porter Stansberry
Founder
Stansberry and Associates Research
Investors Take Profits After Relentless Rallies in Commodities
Crude oil price continues hovering at year-high level in European morning as the market awaits the inventory report. Apart from this report, there’s not much industry-specific data that investors can rely on this week. On the macro front, focus of today is inflation data from the Eurozone and the US. Moreover, regional manufacturing in the US should also trigger market sentiment which will decide oil price’s direction in the near-term.
Released earlier, Eurozone’s CPI moderated more rapidly than anticipated in September. The reading came in flat on monthly basis after rising +0.3% in August. The market had expected a gain of +0.1%. On annual basis, the headline reading contracted -0.3% while the core CPI was stickier and increased +1.2%. In the US, analysts forecast CPI would have risen +0.2% mom in September after surging +0.4% a month ago. On annual basis, contraction should have slowed to -1.4% following a decline of -1.5% in August. CPI is a barometer that investors have been monitoring as its outlook determines the Fed’s monetary policy.
The Empire manufacturing index probably fell to 17.75 in October after soaring to23-month high at 18.88 in the previous month. At the same time, the Philly Fed index might have dropped to 12 after rising 10 points to 14.1 in September. The regional manufacturing surveys will give important indication on how the ISM index moves from September’s level of 52.6.
Gold plunges to 1052 in European morning as investors take profits after the yellow metal rallying +9% in the past 2 weeks. Other precious metals also decline in sympathy. Silver falls -2.2% to 17.5 while platinum pares gains in the past 2 days and currently trades -1.2% lower at 1351.
Silver, which outperformed gold in recent rise, may undergo deeper correction as its fundamental outlook is not at all brilliant. Yesterday, both Rio Tinto and Fresnillo reported rise in silver supply in 3Q09. Rio Tinto said that its silver output rose +39% yoy in the third quarter to 2.12M oz while Fresnillo reported that its production in the white metal increased +7% yoy and +1% qoq to 9.6M oz. Although there are potential strike in Peru (the world’s largest producer in silver), it will be unlikely to eliminate supply surplus this year unless industrial demand picks up rigorously.
Stock market strengthens amid speculations on favorable earnings results. In Asia, the MSCI Asia Pacific Index climbed +0.6% as Japan’s Nikkei 225 Stock Average rose +1.8% to 10238.7 after Elpida memory posted the first operating profit in 8 quarters. Moreover, Credit Suisse recommended buying Panasonic Corp. Other indices such as Australia’s S&P/ASX 200 Index and South Korea’s Kospi Index also gained +0.6%. In Europe, benchmark indices fluctuate between gains and losses. In the US session, Goldman Sachs and Citigroup will report 3Q09 earnings.
Sentiment Returns and Commodities Surge
Crude oil price rallied to a 7-week high at 73.84 Monday as driven by strong equity market and weak USD. While market sentiment once again pushed oil closer to the key resistance of 75, stagnant fundamentals in energy market refrained price from an upside break. The benchmark contract eventually settled at 73.27, gaining +0.7% from last Friday’s close.
For fuel products, heating oil jumped +2.2% to a 7-week high as US Climate Prediction Centre forecasts temperatures in the Northeast and Midwest will drop below normal between October 15 and October 25. Investors anticipated a colder weather should spur higher consumption in heating oil. As lead by strength in the energy complex, RBOB gasoline also climbed +1.8%.
Gold price pared Friday’s loss and rebounded +0.8% to 1057.5 yesterday with the decline in USD remaining the major driving force. Silver surged to almost a 3-month high at 17.955 before closing the day +0.7% higher at 17.82 while platinum added +0.6% to close at 1347.3.
Stocks in US strengthened with Dow Jones Industrial Average gaining +0.2% to 9885.8 and S&P 500 Average adding +0.4% to 1076.2, the highest in a year. Investors were excited as Black & Decker Corp upgraded its 3Q09 earning forecast and Ford Motors said its auto sales in Europe rose +12% in September.
USD weakened against major currencies except for Japanese yen and British pound. The dollar index fell to 76.12. Against higher-yield currencies such as the euro, Australian dollar and New Zealand dollar, USD dropped to 1.48, 0.908 and 0.736 respectively after a brief recovery last Friday. British pound weakened against the dollar and the euro as the Center for Economic and Business Research said the nation’s interest rate should stay at a record low of 0.5% at least until 2011. At the same time, the British Chambers of Commerce said that the BOE should extend its bond purchase program by 25B pound to 200B pound next month so as to support economic recovery. Currently trading at 5-month low against the dollar and 6-month low against the euro, the pound will stay under pressure for some time.
Today in Asia, commodity prices change little as the market awaits more data both from the macro and industry side. Stocks rally with the MSCI Asia Pacific Index soaring +0.5%. In Japan, Nikkei 225 Stock Average gains +1% to 10114 as Japan’s exports should benefit from weakness in yen. Retail sales in New Zealand surprisingly increased +1.1% mom in August, compared with consensus of a +0.6%gain, from a drop of -0.5% in the prior month. Excluding auto, the reading surged +1.2% during the month. The better-than-expected data should increase speculations that the RBNZ will increase its policy rate earlier than previous estimated. Currently, the market is pricing in a move in January 2010.
Source: OilnGold
Silver Stock Report: Wisely Avoid Paper Silver Fraud
(if you didn’t lift it, you don’t own it.)
Silver Stock Report
by Jason Hommel, October 12th, 2009
Most silver investors are still deceived by “paper silver”. Over 99% of silver investments are paper silver, rather than real silver.
For proof, see
The Tiny Silver Market, IV October 8th, 2009
The Tiny Silver Market, III October 6th, 2009
The Tiny Silver Market, II October 1st, 2009
If the dollar amounts were represented 1 to 1 by people, then, very few silver investors (1%) have the discernment and wisdom to avoid the paper silver frauds. But fortunately, the wise investors are probably a bit more numerous, since many individual people are not “sophisticated” or rich enough to get trapped by the offers of paper silver.
I’ve had quite a few discussions with people about this, so let me see if I can help.
Many people justify paper silver, saying, “it’s cheaper”. Sure it is. That’s the point! How else would they convince you to buy it? They can’t float on your money if they charge you higher than normal premiums! Look, I can sell you all the silver you like at 5% UNDER SPOT or even 10% UNDER SPOT, if you promise to never take delivery, and never sell. (NOT REALLY, because I’m honest!) What will it take for people to realize that such offers are totally fraudulent?
Many people justify paper silver, saying, “I’m only using it to gain more money, to be able to buy more physical silver”. Of course. That’s the plan of many. But to be able to get a mere 100% more silver, you’d have to expect that the paper silver market will double in size, from about $150 billion to $300 billion, (with no new paper silver investments pushing it up), while the $1 billion physical silver market stays the same, too. Is that realistic? I don’t think so.
Many people justify paper silver, saying, “I don’t have anywhere where I can take delivery, also, it’s too heavy, or I’m in another nation, or I rent, etc.” Sure. I fully understand. I have one question, if I may. If you refuse to take responsibility for providing for the security and safety of your own wealth, please tell me how you expect that your wealth will provide you with the safety and security that you expect from it?
Well, here’s the same question another way. If you knowingly give your money to corporations who have declared openly in their annual reports that they are technically bankrupt and could not possibly have the silver that they claim, due to the problem of the relative sizes of the markets, then why in the world would you expect to be paid off by them, when unsecured creditors do not get paid off in a bankruptcy?
You can’t possibly be protected by silver that does not exist, “held” in the hands of institutions who are technically bankrupt.
You would be better protected if you gave your money to a bum on the street, because at least a bum who has nothing typically does not have a negative net worth, or a short position in silver. Besides, if you give to a homeless man, you are at least lending to God.
[Proverbs 19:17] He that hath pity upon the poor lendeth unto the LORD; and that which he hath given will he pay him again.
But if you own paper silver, you are giving to the rich, who oppress the poor through usury, and whose lack of real silver and gold testifies against them.
[Proverbs 22:16] He that oppresseth the poor to increase his riches, and he that giveth to the rich, shall surely come to want.
James 5
Warning to Rich Oppressors
1 Now listen, you rich people, weep and wail because of the misery that is coming upon you. 2 Your wealth has rotted, and moths have eaten your clothes. 3 Your gold and silver are corroded. Their corrosion will testify against you and eat your flesh like fire. You have hoarded wealth in the last days. 4 Look! The wages you failed to pay the workmen who mowed your fields are crying out against you. The cries of the harvesters have reached the ears of the Lord Almighty. 5 You have lived on earth in luxury and self-indulgence. You have fattened yourselves in the day of slaughter. 6 You have condemned and murdered innocent men, who were not opposing you.
The wealthy bankers who oppress through usury have “rotted” gold; they issue more claims than gold exists.
Owning real gold and silver is not unwise, gold is a provision from God, and we are commanded to obtain the real stuff.
Rev 3:18 I counsel you to buy from me gold refined in the fire, so you can become rich; and white clothes to wear, so you can cover your shameful nakedness; and salve to put on your eyes, so you can see.
Here are my most important Bible based essays regarding the importance of obtaining real physical gold and silver money, and avoiding paper promises and usury:
- 666: Mark of the Beast 1998
- Gold and Silver in Bible Prophecy December, 2001
- The Great Harlot of Rev 17-18 is Jerusalem, & what that means. October, 2002
- Usury Enslaves Jan 19, 2004
- Freedom from Usury Jan 23, 2004
- Bible Verses on how to Manage Money November, 2005
- The Use of Paper Money Violates All of the Ten Commandments July 2, 2006
- The Stumbling Block of their Iniquity April 9, 2008
- Biblical Political Positions February 7, 2009
- The Pre-Rapture Gold Gathering August 17th, 2009
I strongly advise you to get real gold and silver, at anywhere near today’s prices, while you still can
Jason Hommel
Silver Daily Technical Outlook
Comex Silver (SI)
With 4 hours MACD staying below signal line, intraday outlook in Silver remains neutral for the moment and some more consolidation could be seen. Nevertheless, since the break of 17.69 resistance indicate that rise from 12.435 has resumed, current retreat is expected to be contained above 16.785 and bring rally resumption. Above 17.95 will target 61.8% projection of 13.495 to 17.69 from 15.76 at 18.35 next.
In the bigger picture, whole medium term rise from 8.4 is still in progress and should extend further towards 19.55 resistance next. However, note that we’re not seeing a clear impulsive structure from 8.4 yet and hence, we’d treat such rise as part of the long term, wide range, consolidation pattern that started at 21.44 back in Mar 08. In other words, current rise from 8.4 is expected to be limited by 19.55/21.44 resistance zone and bring at least one more medium term fall. On the downside, break of 15.76 support will be the first sign of topping. Further break of 12.435 will confirm that rise from 8.4 is finished.
Comex Silver Continuous Contract 4 Hours Chart
Comex Silver Continuous Contract Daily Chart
Commodities Edge Higher on a Quiet Day
Crude oil rises to 72.15 in Asia Monday. However, trading volume is thin as Japan, US and Canada markets are closed on holidays today. Last Friday, Dow Jones Industrial Average climbed +4% to 9684.94 and S&P 500 rose +4.5% to 1071.49. Rallies in stock indices to 1-year high spurs interest in oil markets as investors anticipate recovery in energy market consumption.
Despite the improved sentiment, crude oil price will continue to gyrate within recent trading of 65-75 until concrete evidence of demand recovery is seen. Over the weekend, Kuwait’s oil minister Sheikh Ahmad al-Abdullah al-Sabah said that ‘oil prices between 60 and 80 are suitable for exporters and importers’. Judging from outcomes from recent OPEC meetings and comments from member countries, OPEC seems to be satisfied with current price level. The likelihood for further output cut is low in coming few months. In fact, rising spare capacity and rise in oil price have triggered some members to produce more than their quotas. The International Energy Agency estimated OPEC’s compliance has fallen to 62% in September, compared with 66% in August and over 80% in the first quarter.
Gold price has little change after plummeting -0.7% last Friday. Although currently recovers to 1051, the yellow metal may still have risk to decline on long liquidation and USD’s technical rebound. However, gold should resume its uptrend after consolidation. Global central banks’ diversification away from the dollar is expected to pressure USD further. At the same time, diversification would increase central bank’s purchase of gold.
Commitments of Traders
- Crude Oil: Net speculative long positions rebounded to 50006 contracts last week as oil price recovered. While staying below the peak of 62216 contracts 2 weeks ago, net longs in crude oil continued to hover around high level in 2009, suggesting traders were not much affected by stricter CFTC regulations
- Natural Gas: Net shorts contracted for the second consecutive week. Gas price has rebounded strongly in recent weeks but we worry that high gas price would delay demand recovery. Record high gas storage should continue pressure on the cash market which in turn forces the futures market to move lower
- Gold: Net speculative long positions reached record high of 239668 contracts. At long positions have become more stretched, we feel it more necessary for gold price to correct
- Silver: Net speculative long positions pulled back after rising for 7 weeks. Recent rally in silver have been simply an amplification of gold’s rise. Similar to gold, silver is prone to a correction before resuming the uptrend
- Platinum: Net long positions recovered to 17955 contracts
Source: Oil n Gold
