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Silver Market Roller Coaster & QE∞

Today's Gold/Silver Ratio: 51/1 SAME

Issue 136

Gold: $1770.500/ Silver: $34.68

SGS Notes: Well, it's been another eventful week... if you had been watching silver prices this week, you would have seen the roller coaster we all experienced. I rarely write the SGS Newsletter main article(s), preferring to allow the 'experts' to speak since they can do it far better than I. However, I'd like to provide the following commentary to try to explain in simple terms what we saw happen this week, and some of the implications, taking information from the variety of sources I peruse daily.

Silver Market Roller Coaster & QE


Monday 10th -
Our week started out with silver spot at $33.69 as the market opened Sunday evening, and Monday was pretty uneventful closing at $33.51.... the calm before the storm.


"Everything going on these days behind the scenes is interconnected to the take down of the 'Bad Guys'. From the US elections to the European situation to the silver market volatility - it's all interconnected. It is all an orchestrated play that is coming to it's climax. OUR TIME is approaching fast and this go-round there is no stopping what is to come." Bix Weir 9/10

(See 'The Planned Silver End Game' at right)

Tuesday the 11th Monday was followed by a volatile day on Tuesday the 12th. Prices fluctuated all day in a $.40 range... and finally cloased the day at $33.62.

Tension is mounting as the world awaits the speech & anticipated announcement by Ben Bernanke on Thursday.

 

 

 

Wednesday, the 12th all is still fairly quiet when WHAM! around 10:30 a.m. EDT, we have an abrupt downturn of $1.
If there was any doubt in your mind about the silver market manipulation, this week's activity should lay it to rest.

Wednesday's smackdown by the manipulators is on record for all to see. How does a naturally occurring market make a instantaneous drop of almost $2.00, then rise $1 within the hour ???

So what was happening?

One of the favorite tools of the manipulators is to do a quick massive sell-off, which triggers the stop-losses of other investors and floods the market, thereby causing a sharp downturn in price. At the bottom of the downturn, they use the same money to buy up more positions before equilibrium returns. When you are dealing with millions of shares, $1 in price can make a big difference.

Remember we've been hearing how JP Morgan (primary culprit - there are others) holds a massive naked short position in silver derivatives.

Wednesday, I got this from Bix,

" Just a heads up about the Fed announcement tomorrow...

WATCH FOR A BACKFIRE!

I don't know what that backfire will be but in the Road to Roota Theory the Fed will have to be blamed for the global monetary meltdown. It may be the announcement of some form of QE3 as that would be something that is very visible.

Whatever comes from the announcement watch for the global meltdown to increase in speed over the weeks following."

Thursday, the 13th

Bernanke announces QE to infinity...

Bix's comments:

"No limits. No end date. This is QE to INFINITY!

Make no mistake...this is all on purpose. This is the END GAME and the blame for the global meltdown will be placed, rightfully, on the shoulders of the Federal Reserve.

Basically, the Fed has chosen to FALL ON IT'S OWN SWORD!

The Gold and Silver move upward has caught all the shorts off guard. The Bad Guys are in deep, deep trouble as they took their cues from the likes of Jeffrey Christian and Jon Nadler who were advising EVERYONE to short gold and silver. Now it gets exciting!"


Silver had a small drop right before the announcement, then a huge leap of $2.00 where it broke through the $34 ceiling almost reached $35 before dropping off a bit, and continued on almost flatlining throughout Friday.

What was the final outcome of the week? Check out this week's COT Report (at right).

"Clearly, the commercials were preparing for a massive raid on Thursday, until Bernanke dropped their pants by announcing QE." Watch for the upside in silver in coming weeks ahead.

Bix Weir is looking for a major CFTC announcement this month on the imposition of position limits, the beginning of the derivative implosion, followed by a silver 'moon shot' in October.

 

Other Articles      


The PLANNED Silver End Game
Bix Weir

Silver COT Report

German Court Caves to Euro-Zone Hyperinflation

Jeff Nielson

Bernanke Defends Unlimited QE, as Market Goes Wild

Business Insider

FED Press Release

Ron Paul is Right; the FED and Lunatics that run it is the heart of the problem
Zerohedge

Where Does Money Come From?

China Launching Gold-Backed Worldwide Currency

Judge says $80M Gold Coins belong to the Government

 


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GATA's Bill Murphy on
the JP Morgan Silver Shortage
and the next Bullion Bank Run!

 

John Williams (Shadowstats)
Sell-Off in Dollar Should Evolve into Hyperinflation

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Dorothy's Silver Shoes or The Re-monetization of Silver Currency ~ Hugo Salinas Price
Issue 92
Today's Gold/Silver Ratio: 44/1 Up

Issue 120

Gold: $1751.10/ Silver: $39.18

SGS Notes: This week the GATA Gold Rush 2011 Conference was held in London. GATA is the Gold Anti-Trust Action Committe (http://www.gatagoldrush.com/ ) ... and we've seen material in the past from Andrew Maguire, Bill Murphy, and Ted Butler and others who have been actively involved in fighting the precious metals' manipulation over the years. Speakers this week at the conference include such big names as James Turk, Eric Sprott, Hugo Salinas Price, John Embry, Jim Sinclair... you've read articles by these folks and others in the SGS Newsletter since we began it.

The issue of the possible re-monetization of gold and silver is a hot one as we watch fiat currencies around the globe crumble into ruin. It's been on our radar screen at SGS since we began in 2008. There are many credible experts that believe it is coming faster than a speeding freight train... Bix Weir, of Road To Roota, is one such person. He has long been associated with GATA. As the world wakes up to the fiat schemes of the central bankers, there will be a rush... supplies will be in limitation... prices will skyrocket...

 

Dorothy's Silver Shoes or The Re-monetization of  Silver Currency of the United States of America

Hugo Salinas Price

President, Mexican Civic Association Pro Silver

www.plata.com.mx

Download article + bonus article, Gold Standard Generator & Protection Of Jobs

Why not re-monetize the silver dollar? Re-monetization could put the silver dollar and its subsidiary silver coinage into circulation in parallel with FRNs – “Federal Reserve Notes”.

There are several reasons that make this action possible, and only one that might be considered as an unimportant material obstacle.

In favor:

The silver dollar is the money that is still the Constitutional “coin of the realm”, defined by Act of Congress as 371.25 grains of pure silver. (The Troy ounce contains 480 grains.)

The silver dollar is familiar or at least known to almost all Americans.
A considerable quantity of these silver dollars is owned by Americans.

The silver dollar is a cherished symbol of a great past.

The monetized silver dollar would ignite a desire to save such as America has perhaps never seen before. The very first thing that must be done, to encourage people to save, is to give them something worth saving. As the US government gallops toward the abyss of bankruptcy by unlimited spending, the American people desperately require a refuge for their savings!

In this writer’s opinion, a large majority of the American people can see themselves as owners of silver money and, if a poll were taken, one can imagine that most Americans would express themselves in favor of silver money. Not so with gold, towards which the American people have little emotional attachment: gold is seen as the money of the élite. William Jennings Bryan exploited this fundamental attitude of the American people with his “Cross of Gold” speech. (Note: this should not be taken as disparaging gold; it is simply the statement of an opinion about the attitude of Americans regarding gold.)

Against:

The silver dollar bears a value stamped upon it: “One Dollar”.

***

The branch of government which the Constitution has designated as the agency “to coin money [and] regulate the value thereof” is the Treasury.

If the Treasury were to monetize the silver dollar coin by attributing to it a monetary value in terms of FRNs - “Federal Reserve Notes” - the public would very probably ignore the inscription of “One Dollar” upon the coin and accept it as legal tender money for the amount of the Treasury quote given to it. It would not be necessary to explain that twice, to anyone owning a silver dollar coin! In a short time, people would regard the term “One Dollar” as the name of a coin, rather than as a numeric indicator of legal tender value.

Determining the value of the silver dollar falls quite nicely into the Constitutional mandate to the Treasury: “To coin money [and] regulate the value thereof…”

How would the Treasury go about determining a quote to regulate the value of the silver dollar? Let bureaucrats and lawyers write books about how it should be done; here it is in a few words:

Suppose the price of silver bullion is $35 per ounce.

The silver dollar contains 77.34166% of a Troy ounce.

$35 X .7734166 = $27.07, the value of the silver in the silver dollar.

The Treasury will quote the silver dollar’s value in FRNs, with a margin of 15%, and round the figure to the next highest multiple of four:

$27.07 X 1.15 = $31.13, rounded up to $32.

The silver dollar as a legal tender coin worth $32 FRNs. The American public would eagerly purchase these silver dollars, worth $32 FRN dollars, and which could be used for all transactions without any haggling. The silver dollar worth $32 FRNs could even be deposited for that value in banks, if anyone had a mind to do such a thing.

If the price of silver rose to $37.61, the margin of profit of the Treasury, or seigniorage as it is formally known, would be reduced to 10%; at that point, a new and higher quote would be issued, to restore the 15% profit of the Treasury:

$37.61 X .7734166 = $29.09 value of silver in the silver dollar X 1.15 = $33.45, rounded up to $36 FRNs - 36 being the next highest multiple of four.

Why “the next highest multiple of four”? Because by doing so, the result would be the re-monetization of the entire silver currency system of the United States as it existed up until the Sixties of the last century.

In the last example, the silver half-dollars would automatically be worth $18 FRNs, the quarter-dollars would be worth $9 FRNs, and the dimes would be worth one-tenth of the silver dollar: $3.60 FRNs.

As pointed out in many articles at www.plata.com.mx, in the section in English, the last quote of the Treasury would remain firm and not subject to reduction, just as if the value in FRNs had been re-stamped upon the coin. The Treasury quote would simply take the place of a stamped quote, which cannot be reduced. The Treasury quote would only be raised, to follow the rising price of silver. In this way, the silver dollar would be a coin that would remain in use permanently.

This program would return the silver dollar and its subsidiary silver coinage of half-dollars, quarters and dimes to the American people in such a way as never to disappear again: all rises in the price of silver would be matched with rises in the quoted monetary value of the silver dollar and by derivation, of its subsidiary coinage: the silver half-dollar, the quarter and the dime.

This program would not cost the Federal Government – or the taxpayers that support it – one single cent! And yet, it would constitute the greatest gift to the American people that any US Congress could possibly invent, next only in importance to the return of the Gold Standard. The restoration of the silver currency of the United States to circulation, in parallel with the fiat FRN, can be considered the prelude to the revived Gold Standard.

By paying the Treasury a premium of 15% over the bullion price of silver, the American people would actually be subsidizing the Treasury’s work of monetization. This cost would be a one-time cost of obtaining real money of permanent value and utility, independent of the Fed and the banking system.

The re-monetization of the silver currency of the United States would create a new, vast market for physical silver and drive the price of silver very much higher. Those who might not be able to afford the purchase of monetized silver dollars could purchase half-dollars, quarters or dimes, which would provide the same security: they too, would rise with the rise in the price of silver. The rise in the price of silver would affect gold, which would also rise in price.

In order to facilitate larger transactions in silver, the Treasury could once again issue “Silver Certificates” attesting to the existence of silver held in its vaults.

With regard to the present faux-silver coinage in circulation, the American people are too intelligent to be deceived by it; this coinage may remain in circulation until the Treasury issues new coins for the purpose of making change in small transactions.

Though the restored silver currency may legally circulate, in practice it will be saved in its entirety and only be used in cases of emergency. Its “velocity of circulation” will be effectively close to zero.

******

Dorothy wore silver shoes, in L. Frank Baum’s classic book. Silver shoes on the yellow brick road! Dorothy symbolized then and still does today, the American people. Dorothy was unaware of the magic power of her silver shoes – and the American people are still equally unaware of the magic power of the re-monetized silver dollar: the power to recover America as the land of Hope and Opportunity!

What are the obstacles to regaining the silver dollar as money which can circulate in parallel with Federal Reserve Notes? The main obstacle will be the weapon of fear wielded by the entrenched interests of banking and the Federal Reserve, the intellectual centre of the banking cartel. These fiat money-mongers will rely on generating fear of the consequences of silver money so that they can maintain their huge fraud of fiat money FRNs; the Fed and the “Too Big to Fail” Banks are deathly afraid of the competition of silver. They know that the slightest crack in their monopoly of issuing fiat money will expose their scheme.

The Fed and the banking system will without doubt claim that “silver money is very costly”, but they will certainly not mention that the American people will fall over themselves to acquire it and even pay a premium of 15% to the Treasury, for the blessing of owning real money. Nor will the Fed and the banking system ever mention the gigantic costs that the depreciating FRNs have inflicted upon American savers; nor will they wish to recognize that the fiat FRN and the Fed are directly responsible for the present financial and economic destruction of the once great United States of America.

Another objection which will be put forward forcefully is that what the American economy requires is more spending on the part of the public. They will argue that more savings on the part of the American people spells doom for the economy: “More drink for the drunkard” is essential, according to the prevailing Keynesian thinking.

However, the humbug wizard has already been exposed and the Fed has lost its prestige forever. Toto has drawn the curtain! The State of Utah has already voiced its dissatisfaction with the present monetary system, by legislating in favor of gold and silver as legal tender money. If this project - monetizing the silver dollar by the Treasury’s giving it a numeric monetary value in FRNs, which immediately places it alongside the Federal Reserve Note as money – if this project comes to the notice of the several States of the Union, they together may force the issue.

The present policy is to “kick the can down the road” and postpone the final reckoning. But, the end of the road is already in sight! The condition is one of utter helplessness. The re-monetization of the silver dollar is the first step toward regaining health for the economy of America. Paper, fiat money will probably remain in use for some time, but the presence of the monetized silver dollar will force the Federal Reserve, the banking system and the US Government itself, to a more prudent financial course. It will be possible to regain financial health, because an alternative is available. Savings, the foundation of prosperity, will bloom as Americans opt for massive voluntary austerity by saving monetized silver dollars, half-dollars, quarters and dimes.

The banking system in the United States will be anxious to receive the massive savings in silver of the American people as deposits, but this will only be possible when the price of silver bullion has stabilized. Thus, the American people will have the upper hand; they will bend the banking system to their will by refusing to deposit their silver in the banks and thus force the banking system to reform itself to prudent monetary practice and desist from inflating by expanding credit out of nothing. After a stabilization of the banking system, the way would be open to a resumption of the Gold Standard.

Americans are today caught in a financial calamity with no parallel in history. They are being told this every day by every medium of communication. But they watch their crumbling economy in utter paralysis, because there is no alternative to which they may turn. The whole world is a mirror of their plight.

The restoration of the silver currency of the United States of America by the very simple procedure outlined here can provide the life-saving alternative. There is, at present, no other practical proposal for a viable action in the field of money. Perhaps there can be no other practical proposal? Perhaps a return to silver money is the only path out of the present crisis of civilization?

Let us hope that a political leader in the United States understands this message. The popular appeal of silver is universal; “silver shoes” will take that leader far – and the American people will follow him on that road!

Other Articles      

Road To Roota Theory
Bix Weir


Silver Money For Americans

Hugo Salinas Price

 

Next Leg Up for Silver Could Take it To $65-$75
David Morgan

 

Silver To Go Nuts
Bill Murphy

 

11 Mentality Shifts of Silver Investors

Silver Shield

 

5 Stages of the Awakening

Silver Shield

 

Get Out Of ALL Paper Assets and Into REAL Assets

Silver Shield

 

 

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Gold Rush 21
GATA Conference

GATA Gold Rush #1

GATA Gold Rush #2

GATA Gold Rush #3

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Silver's Performance to Triple That of Gold over The Next 3-5 Years..
Issue 92
Today's Gold/Silver Ratio: 43/1 Up

Issue 119

Gold: $1684.80/ Silver: $39.15

SGS Notes: The big news this week was the downgrading of the US credit rating from AAA to AA+ with S&P. I won't fill the newsletter with that since it's been in all the news... But what we are about to watch is the coming spike in gold and silver prices due to this and other factors... The downgrading of the US Dollar will have a huge domino effect on other currencies around the world. So we will be seeing unbelievable volatility everywhere in the markets... and demand is about to go sky high.

 

Silver's Performance to Triple That of Gold over The Next 3-5 Years..

Eric Sprott

Silver is likely to be the investment of the decade in the same way that gold was the investment of the last one as both industrial and investment demand come to the fore, says Eric Sprott

 

According to Sprott Asset Management CEO, Eric Sprott, Silver is the investment of the decade. Not only is it likely to reach $50 an ounce by the end of the year but, he says, over the next three to five years, it's performance is likely to treble that of gold's.

Speaking on Mineweb.com's Metals Weekly podcast, Sprott said, "We've been huge proponents of gold over the last 11 years, and we've been involved in silver over that same time period but beginning about a year ago it became extremely evident to us that the investment demand for silver was massively understated."

This move also appears to be occurring in India, where festival celebrants, deterred by high gold prices have been buying silver ornaments as gifts. (See: Silver puts gold in the shade.)

He adds, as a result of this, the ratio between the two metals is likely to get back to a more "appropriate" level around 16:1 - it is currently around 37:1 and only in June last year it was sitting around the 70:1 level.

"If one looked at the silver and gold sales as an example of the US Mint, so far this year, people have put the same dollars into silver as they've put into gold - which can't carry on with the price being 38:1 - you just can't have the same amount of money going in. We see the same thing in the ETFs - the silver ETFs have been growing while the gold ETFs so far this year, have declined," he says.

One of the main reasons for this, according to Sprott is that more and more people are viewing gold, and now silver, as the reserve currency and given the state of the world, there is a shift from paper to hard currencies.

It is not, however, just Sprott who sees this shift toward hard currencies. The state of Utah, recently signed a law which has made it the first U.S. state to recognize federally issued gold and silver coins as legal tender.

Asked why there is likely to be such a large relative outperformance, Sprott says, "the fundamentals for the two metals are entirely different. There is huge industrial demand for silver, there's not much industrial demand for gold. It's interesting when you look at how many dollars of gold are produced in a year and what's available for saving, and how many ounces of silver are produced per year, and how many of those ounces are available for investment, the ratio is something like there are 10 times more gold available for investment in dollars every year, than there is silver. So if the guy is just as happy to own silver as gold, the fundamentals are going to diverge markedly here."

With the growing industrial uses for the metal in, among other areas, photovoltaic cells, and the medical field (for its antibacterial properties) on top of the growing investment demand, higher prices could result in some substitution but, according to Sprott this is not really a concern as the dollar value of the silver is almost immaterial to the total cost of the product.

Any clouds to the silver lining?

Asked if there are any potential hiccoughs to the run for silver that he is predicting, Sprott says that while there are a few things that would cause him to change his mind, he does not really see any of them coming to pass any time soon

The first cloud, according to Sprott would be fiscal and monetary responsibility by governments and central banks but, he says, this is certainly not evident at present and would go so far as to say, " ever since we had QE1, the reason to own gold and silver has just changed materially here because of the irresponsibility of the central banks in the world

The other potential hiccough, he says would be some kind of massive mania type blow off, " you have to take your best guesses when something like that might end - I don't see it as being anywhere near that stage at this point."

And, finally he says, "The other thing that would have an impact is if, ultimately, gold and silver in fact are named reserve currencies - then we will all have accomplished what we're after and you may or may not need it neat because it's now money."

Where to from here?

According to Sprott Silver will move to $50 dollars this year before powering ahead, "If you ask me in the three to five year time frame, obviously I think it's going to go north of $100 simply because we'll get that 16:1 ratio and I certainly see gold going a lot higher, so that's my outlook here and therefore the rewards for owning silver and the equities will be quite outstanding."

Quote of the Week                               

“By this means (fractional reserve banking) government may secretly and unobserved, confiscate the wealth of the people, and not one man in a million will detect the theft.”

--John Maynard Keynes
The Economic Consequences of the Peace (1920

Other Articles      

8 Reasons Why Silver Is the Investment of the Decade
Eric Sprott


3 Reasons Silver Should Head Higher Than $50 Now

Seeking Alpha


JP Morgue Increases Physical Silver In New Vaule 39% In 2 Days!

 

U.S. Debt Ceiling Crisis Only A Minor Player in Gold And Silver Prices

MineWeb

 

Gold Is The True Reserve Currency

 

We Are at the Cusp of a Global Move into Gold and Silver

Chris Weber

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Gold and Silver Beyond the Limit ~ Peter Schiff
Issue 92
Today's Gold/Silver Ratio: 41/1 Up

Issue 118

Gold: $1628.00/ Silver: $39.95

SGS Notes: We are watching a political theater unfold that is certain to have a dramatic and lasting effect on silver and gold prices well into the future.

Gold and Silver Beyond the Limit

Peter Schiff

Perhaps the debt ceiling should be renamed the "national debt target," for it seems Washington is always trying to reach it. One could say it's their only reliable, time-tested achievement. And without fail, upon reaching their national debt target, they promptly extend it further in order to discover how quickly it can once again be attained!

While I have little doubt that the ceiling will be raised, my readers have been curious as to the implications for gold in each of the debt and "default" scenarios possible after August 2nd. This month, I'll outline how each outcome could affect the price of gold and silver.

BEARISH GOLD CASE #1: DEBT CEILING NOT RAISED - ENOUGH CUTS MADE TO AVERT DEFAULT

My readers know that this scenario is actually what the US government should do. The debt ceiling should not be increased and massive cuts must be made. We know this outcome is extremely unlikely - it would require not only a resolute steadfastness to sound money, but also a 180-degree change of philosophical beliefs by the majority of Congress (and the American public) overnight.

Yet in our fantasy world, if this did occur, it would be bearish for gold. It would mean the US government was shrinking, that debts were being paid, that the entire US economy was becoming more solvent and viable. Gold would be less important to own, as the risk of both currency crises and sovereign debt crises would be lower.

BEARISH GOLD CASE #2: DEBT CEILING RAISED - FEDERAL BUDGET BALANCED

If the debt ceiling is raised in order to avert imminent default, but the spare time is used to truly bring the federal budget into balance, the US economy might still be saved. But when I say "balanced," I mean it. This would mean not only eliminating the entire $1.5 trillion deficit, but also leaving enough of a surplus to cover all outstanding debt and unfunded liabilities. For perspective, Senator Rand Paul's proposal to but $500 billion a year, widely considered more radical than landing a man on Mars, would only address 1/3 of the annual deficit - it would take cuts many times that for the US to return to solvency.

But let's be optimistic: if the budget could be balanced, then the fact that the debt ceiling was being increased yet again would not be so awful. Since the US government's fiscal policies would be completely reversed, we could expect to start seeing a strengthening of the dollar (so long as Bernanke stopped the printing presses too) and a weakening of gold and silver.

However, this is just as much of a pipe dream as the first scenario. No government in history has dug itself out of the hole we now face without defaulting. If Congress even tried to enact a plan like this, people would be rioting in the streets over their lost entitlements. And we'd suddenly have millions of unemployed soldiers. Not exactly a recipe for peace and prosperity.

BULLISH GOLD CASE #1: DEBT CEILING NOT RAISED - US DEFAULTS ON TREASURY DEBT

This is the scenario that President Obama and Secretary Geithner are threatening. They claim that if the debt ceiling is not raised, they will have to immediately begin defaulting on Treasury interest payments. This is rather unlikely, as interest payments make up only 10% of spending, but let's say they stop paying anyway.

If they do this, market interest rates for US debt would skyrocket, meaning the only buyer left at rates the Treasury could afford would be the Fed. In other words, if they default on August 2nd, QE3 will start on August 3rd. Of course, a default would be absolutely devastating to the dollar and a boon for gold and silver. Global confidence in the invincibility of the United States would be shattered, and the underlying problem of excessive spending would still remain to be addressed.

Another interesting scenario would be if Congress didn't raise the debt ceiling and the Treasury just kept borrowing anyway. It's not like the Executive Branch follows laws scrupulously nowadays. What if they just ignored it? Someone could challenge the act in federal courts, but the odds are often in the President's favor. In this case, gold and silver might experience less of an initial spike, but their long-term prospects would be elevated as the world recognized that we were one step closer to becoming a banana republic.

BULLISH GOLD CASE #2: DEBT CEILING RAISED - SYMBOLIC CUTS IN SPENDING

This scenario is by far the most likely outcome of the debt talks in Washington; they will raise the debt ceiling and make spending cuts which sound substantial, but which only mange to slow the accumulation of new debt.

The plans on the table suggest cutting a couple trillion in cumulative spending over the next decade. In other words, they propose cuts that only reduce deficits by about 10-20%; they do nothing to reduce actual debt levels. So if these talks are successful, then instead of a $1.5 trillion deficit each year, perhaps we only suffer a $1.2 trillion deficit. Meanwhile, the debt continues growing. This is "success" in Washington.

Clearly, this is bullish for precious metals. It means more of the same - more spending, more debt, and necessarily more money-printing.

The Empire Has No Ceiling

Over the past 50 years, the US debt ceiling has been raised over 70 times. In other words, there is no ceiling at all - it is as fictitious as the idea that central planning works, or that the US has anything resembling a "free market."

So, I guess it stands to reason that regardless of the debt ceiling increase, it is likely that the US will be downgraded by one or more ratings agencies. The effect will be massive because the world's largest pension, mutual, and sovereign wealth funds typically mandate investment only in AAA-rated securities. A downgrade of US debt means those funds must immediately sell off their primary reserve asset. The effect of this cannot be overstated, and gold would be the first and best refuge for an onslaught of orphaned capital.

Despite gold once again hitting new highs, I can only recommend my readers continue to keep a healthy portion of their portfolio in precious metals. Given the sad realities of the US fiscal and monetary situation, it's prudent to assume that nothing will be solved by August 2nd.

Quote of the Week                               

Other Articles      

Peacock Syndrome - America's Fatal Disease
Silver Bear Cafe

 

Gold And Silver: We Were Right - They Were Wrong

USA Watchdog

 

Silver in Your Bandages and Copper in Your Pillow
Dr. Jeff Lewis

 

Gold settles at record as GDP Disappoints
MarketWatch

 

U.S. debt ceiling crisis only a minor player in gold and silver prices
MineWeb

 

The Buzz Around Gold Is Growing Louder
Jeff Clark

 

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Ron Paul to Bernanke:
Is Gold Money?

Eric Sprott, of
Sprott Asset Management

Financial Sense
Newshour

" Silver Set to 'Explode' "

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Silver and Industrial Demand - Part I by Jeff Lewis
Issue 92
Today's Gold/Silver Ratio: 42/1 Dn

Issue 115

Gold: $1545.70/ Silver: $36.67

SGS Notes: This week's article was too long for one newsletter, so we've split it up into 2 parts. This week will deal with historical and established silver demand; Part 2 will deal with Future Trends and silver's role in them. Meanwhile, if you haven't been watching silver and gold prices lately, you'll note that in the past week, we've seen a rise again in silver from the $34 range to the $36 range, and gold from the $1490s to the mid $1500 range and a drop of the gold:silver ratio of 2 points...

 

Silver and Industrial Demand - Part I

Jeff Lewis

I. Introduction

As you know, silver is much more than just a form of money. Although not often discussed in great detail, silver is actually an incredibly important and strategic industrial commodity. In fact, demand for silver by industry has increased dramatically in recent years and shows no signs of slowing despite price fluctuations.

Silver's incredible versatility - as a conductor, a catalyst, an antibacterial agent and much more - and unrealistically low prices have made it ideal for use in a huge number of products spanning countless manufacturing sectors. And the continued (relative) affordability of this super-metal points to dramatically increased demand in coming years.

As silver investors and educators, we feel that understanding silver's tremendous role(s) in industry (along side its importance as a store of wealth) is critical to understanding its past, present and future value. In fact, we are confident that you will find the insight and knowledge gained to be crucial for maintaining perspective as we head through the upcoming currency storm.

Ironically, if not miraculously, we find ourselves at the cutting edge of technology, while simultaneously, re-aligning with what also happens to be an excellent, proven, and historic form of wealth preservation - and money. Not to mention it is becoming increasingly scarce!

To broaden your understanding of silver's industrial applications, we're examining past and current industrial demand and looking forward toward what is expected to be a very bright future for this powerful and increasingly rare metal.

Growing Industrial Demand

As recently as 1990, total annual demand for silver by industry was about 273 million ounces (Moz). This represented about 39 percent of the total amount of silver fabricated each year. By 2000, industrial demand represented over 40 percent of total fabrication. And as of 2007, it had climbed to an all-time high of 465 Moz annually - or 55 percent of total fabrication - where, despite a downturn related to the global economic crisis that began in 2008, it is approximately today.

This upward trend is expected to continue, with annual industrial silver consumption growing from about 487 Moz in 2010 to approximately 666 Moz in 2015. This increase in demand will come from growth in both long-established industrial uses of silver and some intriguing new applications.

Established Industrial Applications

Silver's superiority as an electrical conductor makes it ideally suited for use in batteries and electrical contacts. Silver is used widely in automobiles (the list of core automotive applications is growing) and, in the form of a highly conductive paste, in photovoltaic cells. Photovoltaic cells - which convert solar energy into electricity - are already in great demand as concerns about dwindling fossil-fuel supplies grow. Photovoltaics also promises to play a key role in the drive toward clean energy sources in coming years. In fact, silver demand for use in photovoltaic cells is expected to double by 2015.

Emerging Industrial Applications

Thanks to silver's unmatched conductivity and relative affordability, it has become a critical element in the manufacture of a great variety of electronic devices - many of which have become important (and largely taken for granted) parts of our daily lives. Because silver-containing batteries manage energy output in very small packages, they are widely used in smart phones, laptops, and tablets, demand for which seems to be virtually limitless.

Other new applications capitalize on silver's powerful antibacterial properties. Silver-bearing products ranging from socks to cosmetics are appearing on the market with increasing frequency.

Because, in many of its industrial applications, silver performs much better than its possible replacements (if they exist), industry shows little interest in moving away from it toward less expensive or more abundant materials. So long as silver continues to be relatively inexpensive, and consumers don't lose their appetites for silver-containing products - which doesn't seem likely - industrial demand for silver will continue to grow.

 

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Peter Schiff on
numismatic vs. bullion

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The Final Fight ~ Silver Shield
May 7 , 2011
Issue 92
Today's Gold/Silver Ratio: 42/1 Up

Issue 107

Gold: $1500.70/ Silver: $35.85

SGS Notes: :Yes, silver took it on the chin this week. What we have seen in the dramatic price drop for silver and gold has been a carefully orchestrated manipulation of prices by some powerful folks in high places… If you have been following the SGS newsletter for very long, you would know that we've been reporting on this faithfully from the beginning. It's been going on for several years now… and with all the exposé going on by some honest and persistent men in the industry, the fire is heating up under this issue. So this week I am devoting the newsletter to the various commentaries from these people who have reported the truth about what's happening. There's a lot to 'feast on' this week.

This is NOT a normal 'market correction' as some would have us think…Remember that investing in physical silver and gold is not the same as paper … yet the dynamics in paper have a dramatic effect on physical. (Also noteworthy this week… huge difference in Gold:Silver ratio… last week was 32:1

Bear in mind, that all of manipulation forcing prices downward have long-term effects on this market beyond the prices… it creates a disincentive for mines to produce and refine silver… a disincentive for research & development on new sources for silver. Consequently, there is a very real shortage of phyical metals in the market…

And, again, the warning is issue repeatedly: Hold on for the Long Haul. This is NOT the time to SELL… it is the time to ACQUIRE.

Silver Shield: The Final Fight

This is the final fight of physical and paper silver, so hold the line and get ready to take it to the enemy. The Elite have literally thrown everything they have at the silver markets to try to make silver investors weak in the knees and cry uncle. Like a bully trying to take your lunch money by twisting your arm.

This can only end one of two ways; you give up and the banksters laugh or you stand up and say enough! These tactics may work on some paper traders who are literally forced by margin calls. For those who have listened to me, and bought only physical, this recent manipulation is only a subsidized discount to buy more, for less.

The CME has raised the margin requirements an unprecedented 5 times in less than 2 weeks to force higher and higher costs on paper traders to force them to sell. The higher the costs and the lower the price of the underlying asset is a toxic combination in the paper market.

I saw this happen in the 2008 rout, where they took it down 60% in a matter of months. It was the worst time to be a silver holder, but I knew the real story and held on when everything in the world said get out. I held on and even added to my position to then see a return of close to 500% in the next 2 years.

Read Entire Article Here


Collusion by Fed Officials and Commodity Exchange Heads Has Its Intended Effect
Trader Dan


I find it amazing how effectively these people can coordinate their policies with the heads of the commodity exchanges and their pals at the big banks who are perennial shorts in the markets and have now managed to pluck the money out of hundreds of thousands of commodity trading accounts enriching the big banks (government sponsored hedge funds) in the process. Nothing like a freely operating financial system where the playing field is completely level and no one has an advantage over the next guy!

By their continued hiking of silver margins, the exchange effectively removed the liquidity in the silver market that the smaller specs have been providing. That left the market vulnerable to severe drops in price as these specs exited due to financial constraints which then removed a source of potential bids under the market as the CFTC commitments report has shown the small specs to be good buyers in the silver market. Even the bigger hedge funds are impacted by such a sharp hike in margins as their losses in silver then precipitate even more losses across other assorted commodity markets due to the cascading effect of mounting paper losses and margin calls and the need to raise cash.


As the silver market tanked the exchange officials could then warn about Clearinghouse integrity and have more reasons to drive margins even higher as they point to the increased volatility, volatility which I might add, they created themselves by hiking margins to such an extreme degree.
Read Full Article Here

 

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A Few Notes...      

 

Some things we are seeing as the market demand is increasing…and things which have an impact on our customers…

  • Longer wait times for our inventory orders

  • Higher Premiums, especially for Silver Eagles

  • Product sell-out (from our suppliers)
Rest assured, however, that we are doing our utmost to get products out the door to YOU and will continue to provide you with the best service possible.

 


Honoring All Our Mothers…

 

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Gold and Silver Storm The Fed


Darryl Robert Schoon

Gold and Silver To Explode Again


John Hathaway

Short Term Volatility but Silver will Zig Zag to $100
Paul Mladjenovic

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Interview With
Adrian Douglas
Part 1

Adrian Douglas is a Director of the Gold Anti-Trust Action Committee (GATA) and editor of the Market Force Analysis Letter
Part 2

Fractionals Are Back

 

 

We have brought back the silver fractional rounds…
½ oz, ¼ oz and now 1/10 oz
.999 Fine silver rounds are now available for purchase.

Does SGS
BUY BACK Silver?


We get inquiries about this all the time… Our answer is a qualified 'Yes'.
We are purchasing inventory replacement all the time. Consequently, timing is everything.

Customers have first priority over our vendors.
So, while we don't recommend selling at this time… we understand that circumstances sometimes dictate liquidation.

Don't hesitate to call and ask us if you need to liquidate some of your holdings.


 

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Contact us at info@silverandgoldshop.com
Phone: 888-203-2232 x 1
The Reason Silver Has Been Rising Faster Than Gold
April30 , 2011
Issue 92
Today's Gold/Silver Ratio: 32/1 (same)

Issue 106

Gold: $1513.50/ Silver: $46.86

SGS Notes: The crazy ride continued this week…the week began Monay with a sharp rise from $46.86 to$47.88, then Tuesday spike up into the high $49s… closely pressing the $50 threshhold…then back down by end of day to just over $45. By Wednesday night, the price was back to the mid $48 level, continuing strongly in that range until close of week Friday night. The ratio has remained constant at 32/1… but we've also seen Gold do a huge $58 spike this week. The dollar went to 73.2 in the wake of the S&P downgrading the US credit rating down to C - lower than Mexico… We've had several inquiries this week about whether silver is still a good buy at $50+… This week's newsletter will be addressing that…

Psst! Letting you in on a little 'secret'… if you watch our Facebook page for SGS, (see link at right) you will see a flurry of activity of postings on Fri/Sat … this is because we post a lot of articles and links that we come across while preparing for the Newsletter, but 'reject' for newsletter publication… lots more extra stuff there, folks!

The Reason Silver Has Been Rising Faster Than Gold
Analysis of the different advance which has occurred in the silver price vis-à-vis gold in the past few months where the former has substantially outperformed the latter.
Author: Julian Phillips, MineWeb

Silver is breaking new records at around $40 and gold is touching new highs of close to $1,460. Looking back, over the past few years we have seen gold rise from around $312 to $1,460 a rise of 4.68 times and silver from around $6 to $40 a rise of 6.67 times.

But this does not give a clear picture, so we went back over the last year and what did we see? Since early 2009, gold has moved from $900 to $1,460, a respectable 62%. Over the same period silver has moved from $10 to nearly $40 a remarkable 400%. Why the difference in relative performance?

Both metals have moved as money. Gold and silver Exchange Traded Funds have attracted massive investments in the developed world where trust in the monetary system is far higher than it is in the emerging world. But it was the underlying gold and silver that attracted investors. Waning confidence in the value of paper currencies gave way to demand for precious metals as a store of value retainers for investors.

Gold and silver have substantial differences as value retainers which help us to identify why the two metals have differed so much in performance.

Gold is and has always been the 'senior' monetary metal held by Central Banks as money until 1971 and after that as a valuable reserve asset in the vaults of central banks.
Silver was rejected as money and as a reserve asset by the mid-fifties, despite it being treated as money throughout the ages before that.

Both gold and silver have been attacked as money through 'official' sales from the seventies until last year. But gold was sold to undermine the reality that it is money. Silver was sold out from reserves almost completely by central banks discarding it as money, completely.

Apart from a brief period when Egypt was at its height and supplies of silver less than those of gold, gold has always been in far shorter supply than silver and considered far more valuable than silver.

Silver in the past few decades has been seen as a commodity, mined mainly as a by-product of base metal mining, with only 30% mined in a pure silver mine.

Most silver is consumed whereas gold is not, which will continue to be the case until less expensive substitutes are found. This will only happen at far higher prices still.

GOLD AS AN INVESTMENT

Gold has always been the precious metal of choice for wealthy individuals, institutions and central banks. It has never been abandoned as such. Even when "Official" selling was at its peak, central banks sold only what they thought was sufficient to add credibility to the paper currency they were pushing to the centre of the system, first to add credibility to the dollar then after 1999 to the euro. With those tasks completed, Central Banks are now either holders or buyers of gold.

The amount sold in most cases was around 20%, but in the case of the uninspired then-Chancellor Brown of the U.K.'s case, half of Britain's reserves were sold. The largest holders of gold sold none or only small amounts. So while it was underpriced and we believe still is, did not see its price 'crushed' completely.

The path back to investment acceptance is a slow one and a long one with most of the journey still to come. We believe that we are on the brink of major changes in price levels in 2011 and beyond.

SILVER AS AN INVESTMENT

Silver had not really been an investment metal until 2004 and not a significant one until 2009.

It was a commodity metal in so short a supply that the Hunt brothers of Texas felt they could corner the market. In 1979, they took the silver price from its high of $8 an ounce [it had doubled since it stood at $4 an ounce in the mid- 1970s' already] to $50 an ounce by the early 1980's. It then fell all the way back to $5 an ounce thereafter as the Hunt Brothers found they were unable to sell the silver until prices had fallen back to those levels where they stayed until October 2003. Until 2009, it was relegated to the sidelines as an investment metal.

It started to regain popularity as an investment metal because it began to be considered as "poor man's gold" as the gold price rose out of reach of the poorer investment classes.

For instance, in India until its middle classes began to grow substantially, 70% of all gold bought was bought by the agricultural sector, whose income was directly related to the quality of the monsoon rains. When profits were good, they found their way into property and into gold, As the price rose, the quantity of gold available to such people fell. Then $1,500 bought five ounces of gold, but with gold at $1,460, it only buys just over 1 ounce of gold.

In India, precious metals are used in commercial transactions so the divisibility of silver relative to gold was far greater and more flexible. It also remained affordable in larger quantities. After all, now one ounce of gold buys 36.5 ounces of silver. So, silver remains affordable far lower down the economic ladder than gold does. It therefore can attract a far wider market than gold does currently at retail levels. Bearing in mind that precious metals are attracting a huge and growing market in the emerging parts of the world, the demand, as a wealth protector, at the retail end of the market is expanding rapidly.

CATCH-UP

It would therefore be wrong to still categorize silver as a monetary metal. Its day will come, but not until its price is much higher and not until paper currencies have lost considerably more credibility than at present.

The most difficult part of silver's rise as a wealth protector has been from October 2004 to October 2008, from when its price moved from $5 an ounce to a peak of over $20 an ounce then to fall back to than less $10 an ounce before taking off on its current path. The fall coincided with the onset of the 'credit-crunch.

All the while, demand from the photographic sector has waned. More importantly, the uses of silver have morphed from discretionary demand to a need. Even in a downturn, the demand for silver will remain strong as its uses are considered vital now.

So as a non-monetary, more volatile precious metal, its future then was far cloudier than now. The transition from those days to 'poor man's gold was its re-birth as an investment metal. While we believe it has now returned as such to stay, it still has a lot of catching up to do. By catching up we mean that it still has to return to the concept fully, that it is a lower category investment metal respected from institutions [eventually by central banks] as well as the retail end of the market.

Gold is already at that point. This does not mean that the gold price has reached a ceiling of any kind. It does mean that the gold price will rise relative to the value of currencies from now on with its metallic qualities being far in the background. Silver is still a long way off from that point.

Julian Phillips is a long time specialist analyst for gold and silver and is the principal contributor to the Gold Forecaster - www.goldforecaster.com - and Silver Forecaster- www.silverforecaster.com - websites and newsletters

Quote of the Week                               

 

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Peter Schiff
Commentary on CNBC

Gold at SGS      

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only $48 over spot

10 gr. (.32 oz)
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A Few Notes...      

 

Some things we are seeing as the market demand is increasing…and things which have an impact on our customers…

  • Longer wait times for our inventory orders

  • Higher Premiums, especially for Silver Eagles

  • Product sell-out (from our suppliers)
Rest assured, however, that we are doing our utmost to get products out the door to YOU and will continue to provide you with the best service possible.
Note: If you are getting duplicates of the S&GS Newsletter, please eMail us and let us know.
Contact us at info@silverandgoldshop.com
Phone: 888-203-2232 x 1
The Bullion Report - Your Money is No Good Here
April 22 , 2011
Issue 92
Today's Gold/Silver Ratio: 32/1

Issue 105

Gold: $1513.50/ Silver: $46.86

SGS Notes: Whew! This week was a wild ride. (Did you notice the big drop in the ratio again?) I'm going to share a lot of info in the newsletter this week. As usual, the experts and economic advisors have been prolific in their writing the past 2 weeks. The S&P downgrading of the US credit rating was a HUGE factor in the numbers we're seeing. So read what you can now, bear with me, and stash this away for digesting the rest of the information as you are able. Let the dust settle a little this weekend and celebrate the MOST momentous occasion in history.

Your Money's No Good Here
Richard Zimmerman, Berkshire Asset Management

Fear premium seems like an understatement following the Standard and Poor's downgraded outlook for US debt. Markets reacted in kind, with and the threat of losing a AAA rating brought another round of potential haven seekers to gold and silver. What is it about the rating that is so special, and why should this change anything?

Let's get one thing clear - there were a few stories that reported the US' credit rating was lowered from neutral to negative. The Ratings Service actually lowered their outlook for US debt. The reasoning? They lack confidence that Washington will get the federal deficit under control in the next two years or so. The long term outlook suggests that there is a roughly 30 percent likelihood that the US will lose its current investment rating. That rating was actually reaffirmed in yesterday's Standard and Poor's release, but with paragraph after paragraph of concerns over the future growth and expenses for this western superpower.

The AAA rating is endangered by what the Standard and Poor's views as "very large budget deficits and rising government indebtedness and the path to addressing these is not clear to us" - exactly the kinds of things that have been moving more than a little investment in precious metals. Unlike the US dollar, I have often reiterated that gold and silver are difficult to manipulate with changes in policy. However, the key issue here is the cracks in the foundation.

Since the start of the global recession, it was not uncommon to hear that a country was in trouble on the credit front. Greece, Portugal, Spain, Ireland - there is no shortage of areas of potential weakness. The thing is - it seemed a lot less dire when it was somewhere else. The idea that the Euro zone would have a country or two with fiscal weakness is one thing, but an industrialized nation of this size? The US is practically the backbone of a global economy, and one of the largest single economies in the framework of the world.

Perhaps it is more unsettling because of the scope of foreign investment in the United States. As of February 2011, China held over $1 trillion in US treasuries. Japan had a cool $890 billion. The United Kingdom and other nations held more modest levels, around $200 billion or so, for a grand total of $4,474,300,000. (1) Of course, Japan's finance minister was quick to state that US treasuries remained attractive, despite the warning against the US. China was less magnanimous. Their foreign ministry urged policy makers in Washington to move to protect investors in their debt. Besides debt obligations, foreign governments are probably eyeing their ample US dollar reserves. While it is anyone's guess how much of China's foreign currency reserves are dollar denominated, it cannot be comfortable on any level to see the recent troubles in the US devalue the currency. Uncertainty in the future of the US and the overall perceived risk of default has as much of a chance to drive investors from the US dollar and into other assets.

The Treasury Department's projection is that the debt-ceiling is within reach, to be breached as early as May. Default could come as early as this summer.

Summary

The US is unlikely to see the kind of real growth that the situation requires to sort out its massive deficit. Right now, the economic crisis has pared growth, and playing an eternal shell game with the fiscal deficit doesn't seem close to over. The diminished outlook in a superpower like the United States is enough to rattle even the most stalwart investor's cage. That means the chance for more investor uncertainty, and that usually means fresh highs in precious metals. The threat from Standard and Poor's was a surprise to a lot of people. Everyone seems to be aware that things are not perfect, and that public finances are relatively tattered. The short term key will be how people feel this credit ruin stands up to global counterparts. If the US is viewed as the 'best of the worst' as it were, this initial gain in gold and silver will likely be met with some pressure. If all it does is create talking points ahead of re-election promises then people are less likely to assuaged, and that means a harder currency than a feeble buck.

1. http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt

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Yes, we like Ayn Rand, Atlas Shrugged… which, by the way is out in theaters…We saw it last week, Part 1. Check it out here: http://www.atlasshruggedpart1.com/
Just picked up a copy of the book at Costco to re-read.

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20 Reasons to SELL Your Physical Silver

 



Gold at SGS

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Silver Is Getting Too Popular, Right? by Jeff Clark
April 16 , 2011
Issue 92
Today's Gold/Silver Ratio: 34/1

Issue 104

Gold: $1487.10/ Silver: $43.12

SGS Notes: If you've been watching spot prices in Precious Metals the last 2 weeks you're probably holding on to your seat at the leaps being taken. 3 weeks ago, on 3/11 our newsletter reported the gold:silver ratio at 39:1 with gold at $1419.60 and silver at $35.90. This week the ratio has dropped to 34:1 with gold at $1487.10 and silver at $43.12. This represents a 20% increase for silver and a 4.7% increase for gold, which is in keeping with the fact that silver has outperformed gold historically, and the projections that it will continue to do so.

Jeff Christian says "Metals most likely to top out in 2nd quarter, correct into late summer before resuming another run"… We will surely see some correction in these prices on the short term, but for the long term, experts are agreeing that prices are projected to increase as currency is debased around the world and economic policies remain in place. Even at these prices, silver and gold are still a good hedge against inflation as well as having potential for solid dividends.

Silver Is Getting Too Popular, Right?
Jeff Clark, Daily Gold

04/15/11 Stowe, Vermont - It's no secret that the silver market is red hot. As I write, silver American Eagles and Canadian Maple Leafs are sold out at their respective mints. Buying in India has gone through the roof, especially noteworthy among a people with a strong historical preference for gold. Demand in China continues unabated. Silver stocks have screamed upward.

So, as an investor looking to maximize my profit, I have a natural question: is the silver trade getting too crowded, meaning we're near the top? Have the masses finally joined the party such that we should consider exiting? After all, it's not a profit until you take it, and you definitely want to sell near the top.

There are several ways to measure how crowded the silver market might be. I prefer to look strictly at the big picture and not get caught up in the weeds. This means I'm looking for signs of market exhaustion or the masses rushing in. Nothing says "peak" more than an investment everyone is buying.
So how crowded are silver investments right now? Let's first look at the ETFs.

At $35 silver, all exchange-traded funds backed by the metal amount to $20.7 billion. You can see how this compares to some popular stocks. All silver ETFs combined are less than a quarter of the market cap of McDonald's. They're about 10% of GE, a company that still hasn't recovered from the '08 meltdown. Exxon Mobil is more than 20 times bigger. And this isn't even apples-to-apples, as I'm comparing the entire silver ETF market to a few individual stocks.

This comparison is even more interesting when you consider that it's the ETFs where most of the public - especially those that are new to the market - first invest in silver. So while the metal has doubled in the past seven months, total investment in the funds is still far beneath many popular blue-chip stocks.

Okay, maybe all this money is instead going into silver mining stocks. How does the market cap of the silver industry compare to other industries?

While you fetch your magnifying glass, I'll tell you that the market cap of the silver industry is $73.1 billion. It barely registers when compared to a number of other industries I picked mostly at random. The dying newspaper industry is over 26 times bigger. Drug manufacturers are 213 times larger. Heck, even the gold market is 19 times greater. And here's the fun one: the market cap of the entire silver market, with all its record-setting prices and stock-screaming highs, represents just one-third of one percent of the oil and gas industry.

To be fair, there are a number of sectors that are smaller than silver. Radio broadcasters ($43.2B), video stores ($10.9B), and sporting goods stores ($2.5B) have puny market caps, too. But then again, who's buying DVDs or baseball mitts to protect their wealth from a coming inflation?

Silver hardly resembles the picture of an investment that is too crowded.

I'm not saying one should rush to buy silver right now. After all, it has doubled in seven months. Unless this is the beginning of the mania, prudence would certainly be called for at this juncture. The price will always ebb and flow in a bull market, and an ebb is overdue.

The question, of course, is from what price level it occurs. What if a correction doesn't ensue until, say, a month from now, and the price falls back to…where it is now? I remember some articles in January that insisted silver would fall to as low as $22, and, well, they're still waiting and have in the meantime missed out on some huge gains. For silver to fall back to $22 now would require almost a 50% drop!…Not impossible, but I wouldn't hold my breath.

Fixating on market timing takes your focus off the ultimate goal. In my opinion, instead of worrying about what will happen next week or even next month, focus on how many ounces you have, and then buy at regular intervals until you reach your desired allocation. This has the added benefit of smoothing out your cost basis. And don't forget to buy more as your assets and income increase.

This is a market where you'll want to be well ahead of the pack. Someday in the not-too-distant future, average investors will be tripping over themselves to join in. That will make the market caps of our silver investments look more like some of the others in the charts above. And that will do wonderful things to our portfolio.

See Related Article: The Tiny Silver Market - Jason Hommel
(3 parts)

Quote of the Week                               

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Instead of offering you one particular video this week, we are directing you to Bix Weir's page where several are listed.

Bix says, "I'm amazed by all the information that is coming into line with the Road to Roota Theory on Youtube and other forms of the "New Media". From all corners of the world events related to the "End Days" of the fiat monetary system are taking place and the "New Media" is the place to track down the TRUTH. From the end of the Oil Standard to the Silver Moonshot to the final preparations of implementing a true gold standard in the US...it is all happening NOW!"


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Disinformation and Silver Confiscation: Opinion ~ Jeff Nielson
March 18 , 2011
Issue 92
Today's Gold/Silver Ratio: 40/1

Issue 100

Gold: $1419.70/ Silver: $35.28

SGS Notes: Be sure to read the entire article in this week's main editorial…
The title is misleading and you may be surprised at what they author is actually saying… Nevertheless, we took the 'risk' of presenting it because we want you to be well informed.

Disinformation and Silver Confiscation: Opinion
Jeff Nielson, BullionBulls , Canada

VANCOUVER (Bullion Bulls Canada) -- There have been two trends in precious metals markets in recent weeks that I find very alarming. On the one hand, we see the large "shorts" (JPMorgan and HSBC) in the bullion market ratcheting up their short positions again.

Understand that these short positions are tremendously underwater, and once the 100:1 paper-leverage of these financial terrorists is factored in, their short positions already represent large enough losses to ensure the bankruptcy of both of these vampires. Thus the fact that these "life-threatening" short positions are increasing (and being allowed to increase) tells us two things.

First, it is confirmation that the hopelessly corrupt U.S. Commodity Futures Trading Commission is simply going to defy the law, which requires these banker-slaves to institute "position limits" against the very Oligarchs they have dedicated their careers to serving. It is also apparent that JPMorgan and HSBC are now openly charging toward their own bullion-Armageddon: default events in the silver market (and possibly the gold market as well) which would lead to their financial annihilation -- in the absence of any government intervention.

Obviously the key phrase in that paragraph is "in the absence of government intervention." I will return to that point later.
The other recent trend which I find equally disturbing is the sudden explosion of rhetorical rants on the internet, which specifically revolve around the battle-cry of "taking down JPMorgan" or even the entire U.S. financial system. As a silver bull, there are many reasons for me to be dismayed by this rabid and incessant rhetoric.

For one thing, it adds nothing to the "debate" about silver manipulation, nor does it do anything to inform investors -- most especially the new investors streaming into this sector. Indeed, the emotional excesses of these writers are likely only to frighten new arrivals to this sector, who were looking for an "investment" not a "war."

In addition, this totally misrepresents how and why the original investors came to this sector: it was not to "attack" the rapacious U.S. Banker Oligarchs, it was to protect ourselves from them. Silver isn't (to use the term coined by Warren Buffett) a "financial weapon of mass destruction," like the $1.5 quadrillion paper time-bomb which these Oligarchs have created in their derivatives market. It is a "suit of armor" -- to make us invulnerable to banker blood-sucking.

Thus the rabid-ranters are in no way representative of the vast majority of silver investors. The bankers are doing a perfectly fine job of destroying themselves -- and they need no "assistance" from us to finish their greed-induced suicide. In fact, I am convinced that most of these "mouths that roar" are in fact paid tools of the bankers, performing an invaluable service for them: demonizing silver investors in the eyes of the (ignorant) general public.

Readers must realize that among any even semi-informed individuals, "precious metals manipulation" no longer represents a "question mark." It is an obvious reality, which has been documented by many (including myself). It includes not only obvious statistical evidence of manipulation, but a plethora of confessions from various "insiders" and (somewhat more recently) a bona fide "whistleblower" (Andrew Maguire ) with decades of experience in bullion-trading. However, with respect to the general public (i.e. the sheep) "manipulation" represents just another "conspiracy theory" -- which the sheep have been carefully programmed to automatically ignore.

Continue Reading...

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