Silber am 600-Jahres-Tief?? - 500 Beiträge pro Seite

[manfred1_I]

Silver at a 600-year low; breakout is near

By Clif Droke
June 5, 2003

www.clifdroke.com



Let`s talk silver, shall we? Over the past few weeks there has been increasing interest in the white metal sector after the vigorous rally in silver earlier this spring. One thing that has really blown me away is a super long-term silver chart that is being circulated among precious metals enthusiasts which shows silver`s 600-year price history in 1998 dollars. Would you believe that silver hit a 600-year low back in 1992, and a secondary low in 1997? At that very time, value investor Warren Buffet began his much-publicized accumulation of silver while Bill Gates soon thereafter began buying shares of Pan American Silver. Do the insiders know something about silver`s outlook that we don`t?

Incidentally, I highly recommend viewing this long-term chart of silver for perspective on the major trends in silver. You can see it at the following url:

http://goldinfo.net/silver600.html

What really stands out about this chart is the fact that silver prices (as valued in 1998 dollars) have been mostly in decline ever since the all-time high of $806/ounce in the Year 1477. Looking at this chart there can be no doubt that silver has seen its low for many centuries and is poised to begin a new phase of rising prices.

Now let`s take a look at the 25-year monthly chart of COMEX silver futures. I`ve labeled the dominant long-term time cycles in this chart, and you can see how they have bottomed at major trading lows in silver since the early 1980s. The blow-off spike in silver prices back in 1979-1981 was a function of the peaking 40 year cycle, which is one of the most important time cycles of less than 100 years duration. Notice where its half-component, the 20-year cycle, bottomed in 1982, which left a massive V-shaped spike in the silver price line. Fast-forward 20 years later to 2002 and we have the next 20-year cycle bottom and, more importantly, the 40-year cycle bottom! A 40-year cycle bottom is where the 2-year, 4-year, 8-year, 10-year, and 20-year cycles all bottom in unison, producing a pivotal low from which a new phase of advancing prices can begin. Thus, Year 2002 was an important time low for silver.



Silver`s *price* low occurred in 1992, when the 10-year cycle bottomed and the excess supply from the 1980s crash brought silver to its knees. After extraordinary upside runs followed by equally extraordinary declines, my observation is that markets tend to make lows in price ahead of time cycle lows due to the emotional extremes of the prevailing bear market. This has been true in the U.S. stock market in recent years and true as well in the gold and silver markets.

The peaks and troughs of the dominant time cycles is what causes trend lines and trading channels to form in the charts. For instance, in the above 25-year silver chart you will notice that a multi-year downtrend line was begun with the 1987 peak in silver prices and has been intact ever since. The 1987 price peak was formed by the peak in the 10-year cycle (which bottomed previously in 1982) and this led to the low of 1992 when the 10-year cycle bottomed next. Now that the 20-year cycle and 40-year cycles have bottomed, it is a fairly safe assumption to make that this more than 15-year downtrend line will be broken, probably sometime this year.

The next observation is made of the projected uptrend channel (see above chart) where the upper boundary is formed beginning around 1991 (just after the 12-year cycle bottomed) followed by peaks in silver`s price in 1993, 1994, and 1995. This latter price peak was mostly a function of the peaking 12-year cycle. The next significant peak in silver`s price came in 1998, which met resistance at the declining downtrend line which began in 1987 (see chart) as well as the upper boundary of the projected uptrend channel. From the 1998 high, silver declined all the to the 40-year cycle low of 2002 (actually making its price low in late 2001).

After the silver market action of the past few months, we can now see an established uptrend line which is exactly parallel with the upper boundary of the projected uptrend channel. Thus, the projected uptrend channel is no longer merely a projection but a reality. Now all that remains for the silver market to start charging ahead is to break above the 15-year downtrend line, an event that could easily happen in the politically charged and highly eventful year of 2003.

********

Clif Droke is the editor of the Bear Market Report newsletter, a 3-times weekly forecast and analysis of stocks, markets, gold stocks, and equity cycles. He is also the author of numerous books on finance and investing, including the top-selling "Moving Averages Simplified." Visit his web site for free samples of his analysis at www.clifdroke.com


Vom breakout müsste neben Macmin ja auch die
Ware Silber profitieren.

[svc]

@manfred, es ist sehr schön, dass du wieder da bist! du bist der indikator für einen steigenden pos. wir warten auf den tag, an welchem mmn wieder 30 und mehr % zulegt - und der wird kommen!

die frage ist nur, wann?????? svc

[ThaiGuru]

[manfred1_I]

an thai-guru

dank für die Charteinstellung.

[manfred1_I]

THE MERITS OF BUYING $ILVER NOW kazvestor
6/5/2003 7:04:02 PM
Note that I am simply an individual investor. Read my report below and use your own sense of logic and common sense. If you have any questions/comments or want to discuss the details of any section below feel free to post and/or shoot me a message.

I`ll be surprised if such a long post is accepted by the system but here goes.....


THE MERITS OF BUYING $ILVER NOW

Here is most of the $ilver “story” below with many web site references. It involves the use of logic and common sense to analyze the events surrounding $ilver.

I. $ilver Supply/Demand imbalance: The #1 reason to buy $ilver is because there has been consistently more user demand than producer supply for 14 years. During this time over 1500 Moz. (Million ounces) has been consumed from the world $ilver stockpiles and used for industrial applications (mostly electronics), photography, jewelry & $ilverware, and coins & medals. Last year 586 Moz. was mined from the Earth and 185 Moz. was recycled (mostly from photographical $ilver applications) for a total supply of 771 Moz. Meanwhile the total demand was 838 Moz. Therefore last year 67 Moz. was consumed from world stockpiles of $ilver. After 14 years of deficits the world stockpiles are extremely low. It is impossible for this deficit to continue much longer. Supply must soon come into equilibrium with demand. Either demand must fall substantially and/or supply must increase substantially. $ilver is essential for our electronics rich world with new applications and uses for $ilver consistently being discovered (as you can see at http://www.silverinstitute.org/newsdesk.html such as http://www.silverinstitute.org/news/pr10oct02.html and http://www.silverinstitute.org/news/pr11apr03.html ) with very little likelihood of a significant decline in industrial demand going forward. Therefore supply must increase to meet the demand. However, starting new mines to produce $ilver costs $7-$10+ per ounce. Therefore the price of $ilver MUST go up to encourage new mines to be tapped. It is smart to own something which has and will continue to have more demand than supply at a given price. This simple supply/demand disequilibrium analysis is mentioned by Warren Buffett as the main reason he bought a large chunk of the world stockpile of $ilver http://www.berkshirehathaway.com/news/feb03981.html

II. $ilver is scarce: There is very little physical $ilver that can be purchased for less than $5/oz. possibly less than 10 Moz., definitely less than 100 Moz. which is small change in today`s investment world. Even up to $10 there is most likely less than 500 Moz. available for new investment.
Proof of scarcity:
1) The U.S. govt. had 2500 Moz. of $ilver left after it discontinued making 90% $ilver dimes/quarters/half dollar coins over 30 years ago. As of the end of 2002 it had none left. In 2003 the U.S. govt. is making market purchases averaging almost 1 Moz. per month to mint it`s now popular American Eagle 1 oz. coins. http://www.silverinstitute.org/news/pr06aug02.html
2) The official Comex warehouses for investor $ilver storage in the U.S. used to have over 300 Moz. 10 years ago http://www.silverinstitute.org/news/prsinv.htm
Now the Comex has 105 Moz. http://www.nymex.com/jsp/markets/sil_fut_wareho.jsp
3) European bullion bank vaults had over 550 Moz. in 1990 and less than
300Moz. at the end of 2001 (of which 129 Moz. is owned by Warren Buffett).

4) Total government stockpiles of $ilver is estimated to be under 100 Moz. after
4 years of very heavy selling (mostly by China).
I expect there will soon be publicized shortage of $ilver. You definitely want to own $ilver before any shortage is widely publicized.

III. $ilver is cheap: Despite the scarcity of $ilver that has developed from 14 years of supply deficits the price is at all-time lows ($4.55). At its peak in 1980 $ilver went over $50/oz. (equivalent to $150 in today`s dollars) when a small group tried to corner the market in it. You can review price data charts for the last 20 years by going to http://www.kitco.com/charts/liveSilver.html
$ilver is especially cheap relative to gold. At various times in the last 30 years 20-100 ounces of $ilver could buy you 1 oz. gold. Right now you need 80 oz. $ilver to buy 1 oz. gold; thus making $ilver relatively cheaper. http://www.cairns.net.au/~sharefin/Charts/AuAG1lt.gif
One of the main reasons why $ilver remained cheap in the 1990s despite big supply deficits is because most investors were selling their $ilver holdings to buy into the popular stock market companies. This selling of $ilver peaked in 2000 along with the stock market. From 1999 to now governments (mostly China) have helped fill the supply/demand gap by selling their holdings. Going forward, China should curtail its selling of $ilver since it realizes it`s rapidly growing economy will soon be needing more $ilver that it can produce internally.
Another important reason why $ilver prices have remained low is because most mines that produce $ilver produce it as a byproduct. Mining companies that primarily produce zinc, lead, copper, and gold often extract $ilver as well. In fact 70-75% of the $ilver mined around the world is a byproduct of mining other metals.
http://www.silverinstitute.org/production.html
This results in the supply of $ilver being inelastic to the price of $ilver. Whether the price of $ilver goes up or down substantially its supply will not vary much. Effectively the supply of $ilver is governed more by the prices of zinc, lead, copper, and gold. If the prices of those metals are lower, some mines will reduce mining activities and thereby mine less $ilver as well; and vise versa. So, although some primary producing mines have closed operations over the last 13 years due to being unprofitable operations under $5/oz. the supply of $ilver has not been significantly affected since primary $ilver mines make up a minority of $ilver production. A price of over $7 is needed to encourage new primary production of $ilver.

IV. The smartest people own $ilver now: At major turning points of asset prices the overwhelming majority of investors are always wrong. After a 23 year bear market in $ilver, most investors have sold their holdings. Those that remain are disciplined savvy long-term investors like Warren Buffett that bought 129 Moz. in 1997 at $5.05/oz. http://www.berkshirehathaway.com/news/feb03981.html
Other billionaires that are invested in $ilver include George Soros, Lawrence Tisch, and Bill Gates who own shares over various $ilver mining stocks. So if we look at the 105 Moz. that is in storage at the Comex warehouses as mentioned above; it is likely that over 90 Moz. maybe 100+ Moz. is owned by people that will not sell anywhere near these prices. Most will not sell even if $ilver goes to $10 next month.

V. Major short positions in $ilver: Another major reason for the incredibly low price in $ilver is that there have been massive amounts of shorting of $ilver in the last 15 years. There have been 2 major reasons for $ilver short selling over the years.
1) $ilver producers enter into forward sale contracts to make delivery of future production at prearranged prices. For example, the biggest U.S. producer and shorter of $ilver is Barrick Gold (ABX:NYSE). They produce 20 Moz. of $ilver per year but were short almost 50 Moz. in $ilver at the end of 2002. Effectively that`s 2.5 years of pre-sold production which limits future supply. In February ABX made a press release that included the mention that they would start reducing their short position in various ways including making delivery on their forward contracts using current production. This means most of their 20 Moz. production will not be supplied to the market this year but will go to fulfill their previous delivery contracts. Thus adding to this year`s supply deficit numbers.
2) The leading independent $ilver analyst Ted Butler (http://www.butlerresearch.com/archive_free.html) discovered $ilver leasing around 7 years ago. With $ilver leasing, an institution leases $ilver from a major holder (mostly government central banks) and pays them a small interest rate of 1-2%. Seemed like easy money for the central bank that had the $ilver collecting dust and storage fees so they loved the idea. For the institution that leases the $ilver they simply sold the $ilver into the marketplace and used the proceeds for investments yielding 6-10% thereby making a nice profit spread. A problem here is that most of these leases will never be repaid since the $ilver has been sold and consumed and there is not enough $ilver left out there to repay these leases back with $ilver.
Then we have a massive short position on the Comex futures exchange. Each Comex $ilver futures contract represents 5000 oz. and there are around 80,000 open contracts. That`s 400 Moz. which is more than what the world has today. The thing is most of these contracts are simply rolled over into the future when they come due. Few of them end up with the long side of the contract demanding delivery from the short side.
The detailed analysis of short activity in the $ilver market is very complicated but the result is that it has caused the price of $ilver to stay at an artificially extremely low price. It also means that future supply will be curtailed due to these pre-sales.

VI. Renewed investor demand: After a 20+ year bear market in $ilver the average mainstream investor has had complete apathy for $ilver as an investment since its been “dead money” for so long. Plus there have been no brokerage firms “pushing” $ilver as an investment. Until about 10 years ago a portfolio allocation of 5-10% in gold and $ilver was considered prudent by almost all financial advisors and brokerage firms. The 90`s mega stock market bull wiped that allocation off everyone`s sheets. However, since the pop of the stock market bubble investors have started moving back to gold and $ilver as defensive investments. 2003 has shown an acceleration in investor demand for $ilver. Some proof below:



1) Data from the U.S. mint showing a big increase in demand for the American
$ilver Eagles:
In 1999 sales doubled to 9 Moz. from an average of 4-5 Moz. in the 1990s due to the Y2K scare. But that increased pace stayed with us....
2000 sales were 9.1 Moz
2001 sales were 8.8 Moz.
2002 sales were 10.5 Moz.
2003 1st Quarter sales were 3.656 Moz. which is an annual rate of 14.6 Moz http://www.usmint.gov/mint_programs/american_eagles/index.cf…

2) The most respected name in precious metals fabrication, Johnson Matthey,
started producing 100 oz. bars for retail investors for the first time in 15 years to meet the renewed investor demand for $ilver http://www.amark.com/newproducts/16.htm
3) One of the most popular low-cost retail dealers
http://www.tulving.com/goldbull.html#silver
was often temporarily sold out of parts of their $ilver inventories early this year. In March they even had to switch their primary supplier mint from Northwest Territorial Mint to Amark because NWTM was not able to keep up with the huge increase in demand for $ilver from Tulving customers. I have also seen notes that some local $ilver dealers around the U.S. keep running out of inventory as well.
4) There is a closed-end mutual fund (CEF) that invests in physical gold and
$ilver (no other fund does this). Closed-end mutual funds always trade at a discount or premium to the actual Net Asset Value of the fund. The degree to which a fund trades at a discount or premium is directly associated with the enthusiasm for that type of an investment by the public. During the precious metals major bear market from 1980 till 2001 CEF mostly traded at a discount. Since the end of 2001 CEF started trading at a premium and has remained that way. This shows us the renewed investor interest in $ilver and that we are most likely at the beginning of a major bull market in $ilver.
http://www.etfconnect.com/select/fundPages/data_through_ince…
5) Mexico (the largest $ilver producing country) is considering adding $ilver
coins “Libertads” in mass to be used as money:
http://www.plata.com.mx/plata/

VII. Negative real interest rates: Historically, times of negative real interest rates (when inflation is higher than short-term interest rates) are very bullish for precious metal investments. There is simple logic behind this. Precious metals generally go up with inflation. Now investors are offered 1-2% short-term rates while inflation is 3-5%. So some investors recognize that they should own precious metals that should appreciate at least 3-5% to match inflation compared to only earning 1-2% interest. This investor appetite should increase greatly if capital gains on precious metals are taxed at 15% compared to interest income that is taxed at up to 35%.

VIII. $ilver IS MONEY: The 2nd best reason to own $ilver is as protection against inflation. The benefit of owning $ilver (as well as gold) during inflationary times is that it will hold its purchasing power. $ilver (and gold) has been considered MONEY in most places for all of human civilization. In fact the word for money in many languages is the same as the word for $ilver. While gold was used to settle large transactions (mostly between nations) $ilver was used for everyday transactions. $ilver is real money that cannot be inflated without the heavy costs of mining and refining it out of the Earth. This is in sharp contrast to the currencies around the world today, especially the U.S. dollar. It is very easy to “print” dollars out of thin air which is being done consistently. In fact here is the dictionary definition of inflation: “A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services”. 30 years ago the United States went off of the gold and $ilver money standard and increased the printing of dollars. The money supply almost doubled from 1972 to 1978. Common sense tells us that the more dollars exist, the less the value per dollar. This is the basic meaning of inflation. During this period of unabashed increase in money supply the price of $ilver went from under $2 in 1972 to over $6 in 1978. Then it defied a “normal” price of $7-$10 and continued to a high of $50/oz. when a group tried to corner the market on $ilver. Of course this corner failed and the price crashed to more normal levels. Meanwhile our government (through the Federal Reserve Bank) woke up and decided to cease the massive expansion of the money supply. This was the beginning of the 20 year big bear market in $ilver. The last time $ilver traded over $10 was in 1987.
We are at the very beginning of a renewed period of hard asset inflation. The Federal Reserve is conducting a highly inflationary policy of low interest rates and heavy new printing of dollars. This manipulation of dollars has already devalued our dollar by 30% against the Euro currency in 1 year. Gold is up 15% in 1 year. The average commodity is up 20% in 1 year as measured by the popular Goldman Sachs commodity index: http://www.futuresource.com/charts/charts.asp?r=&type=future…
Meanwhile $ilver is actually slightly down over the last year. This offers current buyers an extremely low price entry point.
Inflation of our dollars is simply a hidden way to tax holders of dollars. The spending habits of our government are gluttonous and ever growing. The citizens of the U.S. are already very heavily taxed. Our government already has accumulated a colossal debt load by borrowing $trillions in the debt markets. Yet govt. spending is increasing while its revenues are decreasing. So what happens? Effectively the govt. is now printing dollars out of thin air to pay for the shortfall in revenues versus expenditures. This process will now be accelerated with the new tax cuts. This excessive printing of dollars is devaluating the dollar at a rapid pace. This is very appealing politically. The tax cuts make the citizens happier and shift the burden of the monstrous government budget deficit on all holders of U.S. dollars. Since almost half the holders of dollars (especially U.S. govt. bonds) are not U.S. citizens, the burden of the dollar devaluation is partially put on the backs of foreigners. As the dollar depreciates, it follows that the price of $ilver (which is stated in dollar terms) must appreciate over time.

The U.S. is now running a trade deficit of around $500 billion per year. This essentially means that we are importing more goods and services than we are exporting. The deficit is filled by exporting dollars (mostly in the form of debt) to other (mostly Asian) countries. We are literally exporting dollars at almost $1,000,000 per MINUTE. Thus far these Asian exporting countries (mostly China now) have been “suckered” into taking unbacked paper dollars to finance our consumption oriented culture. Now they are being suckered in even more by accepting extremely low interest rates on their dollar holdings. It is probable that these foreign countries awash with low yielding IOU`s (dollars) will stop accepting dollars as payment by quickly selling dollars to buy hard assets as new dollars come in. This will accelerate the devaluation of the dollar, causing inflation.

Additionally, it is politically easy to engineer inflation because the overwhelming majority of Americans are in debt (usually heavy debt). Holders of debt embrace inflation since their repayments will be easier to make. In the United States: consumers, corporations, and the govt. have racked up immense amounts of debt. This massive debt is increasing at a huge pace due to the (manipulative) low interest rate environment. In fact our culture strongly encourages debt. Everyone gets endless credit card promotions in the mail. The American net savings rate is near zero. It is almost unheard of to purchase a new car outright let alone a house. Debt has become a huge part of our society. The current American very high standard of living is financed by and very dependant on debt. How many people would be driving $40,000+ cars if they were not able to finance them? Who will cry foul as high inflation takes hold in the dollar? Most of the net creditors of dollar debt are foreigners. Why would the govt. politicians care what they think or how they get hurt? What are they going to do to the only super-power left in the world?

As you can see, the path of least resistance is high inflation. $ilver (and gold) is your best protection against this rapid devaluation of the dollar. In the 1970`s real estate also protected investors from the inflation of the dollar. However, today`s situation is very different. Today`s real estate valuations are already inflated due to the credit/debt bubble. Today`s real estate prices are very dependent on buyers getting credit at a low interest rate to fund the purchase. When strong inflation takes hold and interest rates are forced higher there will be a triple whammy for real estate (especially homes). First, most potential buyers will walk away from the market when faced with 8%+ rates compared to [6% rates. This will be a big decrease in demand. Second, banks will be more cautious on making low down payment loans. Third, banks will become more cautious about making any types of loans with long-term fixed interest rates since they will be getting repaid with rapidly depreciating dollars. If you imagine yourself in the shoes of a banking entity you will see how dangerous this is to the currently high housing prices that are completely based on debt.


In the very long-run the whole basis behind having a currency without any hard asset backing it up is flawed and fraudulent. There is nothing stopping our govt. from printing unlimited amounts of dollars. In fact this printing power is necessary for a govt. that often buys votes through unmerited handouts. The extreme of this is a socialistic or worse a communistic govt. that takes money from productive individuals and gives it to unproductive “needy” individuals (minus taking a percentage for itself) without regard to merit. This is the opposite of capitalism based on freedom and liberty. Our paper dollars are now essentially worthless except for our faith in the govt. As our govt. moves more away from capitalism there will come a time when its motives are publicly put into question. You certainly do not want to own dollars at that time. Ironically, our popular Federal Reserve chairman Alan Greenspan understands the inherent fraud of dollars unbacked by gold or $ilver as you can see by the very interesting article he wrote 40 years ago that I strongly advise reading:
http://www.gold-eagle.com/greenspan041998.html
Most likely there will come a time when most of us will be billionaires but a gallon of milk will cost $25,000! A new currency will have to be issued that is backed by real gold and $ilver. Since currently all world currencies are not backed by hard assets the same will happened worldwide. The biggest losers will be holders of fixed-income credit securities (mostly bonds) and cash.
The inflationary risks themselves warrant $ilver (and/or gold) ownership at 10% of your net worth if only as “insurance”.

IX. $ilver going to $50+/oz.: I believe $ilver`s intrinsic value is worth around $15/oz. right now. As a value investor I love buying undervalued good assets then selling them out around what I think they are worth without regret when they go much higher. However, in the case of $ilver I expect to sell much of my holdings at prices well above the intrinsic value. Below are the reasons why $ilver should catapult well past its intrinsic value for a period of time. All are based on the development of a $ilver shortage:
1) $ilver industrial demand and mining supply is inelastic. That means the amount demanded and supplied is barely affected by changes in the price of $ilver. I explained the inelasticity of mining supply at the end of part III. $ilver industrial demand is almost completely inelastic. $ilver is an essential and irreplaceable part of many electronic devices such as computers. The amount of $ilver used to make each electronics device is miniscule. A $2000 new Dell computer has nowhere near 1 ounce of $ilver in it so it does not matter to Dell whether it costs $1 or $20 worth of $ilver to produce 1 computer. Dell would even pay $100 for the tiny amount of $ilver it needs for each computer since without that $ilver it is impossible to build that computer. The same is try for $ilver application in photography. Also most of the cost of $ilver jewelry is based on the labor it takes to make it into various shapes so a price of $50/oz. may only result in a doubling of the price of $ilver jewelry which is inexpensive anyway. So the overall fabrication demand for $ilver should hardly drop at all even with a tenfold increase in the price of $ilver. While the mining supply of $ilver will not increase greatly since 70% of the $ilver mined is a small byproduct from mining other metals (assuming the prices of those metals do not rise substantially).
2) Most users of $ilver operate under Just In Time inventory management. JIT was an innovation by Japanese firms 25 years ago and made a standard in corporate culture in the 1980s to reduce capital expenditure costs. Companies no longer keep large amounts of raw materials that are needed to manufacture their products. They have efficient arrangements with suppliers to make delivery “just in time” for production thus freeing up capital that used to be just sitting around in the form of raw materials that would not get used for many months. The $ilver shortage will be a serious problem for them since some will fail to receive all the $ilver they need from their usual suppliers. For many companies a lack of $ilver would result in a halt of production. This situation will probably encourage most $ilver using companies to aggressively buy up as much $ilver as they can for fear of delays in production. Most companies will pay ANY PRICE needed to obtain physical $ilver right away. Wouldn`t you do the same in their shoes?
3) When a shortage of $ilver becomes widely publicized and the price races over $10/oz. an immense group of momentum traders/investors whose strategy is to “buy high & sell higher” will be looking to buy into it. Tens (maybe hundreds) of Billions dollars will be chasing after less than $5 Billion of $ilver.
4) Most investors naturally do not quickly sell an asset that is quickly appreciating in value thus adding to the shortage.
5) Recognizing the shortage, enough money will want to buy physical $ilver by looking to take delivery on Comex $ilver futures contracts to cause the failure of shorts to make delivery of $ilver on their obligations against these contracts since they do not have enough $ilver. The result will be that $ilver futures contracts will trade at a substantial discount to physical $ilver because no one will know when deliveries will actually be made.
6) When $ilver goes over $10 there will be a lot of new (and old) primary $ilver mines that will be started. However, it takes 1-3 years from the time a decision is made to start a $ilver mine till the first ounce of $ilver is sold into the market. Therefore this future supply will not help the immediate $ilver shortage situation.
7) As prices approach and surpass $50/oz. there will be a flood of small coin holders looking to cash in their coins. They will look to sell them to local dealers who will then sell them to smelters that convert them into $ilver suitable for industrial uses and/or to make delivery on the Comex. However, there will be a bottleneck since the few smelting operations that exist can only smelt a limited amount of $ilver per month. Therefore the large quantities of $ilver coins will not impede the price rise in $ilver immediately.

All these reasons combined make it quite possible that $ilver will go to well over $100/oz. at its peak. It is impossible to say how high $ilver can go.


Now is the perfect time to buy $ilver. Not only does it offer explosive potential due to scarcity and protection from inflation, but it is now so cheap that the downside risk in price is negligible. It is better to own $ilver years early than 1 day late. $ilver will still be good buy at $6, $7, $10 per ounce; but the risk/reward ratio will never be this low again. Ownership of $ilver does not offer you interest/dividends while you hold it and it incurs storage costs of up to 1% per year but these negative factors are tiny compared to the positive ones.



Ways to buy $ilver:

There are several ways to participate in the coming rise of $ilver prices. Each has advantages and disadvantages. The best ways to invest are dependant on individual situations.
1) $ilver mining company stocks: Since the majority of people today are very familiar with stocks, many will choose to purchase $ilver stocks to speculate on the price of $ilver. There are only 3 major primary $ilver mining stocks. Their symbols are SIL, PAAS, and SSRI. Additionally there are 2 more companies that produce a lot of $ilver but also produce gold. Those are CDE and HL. SIL has George Soros as a major investor and his brother Paul Soros is on the board of directors. PAAS has Bill Gates as a major shareholder. The company web sites offer a wealth of information about $ilver in their annual reports http://www.apexsilver.com/ http://www.panamericansilver.com/
I believe direct physical $ilver ownership is better than owning $ilver mining company stocks if the $ilver shortage situation that I am expecting forces the price to explode very high and very fast. These companies cannot take advantage of a fast run-up in prices like an individual holder of physical $ilver can since they cannot increase production substantially in a short period of time. Plus their mines are mostly located in countries that are not politically stable and may make detrimental moves against a mining operation that is making windfall gains by selling $ilver at $30-$100+ per ounce. Some of those countries may increases taxes and/or tariffs or even nationalize the mines yelling that these natural resources belong to the people of the country. These mining stocks are better suited towards a gradual rise in price that stays high but not too high. Plus you have the risk that management will make poor decisions on your behalf and/or take extreme bonuses in the form of stock options and dilute your ownership stake.

2) Central Fund of Canada. I mentioned this closed-end mutual earlier that owns physical gold and $ilver. It trades under the symbol CEF and is as easy to buy as any other stock. The main disadvantage of the fund is that only 40% of its assets are in $ilver (the rest is gold). While gold will do great in protecting you against inflation, it should significantly under perform $ilver especially when the $ilver shortage hits. So an investment in CEF is a “diluted” way of investing in $ilver. The other disadvantage is that it now trades at a premium (which fluctuates daily) to its net worth. Currently the premium is 7%. At 10%+ premium it becomes significantly overvalued relative to the underlying precious metals it owns. http://cefa.com/scripts/fundstat.asp?id=cef

3) Physical $ilver at stored Comex: $ilver that is stored at Comex is grouped into Comex warehouse warrant receipts. Each warrant consists of 5 1000 oz. bars of .999 pure industrial $ilver (each bar varies in precise weight and has a unique serial number). For most people this is the best way to invest in $ilver. The easiest way to buy Comex $ilver is through a precious metals brokerage firm such as http://www.fidelitrade.com/
that charges around 1% commission. You should request the $ilver be deposited at Comex and the warrants of ownership be mailed to you. It costs around $20/month/5 1000 oz. bars to store your $ilver at Comex. Since 75% of the total Comex $ilver is stored in New York City which is clearly a target for terrorist attacks it may be wise to have your Comex $ilver stored at the only warehouse outside of NYC which is in Delaware. Fidelitrade deals directly with that Delaware warehouse. Since recently, you are allowed to purchase 1000 oz. bars in your IRA. The biggest IRA custodian that specializes in this is http://www.churchtrust.com .

The most cost effective way to buy Comex $ilver is by taking the time to open an account with a futures/commodities brokerage firm and send them money. Buy a nearby $ilver futures contract(s), pay around $15-$35 commission per contract. Pay an extra $50-$100 per contract to take delivery of the warehouse warrants of ownership. It comes out to a cost of less than $.02 per ounce compared to up to $.05 per ounce by purchasing the bars directly. Another good broker for 1000 oz. bars is Amark.com which is probably the biggest $ilver wholesale dealer and has been around for a long time.
If $ilver goes to $50 you will be able to sell these bars at the spot price.

4) $ilver futures: This is the most efficient way to actively trade $ilver; which I would not suggest doing. If you want to speculate in $ilver using high leverage this is the way to go. You can control 5000 oz. of $ilver with less than $2000. This effectively gives you more than 12:1 leverage if you want it. I believe this type of $ilver investment is not good for most people since it encourages buying more than one can handle and possibly taking big losses on small pullbacks in price. More importantly in a major $ilver shortage $ilver futures contracts will be trading at a big discount to physical $ilver prices.
5) $ilver coins and bars: This is “retail” $ilver in many forms ranging from 1 oz. coins to 100 oz. bars. This is a good way to own $ilver if you want to keep some of your holdings privately for whatever reason. Also some people (not including me) own a lot of $ilver (and gold) because they think a financial collapse is coming whereby regular purchases would only be made in $ilver and gold. As an investment, retail $ilver is very poor. You have to pay more than a 10% premium when you buy. Then you have to accept a discount when you sell if prices went up a lot. In 1980 when the price of $ilver went to $50 people that wanted to sell their $ilver coins were usually offered only $20-$25 per ounce.


http://www.prudentbear.com/bearschat/bbs_read.asp?mid=118385…

[jeffery2]

Das geht leider schon seit 10 jahren so, kein Silber mehr da. Trotzdem habe ich mal 1600 Euretten in ein kleines Spiel mit 574 219 investiert. Na ja, 16 cent das gute Stück.
J2

[noch-n-zocker]

gibt`s eigentlich kein Hebel-Produkt auf den Silberpreis in DOLLAR?

Das ABN open-end Zertifikat ist zwar grundsätzlich okay, aber da müßte ich mir gleich noch einen Dollar-Put hinzukaufen. Ansonsten hab ich nichts gefunden und so ein illiquides Zeug wie den UBS-Schein mit 15% BID-OFFER-Marge will ich nicht.

[Wasserzeichen]

@nochnzocker

Die ABN-Scheine sind ok!Das mit dem Dollarhedging ist natürlich ein Problem!Es wäre schon ein Riesenzufall wenn
wir eine Silberpreisexplosion bekommen,ohne ein €/Dollar
Kursniveau von 1,30-1,40.
Ich hab grade eine Order für den 3,90er -Mini im Markt.Sobald die ausgeführt ist,hol ich mir noch einen €/Dollar- Wave oder Mini dazu...(muss ja nicht gleich sein,man kann ja versuchen irgendwo bei 1,15-1,16 reinzukommen)

Möge der Silberpreis der Lügenbörse das fürchten lehren!

[noch-n-zocker]

Aha, dann gibt`s wohl keine andere Möglichkeit

Das mit der Order am Markt verstehe ich nicht. ABN stellt das Teil doch aktuell 3,86 zu 3,88. Was brauchst Du da einen Markt? Oder handeln die nicht direkt

[Wasserzeichen]

Kaufkurs für den 237241 ist 0,51.Heutiger Stand 0,57 zu 0,61
bei Silber 4,59(Kitco.com)

Der Euro "riecht" verdammt nach einem neuerlichen Ausbruch!
Würde bedeuten:Bei €/Dollar 1,22 und Silberspot ca. 4,60
steht der Schein bei ca.0,57 statt 0,59!

Hedging lohnt sich also nur bei extremen Euro-Kursanstieg!
Werde mal noch nix machen...

[Wasserzeichen]

@nochn zocker

Die "Order im Markt" war drinnen,weil ich letzte Woche keine Zeit hatte,ständig vor dem Kübel zu hocken....

[Wasserzeichen]

Schaut langsam richtig gut aus für Silber!

[Wasserzeichen]

Tja,sorum ist das mit dem hedging natürlich auch nicht schlecht...wenn sich Silber halbwegs stabil hält und der Euro
weiter schwächelt,dann hat man wenigstens keinen Verlust...