Good Investment

Discussion in 'Happy Hour' started by waterbed, Sep 29, 2010.

  1. Don Wassall

    Don Wassall Administrator Staff Member

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    Silver went up another 2.58% today, putting it up over 6% just in the past two days. It closed today at $32.60 per ounce, the highest it's been since its very brief spike to $50 an ounce in 1980.
     
  2. Colonel_Reb

    Colonel_Reb Hall of Famer

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    I was thinking of unloading some 40% silver and reinvesting in 90%, but now that the price is going up, I'm going to stay put. 20 years ago, a circulated 40% silver half wasn't collectible because it's silver value wasn't even 50 cents, much like the 71 and up clad halves. Now one of them is worth around $4.80 in silver content alone. [​IMG]
     
  3. Quiet Speed

    Quiet Speed Mentor

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    Anyone notice the severe dip silver took this afternoon? It happened the same time as the drop in oil. A straight shot down. Natural market forces at work?

    [​IMG]

    </span></pre>
     
  4. Don Wassall

    Don Wassall Administrator Staff Member

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    Silver does tend to fluctuate wildly from day to day on a percentage basis, far more than the stock market, or gold and other precious metals. And it often goes up when the stock market goes up and down when it goes down, which is completely counterintuitive, so it's likely it's still being heavily manipulated, but both industrial and investor demand is lessening the manipulation. China and India have been buying up all the silverthey can. At least the bottoms keep getting higher, andthe highskeep getting higherbefore they fall back.
     
  5. Kaptain

    Kaptain Master

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    I have not researched this yet, but I heard that the dip in all commodities that took place yesterday was due to a change in commodity margin requirements - tightening the margin requirements. They played this game a lot leading up to the meltdown and afterwards. It forces people to sell to cover their margin requirements. Of course, only the big boys know in advance of the rule changes and they profit from it tremendously. Edited by: Kaptain
     
  6. Colonel_Reb

    Colonel_Reb Hall of Famer

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    I found this article about the increasing attractiveness of silver as an investment. It mentions several points that have been posted about here.
    http://www.stockhouse.com/Columnists/2011/Mar/2/Most-compelling-argument-for-owning-silver-I-ve-evMore than 95% of today's demand comes from industry. And when that is consumed, it's gone forever.


    The talk of the investment industry is a video making its way around the Internet right now"¦


    And no"¦ it's not the popular "End of America" video I'm sure you've seen.


    The video is footage of expert resource investor Eric Sprott of Sprott Resources discussing precious metals at Casey Research's excellent Gold &amp; Resource Summit late last year. If you're interested at all in precious metals, Casey's work is a "must-read," and this video is a must-watch (click here to see it on YouTube).


    Eric Sprott is one of the world's best investors"¦ probably the best
    investor you've never heard of. He specializes in natural resources,
    and he's a big precious metals bull. He holds 70%-80% of his fund in
    gold and silver (he says silver is his largest holding). In the video,
    Sprott makes the most compelling argument to buy silver I've ever heard"¦



    In short, the world is out of silver. Sprott says aggregate
    investment demand for silver between 2000 and 2009 was 293.8 million
    ounces (according to the GFMS, the world's foremost precious metals
    consultancy).


    Using his own numbers, Sprott compiled the silver holdings for seven large investors, including himself, iShares Silver Trust,
    ZKB, GoldMoney, and so on. Just those seven entities own 519.6 million
    ounces of silver"¦ That's 225.8 million missing ounces. And again"¦
    that's only seven investors. It doesn't include central banks,
    individuals, hedge funds, etc.


    It's obvious, as Sprott notes, silver data has been "very, very misstated."
    Sprott ends his speech saying, "There's $22 billion of silver
    available in the world, of which the ETFs already own half... and
    between you guys and us, we probably own the other half... which means there's nothing left."


    Sprott's comments remind me of a conversation I had with a friend
    this week"¦ My friend is one of the largest gold and silver coin dealers
    in the country. He said he hopes silver retreats, because the coins
    are going crazy. "People have no idea how small the market is," he said. "I've seen prices jump 10% in the last week."


    Sprott's argument only takes the investment demand for silver into
    account. And while investors do hoard silver, more than 95% of today's
    demand for silver comes from industry. And when that silver is
    consumed, it's gone forever. Silver's current production is just enough
    to meet the industrial demand. In other words, there is virtually zero
    new silver available for investment purposes.


    The U.S. Congress established its monetary system in 1792 and agreed
    to mint coins using both gold and silver. At the time, you needed 15
    ounces of silver to buy one ounce of gold. (In other words, what we
    call the "silver-to-gold ratio" was 15:1.) But in the early 20th
    century, world governments stopped backing their currencies with gold.
    The ratio went haywire, cracking 71:1 during the Great <nobr style="color: rgb129, 168, 189; font-weight: normal; font-size: 100%; font-family: Arial,Helvetica,sans-serif;" id="itxt_nobr_17_0">Depression[​IMG]<obr>. Today, the silver-to-gold ratio is 43:1.


    But for the first time in decades, people are viewing silver as a
    monetary asset again. And when silver's viewed as money, the ratio
    contracts. Will
    we return to the 18th century ratio of 15:1? Probably not. Even if
    silver doubled while gold went nowhere, the ratio would still only be
    22:1.


    We've been asking readers to buy gold and silver
    for a decade. And if you haven't already bought, it's not too late.
    Yes, precious metals are more popular than they were a few years ago,
    but we're far from a top. If you bring up your bullion holdings in
    conversation with a table of friends, you probably won't get the weird
    looks you would have years ago"¦ But you'll still be alone in your
    ownership.


    Don't speculate on gold and silver prices. Gold is money. Silver is
    money. Buy them as a form of savings, setting aside a chunk of cash
    each month just for bullion. Store your bullion somewhere safe (like self storage). And leave it.


    Before you realize it, you'll have considerable wealth in precious
    metals. And as Eric Sprott has outlined, you'll likely see a huge
    increase in value when the world wakes up and realizes we're out of
    silver.</span>
     
  7. DixieDestroyer

    DixieDestroyer Hall of Famer

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    All states would be wise to follow Utah's lead...

    Utah Considers Return to Gold, Silver Coins

    By Stephen Clark

    Published March 03, 2011
    | FoxNews.com

    The Utah House was to vote as early as Thursday on legislation that would recognize gold and silver coins issued by the federal government as legal currency in the state. (AP)
    It's been nearly 80 years since the U.S. stopped using gold coins as legal currency, and nearly 40 since the world abandoned the gold standard, but the precious metal could be making a comeback in the United States -- beginning in Utah.

    The Utah House was to vote as early as Thursday on legislation that would recognize gold and silver coins issued by the federal government as legal currency in the state. The coins would not replace the current paper currency but would be used and accepted voluntarily as an alternative.

    The legislation, which has 12 co-sponsors, would let Utahans pay their taxes with gold and also calls for a committee to study alternative currencies for the state. It would also exempt the sale of gold from the state capital gains tax.

    The bill cleared a state legislative committee on Wednesday, the first of 13 similar bills in statehouses across the country to do so. If the bill clears the House, it would have to pass the Senate before the governor could sign it into law.

    Attorney and Tea Party activist Larry Hilton, author of the original bill, said he doesn't foresee any roadblocks.

    "There's enough uneasiness going on in the economy to trigger people to feel that, hey, having a little Plan B, kind of a backup system, is not a bad idea," he told FoxNews.com.

    The U.S. used some version of the gold standard from 1873 until 1933, when President Franklin D. Roosevelt outlawed the private ownership of gold amid the Great Depression. An international monetary system based on a gold-exchange standard continued until 1971 when President Richard Nixon stopped the U.S. from redeeming dollars for gold altogether.

    Critics of the gold standard say it limits countries' control over its monetary policy and leaves them vulnerable to financial shocks, such as the Great Depression. But supporters argue that the current financial system's dependence on the Federal Reserve exposes the value of U.S. money to the threat of inflation.

    Rep. Ron Paul, a longtime critic of the Federal Reserve who has called on a return to the gold standard, has praised Hilton's efforts.

    "Efforts such as yours in states around the country highlight the importantance of returning to sound money," Paul wrote in a letter to Hilton. "Even if such efforts fail to achieve legislative success on their first try, their importance lies in bringing to the public's attention the problem of the ever-weakening dollar and the necessity of returning to a sound monetary system."

    Hilton said the bill before the House doesn't go as far as his original draft, which was more sweeping, including recognizing more than just U.S. minted coins and more details on specific tax treatment. But he said he's willing to take it step-by step.

    He also said he's not pushing to restore the gold standard in the U.S.

    Federal Reserve Chairman Ben Bernanke this week dismissed the notion of the gold standard returning to the U.S.

    "It did deliver price stability over long periods of time, but over shorter periods of time it caused wide swings in prices related to changes in demand or supply of gold," he told the Senate Banking Committee. "So I don't think it's a panacea."

    Bernanke also said that gold couldn't return as the world standard because there's not enough gold in the world to effectively support the U.S. money supply.

    Hilton said he's taking a positive approach to the issue.

    "This is not an anti-dollar issue at all," he said. "We want to strengthen the dollar. We think by introducing gold and silver of our nation's history, by injecting that into the debate is very healthy for our policymakers."

    Jeff Bell, a policy director for the Washington-based American Principles in Action (APPIA), which helped shape the Utah bill, told FoxNews.com that passage of the bill would send a message to Washington and other states.

    "People sense that in the era of quantitative easing and zero interest rates, something has gone haywire with our monetary policy. But people are afraid to say it," said Bell, who was an adviser to Ronald Reagan's 1976 and 1980 presidential campaigns. "If one state recognizes gold as a valid currency, I think it would embolden people not just in other states but in Washington."

    Bell credited Tea Party activists for advancing the legislation this far. Rep. Brad Galvez, who introduced the legislation, is a freshman legislator backed by the Tea Party.

    "Saying we now recognize gold as money is a big step forward," he said.

    Twelve other states have offered similar proposals: Georgia, Montana, Missouri, Colorado, Indiana, Iowa, New Hampshire, South Carolina, Tennessee, Washington, Vermont and Oklahoma.

    http://www.foxnews.com/politics/2011/03/03/utah-considers-return-gold-silver-coins/#

    Edited by: DixieDestroyer
     
  8. Colonel_Reb

    Colonel_Reb Hall of Famer

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    Dixie, it looks like the Utah house passed that bill. Now it goes to the state senate. I do believe this is a good thing for states to do, but there is one question I don't see answered in either of these articles. That is that if gold coins are going to be accepted voluntarily as an alternative to cash, wouldn't the value be determined by the intrinsic value, instead of by the monetized value given to each coin by the U.S. government? If not, then I don't see how this makes any sense at all. If you are only allowed to use gold for payment based on the value stamped on the coin, you are practically giving it away.

    For example, a $50 (face value) gold American Eagle has 1 ounce of gold in it, which is currently worth $1,432. I am interested to know how this discrepancy is dealt with in this bill, if at all. If the only way you can use these gold coins is through their face value, then the bill doesn't accomplish much of anything. Who is going to take a coin worth over $1,400 and use it to pay a $50 debt? Maybe I'm missing something here, but that just doesn't add up.



    Article about the bill's passage in the House:http://www.foxnews.com/politics/2011/03/04/utah-house-passes-recognizing-gold-silver-legal-tender/#ixzz1Fkbrwihx


    Edited by: Colonel_Reb
     
  9. Colonel_Reb

    Colonel_Reb Hall of Famer

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    I found the answer to my question about the Utah House bill and it is good news, even if it is voluntary.























    <div ="theline entry-title" id="theline">

    Utah House stamps gold, silver as legal tender

    </div> It may not fold as conveniently as dollar
    bills, but the Utah House took a first step Friday to recognize gold and
    silver as legal tender.
    It voted 47-26 to pass HB317 by Rep. Brad
    Galvez, R-West Haven, and sent it to the Senate. The measure would
    recognize as legal tender gold and silver coins issued by the federal
    government â€" not just their face value, but also their value in gold and
    silver or to a collector.

    It also would order the state to study
    whether Utah should establish an alternative form of legal tender, such
    as one backed by silver and gold.
    "This is a step in preparedness, a step in
    security,"Â Galvez said, "that allows us to be able to help hold up our
    economy as the dollar continues to shrink."Â
    Rep. Ken Ivory, R-West Jordan, said, for
    example, that a 1960s John F. Kennedy half-dollar coin â€" 90 percent
    silver â€" would have bought three gallons of gasoline with its face value
    in the mid-60s. But the value of the silver in it today would buy about
    five gallons of gas, while the face value of the coin would buy only a
    fraction of a gallon.

    Ivory said the bill is "a way for us to preserve for the citizens of Utah "¦ the purchasing power of the money they hold."Â
    The bill would not require anyone to accept
    gold and silver coins as legal tender. It also would exempt the sale of
    such U.S. coins from state sales taxes and from capital-gains taxes.
    Rep. Steve Eliason, R-Sandy, a certified
    public accountant, opposed the bill, saying it could create tax
    loopholes. He said people seeking to escape capital-gains taxes on other
    assets â€" such as gold bullion â€" might be able to do so by selling it
    for coins under the bill.http://www.sltrib.com/sltrib/home/51364301-76/silver-gold-legal-tender.html.csp
     
  10. Don Wassall

    Don Wassall Administrator Staff Member

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    He should have specified a 1964 Kennedy half dollar, which is the only one that's 90% silver. The 1965-'69 Kennedys are 40% silver.
     
  11. Colonel_Reb

    Colonel_Reb Hall of Famer

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    That is a good point, Don. I'm curious to know if the rep is in the wrong or whether the writer changed it the statement from 1964 to 1960s without knowing there is a difference between the two. I have a tough time passing over the 40% silver-clads for investment. You can still get them at or below spot value, which is a totally different story when compared to the 90% silver pieces.
     
  12. DixieDestroyer

    DixieDestroyer Hall of Famer

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    NC Congressman pushes against fiat currency.

    Legislator says the state needs its own currency

    BY MICHAEL BIESECKER - Staff Writer

    RALEIGH -- Cautioning that the federal dollars in your wallet could soon be little more than green paper backed by broken promises, state Rep. Glen Bradley wants North Carolina to issue its own legal tender backed by silver and gold.

    The Republican from Youngsville has introduced a bill that would establish a legislative commission to study his plan for a state currency. He is also drafting a second bill that would require state government to accept gold and silver coins as payment for taxes and fees.

    If the state treasurer starts accepting precious metals as payment, Bradley said that could prod the private sector to follow suit - potentially allowing residents to trade gold for groceries.

    "I think we're in the process of inflating a dollar bubble that could be very devastating," said Bradley, a freshman legislator elected in November's GOP tide. "The idea is once the study commission finishes its work, then we could build on top of the hard-money currency with an actual State Tender Act that will basically [issue currency] in correspondence to precious metals stored in the state treasury."

    Bradley's bill has yet to attract any co-sponsors among his fellow Republicans.

    Mike Walden, an economics professor at N.C. State University, said the notion of North Carolina reverting to having its own currency is outlandish.

    "We dealt with this issue about 100 years ago when the Federal Reserve was established," Walden said. "If North Carolina were to have its own currency, that would put us at an extreme competitive disadvantage vis-a-vis other parts of the country and other parts of the world."

    State Treasurer Janet Cowell joked that Bradley's precious metals proposal could increase efficiency in state government by providing a good use for her department's old basement vault, which is currently used for storage.

    "I look forward to engaging in an important public policy debate about whose face should be on the gold coin," quipped Cowell, a Democrat.

    But Bradley predicts that world events could soon prove him prescient.

    "I don't necessarily believe [the Federal Reserve] is about to collapse right now," said Bradley, 37. "There are still a few things they can do with qualitative easing to sort of extend their survival. It's just a question of how long. Right know we have a lot of sovereign debt going to China and Japan. When that debt stops being purchased by foreign countries, that currency is going to flood back onto American shores, potentially creating hyperinflation and bursting the currency bubble we have coming in Federal Reserve notes today."

    The Austrian School

    Bradley, a self-employed computer technician and former Marine, attended Southeastern Baptist Theological Seminary in Wake Forest until he could no longer afford tuition, he said. While he has not taken any in-depth classes in economics, Bradley described himself as a devotee of the Austrian School, a branch of economic thought that originated in Vienna and was influential before World War I.

    Back then the value of most of the world's currencies were tied to the amount of the gold amassed in their national treasuries. The United States abandoned the gold standard in 1933, after it was blamed for worsening the Great Depression.

    Though the ideas of the Austrian School have been rejected by mainstream economists for much of the last century, they are in vogue with Libertarians and some supporters of the tea party movement.

    The language of Bradley's House Bill 301 predicts a dire future for the U.S. economy.

    "Many widely recognized experts predict the inevitable destruction of the Federal Reserve System's currency through hyperinflation in the foreseeable future," the bill declares. "In the event of hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System, for which the State is not prepared, the State's governmental finances and private economy will be thrown into chaos. ..."

    Asked who are the "widely recognized experts" to which his bill refers, Bradley cited U.S. Rep. Ron Paul of Texas and Peter Schiff, a precious-metals dealer and investor who regularly appears as a commentator on Fox News.

    Walden, the economics professor, said the views espoused by adherents of the Austrian School are well outside the mainstream of modern economic thought.

    Bradley's ideas for taking the state back to the Gilded Age don't end at economics.

    About Commerce Clause

    A strict Constitutionalist, he has also introduced bills to exempt North Carolina agricultural products and firearms manufactured in the state from federal regulation as long as they are not sold or exported across state lines, measures that fly in the face of more than a century of U.S. Supreme Court rulings interpreting the Commerce Clause of the U.S. Constitution.

    "They're wrong," Bradley said confidently of generations of justices. "The 10th Amendment is quite clear that those powers not reserved in the Constitution for the federal government are reserved to the states. It's doesn't take a high-priced lawyer to interpret the Constitution."

    Rep. Becky Carney, a Charlotte Democrat, said she found Bradley's currency bill "perplexing."

    "There has absolutely been no indication of the collapse of the Federal Reserve system," said Carney, who serves on the House banking committee. "It sounds like the Chicken Little story about 'the sky is falling.'"

    The office of House Speaker Thom Tillis declined to say whether the GOP leadership supports Bradley's proposal to create a state currency. His bill has been referred to the House rules committee, where legislation is sometimes sent to die.

    "There are a lot of diverse opinions and diverse views in our caucus," said Jordan Shaw, Tillis' spokesman. "I don't think we're going to forecast what will happen."

    http://www.newsobserver.com/2011/03/17/1059132/legislator-says-the-state-needs.html

    Edited by: DixieDestroyer
     
  13. Colonel_Reb

    Colonel_Reb Hall of Famer

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    "We dealt with this issue about 100 years ago when the Federal
    Reserve was established," Walden said. "If North Carolina were to have
    its own currency, that would put us at an extreme competitive
    disadvantage vis-a-vis other parts of the country and other parts of the
    world."

    Classic case of ignoring the elephant in the room or the increasing heat
    of the water that the frog is in. Sad that such a "brilliant economist"
    won't acknowledge what is happening right in front of our eyes.
     
  14. Colonel_Reb

    Colonel_Reb Hall of Famer

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    I found this article a few weeks ago but forgot to post it. Schiff does a good job outlining the reasons why physical silver is a smart investment, although I don't agree with his specific recommendations. They are too low for my liking. People should invest much more heavily in physical than 10%.

    Silver Outweighs Gold

    By Peter Schiff | March 2, 2011

    <div id="">
    <div ="1"="">



    In the world of precious metals, silver spends a lot of time in the shadow of its big brother gold.


    Gold</span>,
    with its high price-to-weight and distinctive yellow tint, has always
    occupied a special place in the human psyche. To many people across
    many ages, gold is simply the ultimate form of money - and, as a
    long-term, stable store of value for one's personal wealth, I agree
    it's hard to beat.
    </div>

    <div ="2"="">



    However, rare circumstances are aligning today that I believe will make silver the true champion of this bull run.


    WHAT'S DRIVING PRECIOUS METALS?


    Gold</span> and silver are both benefitting from a perfect storm in the sector.


    Dollar devaluation means that much of the 'gains' we see are really
    just losses by people holding dollars. In other words, if your dollars
    lose 50% of their value, it's going to take twice as many of them to
    buy the same ounce of gold.


    But the rally is based on more than simple inflation. Precious
    metals are regaining their role as the ultimate reserve asset. That
    means many, many more people are buying and holding these metals than
    at any time in the last thirty years.</div>
    <div id="right_tool"><div ="newslist3"="" id="inner_must_reads">

    <div ="art_"="">
    <div style=": ; left: 0px; top: 0px; visibility: ;" id="beacon_88248cdc45">[​IMG]Another factor is the rise of emerging markets and decline of
    developed markets. As billions of poor Asians, Africans, and South
    Americans lift themselves out of poverty by embracing the free market,
    the US is plunging itself into poverty by rejecting it. This means
    there are a mind-boggling number of new customers for jewelry, savings,
    and industrial products that require precious metals - and that we are
    becoming less and less able to outbid them for these resources with
    our dollars.</div>
    </div> </div></div>
    <div ="3"="">


    SILVER'S DRIVING FASTER


    If the world were going to hell in a hand-basket, then I would
    expect gold to outperform silver. However, it is only the developed
    economies that are on the rocks - and only the US that faces true
    catastrophe. Thus, we have seen silver outperform gold for the last
    eight years.


    The market is telling us that while uncertainty reigns supreme, the
    global economy will prosper in the years ahead. While gold most
    effectively insures the investor against economic devastation, silver
    offers both a shield against monetary turmoil and exposure to market
    growth.


    THE KEY: INDUSTRIAL DEMAND


    This is because silver is both a precious metal and an industrial
    metal. Gold is mostly precious, copper is mostly industrial, but silver
    strikes a fine balance between the two. And it seems as if this moment
    in history is perfectly suited to this balance. We are facing not only
    the prospect of the collapse of the international monetary order, but
    also the largest industrialization process the world has ever seen.


    While in a past era, wood, steel, or oil would have been the most
    critical commodity, today silver is used in everything we hold dear:
    iPhones, flat-screen TVs, batteries, solar panels, etc. Asia - the new
    heart of the global economy - isaccumulatinggold, but they'reconsumingsilver. That makes both metals good bets, but likely gives silver the edge.


    It's safe to say the future depends on a steady supply of silver.
    This burgeoning demand is reflected in the latest figures: global
    demand for silver is about 890 million ounces a year, while global mine
    production is about 720 million ounces a year. We're actually
    consuming scrap to make up the difference. And unlike gold, which tends
    to remain in a recoverable state as coins or jewelry, a large quantity
    of silver is ending up in trash dumps - where it is essentially lost
    forever.


    As long as the emerging markets continue to trend toward freer
    markets, and consumers the world over continue to demand computers,
    electronics, and green tech, silver should only become more scarce -
    and thus more valuable. I think these assumptions are pretty safe to
    make.


    CAN THE WORLD THRIVE EX-US?


    Of course, if everyone agreed with me, silver would already be worth
    hundreds of dollars an ounce and there wouldn't be any profit to be
    made on the trade. Fortunately, there are a couple of bogeymen in the
    financial media scaring the majority of investors away from silver so
    far.


    First, some analysts still believe - bless their hearts - that the
    US is really going to pull through this time into a sustainable
    recovery. After being duped by dot-coms and then housing, they are all
    aboard the Treasury Express back to Bubbletown. Unfortunately, as in
    the previous two cases, the current low interest rate environment is
    merely masking an underlying economy that is vastly more rotten than it
    was even a decade ago. The unemployment rate is a key signal thatthistime, Bernanke's magic medicine won't work.


    A second cohort sees that the US is doomed, but still thinks we will
    drag the rest of the world down with us. This is the school that holds
    that despite our persistent current account deficits and monumental
    external debt, the world economy "needs" the US consumer to drive
    growth. As I alluded to in my book,How An Economy Grows And Why It Crashes,
    this is like a plantation master claiming his slaves need him around
    to consume the fruits of their labor, or else they wouldn't have
    anything to do. Well, the results are in: after an initial panic rush
    into dollar-based assets, emerging markets are back at full sprint
    while the US is still limping along.


    SILVER IN A DOLLAR COLLAPSE


    Just like a Hollywood</span>
    celebrity, we in the US spent our time at the top of the world - and
    soon let our status get to our heads. And like a celebrity, our adoring
    fans the world over will be quick to forget us as we fall from the
    limelight and deal with our powerful addiction to partying and cheap
    money. To survive the next decade in America, you are going to want an
    asset that is in demand globally, but is also free from counterparty
    risk here at home.


    I recently did an interview with a group that is making a film about
    living in America in the year 2019. The premise is that inflation is
    rampant, the economy is in shambles, and groups are springing up that
    do all their trading in silver rounds. While I think their timeline is
    quite generous, this is a fairly accurate picture of what lies ahead.


    Not only does silver appreciate while sitting in your safe due to
    overseas demand, but it also comes in units that are ideal for use as a
    common trade unit. Two or three ounces of silver can buy you groceries
    for a week. By contrast, just try to eat an ounce of gold's worth of
    vegetables before they spoil. There are fractional gold coins and bars,
    but they carry very high markups.


    None of us have had to think about these things in our lifetimes,
    but it is not abnormal in history. Soon, understanding precious metals
    will be as much a survival skill as knowing how to change a car tire.


    THE GOLDEN RATIO


    I always say that every investor should have at least 5-10% of his
    portfolio in physical precious metals. Of that, the proportion
    allocated to gold vs. silver depends mainly on risk tolerance. Silver
    tends to be more volatile than gold, so silver investors must have the
    discipline not to liquidate their stash at the first sign of a
    correction.


    I generally advise a ratio of 2:1 gold-to-silver in the average
    portfolio. More aggressive investors can push it to 1.5:1 or beyond.


    Year-to-date, silver is up5 percentage pointsmore than
    gold, and I expect that trend to continue. It's important to understand
    that in this fast-changing world, silver is no longer runner-up.
    </div></div>Read more: http://www.ibtimes.com/articles/117997/20110302/silver-outweighs-gold.htm#ixzz1Huhg9mDk


    Edited by: Colonel_Reb
     
  15. Colonel_Reb

    Colonel_Reb Hall of Famer

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    Oil, gold, and silver continue to rise as the fiat dollar continues to lose ground and uncertainty remains abroad. Silver is currently at $39.17 an ounce. That is up about $5 in the last month.

    <h1 ="sublinemain">
    Gold Settles at Record High Above $1,452</h1>

    Gold prices rose to settle at a record high above $1,452 ounce
    Tuesday (actually it is at $1,456 right now), as new peaks in crude oil and grains fueled inflation fears and
    a downgrade of Portugal's credit rating fed safe-haven demand.


    Bullion prices broke out after a struggle to sustain new highs in the
    last month, and silver soared to a 31-year peak after Federal Reserve
    Chairman Ben Bernanke suggested he was committed to complete a $600
    billion stimulus program as scheduled in June.


    "What it shows is that big money continues to believe gold will go
    higher"¦because Bernanke wants to grow at any cost,"Â￾ said Axel Merk,
    portfolio manager of the $600 million Merk Mutual Funds.http://www.infowars.com/oil-rises-on-market-speculation-over-globalist-war-in-libya/
     
  16. Don Wassall

    Don Wassall Administrator Staff Member

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    As I write this, silver is up almost $1 an ounce just today. Considering how long it hovered around $4 to $5 an ounce, such jumps are pretty amazing. The price is still more volatile than that of other precious metals, but it's now over $40 and it's been a steady climb to get there, unlike 1980 whensilver skyrocketed from $5 an ounceto $50 and then quickly back down under $10.Continually increasing investor demand combined with irreplaceable industrial needs should keep the price rising even if there are short-term dips.
     
  17. Kaptain

    Kaptain Master

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    I don't think we have even experienced the JP Morgan short squeeze yet. We may see 5-10% or more daily jumps in the silver price. Question is; will it pause or correct as it approaches the magically $50 dollar mark? I'm almost hoping so - so that I can buy more. After it proves to be able to maintain 50 for period of time, we might see it run even faster.
     
  18. Quiet Speed

    Quiet Speed Mentor

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    A dip this coming week would not be a bad thing. I also see it as a buying opportunity. Can you imagine what the buying would be like if/when the Fed announces another round of QE beyond June?
     
  19. Colonel_Reb

    Colonel_Reb Hall of Famer

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    Don, Kaptain, and Quiet Speed, it is going to be really interesting to see what happens during the next months. I didn't think we'd hit $40 this early in the year, but I do believe we'll hit the January 21, 1980 peak by the end of 2011.
     
  20. Don Wassall

    Don Wassall Administrator Staff Member

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    One of the reasons it's not a bubble to this pointis because so few people are investing in silver even now. Bubbles are the result of the general public manically joiningan investmentperceived as an easy way to make money, thus driving up the price to an unrealistic level before it ultimately bursts. But silver is ignored by the establishment financial "experts" when it's not outright deridedand only some of those who read the alternative media understand the potentially super-bullish circumstances surrounding silver. Probably not one out of a thousand Americans has invested substantially in silver. Edited by: Don Wassall
     
  21. Colonel_Reb

    Colonel_Reb Hall of Famer

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    That's a good point, Don. I've convinced a couple of people to get on board over the last 2 years or so, but I only know of one other person who has started investing in silver since then (thanks to prodding from one of the men I got into it), and that was only after it had gone up to $35 an ounce. As with the caste system and many other things, some folks just won't listen. Even worse, a lot of them just don't care.
     
  22. Freethinker

    Freethinker Hall of Famer

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    I hear you Colonel. It is frustrating. I bought in heavily when it was around $13 back in 08. I told friends and family and they thought I was crazy. Well in the last year or so my dad finally purchased some gold as well a small amount of silver. He finally understands. My friends however are still clueless. Even when I casually mention "oh, silver hit $40 today" in my sort of "told you so" moment nothing clicks. Wonder if they'll listen when it hits $50 and eventually $100....
     
  23. Colonel_Reb

    Colonel_Reb Hall of Famer

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  24. Kaptain

    Kaptain Master

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    What's interesting is to see how physical and even paper silver ETFs have run-up, but some of the silver minings stocks have halted. Some mining stocks have doubled tripled or quadruapled from a year ago (endeavour, first majestic, great panther). Meanwhile, some of the hot names more than 4 years ago (pan american, silver standard) are below or near the price they had back then. Stocks are like fashion. Everyone thinks it's all based on hard numbers, but in truth it's often based more on psychology. I just bought a boat load of Pan American. Just like fashion, trends always recycle.

    Here's an interesting question/scenario; people are buying silver etf's like crazy. The insiders know that these banking cartels that are selling paper silver can't back it with real silver. How will the silver etf's finally fall? What will happen to those investors who have etf's like SIL or AGQ? Will the etf's go from skyrocketing to no-value overnight? Will it be like a bank run?
     
  25. Colonel_Reb

    Colonel_Reb Hall of Famer

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    Kaptain, that is a great question. I think the answer is that if things continue down this path long enough,yes, the etfs will lose out in popularity and value as people wake up to that reality just like more are waking up to the fiat money reality. Physical is where it is really at and will continue to be even if things get really bad.
     

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