Commodity Trade Mantra

Watch out for the Silver Mania Outbreak!

Watch out for the Silver Mania Outbreak

Watch out for the Silver Mania Outbreak

It is often said that “There is no fever like Gold fever,” but it will soon be said that “There is no mania like a Silver Mania.” This highly contagious Outbreak is expected to hit anytime soon, although has started spreading wildly in some parts of the world. Please contact your family jeweler or the closest Bullion dealer soon. An ounce worth of Gold can buy you 53 ounces of Silver at current prices. At the current spot price of $1662 an ounce, even a fractional Gold Bullion piece is beyond the reach of many working folks. The current Gold / Silver price ratio of 53 to 1 also indicates that Silver Prices have much more upside than Gold. With the rise percentage factor, even to the recent highs in Gold and Silver being very much in favor of Silver, demand for Silver Investment has shot up multifold. An investment into Silver is more than likely to appreciate astonishingly higher than an investment of similar value in Gold. Silver Demand has increased to an extent that not only are the Silver Coins going off the shelf before they are placed there, but people are buying the entire 500-ounce boxes that are sealed by the U.S. Mint. The U.S. Mint is not the only one experiencing an increased demand for silver. The Royal Canadian Mint (RCM) is rationing the sales of its Silver Maple Leaf coins. The Manager of Communications at the RCM said, “Due to very high demand for Silver Maple Leaf coins, the Royal Canadian Mint is carefully managing supply to ensure all our bullion distributors are served and we continue to take orders.”  Silver Bullion imports by China remain robust. Silver imports were 228 metric tons in December, according to data released by Chinese customs. The implications are huge if this indeed leads to a severe Silver Bullion shortage. There is every major possibility that we are seeing something different here. Never before has such a monstrous demand for physical Silver or such a high inflow into Silver ETF been seen, with perceived sentiment so low about the price. At this rate, Silver Demand will soon have grown to feverish stages worldwide. While some investors buy Silver hoping to resell it later for a few more paper dollars in the future, that isn’t the main reason for becoming a Silver Bullion owner.  Think of your Silver Holdings as a financial insurance in an increasingly unstable world. For a realistic example, simply imagine having found a 50 year old forgotten package kept by your grandparents. The package contains 1 US Dollar & a chunk of Silver which was bought then for 1 US Dollar (A Rs.100 note & a chunk of Silver which was bought then for Rs.100, for my readers in India). What would the same be worth today? The printed currency note would be worthless in comparison to its buying power then & now. You would not be able to buy even a fraction of something today with the same currency note as compared to what it could buy then. Fine! But then turn to the Silver chunk and check for its valuation today. One would say you struck Gold! But then hey – that is Silver Investment. Also important is the realization that today’s convenience of e-silver or e-gold is not equal to holding the actual Bullion. With trust eroding fast from the “Too Big to Fail” Banks, this concept will also take a hit as investors start looking at Banks & Funds with growing doubts. Keep your bank cash not in the bank, but rather in fully paid Gold and Silver Coins and sell a few when you need funds.

Physical Silver or Gold Coins – A Better Choice than Currency:

Gold or Silver Coins are recognized around the world and have intrinsic value any and everywhere. The same is not true for hundreds of paper currencies that have become worthless, usually because the government or central bank printed them to excess to pay the debts of governments that did not control spending. Silver has been used as money (medium of exchange and a store of value) for over 3,000 years. A Silver US Dollar Coin contained approximately 0.77 ounces of Silver until 1960, after which they were removed out of circulation when inflation in the paper money supply caused the price of Silver to rise sufficiently. Currently the US Mint produces Silver Eagles which contain 1.0 ounce of Silver – and cost approximately $35. It took about 20 US Dollars to buy an ounce of Gold a 100 years ago and it takes over 1,650 dollars to buy the same ounce of Gold today. The value or the purchasing power of a currency declines as more & more currency is printed amid rising national debt. Hence the prices, measured in currencies which have declining value, for silver, gold, wheat, crude oil, bread, coffee, and ammunition are much higher. Throughout history the prices of Gold and Silver have increased and decreased together, usually with Gold costing 10 to 20 times as much as Silver. A historical ratio of 15 or 16 is often quoted and that places the current ratio, which is in excess of 50, as relatively high. There is much room for Silver Prices to explode higher, narrowing the Gold to Silver ratio to perhaps 20 to 1. The price of Silver could approach $73 to $100 per ounce, on its way to a much higher number, depending on the extent of the QE-Infinity “money printing,” panic, hyperinflation, and investor demand. Gold and Silver Price movements for the day have been highly volatile & choppy of late. Gold and Silver currently remain range-bound, “caught between the real economy and the monetary economy. CFTC data shows speculators were liquidating long positions, but the physical market in Southeast Asia remains “consistent buyers” of Gold and Silver. A break out in Bullion prices may occur anytime soon. It is better to be early than late if a panic-moment is about to arrive.

An article from mentions –

If you think a Silver price of $200 per ounce is outrageous, I suspect you would find near universal agreement among most Americans. But is a national debt in excess of $16,000,000,000,000 less outrageous? If unfunded liabilities are included the “fiscal gap” is, depending on who is calculating it, approximately $100,000,000,000,000 to $220,000,000,000,000. For perspective, that places the unfunded liabilities of the US government at approximately $700,000 per person in the United States. Is $700,000 unfunded liability (debt) per man, woman, and child more believable than a price for silver of $200?

Silver – A Super Hedge against looming Super Inflation:

Anyone saying that Inflation is not going to rise or will be under control needs to check his mind. Let Governments or Politicians say what they may want to. With the kind of limitless or King sized QE programs running simultaneously around the world, Super Inflation is bound to hit in a Big Way – A Hyper Inflation. I would like to bring attention to Jim Sinclair’s commentary a few days ago.

Interest rates and the government bond market are one and the same. You cannot predict higher interest rates if you also predict QE to infinity. QE is the non economic purchase of government and other debt securities. Therefore as long as QE expands to meet the size of bond offering, the bond market will stay bullish and interest rates will not rise significantly. If you adhere to the prediction of higher interest rates then you are saying QE will cease or contract significantly. As long as QE is increased, as it just has been, bond bears will continue to get crushed. You cannot separate predictions on interest rates from predictions on the conditions of the US Treasury market. Interest rates and the government bond market are one and the same. I believe that every effort known to man to keep the bond market a raging bull will be undertaken. As long as QE is practiced, which is non economic bond buying, the bond market cannot break. The mechanism of preventing a bond market break is positive to equities.

Would you want to find yourself without any Silver Holdings then? Gold is going to rise but may not help you to the extent that Silver could. Think again! For the reference of new visitors & those investors yet only thinking about Silver Investing, I am adding some links below to some of my earlier articles on Silver that received tremendous response.

Silver Investment – The Sole Quantum of Solace

Silver seems Ready to Take-Off – Are you ready for the Flight?

Ridiculously Low Silver Prices to Explode on Supply Crunch

SILVER Demand set for Dramatic climb to Historic High in 2013

Debt Darkness of 2013 has a SILVER Lining

China Evolves as Major Silver Market Player


Silver: The Element of Change.”  The video from the Silver Institute covers numerous facets of one of the most widely-used and indispensable precious metals: Silver. The video explores silver’s role in history and how it changed the course of countless lives in times of the Greek and Roman Empires, when it was used to prevent infection.

Focusing on its remarkable properties as an element of change, the video looks at silver’s role in industry, highlighting its ability to make today’s mobile interconnected life possible as well as its use in medicine and water purification, which relies primarily on its natural antibacterial qualities. The video also notes silver’s importance to fashion through exquisite silver jewelry, and finally it speaks to silver’s intrinsic worth as well as its role as a store of value, given its historical and modern use as a popular investment.

Interesting News:

Watch the Dollar: It Could Trigger the Next Crisis – CNBC

Why does the “Paper Gold” Price Track the Physical Gold Price? – Goldseek

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