THE BEAUTY OF SILVER….IS GOLD

roadBy SD Contributor SRSrocco:

While gold is known as the King of Monetary Metals, Silver will become the “OFFICIAL ROYAL UNDERDOG”.

Investment demand for silver hasn’t even begun yet.  This is what I will be discussing in my upcoming presentation.  Investors who are worried about silver selling off after the big move up with gold (AS JIM SINCLAIR HAS STATED)… shouldn’t be.  Sinclair is excellent in understanding gold, but is still forecasting the future price of silver based on 1970-1980 world economic conditions.

Energy will be a MAJOR FACTOR going forward that will impact SILVER INVESTMENT DEMAND.


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High Gold Prices Push India’s Farmers Toward Silver

Author: Shivom Seth
Posted: Friday , 11 Jan 2013

 

MUMBAI (Mineweb) -

Seventy year old Surinder Singh Ahuja, a progressive farmer who has been planting cotton on 50 acres in his Haryana land and wheat in 10 acres in Fazilka in Punjab for the past four years, is in an expansive mood.

In the case of a new bride it is particularly significant, where traditionally, the in laws present clothes and gold jewellery to the her, and a grand feast is organised by the family. This year though, things are slightly different at Ahuja’s house.

“Every year, we light a bonfire, and play games. It is an opportunity for the farming community to get together and bond and also a chance to allow the children to get a glimpse of our traditions. It is especially a grand time to gift gold to different members of the family. Only this year, we have decided to give them silver antique jewellery items,” said Ahuja.

Ahuja said most of the farming community across Haryana and Punjab in North India, were buying silver as a cheaper alternative to the more expensive gold for investment purpose. “The trend began at the end of 2010 when silver prices started rallying to a 30 year high. The price of silver has great potential to go even higher this year. Plus, most shops have been showcasing exquisite silver jewellery items. The lure is too much,” he added.

Article here: http://www.mineweb.com/mineweb/content/en/mineweb-silver-news?oid=169649&sn=Detail

——————-

While gold is known as the King of Monetary Metals, Silver will become the “OFFICIAL ROYAL UNDERDOG”.

Investment demand for silver hasn’t even begun yet.  This is what I will be discussing in my upcoming presentation.  Investors who are worried about silver selling off after the big move up with gold (AS JIM SINCLAIR HAS STATED)… shouldn’t be.  Sinclair is excellent in understanding gold, but is still forecasting the future price of silver based on 1970-1980 world economic conditions.

Energy will be a MAJOR FACTOR going forward that will impact SILVER INVESTMENT DEMAND.

 

SD Bullion

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Comments

  1. Silver will become more valuable than gold.  Be patient….Its coming!!

    • Such statements can lead to loss of credibility.

    • No credibility lost here… Once you look at the numbers of above ground gold vs above ground silver for the past 100 years, how much of silver is wasted in industrial use and what the world has done to its stockpiles of silver over the last few decades you could reasonably make the argument that once the mania in metals starts we could for a short period of time see a 1:1 gold to silver ratio.
       
      Could it really happen? Who Knows… It depends on how long items of worth or hard assets are priced in paper. Once you stand back and look at it from a supply and demand side it becomes a legit argument in my mind. What is really more precious? What is believed to be rarer or what is actually rarer?

      Gold more plentiful than silver? In terms of above-ground available inventory-most definitely yes. Many researchers have reached this conclusion. Silver still interred in the ground is still more plentiful than gold as a whole, but the re-balancing will take decades to correct.

      ” Over the next 28 years, gold should add another two billion more ounces minimum to above ground supplies, while it appears impossible for silver to add even one single ounce. In fact, based upon expected future demand, it’s likely that silvers above ground inventories will decline. For all practical purposes we are close to full depletion currently. “ – Ted Butler

    • @ddclop you say, “Such statements can lead to loss of credibility,” when @silvergood1 stated, “Silver will become more valuable than gold.” My question to you is… Would you have made the same statement years ago if I’d said Gold will become more valuable than platinum???

    • @40OZ
       
      my answer is : no, because the ratio AU/PT prices was 10 times smaller than the AU/AG ratio.
       
      Do you really believe that AG can become more valuable than AU? Come on… I’m sure you don’t.
      Look, gold is better for jewellery, conductivity and many other things and it’s also rarer. And the most important, is that you can’t change 20’000 years of psychology: man hunts, protects family and makes fire, woman takes care of home and children, ressources you dig out of the Earth are yours and AU is more valuable than AG.

  2. Protect the second ammmendment.  Obama on TV setting up the first step before gun confiscation.  When the economy collapses, they will call-in the guns. Take the time to contact your congressmen/senators before things get out of hand.

  3. I agree that silver has great potential.  I also believe that in the intermediate term silver will be highly volitile.  I think it will take several try’s to overcome 50 dollars per oz.  We might see a time this year where silver goes up and down by several dollars or more each day.  I am working on trying to take the emotion out of it.  Emotion will be our worst enemy.  My plan is to temper the emotion by eventually evening out my holdings to 50% gold and 50% silver.  I am a ways off from doing this as the plan is to make this transition when the Gold/silver ratio tightens up significantly.  No one really actually knows if silver is going to ever be a stable store of value.  I hope so.  I believe that 2014 will be the big year for silver.  2013 will be a good year.

  4. Gold monopoly by the government-banker cabal is a tool of financial dominion over The Peoples around the world. If we are to liberate ourselves from their self-ordained legalized lordship over us, copper and silver trade among us must be re-kindled. Ideally, this has to be adopted on a strictly weight-based, rationally circumscribed foundation wholly divorced from the symbols and markings of ‘official sanction’ giving the elites ‘title’ to elbow themselves into our private affairs.

    Giving Mr. Sinclaire benefit of doubt that he merely suffers from the ‘Golden Calf Syndrome’, I’ll continue to peruse his opinions, while separately and far more vigorously promoting Liberty and Independence secured by copper and silver, that his beloved gold has rather demonstrably proven in history  to work at odds against.

  5. Gold and silver will always be one and the same.  They are monetary metals.  Gold will always be the money of kings and for good reason.  Silver will always be the money for the common man.  Jim Sinclair is not anti silver.  Not at all.  He is wealthy though.  Wealthy people are more interested in gold because gold is a proven store of wealth during hard times.  Easier to store and is definitely a more stable store of value than silver.  He knows that both metals are very important.  And, he does not try and discourage anyone from owning silver.  

    • The key to destroying the Silver cartel is decoupling the physical price from the futures price.  It is nearly impossible to decouple silver by using silver futures.  I am hoping China and India can win the silver war.  I do not think the Silver Army by Max Keiser has a chance, but anything can happen.
      Warren Buffet has dissed gold but not silver.  Hopefully, Eric Sprott can decouple the link between physical silver and silver futures.  As a Canadiian citizen i AM ROOTING FOR HIM.
      Buy silver!

    • In my mind, it is the futures market that will be the successful point of attack by physical metals holders upon the house of paper cards, aka the CME and the LBMA.  If large bullion buyers will buy futures contracts and then stand for delivery of the physical metal, push will very quickly come to shove as the people running the futures markets become unable to settle those contracts in metal.  These markets are very highly leveraged, so there is a lot of paper being backed by small amounts of real metal.  The vast majority of the time, they do not need metal on hand to settle those contracts so do so in cash.  Unless the language of the contract requires a cash settlement, metals can and should be demanded.  Only those who wish to profit from the up and down movements of the metals, while having no desire to own, transport, store, and insure physical metal, should accept paper currency in settlement of their contracts.  Those who want more to show for their efforts or who need physical metal for other purposes that only physical metal can provide will be standing for delivery.  It is the failure to deliver the promised metal that will be the undoing of the paper metals markets but ONLY if those who buy those futures contracts demand metal and not paper as payment.

    • @Ed_B Suppose I bought such contracts and stood for delivery to bankrupt the COMEX and my actions did just that. How would I get my billions back? How many people prudent enough to manage that much wealth would try it? I do value your opinions so I’m definitely interested in your reply to help me and others understand both sides of this coin.

    • Standing for delivery is done to gain silver metal in the possession of the futures contract buyer, hopefully at a lower price than can be obtained in the physical metals market, and not specifically to bankrupt the COMEX.  While that could be a result of such buying, it does not have to be the goal.  
       
      Those who buy futures tend to have a lot of money of their own or in their care, so much of what they own is not tied up in current futures contracts but is in cash, physical metals, or other investments.  I agree that if the COMEX or the LBMA were to collapse, money currently in futures contracts could be lost ala MF Global when it went bust.  But it is also likely that this would result in the decoupling of the paper and physical metals prices and the end of the manipulation of those prices.  So, if one loses 5-10% of their money in the busted current futures contract but the price of gold and silver increase dramatically due to decoupling and the end of price manipulation, those holding physical gold and silver will be very much better off in spite of recent losses.
       
      The big fly in the ointment could very well be in the unintended consequences of such a COMEX / LBMA collapse.  There are wheels within wheels in the global financial network and the failure of the paper metals manipulators could well cause other financial companies to collapse, probably via derivatives losses. Unfortunately, we probably will not know the full extent of it all until it happens.
       
      A recent article discussed the fact that large amounts of silver were flowing from the US to the UK, as well as large amounts of gold flowing from Switzerland to the UK.  The thought there is that the Chinese and Indians are buying LBMA metals futures contracts and standing for delivery, draining the LBMA vaults.  Because the entire futures market viability hinges on them being able to deliver any amount of metal for which they have written futures contracts and the fact that those contracts are leveraged means that a lot of metal is being bought and is moving from London to Asia.  Why the US and Switzerland are supporting the LBMA is not clear to me, other than they are participants in the entire metals futures sham / manipulation and will do whatever they can to keep it going for as long as they can.  Perhaps someone else knows more about this and can explain it better?
       
      Not that metals buyers have to be individuals or hedge funds.  They could also be nations, such as Russia or China, that would like to stick a thumb in our eye if they can get away with it.  If they could damage our prestige and thereby our leadership position, they would be tempted to try it as they are jockeying for more of a leadership position in the world themselves.
       
      Of course, it is also possible that if the LBMA vaults were nearly emptied and no additional supplies could be received in time to satisfy the expected delivery of metal for the next batch of futures contracts, they could always not write as many contracts for metals they do not have.  That would send a huge shock-wave through the metals markets and the financial system but it probably would not be as bad as a genuine failure to deliver.
       
      I am hoping that others will add to this thread.  I am sure that I am leaving out some things that should be said here or simply do not know all of the relevant info.  I am not an expert in this, so am just going by the reading I have done in this area.  SRSRocco would likely be the guy to really delve into this area.
       

  6. It is great to see that demand for physical Silver is strong in BOTH India and China (the two most populous countries on Earth).  I agree that it is the common people who will re-monetize Silver, rather than the few who already own most of the Gold in the world.  Even so, ownership of both Silver AND Gold is essential, because they are really two sides of the same monetary coin (the Yin and the Yang representation).
     
    In other news, Reggie Middleton has made a prediction recently on RT (Max Keiser Show) that he sees the Big Reset happening in 2013-2014.

    • I’ve seen more Asians buyin silver in 2012 than any other investor. And they keep it in Asia. Not in Switzerland. I fear that my national swiss economy collapses too. I hope that Europe will keep a part of the global cake and maintain our life standard.
       
       

    • “I hope that Europe will keep a part of the global cake and maintain our life standard.”
       
      Many Americans would hope that to be the case for us as well but fear that all that will remain will be the crumbs.  At best, it appears unlikely that the current living standard will be maintained during and after any sort of monetary collapse.  After all, the primary effect of a collapse is that the old system and its standard of living is replaced by a brand new system and its lesser standard of living.  It is the difference in value between the two systems that pays off that part of the debt that the old system created that is recovered by those who lent money to it.  Much of the Western world has indulged itself in an orgy of profligate spending for the past 50 or so years.  This has created a massive amount of debt that is fully the financial equivalent of a powerful tsunami.  We can’t successfully continue to party on the beach as it hits.  Much will be swept away and only that which is truly built upon the most rugged and solid foundation possible will remain.  Gold and silver are that foundation, IMO.  Other financial instruments may or may not survive and there is no sure way to tell beforehand which will and which will not survive.  It is likely that the stocks of very large US and International companies will survive.  Many of them made it through The Great Depression of the 1930s, World Wars I-II, and many other problems as well but there is no guarantee that they will survive.  As a wise old man once told me about life, “You wanna guarantee, Sonny?  Buy a toaster!”.

  7. Wow! Great news for silver. I’m surprised there wasn’t a smackdown today…(or maybe there was, I haven’t checked the charts yet!)

  8. Gold and Silver is Gods Money and I might add Mine. Lol Keep Stacking

    • Well, then, that definitely puts you on the right side of things, Charlie.  :-D
       
      Actually, I tend to think that God has a terrific sense of humor and is looking down on all of us lesser beings with amusement as we collect, store, fight over, and hold all of this heavenly paving material as if it was really special.  I dunno, guys and gals… maybe down here it is!  Up there, not so much. Maybe that is why we can’t take it with us when we die.  lol
       

  9. I don’t have anything to say at all.

  10. Silver will be more valuable that gold.   That statement should not be ridiculed.   If silver increases at a rate of 3x-4x that of gold, would it be fair to say silver is more valuable.    Because that would be what happens when the silver:gold ratio declines to historical, geologic, and monetary NORMS.    The last 100 years of central bank manipulation and demonetization of silver ARE AN ABBERATION compared to 5000 years of history.
    For Chuck’s sake, silver is the only commodity trading for less now than it was in 1980 and it’s not just some queer coincidence and does not reflect silver’s fundamentals or supply/demand outlook.   Is there ANYTHING in this world that costs 40% less today than in 1980 except silver?!    Shouldn’t it be more expensive since aboveground supply has shrank from tens of billions of ozs to what is now a TINY FRACTION of once massive reserves?  You can maybe at maximum actually buy and have delivered 10,20,30M like Sprott (with 3 month total delivery time of course LOL!)  
    Will people who “own” PHANTOM silver like unbacked ETFs wise up and convert those few hundred million ozs and stack the smack for real??   Well, THEY COULDN’T IF THEY WANTED TO, THERE ISN’T ENOUGH SILVER TO AROUND! If etf silver is leased, hypothecated, or being employed on a fractional reserve basis like many “financial assets,” and they probably are(!), these people get screwed.  If you own real silver be glad you have it and don’t worry about $4-5 price swings.    $5 price swings will be daily volatility in a few years IMHO.
     

    • “ Is there ANYTHING in this world that costs 40% less today than in 1980 except silver?! ”
       
      Good question.  I can’t think of anything, except for some of the tech gizmos.  Of course, when discussing commodity prices, things get complicated by a number of things, including technology advancement and inflation.  To help solve this, I like to compare commodities to gold.  Gold is, well, the gold standard in commodities.  It is the graph of the Dow 30 Industrials in terms of ounces of gold vs. The Dow 30 Industrials in terms of dollars that REALLY got my attention.  These two charts tell a VASTLY different story about recent stock market performance but it is a story that the media is either unaware of (unlikely) or complicit in manipulating.
       

  11. Interesting article SRSrocco.  Still eagerly waiting on the charts ur coming out with on energy  :)

  12. One has to assume the paper traders are making money in the paper trading of silver, are ok with taking cash, preferring not to take possession of that filthy white metal and perfectly happy with the system as it is.  One may also assume that there are those who would very much like to take title to physical silver but are in such small numbers that silver can be delivered, but with some delay. 
    It can also be assumed that there are some players lurking out these who will  demand large silver settlements since they know they are contributing to the paper trading end game. Whatever the result it will take tens of billions to accomplish this.  China has those sums, maybe even playing with dollar reserves.  
     China’s set up their own paper game, potentially competing with our system.  They’ve already broken the bank at some bullion trading operations, taking the phyzz to China. They are in no rush, taking their time to play this out.  It reminds of the movie The Sting.  The con men conned the uber con man, using his own greed to do him in.  China told us of their plans when one diplimat who inadvertently mentioned that China plans to have a gold backed currency.  That could be said to be the finger along side the nose, indicating the sting is underway.
     Lastly there’s the chance that some large money people will go to long positions immediately after the shorts are taken to the cleaners. No tickee-no laundry
    It’s fun to watch the game. 
    We end up winning since there is little chance in the game will remain static for long and virtually no chance of the prices dropping anything like May 2011.  Flip a silver coin. Heads we win. Tails we win. 
    We may be the little critters under the feet of the dinosaurs, dodging the lumbering beasts.  But everyone knows what happened to the dinosaurs.  An asteroid in the paper markets would be something to see.

    • China has a 10 year plan we have a 2 year at max due to changes in government. And that 2 years isn’t set, it chances daily with whatever deals corporate America can pay someone in congress to give them. Who is going to win?

    • @MaryB
       
      Too many folks view these 5 and 10 year ‘plans’ of totalitarian societies as somehow admirable or superior, when nothing could be further from the truth  In fact it’s rather ’superior’ to have a highly ‘contingent-rich’ plan for dealing with a flow of developments, much like having a chess game mapped out 4 or 5 moves ahead.

      This is precisely what makes (genuine) Free Market economies so very much more productive than prior models. The instantaneously adaptive responses of well informed entreneneurs makes best advantage of whatever resources can be brought to hand … and crucially … the anticipation of what conditions make complete abandonment of a tactic necessary … to arbitrage the existing position at that moment along a completely separate pathway.
       
      ’10 Year Plans’ are economically tantamount to setting one’s feet into a block of concrete.

  13. @SRSrocco
      “Now, all of you know these changes are necessary for a very simple reason–silver is a scarce material. Our uses of silver are growing as our population and our economy grows. The hard fact is that silver consumption is now more than double new silver production each year. So, in the face of this worldwide shortage of silver, and our rapidly growing need for coins, the only really prudent course was to reduce our dependence upon silver for making our coins.”- Lyndon B. Johnson: Remarks at the Signing of the Coinage Act- July 23, 1965
     
    Silver was a scarce material 47.5 yrs. ago, when there was approx. 7-9 billion ounces of above ground available silver, and it was a helluva lot cheaper to mine…fast forward to 2013 with way less above ground available silver and it’s a helluva lot more expensive to mine declining quality of ore.
    Your articles are always spot on SRS, I’m looking forward to your next presentation!
     
    “If anybody has any idea of hoarding our silver coins, let me say this. Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content.”-Lyndon B. Johnson: Remarks at the Signing of the Coinage Act- July 23, 1965

    This statement, to me at least, was the beginning of  silver price manipulation. It has evolved over the years into a ugly,  gigantic short nightmare for JP Morgan (and others), and when it explodes, there’ll be a shortage of ambulances to take the shell shocked traders outta the pits.

    Keep stackin’ brutha’s and sistah’s! ;)

    • I heard that!   Keep stacking whether it’s 1 oz at a time or 5,000.   
       
      All the aboveground gold in the world (5B ozs) valued @$1680 = $8.4 Trillion (or 8400 Billion) 
      All the silver in the world (1B ozs) @$31 = $31 Billion
      Make sense to you?    Even if my 1B oz silver number isn’t conservative enough and you use 2B ozs or 3B ozs of worldwide silver, that’s still far less than $100B to buy every oz of silver in the whole world at $31/oz.    And of course the amount of silver that is actually available to be bought or sold is a small fraction of this…

    • “This statement, to me at least, was the beginning of  silver price manipulation.”
       
      Agreed.  There is solid proof that the US Gov and Fed have conspired to hold gold prices at lower than market levels.  Documents, such as letters exchanged between the presidents and the Fed chairmen, obtained via Freedom of Information Act filings clearly show this and it is indisputable.  We should all consider that if gold price manipulation has been proved, why not silver?  Both of these metals are joined at the hip and are very difficult to separate.  Bart Chilton seemed to accept the idea of silver price manipulation at one time but now cannot seem to find any evidence of it.  Funny how that works.  Makes me wonder who it was who talked to him and set him on the official path.
       
      Speaking of Chilton and the CFTC, few of these regulators seem up to the jobs they are supposed to be doing.  They come into Gov or quasi-Gov service from the banks and other financial institutions, do their service, and then return to the same organizations when they came and supposedly regulated.  For some reason, this never seems to be a conflict of interest.   What is is about all this that I am not getting?  :-/
       

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