Silver Phase Transistion

Silver has made a move... what's next?

In my YouTube video on the 1st of August, 2010, I stated that over the coming weeks we'd see explosive action in the price of silver, taking out previous highs. (You can find that video here).

The action we've seen since then has been nothing short of explosive, Silver is outperforming every other commodity or investment class that I can think of. Here are the prices in various Currencies:

USD: 19.85
AUD: 21.65
EUR: 15.38
GBP: 12.84
CAD: 20.62
CHF: 20.17

Can The Rally Last?

I like to send emails to this database sparingly and only at what I believe are poignant moments in the silver market. As such, I'm writing this email because I believe silver is entering the second phase of its bull market and we have a few indicators to prove this:

1. The gold:silver ratio is closing in at 65:1. Silver is outperforming gold considerably.

2. The usual silver "shenanigans" such as options expiry, non-farm payroll etc are simply not effecting the silver price negatively as they have in YEARS prior.

3. JPM is closing its London prop trading desk to comply with the new financial services regulations out of the US. Although this is just my pure speculation, I believe the reason why they are doing this is for legal reasons, not merely to just comply with regulations (Since they are some 12 months too early and so why would you close a prop trading desk that's making good money 12 months before you have to?) I believe my suspicion will become evident in coming months. For those unaware, it was this very same prop trading desk Andrew Maquire blew the whistle on earlier this year.

4. Silver has dislocated from the dollar. The dollar can be up or down, doesnt matter, silver is just up up up.

5. There is very little hype surrounding silver at the moment. Remember when gold first went to 1225 - the media was all over it... Silver breaks it's two year high and your lucky to hear about it on the gold bug websites! ;)

6. Silver stocks are breaking out.

In my last email to you - below is what I wrote when silver was getting hit hard...

When Silver is Priced as Money.
The reason why silver gets hit so hard in times like this is because its still being priced as an industrial metal. Which is great... it allows investors to stockpile silver as an industry metal and wait for it to be priced as money for maximum gain. Gold is priced as money because that's really its only utility, however, throughout history, even up to a few decades ago - silver has been used more as money than anything else (including sea shells ;)

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Well it seems now silver is being priced as MONEY. and this is what will take it into the next phase of its bull market. Corrections will happen in all markets but the bias from here on is the explosive upside in my opinion.

Keep Stacking.

John Christian
MetalsLeasing.com




http://www.youtube.com/watch?v=ajltqYb_vCo

http://www.youtube.com/watch?v=0UEYa3y7SsE

Yup, I agree with the guy in the first video. I think is analysis is largely correct. However, I predict that traders like him will get hammered. We probably won't be seeing videos from him in a year if he doesn't own physical. If you own physical, you probably are in it for the long long haul. Why sell out at the sign of the FIRST significant breakout? It is way to dangerous a wager if you think you will be able to buy it back lower. The ETF traders with get toasted as the likes of JPM change the medium of their action to the ETFs. The ETF prices will be much more volitile than the physical prices which will go high and stay there. JPM will simply poach the ETF fools on volitility. There really is no need to supress the price as long as they can win on volitility. Perhaps silver will reset to $100-$200 and then simply shadow gold's moves from there until the monetary system implodes, then all bets are off.

http://www.youtube.com/watch?v=16aT9...eature=related

http://www.youtube.com/watch?v=6p893oB7rfQ

http://www.youtube.com/watch?v=o018o...layer_embedded

....

http://news.silverseek.com/SilverSeek/1285605011.php

..

28th September 2010 | SilverForecaster.com

After 18 months of work, the silver price has broken to new highs breaking past $21-$21.25 and is set for a significant run to much higher levels with expectations to hold new high levels at around $24-$29 in the first run up.




For all of this year, the silver price has worked hard to overcome resistance just below record highs. The build up of support has set the stage for a breakout of eventually $30 then $50 an ounce.



The fundamental picture of silver is a combination of three silver-positive forces:



1. “Official” selling by China India and Russia has now ceased, sending the buyers of that silver into the open market.

2. New uses for silver in rfid’s, solar panels, electronic uses, clothing and in medicine have filled the gap left by photography demand.

3. As the gold price is moving out of the range of the smaller buyers in Asia silver is becoming the ‘poor man’ gold and demand is rising fast.

4. Developed world monetary problems have not been solved. With extremely low growth expected for a long time, further structural problems will suppurate at some point in the short, medium or long-term. This is enhancing not only the wealth protective demand for gold but underpinning that for silver too. We believe silver’s monetary value will grow in the years to come.

http://news.silverseek.com/SilverSeek/1285780689.php

Gold Silver Spot Prices Are Rising - But Are You Missing the Silver Boat?

http://www.silver-coin-investor.com/...lver-boat.html

Historically, many people preferred to invest in gold rather than silver because of its rarity. This is about to change so drastically that I decided to seed this page by mentioning gold silver spot prices as if one meant another and I couldn't decided which to go with.

Yes, silver and gold will eventually trade much closer to 1:1.

While gold's main function is used for monetary purposes silver is much more multi faceted. Silver is demanded in various industries including the electronics industry, the jewelry industry, photography and finally in the financial industry with demand percentages as follows 45 percent, 30 percent, 20 percent and 5 percent respectively. Recently gold silver spot prices have been up and this begs the question, are you missing the silver boat?

Another reason why gold has been so popular in the precious metal investment is because silver has been historically easier to mine. Although this is a lesser known fact among investors, silver production is almost now solely dependent on the mining of other metals.

By taking a look at the gold silver ratio, and then the current gold spot prices, it seems that silver must be tremendously abundant. Interestingly enough, over the past 30 years, silver has been used up leaving very few stockpiles left on earth, begging analysts to reassess what the true ratio should be. Recently, many people have been learning that silver is actually much less abundant than gold.



In reality, both gold silver spot prices have been increasing. However, the reason why many people believe that silver may be at the advantage is because silver has not come close to it's inflation-adjusted high. And Silver is more affordable for those who do not have a large amount of investment power. AKA, the masses.

Considering gold prices are now well above $1000 per ounce of gold, indeed, Silver at less than $100 per ounce is increasingly the modest man's investment choice.

technical "analysis" is just the grass that sheeple need to move to the stage II pasture.

Quote:

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Originally Posted by Gknowmx

technical "analysis" is just the grass that sheeple need to move to the stage II pasture.

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http://www.youtube.com/watch?v=IY6ic...eature=channel

So are you guys buying silver now? or going to wait for a pullback?

[img width=600 height=450]http://i52.tinypic.com/t7lmqd.jpg[/img]

Hope you didn't miss the ship.

From the Aden sisters

A NOTE ON SILVER

Silver is starting to take off. It jumped up in recent weeks as it benefits from the gold and copper rise.

You may remember that silver outperforms gold when the resource sector and gold are both strong at the same time. This was the case from 2003-2007 and it's starting to happen again (see Chart 2).

Chart 2

Note silver's uptrend and channel since 1990. It actually reached a low in 1990 and it essentially moved sideways during the 1990s while gold fell. Since 2004, silver has been strong, and it doesn't show any sign of losing momentum.

Now that silver has closed clearly above its 2008 high of $20.80, the $25-$28 level is our next target.

http://news.goldseek.com/AdenResearch/1287082011.php

James Turk:


“The metals market was dominated by pervasive fear Eric, when you and I first started to do this series of blog pieces back in the $18 to $19 area on silver. From those levels in the high teens, the market headed higher as many people watched in disbelief. The lengthy 3 year consolidation pattern in silver had simply worn out the bulls.”


“We’re now into the 3rd stage, we are starting to see the panic buying. As I mentioned previously there was going to be a massive short squeeze the likes of which hasn’t been seen since Cornelius Vanderbilt took on Daniel Drew. We are now witnessing the early stages of that short squeeze.”


“I mentioned in our previous interview on October 6th, when we took out 58 on the gold/silver ratio you would see a quick drop to the 50-52 area. What this means is that silver will outperform gold even though gold will be heading higher also. The reason why I expect the ratio to fall so quickly is that I anticipate the short squeeze in silver to be more acute than the short squeeze in gold.”
http://kingworldnews.com/kingworldne...eam_About.html

Quote:

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Originally Posted by Mister_Pennyweather

So are you guys buying silver now? or going to wait for a pullback?

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Anything under 30 dollars now maybe cheap

....

http://www.youtube.com/watch?v=cEqOr...eature=channel

http://news.silverseek.com/SilverSeek/1287239018.php


http://www.goldtrends.net/

Quote:

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Originally Posted by Libertarian_Guard

[img width=600 height=450]http://i52.tinypic.com/t7lmqd.jpg[/img]

Hope you didn't miss the ship.

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That looks more like a roulette wheel ;D

Quote:

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Originally Posted by Serpo

From the Aden sisters

A NOTE ON SILVER

Silver is starting to take off. It jumped up in recent weeks as it benefits from the gold and copper rise.

You may remember that silver outperforms gold when the resource sector and gold are both strong at the same time. This was the case from 2003-2007 and it's starting to happen again (see Chart 2).

Chart 2

Note silver's uptrend and channel since 1990. It actually reached a low in 1990 and it essentially moved sideways during the 1990s while gold fell. Since 2004, silver has been strong, and it doesn't show any sign of losing momentum.

Now that silver has closed clearly above its 2008 high of $20.80, the $25-$28 level is our next target.

http://news.goldseek.com/AdenResearch/1287082011.php

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Oh please, not the Aden sisters again.

On the subject of silver, these two should forever keep their mouths shut, or at least never be paid a cent for their opinions/research.

Back around 2003 I met these two at the NY gold & silver conference. One of them were asked if silver was a good investment. The ditz replied that if silver could hold above $4.50 it remained a buy, but if silver broke below $4.00 they would get out. I was shocked and blown away at such advice. Did they think silver could go much lower than that? Even back around 2000 the case for silver was STRONG, even though the spot price was at fire sale levels.

buyer under 30.00 frn, or until sane monetary policies are initiated.

Silver exports from China, the world’s largest, may drop about 40 percent this year as domestic demand from industry and investors climbs, according to Beijing Antaike Information Development Co.

Shipments may decline from about 3,500 metric tons in 2009, said Feng Juncong, chief analyst at the state-owned Antaike, without providing a specific forecast. Customs data show exports plunged almost 60 percent to 970 tons in the first eight months. Cancellation of an export rebate in 2008 is also hurting shipments, she said.

Reduced exports may bolster prices that are trading near a 30-year high on speculation that governments worldwide will take further steps to stimulate their economies, weakening currencies and increasing demand for assets that are a store of value. China, the third-largest producer after Peru and Mexico, revoked export rebates in August 2008 to curb use of natural resources.

“There is huge demand in China this year and that has affected exports, which were already hurt after the tax rebate was abolished,” said Ng Cheng Thye, head of bullion at Standard Bank Asia. “The demand is coming from all areas, including jewelry, investment and fabrication and this has resulted in a physical market shortage in the Far East.”

The metal for immediate delivery touched $24.92 an ounce on Oct. 14, the highest price since September 1980, and traded at $24.2750 at 2:28 p.m. in Singapore. Industrial applications for silver, including electrical conductors and batteries, represent about half global demand.

Silver Rally

“China may sharply reduce its silver exports this year following the scrapping of the rebate and as domestic demand picked up amid expectations for higher inflation,” Feng said. This year’s 5,100-ton quota is unlikely to be fully used, she said.

Silver has rallied 44 percent this year, outperforming gold and copper. In the short term, prices will be between $20.50 and $25.50, GFMS Chairman Philip Klapwijk said on Oct. 16. “Silver is likely nearing a top now, and that it has more downside in the short term than upside,” he said. “But we remain bullish in the long term.”

China’s silver production, including mined, by-product output and recycled material, grew by an average 14.9 percent every year in the 20 years since 1990 to 10,348 tons in 2009, Feng said. Growth was mainly because of the fast-growing production of lead, zinc and copper, which generates silver as a by-product, Feng said.

Output Drops

The country’s silver output dropped 1.9 percent in the first eight months to 7,445 tons, she said. About 60 percent of China’s silver mined output is in the form of by-product of base metals, according to Antaike estimates.

An expected drop in lead and zinc concentrate supplies will affect domestic smelter production, weighing on China’s silver output growth, she added.

“There are Chinese investors now hoarding silver, along with other resources, amid anticipation of higher inflation,” Feng said. “China is short of resources so these investors believe the metals will be more valuable in the future.”

http://www.bloomberg.com/news/2010-1...this-year.html

Quote:

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Originally Posted by RJB

Quote:

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Originally Posted by Libertarian_Guard

[img width=600 height=450]http://i52.tinypic.com/t7lmqd.jpg[/img]

Hope you didn't miss the ship.

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That looks more like a roulette wheel ;D

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Fitting perhaps for the silver market ;D

Quote:

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Originally Posted by Serpo

http://www.youtube.com/watch?v=cEqOr...eature=channel

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He demonstrated the progress to 24. But he did not answer the "now what".

Is there a part two to this?

Now what .......very good question......... ;D

There is this though .......

http://www.youtube.com/watch?v=A9Lhv...eature=channel

Rick Rule - Physical Supply Shortages in Silver


With gold and silver correcting, King World News interviewed one of the great minds in the resource world, Rick Rule. Rick is one of the most level-headed individuals in the business, so what he said about silver was shocking, “We are seeing huge inflows into physical silver, and that may create a shortfall of available physical silver.” He also mentioned, “Silver strip and silver coin demand continues very, very strong as well.”

October 22, 2010
KWN Blog
Rick Rule continues:


“I just think it was overbought, the trade was getting very crowded. There were a lot of momentum players and they are not investors. So they jumped ship at the first sign of weakness.


They were attracted to the strength in gold, and as soon as the tape turned weak they were gone. I would expect further weakness in both gold and silver. I’m still very constructive longer-term on both, but the silver market may not decline like the gold market.


You hear from dealers about delays in shipping product. I would assume given the extraordinary amount of coins being minted and the demand, that we may be close to running into physical supply shortages as a consequence of extraordinary demand for minted products.”


When asked about the mining shares specifically Rick commented, “I think you are going to see in the next two years a lot of takeovers, despite the current weakness in gold bullion and gold equities. Majors are now enjoying excellent cash flows and are having difficulty replacing ounces produced.”


That is what we are looking at going forward, tremendous consolidation in the mining sector PAC-MAN style. We can also count on longer-term strength in gold and in particular silver, with potential shortages developing in silver.


Eric King

KingWorldNews.com

http://kingworldnews.com/kingworldne...in_Silver.html

first time have really seen it on main stream type media. aol front page headline... oct 31
silver investment of the century

Ted Butler speaks on the end of silver manipulation.....

http://www.chrismartenson.com/blog/c...pulation/48215

Max Has a Plan: To Crash JP Morgan


http://www.youtube.com/watch?v=hC3ew...layer_embedded

Interview With Theodore Butler

By: James Cook & Theodore Butler



Cook: For the past ten years you have been claiming that silver was the best thing people could own. How do you feel now with silver around $25 an ounce?
Butler: I have a sense of relief that I could not possibly have hurt anyone who followed my advice. I also feel intellectually vindicated about the way things are turning out. Lastly, I feel amazed how good silver still looks for further gains.
Cook: How high could it climb?
Butler: Real high, but by now you should know I shy away from specific price targets.
Cook: A lot has been going on with silver lately. Most of the things you’ve written about are starting to happen. What do you think about the recent spate of lawsuits against JPMorgan and HSBC?
Butler: It’s a big deal. The main thing is not the outcome of this case, but rather the fact that they were filed.
Cook: How many lawsuits were filed?
Butler: The latest tally is 25, I’ve been told.
Cook: Why do you think these lawsuits are important?
Butler: It is another confirmation of the growing recognition that silver has been manipulated in price.
Cook: They must be reading your newsletter because everything claimed in the first lawsuit originated with you. Do you agree?
Butler: Yes, I know that for a fact.
Cook: The basis of the lawsuit is that these big banks are short an inordinate amount of silver. How much to be exact?
Butler: It varies over time, but at the time referenced in the lawsuit, JPMorgan, either alone or with another U.S. bank, held short on the COMEX the equivalent of 25% of world annual mine production
Cook: How many ounces is that?
Butler: In most recent CFTC data, it is 150 million ounces, but within the past year it has been over 200 million ounces
Cook: You’re claiming that’s manipulative?
Butler: Absolutely. It would be impossible for such a concentrated short position not to be manipulative. It was this observation that led to the current CFTC silver investigation which, in turn, led to this lawsuit.
Cook: How many ounces are there held short in total?
Butler: The total net short position in COMEX futures is around 550 million ounces, but if you include everything, especially unbacked bank certificates and pool accounts, it grows to 2 or 3 billion ounces.
Cook: Who are these short sellers outside of the big one or two?
Butler: On the COMEX, there are about 8 commercial entities short over 300 million ounces, including the biggest.
Cook: They got squeezed pretty good when silver hit $29, didn’t they?
Butler: You bet.
Cook: How big have the losses been for the shorts?
Butler: In silver, the big 8 were out over $3 billion at the top, and more than $5 billion if you include all the shorts.
Cook: You pointed out that there had to be a lot of margin calls, when gold is included, what’s the total?
Butler: All in all, almost $15 billion.
Cook: They actually had to cough up $15 billion?
Butler: Absolutely. That’s a key component of the clearinghouse system.
Cook: Did anybody fail to make their margin calls?
Butler: It’s hard to tell.
Cook: I thought the price rise to $29 might have been because some folks couldn’t make margin calls and the brokerage firm bought back their position. No?
Butler: I’m certain there was a lot of that; they liquidate the contracts to satisfy the margin calls.
Cook: They don’t mess around do they?
Butler: This is basic commodity stuff. As a customer, if you don’t meet your margin calls your broker will liquidate your position. Otherwise the brokerage firm must eat the customer’s loss. Brokerage firms don’t allow customers a free ride. If a brokerage firm doesn’t meet its overall margin requirements to the clearinghouse, that’s a default, a real no-no.
Cook: It’s hard for me to believe that JPMorgan is sitting flatfooted waiting for the axe to fall. Don’t you think they’ve dug up a lot of silver to help reduce this short position?
Butler: I’m sure they’ve come up with as much silver as possible, but there are physical constraints to that. Their problem is not a money problem, but a physical material problem.
Cook: I see they raised margin requirements on silver. Why only silver?
Butler: Silver had moved the most and the margins should have been raised. The scandal was when they raised the margins. This is an issue of timing. They waited until prices made a downside reversal and then raised silver margins.
Cook: Is this fishy?
Butler: This is an example of why I refer to the CME Group (COMEX) as operating a criminal enterprise, as I’ve seen them pull this dirty trick numerous times in the past. The exchange times the margin increase so that it comes when it is least likely to hurt, and maybe help, its big constituent member short holders. That time is always best when the price makes a sudden reversal down after a big climb. This way, the margin increase actually hurts the longs and benefits the shorts. The reversal to the downside swings the financial tide against the longs temporarily.
Cook: What should they have done?
Butler: What they should have done is raised margins on the way up, but that would have hurt the shorts, something the exchange would never do. By timing the margin increase just after a price reversal to the downside, the exchange helps the shorts.
Cook: Are they above the law?
Butler: What’s particularly infuriating and illegal is that the exchange is designated under commodity law as a self-regulatory organization (SRO). That means the CME Group is supposed to do things on a fair and even-handed basis, not cater to the selfish interests of its most important members. The phrase that comes to mind when describing how the CME fulfills its regulatory obligations is letting the fox guard the henhouse.
Cook: How in the world did this come about?
Butler: The CFTC and Congress made a very big mistake when they turned over so much regulation to the exchanges years ago. There is a conflict of interest in what the exchange does in its regulatory role. That’s why the COMEX is fighting the CFTC tooth and nail over position limits and every other issue that may infringe on its own interests.
Cook: The Commodity Future Trading Commission has ruled that within 3 months or so they will put limits on how much one entity can be long or short. Will this break up the concentrated short position?
Butler: If they stick to the timeline dictated by the new law and if they impose legitimate limits and throw out the phony exemptions to those limits.
Cook: Won’t that set silver “free at last?”
Butler: Yes, “thank God Almighty.”
Cook: Will the COMEX back down?
Butler: I don’t think so. They know this is the one issue that can blow the lid off silver.
Cook: Silver could turn into a runaway train. Why don’t these short sellers get out of the way and cover now?
Butler: They desperately want to, but it’s easier said than done because their position is so large that they are trapped. Just covering the limited amount of shorts to date has already had a profound impact on price. Why do you think we’ve risen so much in the past few months?
Cook: One of the commissioners at the CFTC has made a number of statements criticizing the shorts and the Commodity Exchange itself. Sounds like the senior regulators have embraced your views. Do you agree?
Butler: It’s hard to reach any other conclusion.
Cook: If that’s true then position limits are inevitable would you say?
Butler: The new law has mandated position limits, so unless the law is repealed I would say they are inevitable. But more than that, it’s important to remember that position limits are of specific relevance for silver more than any other market.
Cook: What do you mean?
Butler: COMEX silver is the only market which must have position limits radically reduced from the current accountability level. In all other commodities, including gold, the level of position limits is not so important because the short position is not that large. In silver, it’s the core issue.
Cook: What kind of position limit level do we need to see in silver?
Butler: If we don’t see a new level of close to 1500 contracts, instead of the current 6000 contract level, then this market is more crooked than I have been alleging. And I would think those in the public who follow this issue closely will be outraged and demand an explanation from the regulators. I know I will be.
Cook: Is it safe to say that silver is a buy until the short position is covered?
Butler: At least until the concentrated short position is reduced.
Cook: The volume on the SLV, the exchange traded fund, went ballistic recently. How many shares were trading before this jump and what did it go to?
Butler: There was an average daily volume of close to 15 million shares a day and it jumped to ten times that on a recent trading day.
Cook: How much of that was day trading?
Butler: Close to 99%, same as in every other market.
Cook: OK, but how much silver do you think was purchased on balance and must be delivered to the SLV?
Butler: I had been guessing close to 20 million ounces, but much to BlackRock’s credit (they’re the new sponsor), the silver is being brought in much more quickly than when Barclays was the sponsor.
Cook: Where is the silver coming from?
Butler: No one knows for sure, but the hallmarks on many of the new bars being deposited were from Russia and China. I think that’s good, because as those two countries wake up to the silver manipulation, they should be unlikely to continue supplying material at artificially depressed prices.
Cook: I heard a big delivery came in to the SLV last week. True?
Butler: Yes, there was an extraordinary deposit of 11.3 million ounces into the SLV on Wednesday, November 10, the largest one day deposit in the ETF since 2006. This brings the deposits into the Trust to over 18 million ounces in little more than a week and a half, to a new record of over 344 million ounces.
Cook: Are you underestimating the amount of silver available? Seems like there is always more silver.
Butler: While it is certainly possible that I have underestimated the amount of silver bullion in the world, that is not yet evident to date. I have always estimated about one billion ounces and we haven’t grown above that amount yet. What has happened is that more silver is being transferred from unreported inventories to reported inventories. This does create the illusion that the supply of silver is endless. It is not.
Cook: How much is left in unreported inventories that can come into the market?
Butler: Unless you have Superman’s x-ray vision and can see all the world’s vaults simultaneously, there is no way to know how much is left in unreported inventories. And I guarantee that you will make yourself crazy if you persist in trying to figure out the amount remaining.
Cook: Are you still sane?
Butler: No one comes with a butterfly net.
Cook: How much is known or in the reported category?
Butler: Since 2006, more than 550 million ounces have been transferred from unreported silver into reported world inventories, including the SLV and all other similar programs. Currently there are more than 716 million ounces in total world visible silver bullion inventories. That’s a very big chunk of my long-time estimate of one billion ounces in total world inventories. The way to look at it is that there are 550 million ounces less that can be transferred in the future. The long-term rise in price would seem to confirm my thinking.
Cook: Could the big shorts be buying the SLV to cover their short position?
Butler: Sure, but not to excessive amounts, as that would require lying to the SEC on ownership disclosure regulations. That’s not likely.
Cook: How much silver do you think JPMorgan and one other bank are short?
Butler: As of this moment, I’m guessing JPM may now be below 25,000 contracts. That’s 125 million ounces. But we won’t know for sure until more CFTC data are released.
Cook: How about the big eight shorts?
Butler: My guess is they are down to 56,000 contracts. That’s 280 million ounces.
Cook: How about all the shorts combined?
Butler: In COMEX futures total, I’d guess a bit under 500 million.
Cook: How does that compare with other commodities?
Butler: Still way off the charts when comparing paper contracts to real world production and inventories.
Cook: Do you see this leading to a price explosion in silver soon?
Butler: It’s one of several things that will lead to an explosion.
Cook: How does the silver short position compare to gold?
Butler: The silver short position is much bigger than gold in every measurement, especially compared to world inventories. Silver’s relative short position is more than 100 times larger than gold’s.
Cook: Do you think silver will outperform gold?
Butler: Yes. Silver has yet to leave gold in the dust, although it has fully matched or exceeded gold’s price performance. That is actually an advantage to those gold investors who have yet to make the switch into silver. It’s not too late.
Cook: Are you suggesting a switch now?
Butler: Yes. The facts suggest silver will outperform gold in the future, the logical investment action would be to convert gold into silver. Not because gold is likely to go down necessarily, but because silver is likely to offer better investment bang for the same buck.

http://news.silverseek.com/SilverSeek/1290625106.php

Cook: Have people begun to switch?
Butler: There has been a noticeable shift to physical silver investment demand, perhaps from gold investors, although I still believe it’s in the early stages. Additionally, U.S. Mint sales of Silver Eagles are particularly strong relative to Gold Eagle sales, further confirming what may be a growing investor preference for silver over gold. Given how little silver exists compared to gold, if this trend continues, the influence on silver prices should be profound.
Cook: What’s the gold-silver ratio now?
Butler: The gold/silver ratio narrowed to almost 52. This is the best relative reading for silver since the summer of 2008, just before the price of silver was manipulated lower by JPMorgan and other commercial crooks on the COMEX.
Cook: You’ve got big cahunas calling JPMorgan a crook over and over again. Ever hear from their lawyers?
Butler: Not a peep and I send every article I write in which I mention JPMorgan to Jamie Dimon, CEO of JPMorgan and to the top regulatory officials at the CME, in addition to the CFTC.
Cook: I wonder why they haven’t sued you. If someone was calling my company crooked I think I would at least have my lawyer send them a letter.
Butler: Look, I’m not looking to get sued, but I don’t know of any other way to flush these weasels out. I know that JPM and the CME are operating as a criminal enterprise when it comes to silver.
Cook: What about the COMEX? You’ve been calling them sleazy for years. Have you ever received an answer to the numerous letters you’ve sent them?
Butler: Up until a few years ago, they would respond from time to time, but more recently they’ve been hiding behind the CFTC’s skirt and letting the Commission do their dirty work.
Cook: Yes, but now I see the COMEX has been in bitter disagreement with the CFTC on position limits. Why are they so opposed?
Butler: It may indicate that the CFTC, under Gary Gensler, is sick of the exchange using the CFTC. The reason the CME is so opposed to position limits is because of silver, not any other commodity. Don’t be fooled into thinking this isn’t a silver-specific issue.
Cook: Why only silver?
Butler: This is an important point. There is no position limit problem in any other commodity apart from silver. Not in oil, or grains or gold. Just silver. It’s the dirty secret that’s about to be revealed.
Cook: How much money have the banks made over the years with this big short position in silver?
Butler: Cumulatively, it could be billions of dollars.
Cook: This gravy train has suppressed the price, right?
Butler: Yes. The concentrated short position makes it impossible for the price not to have been suppressed.
Cook: If the market gets free of the concentrated short position it should revert to the true market price. Any idea what that is?
Butler: I’ll let the market tell us, but much higher than we’ve been in silver.
Cook: Do you think it will overshoot?
Butler: I think it’s impossible for it not to overshoot.
Cook: You think that Chairman Gensler at the CFTC is a straight shooter, right?
Butler: I think he walks on water. I may be dead wrong, but I’m a pretty good judge of human character.
Cook: Will he cure the silver mess?
Butler: If he follows the law and what he knows to be right.
Cook: Is he more competent than prior chiefs?
Butler: Gensler is the smartest guy in any room. It would be an insult to compare him to any former chairman or chairwoman.
Cook: Do you still claim the CFTC has looked the other way?
Butler: They have in the past, but I sense that is changing.
Cook: I think they hate your guts. Nobody’s been in their face with solid accusations like you have. Are they still hostile?
Butler: Hard to tell. I’m not concerned with past feelings. I don’t see why they would still be hostile; I offer constructive solutions where nobody else does. If they are hostile to anyone it should be towards those responsible for the manipulation, like JPMorgan and CME.
Cook: You’ve been the pioneer of virtually every new revelation about silver for over a decade. Just about everything that you predicted has come to pass. You’ve been a great conceptual thinker on silver and the premier whistleblower. Do you think the CFTC will ever acknowledge this and give you the award you deserve?
Butler: I sure hope so, but you’d have to ask them.
Cook: Everybody and his brother is writing about silver now. Some of it is amateurish and the good stuff originated with you. However, most of these articles never give credit to you. Do you agree that this is dishonorable?
Butler: Yes.
Cook: These organizations and individuals are trying to elbow themselves into position to take credit for your work. I’ve never seen anything like it, have you?
Butler: No.
Cook: What do you make of it?
Butler: Those that plagiarize are stealing my stuff and then lying by pretending they thought up my ideas. I’d avoid such people with a ten-foot pole.
Cook: They need to at least mention you if you are the source of their information. Right?
Butler: I think so.
Cook: Let’s change directions. What about COMEX silver inventories? What’s going on with them?
Butler: Recently, COMEX warehouse inventories dropped to near four year lows, at just under 108 million ounces. This drop, importantly, was accompanied with great turnover (in and out movements); highly suggestive of tightness and that the inventory is held in strong hands.
Cook: What’s the historical perspective on this?
Butler: COMEX silver inventories are down 60% from the 280 million ounce peak in the mid-1990’s. In contrast, COMEX gold inventories are at a record high of over 11.3 million ounces, the highest in the 45 year history of the COMEX. This is an apples to apples comparison, as the COMEX is the dominant market for both gold and silver trading.
Cook: Are we in a shortage?
Butler: I think we are in the early stages of a silver shortage that is bound to grow more severe.
Cook: Won’t this cause a surge in mining production?
Butler: Sure, eventually. But any mining increase in response to higher silver prices will take many years to hit the market. It’s not like flipping a light switch.
Cook: You’ve mentioned three things that will drive up the price of silver. It looks like one of them, investment demand, is kicking in. Will it get bigger than this?
Butler: I think that’s a certainty, as more people are waking up to the silver story.
Cook: Your second bullish factor is industrial demand. Do you still expect industrial users to panic because of a shortage?
Butler: Ever see what’s left in a supermarket after a hurricane warning?
Cook: Where does the price of silver burn itself out if a buying panic occurs?
Butler: Use your imagination. Then double it.
Cook: Your final and biggest bullish factor is the end of the concentrated short position. What will this do?
Butler: Terminating the concentrated short position will end the decades-old manipulation itself. That will bring about an honest and free market.
Cook: How will they cover the short position?
Butler: By buying back the position, delivering against it or by defaulting on it.
Cook: What about going forward? What will no big short sellers mean for the future?
Butler: It will be a different world price-wise.
Cook: According to the CFTC, the deadline for position limits is just over 2 months. Is silver a ticking time bomb until then?
Butler: Silver is a ticking time bomb for many reasons and the coming open debate on position limits is one of them.
Cook: The shorts are going to have to buy back futures aren’t they?
Butler: At some point, the shorts buying back is the post plausible outcome, as the only other choices are to deliver metal or default.
Cook: How many more shorts other than JPMorgan will have to cover?
Butler: My guess is somewhere around 15 to 20 thousand, a 75 to 100 million ounce equivalent.
Cook: Am I missing something or is this a lock?
Butler: If you mean much higher prices, then it looks like a lock to me.
Cook: This is so compelling I have to ask why it hasn’t been discounted in the silver price? How come it’s not $100 already?
Butler: I think it’s a combination of a lack of homework and the initial disbelief of the whole silver premise which prevents an objective investigation.
Cook: I remember when we first met ten years ago. You were telling me silver was the best thing on earth to own. Meanwhile, a well known investment service was sending out mailings suggesting people short silver at $4.00. They said silver was more plentiful than cockroaches. I wonder what happened to them?
Butler: I hope they covered their shorts quickly.
Cook: I bring this up because a lot of people have disagreed or argued with you along the way. They’ve all been proven wrong. However, to this day there are naysayers. What do you say to a guy like Jeffrey Christian at CPM who says there’s no way that JPMorgan is short that much silver?
Butler: Generally it’s good that disagreement exists so that market participants can hear both sides of the silver story.
Cook: What about Jon Nadler who says if Ted Butler was right the price would already have gone up?
Butler: The price has gone up and will continue to do so, in my opinion.
Cook: Why exactly has silver made this big recent move?
Butler: Primarily because of a lack of additional commercial short selling on the COMEX. It was the absence of additional commercial short selling, particularly by the big concentrated shorts, like JPMorgan, that allowed the price to climb as much as it did. On the rally it became obvious that the shorts were experiencing great financial stress, being forced to deposit many billions of dollars in margin calls. This should be taken as further proof of the manipulative role that the big shorts exerted on the price of silver.
Cook: Why did it get whacked?
Butler: The problem for the big shorts was that not only were they experiencing financial stress due to the rising price, they were unable to reduce their short position. That circumstance threatened to result in financial ruin if permitted to continue. Faced with financial ruin and the growing awareness by many of the predicament the big shorts were in, they resorted to their only alternative to that ruin – create a large and dramatic sell-off. That was what we began to see on Tuesday, with the CME’s unethically timed silver margin increase and the collusive vicious sell-off on Friday, under the cover of general commodity weakness.
Cook: What’s next?
Butler: No one knows for sure. It comes down to how much additional long liquidation the big shorts can engineer. We are still above all the critical moving averages, so there does exist the possibility we could go lower to get the technical funds completely flushed out. For sure, if we do go lower, it will be because JPMorgan and the other COMEX crooks are successful in tricking the technical funds into forced selling and not for any other reason. But there has been significant liquidation already, so it is just as possible it could be done or nearly so. Certainly there is nothing in the real world of silver that would account for further selling.
Cook: What’s the status of the formal investigation of silver by the CFTC, Enforcement Division?
Butler: It has yet to be concluded. A new director was just named which should help resolve the investigation that was initiated because of my revelations in 2008 and which Commissioner Bart Chilton publicly referenced recently. No one is more anxious than me to see what the investigation concludes.
Cook: You’ve made a big thing about pool accounts at brokerage firms, international banks and private mints. What can go wrong?
Butler: Everything. It is not hard to imagine investors ending up with a total loss because the metal may not exist to back these programs. If someone is claiming to store 1000-ounce bars for you and you don’t have the serial numbers for the exact bars you paid for, you should run, not walk, to a storage program that allows you to get the specific bars. I’d be especially wary of metal purported to be stored out of the country.
Cook: Are you recommending people switch from gold to silver?
Butler: Most definitely. That still appears to be a switch, which will be greatly rewarding. It amazes me how so many commentaries predict that silver will outperform gold, yet won’t come out and say that you should sell gold in order to buy silver. It makes no sense not to sell gold in order to buy silver if you are convinced silver will outperform gold. I think many feel it’s heresy to sell gold for any reason. But if your goal is to get the best return on your investment dollar in the future, which it should be, switch to silver from gold.
Cook: The bottom line is that people who followed your advice have made a lot of money. What advice would you give to our clients now?
Butler: Well, the days of 4 or 5, 7 to 12 dollar silver are over and that’s too bad for new buyers. At least we spared no effort in urging folks to buy all along. I think in the future we will look back at current prices with much the same result, namely, large profits for those who bought. Although the price is much higher now than it was then and conditions have changed, in many ways today’s new conditions are better.

Silver money for China

By: Hugo Salinas Price


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We have been proposing the monetization of a silver coin in Mexico since 2001. According to our proposal a one-ounce coin of pure silver, with no engraved value, would be given a monetary value by the Mexican Central Bank. This coin would exist and circulate as money, in parallel with the paper money system of Mexico.

The monetary value would be superior to the bullion value of the silver ounce by about 15%. This margin would allow a profit, called “seigniorage”, for the Central Bank. Since the coin would not have an engraved value, rises in the price of silver (which would tend to eliminate the seigniorage of the Central Bank) would be met with new, higher, Central Bank quotes for the monetary value of the coin.

The rises in the value of silver in the silver markets of the world would no longer cause the disappearance of the monetized silver ounce. As soon as a rise in the price of silver would begin to affect the seigniorage of the Central Bank, it would produce a new and higher quote.

In order for the silver coin to become money and cease to be a commodity, the last quote of the Central Bank would have to remain stable and not diminish if and when the price of silver were to fall, which of course it does from time to time. Granted such immunity from falls in the price of silver, the coin would become legal tender money and could be used for any commercial transaction.

Now we read that China is having problems with inflation of its money supply. We think that if China were to monetize a silver coin, its Central Bank would have an effective instrument to assist in dealing with inflation.

China used silver exclusively as money for many centuries and restoring it to circulation in China would seem appropriate for China, as it aspires to recover its former glory as the richest country in the world.

The hypothetical case of a monetized silver coin in China.

The first thing that strikes us as we consider a silver coin to be used as money in China is that given its enormous population a one-ounce coin would appear to be much too large.

Let us consider a smaller coin. In the case of silver coins with engraved values we have seen the case of Mexico, whose Central Bank attempted to retain a silver peso (with an engraved value) in circulation all the way up to 1967. The attempt required removing all previously minted and engraved silver coins from circulation and replacing them with new One Peso coins containing less silver.

What we are suggesting is radically different. Instead of replacing a One Peso coin with coins with progressively less silver content, we are simply, in the special case of China, “cutting up” a one ounce pure silver coin into smaller pieces.

For the purpose of silver in circulation in China, we suggest a small coin, about the size of an American dime, with a pure silver content of 1/10 oz., alloyed with 10% copper to give a fineness of .900. In metric terms, the coin would have a gross weight of 3.45 grams and a pure silver content of 3.11 grams.

The determination of the monetary value of the 1/10 oz coin in Yuan

Today, November 24, 2010, the exchange rate for the Chinese Yuan is 6.6489 Yuan per dollar, and silver is traded at $27.59 oz.

At these values, the value of silver bullion per ounce, in Yuan, is 6.6489 x $27.59 = 183.44 Yuan per ounce.

The value of silver in a 1/10 coin would be 183.44 / 10 = 18.34 Yuan.

Add to 18.34 Yuan, the cost of minting, which we shall estimate at 10 cents per coin = .67 Yuan for minting costs. Then 18.34 + .67 = 19.01 Yuan.

19.01 Yuan x 1.1 to provide a seigniorage profit to the Chinese Central Bank = 20.91 Yuan.

We round up the Yuan figure of 20.91, to 25 Yuan as the initial official quoted legal tender value of the small 1/10 oz coin, using multiples of 5 for steps in future increases of legal tender monetary value as the price of silver continues to rise. This facilitates public use of the coin.

The Chinese population will snap up these coins in enormous quantities. As they do so, they will initially be handing over 25 Yuan for each coin purchased.

One tonne of silver will serve to manufacture 321,510 coins. One thousand tonnes of silver will allow for the manufacture of 321,510,000 coins. For the population of China, this will be merely the first appetizer. The population of China will gobble up many thousands of tonnes of silver for its savings.

Each 1,000 tonnes of silver that is monetized, at 25 Yuan per coin, will initially withdraw 8.04 billion Yuan from circulation.

The silver coins that go into circulation will be money, but will hardly be used for purchases. It will be difficult to find these coins, as they will all be treasured up by the Chinese population. Their velocity of circulation will be close to zero and thus they will have no inflationary effect upon the economy. Paper Yuan are withdrawn and replaced with silver money which goes into savings; this is a correct way to fight inflation.

Saving these coins will amount to voluntary austerity for the Chinese. Saving is the postponement of consumption. Voluntary austerity is always more effective and sounder from an economic point of view than the forced savings beloved of Statists, who have dictated taxes and scarcity for consumer goods so that the Statists can build factories.

The monetization of a silver coin will be a free-market decision that prompts people to save, spontaneously, of their own accord, and which does not require raising interest rates to draw the people’s money out of the economy into savings.

When the Chinese begin to withdraw silver from the world markets, in order to supply the vast appetite for silver savings of the Chinese, the price of silver will climb to unsuspected heights. We can easily visualize a price four times higher than the present high price: $100 Dollars an ounce.

At 100 Yuan per 1/10 oz. – the initial price calculated above, times four – the Chinese Central Bank would be withdrawing about 32 billion Yuan from circulation with each 1,000 tonnes of monetized silver coin placed in the hands of the Chinese people.

Silver is sold on the world markets, for dollars. At $100 dollars/oz., the Central Bank would be able to transform part of its vast dollar and euro reserves into silver at $3,125,100 dollars per tonne. One thousand tonnes would require $3.1 billion dollars. A drop in the bucket as far as Chinese C.B. reserves are concerned, but every little bit helps, considering that Chinese reserves are not actually worth a Chinese firecracker and that sooner or later, China will have to take a gigantic bath when this fact is recognized.

What about the impact of $100 silver on the price of gold?

We think that the ratios of the past and of the present will disappear. Gold will not necessarily rise four times in price, to retain the same ratio with silver, at its new price of $100 dollars / oz. The silver ratio to gold has been as high as 100 to 1, and lately has been around 50 to 1. The silver ratio to gold can continue to fall towards the old ratio of 16 to 1. If China persists in purchasing world silver, the price of silver might far exceed $100 dollars per ounce and become increasingly effective in stemming inflation as higher prices for the silver coin draw off greater amounts of paper money from the economy.

Quite apart from the effect of sopping up quantities of Yuan at present in circulation in China, monetizing the silver coin for the use of Chinese in their savings would have a salutary effect upon society in China.

Silver as money gets masses of people to think, not of the present, but of the future, and to focus on their long-term objectives as they accumulate savings in real money. It has a binding effect upon society.

Tranquility, or peace of mind, is one of the great Confucian philosophical values of the Chinese and solid savings in real money are a great tranquilizer. It seems to us, that more tranquility in a frenzied Chinese society would be of benefit to China.

The world is seeking a new paradigm in money. The Keynesians and inflationists and Statists have had their day, and they have fudged it. The world’s monetary system is in the initial stage of breakdown. Confidence in fiat money is evaporating. The trend is in place and there is nothing to stop it. The time for real money has arrived, and China can lead the way by monetizing silver into small coins which can be used as money.

Perhaps silver will open the way to a further, more far-reaching reform for gold in the International Monetary Process; for what the world has at present is not a System, but only a Process – of meltdown.

****http://news.silverseek.com/SilverSeek/1290899199.php

These people seem positive....

Time to sell some gold and buy a heap of silver.

SILVER

Analysts from GFMS and elsewhere are forecasting that "poor man's gold" silver will reach over $30/oz in 2011. Given the favourable supply and demand equation and the significant increase in investment demand this seems likely and may happen early in 2011.

Silver is currently trading $26.67/oz, €20.15/oz and £17.00/oz.

Silver, unlike gold, remains well below its nominal high of just over $50/oz in 1980. Hedge funds and investors with a knowledge of the technicals are targeting this level and will likely continue buying and accumulating until the price level has been reached. Then, many may sell, take profits and/or reduce allocations.

Silver is in effect playing catch up with gold. It remains undervalued versus gold on a historical basis. The gold/silver ratio remains favourable to silver at 50.25 ($1,367/oz divided by $27.20/oz) and the ratio is falling.


Gold to Silver Ratio - 40 Years.

Silver could be the surprise outperformer in 2011 as it was in 2010. Silver's industrial uses should mean that the gold/silver ratio will likely gradually regress to the average in the last 100 hundred years - around 45:1. If the tiny silver market was to see real funds enter it, the ratio could return closer to the historical average of 15:1. This occurred as recently as in 1968 and in 1980 and this time around could result in silver surpassing its 1980 nominal high at $50/oz.

Silver reached $50/oz briefly in 1980 when just one billionaire family, the Hunts (one of a handful of billionaires in the 1970s) attempted to corner the silver market causing the price to surge (in conjunction with many investors seeking to hedge themselves from the stagflation of the 1970s). Today there are hundreds of billionaires and hedge funds throughout the world – some of whom may be tempted to squeeze the large concentrated short positions of JP Morgan in particular. JP Morgan is now facing lawsuits and being sued for manipulation and suppression of silver prices.

Silver is priced at some $27.20/oz today. The average nominal price of silver in 1979 and 1980 was $21.80/oz and $16.39/oz respectively. In today's dollars and adjusted for inflation (government CPI) that would equate to an inflation adjusted average price of some $60/oz and $44/oz. It is for this reason that we believe silver will be valued at over $50/oz in the next 2 to 3 years.

Silver remains undervalued vis-a-vis gold and remains a contrarian play with little or no media coverage and few retail investors having any allocation to silver whatsoever. A close above $28.50/oz could see silver quickly rise to $30 per ounce

http://news.goldseek.com/GoldSeek/1290780000.php

With gold trading near $1,370 and silver breaking back above $27, King World News interviewed Sean Boyd, Chairman and CEO of Agnico Eagle to get his thoughts on where gold and silver are headed. When asked about gold specifically Sean stated, “I think having that perspective of being around the industry for a long time, if you go back ten years ago and someone had said gold was going to $2,000 then you would have thought well, if that’s the case then the world is going to be in a total mess. Well, we can see gold at $2,000 without the world being in a total mess. So I think this argument that we have to have disaster before gold is going to go up is wrong.”

“We get caught up in these short-term fluctuations, and we tend to lose track of the big picture. I was just reading our 1999 annual report where we were making the case for gold when everyone had written it off and people were calling it the barbarous relic. So I just think we are gradually moving away from the concept that it was worthless, to people all of the sudden coming to the conclusion that it has a role. That is just starting in my view.


In the short-term gold has acted reasonably well. In the the next 6 months we should push our way up to $1,500, and gold will likely go through $1,500. But this is just an ongoing trend as we move higher and people start to realize the importance of gold as a currency.


We are seeing some US dollar strength on the back of some euro weakness based on the sovereign debt issues, and when you come full circle this is good for gold.


I can see us gradually moving in the next 12 to 18 months up into the high teens and gold will probably test $2,000 at some point. We want gold to go up gradually, we don’t want it to be in the headlines every day. Pullbacks are always good in the longer-term trend. So I can see if we look out into 2012, gold in that $2,000 range.”


Regarding silver Sean stated, “Silver on a percentage basis is going to do better than gold over the next year or two. Gold will attract money into the precious metals space and silver will be a big beneficiary of that. And if gold is at $2,000, then silver could be $60 to $75.”


When asked about consolidation in the mining sector Boyd responded, “Consolidation will continue because there is a lack of growth in certain quarters, and it gets to the point in some instances where it’s cheaper to buy than to hope that exploration is going to solve your growth challenges. So there will be more consolidation but I think it is going to be selective.


I am not sure of the exact number, but let’s say there are only 20 companies that can actually build mines in the industry. That means there are only 20 potential buyers, and there’s maybe thousands of potential projects out there, so there is a limit to what can get done.


So you have to be in stories with good solid deposits, good management and I think you will be ok there because eventually they will get taken out in this environment.”


Sean Boyd is one of the true veterans of the mining industry, and he has helped Agnico Eagle to achieve a $13 billion market cap. As Sean says, higher prices are on the way as well as more consolidation in the gold and silver space.

http://kingworldnews.com/kingworldne..._to_%2475.html

Quote:

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Originally Posted by Hugginator

Thanks Serpo, couldn't thank every post. Some good info.

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The good news never stops when it comes to silver

http://i56.tinypic.com/90n9qa.jpg

Quote:

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Originally Posted by Libertarian_Guard

http://i56.tinypic.com/90n9qa.jpg

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I'm not absolutely positive but that may just be borderline dick stabbing material, better hope Mamboni gets laid tonight. :P

http://news.silverseek.com/SilverSeek/1291232919.php