Showing posts with label Silver Investment. Show all posts
Showing posts with label Silver Investment. Show all posts
Friday, October 19, 2012
Silver Prices Headed to the Moon?
While there's no doubt we're in the midst of a bull silver market, some comments by silver analyst and bull Israel Freidman on the web site of Ted Butler goes beyond reality (I think), and enters into the realm of fantasy, as he makes the assertion the combination of industrial use and investment value in relationship to silver could push the price of silver beyond gold some day.
Making assertions like that are basically useless, as even if that were to happen, it would take so many years that the idea of someone having made it would have long been forgotten, as will the person making it.
Having said that, the underlying premises for why silver prices will rise are worth looking at, as they are surely part of the silver price picture, and need to be taken into account by silver investors.
It's worth pursuing the matter because a number of commodity experts believe that silver may be the best performing asset class over the next decade.
The major argument for silver prices rising in the view of Freidman, which in general is true, is the growing demand by investors, along with the increased number of industrial uses for silver will end up producing a supply shortage in the not too distant future, which is the impetus behind his belief the price of silver could skyrocket to enormous heights, and potentially surpass gold.
Overall, the problem with that Utopian scenario is once the price of silver were to reach those dizzying price heights, and even before, businesses would seek alternative raw materials or methods to produce products requiring silver as a major component.
That would also be the case for investors, who are now loading up on silver because of it being an effective alternative to gold. Once the prices were to rise too high, the falling demand would bring them closer to reality.
Even so, we should see the ratio between gold and silver improve over what it's been, which means silver prices should rise higher in relationship to gold over the next ten years or so.
As for demand outpacing supply, in the short term that's highly doubtful, and there may even be an abundance of silver in that regard. Over the years though, it could definitely be a possibility that silver supply could come under pressure, and that could move the price of silver up to previously unheard of levels, but not to anywhere near where gold would be, unless the price of gold were to plummet to levels it stood at a little over a decade ago.
The other important factor on the investment side is how long central banks around the world continue to attempt to stimulate their respective economies. If that continues over time, that would result in significant inflation, and in investors moving their money into gold and silver to protect their assets.
This will be especially true as currencies lose their buying power.
At this time investors are still looking to the U.S. dollar as a safe haven, which has helped keep the dollar at levels far above its actual value. That's because other currencies are performing at similar levels, because central bank practices of competing currencies are kept them from being at any significant advantage against the U.S. dollar.
That will change, but that's why some investors continue to be long the U.S. dollar, as they know in this tumultuous economic climate that people and institutions will continue to pour money into the dollar as a perceived safety net. They're wrong, but in the short term that will underpin the dollar.
This will gradually change in regard to silver, and the white metal will continue to rise over time, in spite of those that seem to live to only make money by trying to short the commodity. Over time they'll lose, but those moving in and out of the market, and who know what they're doing, do make a lot of money on the wide prices movements associated with silver, and that will continue even as silver continues to rise in price.
What is good about the boost in industrial usage and demand for silver is it will, over time, place a base under the price of silver as it becomes more predictable as a result.
So the wide movement in prices over the short term may slow in the degree they move, although the relatively small amount of silver in comparison to gold will keep those prices moving much more than its counterpart.
In other words, silver will continue to rise, but the fluctuation in price will continue on unless some unknown hoard of silver is discovered which may change the supply picture over the long term. If not, things will largely remain the same as market factors continue to favor silver and those investing in it.
Sunday, April 4, 2010
Silver Short Squeeze Here?
FORT LEE, N.J., April 3 /PRNewswire/ -- The National Inflation Association today issued a silver update to its http://inflation.us members:
On December 11th, 2009 NIA declared silver the best investment for the next decade. In our December 11th article, we said that it wasn't a coincidence that the very day Bear Stearns failed was the same day silver reached its multi-decade high of over $21 per ounce. We went on to say, "The reason why we believe the Federal Reserve was so eager to orchestrate a bailout of Bear Stearns, is because Bear Stearns was on the verge of being forced to cover their silver short position."
JP Morgan took over the concentrated short position in silver from Bear Stearns and gained complete control over the paper price of silver. Within weeks, JP Morgan was able to manipulate the price of silver down to below $9 per ounce. NIA believes they were able to drive the price of silver down through "naked short selling," selling paper silver that is unbacked by physical silver.
On February 5th, we witnessed another sharp decline in silver prices, which NIA described on February 7th as being "just a temporary wash out, before a huge surge in silver prices later in 2010." Since then, silver prices have rebounded by 18%. The temporary wash out that occurred on February 5th was predicted by independent metals trader Andrew Maguire, who came out this week exposing the fraud that is taking place in the paper silver market.
On February 3rd, Andrew Maguire wrote Eliud Ramirez, a senior investigator for the CFTC's Enforcement Division, giving him the "heads up" for a "manipulative event" signaled for February 5th. He warned the CFTC that JP Morgan was about to manipulate down the price of silver after the release of non-farm payroll data on February 5th. Andrew said that the takedown would happen regardless of if employment was better or worse than expected and the price of silver would be flushed to below $15 per ounce. During the next couple of days, silver was crushed from $16.17 per ounce down to a low of $14.62 per ounce.
Despite all of the evidence given by Andrew Maguire to the CFTC of gold and silver manipulation, Andrew wasn't allowed to speak at last week's CFTC hearing on limiting gold and silver positions held by banks like JP Morgan. Bill Murphy of the Gold Anti-Trust Action Committee (GATA) was allowed to speak (within a five-minute time constraint) and present some of Andrew Maguire's evidence, but right when his presentation began there was a technical failure of the live television broadcast, which was mysteriously fixed as soon as he was done speaking. Bill Murphy was scheduled for several mainstream media television interviews after the CFTC hearings, but they were all abruptly cancelled at once.
A couple of days after the CFTC meeting, Andrew Maguire and his wife were involved in a bizarre hit-and-run car accident in London where a second car coming out of a side street struck their vehicle, which resulted in a police chase using helicopters and patrol cars before the suspect was nabbed. Andrew and his wife were released from the hospital with minor injuries. (NIA does not believe in conspiracy theories but when you consider that this is a potential multi-trillion dollar fraud that could bring down the world's financial system, it really makes you think.)
The silver market provides a window into what is happening in the gold market. Because the silver market is very small and its short position is so concentrated, its price is easier to manipulate than gold, but the same manipulation is taking place in gold on a much larger but less noticeable scale. In our opinion, the CFTC is under pressure not to do anything about the manipulation because the lower gold and silver prices are, the stronger the U.S. dollar appears to be. If we saw an explosion to the upside in gold and silver prices, it would result in a complete loss of confidence in the U.S. dollar.
NIA believes the precious metals markets are currently being artificially suppressed by paper gold and silver that doesn't physically exist. At last week's CFTC hearings, Jeffrey Christian of the CPM Group admitted that banks have leveraged their physical bullion by 100 to 1. This means for every 100 ounces of paper gold/silver that trade, there could be as little as 1 ounce of physical gold/silver in the vaults backing it. However, Mr. Christian sees no problem with this because he says "it has been persistently that way for decades" and there are "any number of mechanisms allowing for cash settlements."
What Mr. Christian fails to realize is, most investors around the world holding paper gold/silver believe they own physical gold/silver. There will come a time when these investors don't want cash settlements in U.S. dollars, but they will want the physical precious metals themselves. When investors around the globe eventually call for physical delivery of their precious metals, NIA believes it will result in the biggest short squeeze in the history of all commodities.
The physical silver market is now more tight than ever before. In the first quarter of 2010, the U.S. mint sold 9,023,500 American Silver Eagles, the most since the coin debuted in 1986 and up from 8,299,000 sold in the fourth quarter of 2009. All U.S. silver mines combined are currently producing only 40 million ounces of silver annually. This means the U.S. needs to use almost all of its silver production just to keep up with the demand for American Silver Eagle coins.
Silver closed this week at a 10-week high of $17.89 per ounce and a major short squeeze to the upside could be imminent. With the spotlight now on JP Morgan, NIA believes they will be less likely to naked short silver at these levels and manipulate the price down like in February. With the mainstream media blackout, it is important for NIA members to work harder than ever to spread the word and help expose what could be the largest fraud in the history of the world.
To receive NIA's latest updates about inflation and the economy, sign-up for the free NIA newsletter at: http://inflation.us
About us:
The National Inflation Association is an organization that is dedicated to preparing Americans for hyperinflation. The NIA offers free membership at http://www.inflation.us and provides its members with articles about the economy and inflation, news stories, important charts not shown by the mainstream media; YouTube videos featuring Jim Rogers, Marc Faber, Ron Paul, Peter Schiff, and others; and profiles of gold, silver, and agriculture companies that we believe could prosper in an inflationary environment.
Contact: Gerard Adams, 1-888-99-NIA US (1888-996-4287), editor@inflation.us
SOURCE National Inflation Association
Back to top
RELATED LINKS
http://www.Inflation.us
On December 11th, 2009 NIA declared silver the best investment for the next decade. In our December 11th article, we said that it wasn't a coincidence that the very day Bear Stearns failed was the same day silver reached its multi-decade high of over $21 per ounce. We went on to say, "The reason why we believe the Federal Reserve was so eager to orchestrate a bailout of Bear Stearns, is because Bear Stearns was on the verge of being forced to cover their silver short position."
JP Morgan took over the concentrated short position in silver from Bear Stearns and gained complete control over the paper price of silver. Within weeks, JP Morgan was able to manipulate the price of silver down to below $9 per ounce. NIA believes they were able to drive the price of silver down through "naked short selling," selling paper silver that is unbacked by physical silver.
On February 5th, we witnessed another sharp decline in silver prices, which NIA described on February 7th as being "just a temporary wash out, before a huge surge in silver prices later in 2010." Since then, silver prices have rebounded by 18%. The temporary wash out that occurred on February 5th was predicted by independent metals trader Andrew Maguire, who came out this week exposing the fraud that is taking place in the paper silver market.
On February 3rd, Andrew Maguire wrote Eliud Ramirez, a senior investigator for the CFTC's Enforcement Division, giving him the "heads up" for a "manipulative event" signaled for February 5th. He warned the CFTC that JP Morgan was about to manipulate down the price of silver after the release of non-farm payroll data on February 5th. Andrew said that the takedown would happen regardless of if employment was better or worse than expected and the price of silver would be flushed to below $15 per ounce. During the next couple of days, silver was crushed from $16.17 per ounce down to a low of $14.62 per ounce.
Despite all of the evidence given by Andrew Maguire to the CFTC of gold and silver manipulation, Andrew wasn't allowed to speak at last week's CFTC hearing on limiting gold and silver positions held by banks like JP Morgan. Bill Murphy of the Gold Anti-Trust Action Committee (GATA) was allowed to speak (within a five-minute time constraint) and present some of Andrew Maguire's evidence, but right when his presentation began there was a technical failure of the live television broadcast, which was mysteriously fixed as soon as he was done speaking. Bill Murphy was scheduled for several mainstream media television interviews after the CFTC hearings, but they were all abruptly cancelled at once.
A couple of days after the CFTC meeting, Andrew Maguire and his wife were involved in a bizarre hit-and-run car accident in London where a second car coming out of a side street struck their vehicle, which resulted in a police chase using helicopters and patrol cars before the suspect was nabbed. Andrew and his wife were released from the hospital with minor injuries. (NIA does not believe in conspiracy theories but when you consider that this is a potential multi-trillion dollar fraud that could bring down the world's financial system, it really makes you think.)
The silver market provides a window into what is happening in the gold market. Because the silver market is very small and its short position is so concentrated, its price is easier to manipulate than gold, but the same manipulation is taking place in gold on a much larger but less noticeable scale. In our opinion, the CFTC is under pressure not to do anything about the manipulation because the lower gold and silver prices are, the stronger the U.S. dollar appears to be. If we saw an explosion to the upside in gold and silver prices, it would result in a complete loss of confidence in the U.S. dollar.
NIA believes the precious metals markets are currently being artificially suppressed by paper gold and silver that doesn't physically exist. At last week's CFTC hearings, Jeffrey Christian of the CPM Group admitted that banks have leveraged their physical bullion by 100 to 1. This means for every 100 ounces of paper gold/silver that trade, there could be as little as 1 ounce of physical gold/silver in the vaults backing it. However, Mr. Christian sees no problem with this because he says "it has been persistently that way for decades" and there are "any number of mechanisms allowing for cash settlements."
What Mr. Christian fails to realize is, most investors around the world holding paper gold/silver believe they own physical gold/silver. There will come a time when these investors don't want cash settlements in U.S. dollars, but they will want the physical precious metals themselves. When investors around the globe eventually call for physical delivery of their precious metals, NIA believes it will result in the biggest short squeeze in the history of all commodities.
The physical silver market is now more tight than ever before. In the first quarter of 2010, the U.S. mint sold 9,023,500 American Silver Eagles, the most since the coin debuted in 1986 and up from 8,299,000 sold in the fourth quarter of 2009. All U.S. silver mines combined are currently producing only 40 million ounces of silver annually. This means the U.S. needs to use almost all of its silver production just to keep up with the demand for American Silver Eagle coins.
Silver closed this week at a 10-week high of $17.89 per ounce and a major short squeeze to the upside could be imminent. With the spotlight now on JP Morgan, NIA believes they will be less likely to naked short silver at these levels and manipulate the price down like in February. With the mainstream media blackout, it is important for NIA members to work harder than ever to spread the word and help expose what could be the largest fraud in the history of the world.
To receive NIA's latest updates about inflation and the economy, sign-up for the free NIA newsletter at: http://inflation.us
About us:
The National Inflation Association is an organization that is dedicated to preparing Americans for hyperinflation. The NIA offers free membership at http://www.inflation.us and provides its members with articles about the economy and inflation, news stories, important charts not shown by the mainstream media; YouTube videos featuring Jim Rogers, Marc Faber, Ron Paul, Peter Schiff, and others; and profiles of gold, silver, and agriculture companies that we believe could prosper in an inflationary environment.
Contact: Gerard Adams, 1-888-99-NIA US (1888-996-4287), editor@inflation.us
SOURCE National Inflation Association
Back to top
RELATED LINKS
http://www.Inflation.us
Friday, March 5, 2010
Silver Wheaton (NYSE: SLW): No Dividend Now
No Dividend for Silver Wheaton Shareholders
Although there has been speculation Silver Wheaton (NYSE: SLW) will issue a dividend soon, the company CEO Peter Barnes said that it's a possibility, but it won't happen until cash flows at the company increase.
Barnes said in the quarterly conference call he feels it would be a better idea to plow cash back into the company in order to better prepare itself for acquisition possibilities in the future.
Shareholders of course were looking at the over $227 million in cash the company has, along with a revolving credit line of $400 million, wondering why they don't get some of that as a result.
Barnes continued to hit on that theme when communicating a $25 million dividend this year would force the company to need an extra $100 million in equity to make any acquisition they were looking at.
No Dividend for Silver Wheaton Shareholders
Although there has been speculation Silver Wheaton (NYSE: SLW) will issue a dividend soon, the company CEO Peter Barnes said that it's a possibility, but it won't happen until cash flows at the company increase.
Barnes said in the quarterly conference call he feels it would be a better idea to plow cash back into the company in order to better prepare itself for acquisition possibilities in the future.
Shareholders of course were looking at the over $227 million in cash the company has, along with a revolving credit line of $400 million, wondering why they don't get some of that as a result.
Barnes continued to hit on that theme when communicating a $25 million dividend this year would force the company to need an extra $100 million in equity to make any acquisition they were looking at.
No Dividend for Silver Wheaton Shareholders
Wednesday, February 24, 2010
Silver Standard Resources (NASDAQ:SSRI) Silvertip Property
Silver Standard Resources (NASDAQ:SSRI) Silvercorp Metals (NYSE:SVM)
Silver Standard Resources (NASDAQ:SSRI) has sold its stake in its Silvertip property to Silvercorp Metals (NYSE: SVM) for C$15 million. The property includes silver, lead and zinc. The terms of the deal was half in common shares of the company and the other half in cash.
“The Silvertip project ranks among one of the highest grade silver-lead-zinc carbonate replacement deposits in North America — with great potential to grow,” said Rui Feng, Silvercorp chairman and chief executive.
The lead could be especially rewarding, as it had a concentrate grade of 65 percent and 80.4 percent was deemed as recoverable in a test a couple of years ago.
Another factor is lead for batteries continues to be in strong demand, while there are only about 7 lead mines in the world to provide it.
Silvercorp wil perform its own due diligence before the deal is officially completed in a couple of days.
Silver Standard Resources (NASDAQ:SSRI) Silvercorp Metals (NYSE:SVM)
Silver Standard Resources (NASDAQ:SSRI) has sold its stake in its Silvertip property to Silvercorp Metals (NYSE: SVM) for C$15 million. The property includes silver, lead and zinc. The terms of the deal was half in common shares of the company and the other half in cash.
“The Silvertip project ranks among one of the highest grade silver-lead-zinc carbonate replacement deposits in North America — with great potential to grow,” said Rui Feng, Silvercorp chairman and chief executive.
The lead could be especially rewarding, as it had a concentrate grade of 65 percent and 80.4 percent was deemed as recoverable in a test a couple of years ago.
Another factor is lead for batteries continues to be in strong demand, while there are only about 7 lead mines in the world to provide it.
Silvercorp wil perform its own due diligence before the deal is officially completed in a couple of days.
Silver Standard Resources (NASDAQ:SSRI) Silvercorp Metals (NYSE:SVM)
Friday, February 19, 2010
Pan American Silver (Nasdaq: PAAS) Gets No Respect
Pan American Silver
The management at Pan American Silver (Nasdaq: PAAS) seem to be quietly building a solid company while most investors in silver and other precious metals look elsewhere for their profits. That, I think, is a mistake.
When talking about increasing their silver production by 31 percent in the third quarter, while generating 6.4 million ounces of silver - a record - they are more than poised to perform strongly for years ahead, and that doesn't even include the acquisition of Aquiline Resources Inc., which has an estimated 632 million ounces of silver in its Navidad project in Argentina.
For all of 2009 the company produced 23 million ounces of silver at a reported $5.53 an ounce; a very good number.
But Pan American Silver isn't only into silver, as its gold production skyrocketed in 2009 by 331 percent.
The best part though, is even with their increased production and available resources, they are being managed well with cost being shaved significantly during the year.
With these facts and other numbers showing a company growing and expanding, while maintaining its handle on costs, and you have all the pieces for a great investment.
For some reason many people simply miss this with Pan American, and that's to their detriment over the long haul.
Pan American Silver
The management at Pan American Silver (Nasdaq: PAAS) seem to be quietly building a solid company while most investors in silver and other precious metals look elsewhere for their profits. That, I think, is a mistake.
When talking about increasing their silver production by 31 percent in the third quarter, while generating 6.4 million ounces of silver - a record - they are more than poised to perform strongly for years ahead, and that doesn't even include the acquisition of Aquiline Resources Inc., which has an estimated 632 million ounces of silver in its Navidad project in Argentina.
For all of 2009 the company produced 23 million ounces of silver at a reported $5.53 an ounce; a very good number.
But Pan American Silver isn't only into silver, as its gold production skyrocketed in 2009 by 331 percent.
The best part though, is even with their increased production and available resources, they are being managed well with cost being shaved significantly during the year.
With these facts and other numbers showing a company growing and expanding, while maintaining its handle on costs, and you have all the pieces for a great investment.
For some reason many people simply miss this with Pan American, and that's to their detriment over the long haul.
Pan American Silver
Tuesday, February 16, 2010
Pan American Silver (TSE:PAA) Posts Profits
Pan American Silver Quarterly Report
After a disappointing fourth quarter last year, Pan American Silver (TSE:PAA) came roaring back to post a profit in the fourth quarter ending December 31.
The factors contributing to the profits according to Pan American Silver was increased production and the increase in the price of silver.
Earnings for the quarter came in at $27.8 million, or 31 cents a share. That was in comparison to the same quarter last year where the mining company lost $33.3 million or 41 cents a share.
Overall revenue grew to $154.4 million, a 234 percent gain. Production during that time resulted in another 6 million ounces of silver, a 30 percent surge. A portion of that was attributed to the expansion of the San Vicente mine in Bolivia.
Gold also enjoyed increased production, as it gained by 425 percent.
The company estimated that silver production should reach 23.4 million ounces for 2010.
Pan American Silver Quarterly Report
After a disappointing fourth quarter last year, Pan American Silver (TSE:PAA) came roaring back to post a profit in the fourth quarter ending December 31.
The factors contributing to the profits according to Pan American Silver was increased production and the increase in the price of silver.
Earnings for the quarter came in at $27.8 million, or 31 cents a share. That was in comparison to the same quarter last year where the mining company lost $33.3 million or 41 cents a share.
Overall revenue grew to $154.4 million, a 234 percent gain. Production during that time resulted in another 6 million ounces of silver, a 30 percent surge. A portion of that was attributed to the expansion of the San Vicente mine in Bolivia.
Gold also enjoyed increased production, as it gained by 425 percent.
The company estimated that silver production should reach 23.4 million ounces for 2010.
Pan American Silver Quarterly Report
Friday, February 12, 2010
Silver Standard Resources (TSX:SSO) Public Offering
Silver Standard Resources (TSX:SSO)
Silver Standard Resources (TSX:SSO) (NASDAQ:SSRI) announced in a press release they have filed a with the securities commissions of each providence of Canada, along with the Securities and Exchange Commission (SEC) in the United States in relationship to a public offering of its common shares.
The company said it is looking to raise about $100 million through the offering " to fund the exploration on and development of mineral properties, for working capital requirements, to repay indebtedness outstanding from time to time or for other general corporate purposes."
Silver Standard Resources (TSX:SSO)
Silver Standard Resources (TSX:SSO) (NASDAQ:SSRI) announced in a press release they have filed a with the securities commissions of each providence of Canada, along with the Securities and Exchange Commission (SEC) in the United States in relationship to a public offering of its common shares.
The company said it is looking to raise about $100 million through the offering " to fund the exploration on and development of mineral properties, for working capital requirements, to repay indebtedness outstanding from time to time or for other general corporate purposes."
Silver Standard Resources (TSX:SSO)
Thursday, February 11, 2010
Silver or Gold for 2010?
Gold or Silver?
While silver is different from gold in that it isn't only a safety investment but an industrial one as well, under normal conditions it does tend to move in tandem with it, although no always in a straight line.
According to Asian investment firm Hang Seng Financial, they believe silver could very well outperform gold over the next several years by investing in the precious metal physically, through mining companies, ETFs and other means.
I don't think we have to make that distinction so much, as more than likely gold and silver over the next several years will both perform well, with quite possibly gold being the winner in general, although it would depend on how you invest in gold to determine that for each individual investor.
Now long term I think silver could break away form gold when it is largely looked upon for its growing industrial use and demand, but that could take a little while, and the slow (if any) economic recovery over the next several years could easily keep it from doing so.
For 2010, again depending on how you choose to invest in the two precious metals, gold will probably outperform silver, at least in futures trading.
Gold or Silver?
While silver is different from gold in that it isn't only a safety investment but an industrial one as well, under normal conditions it does tend to move in tandem with it, although no always in a straight line.
According to Asian investment firm Hang Seng Financial, they believe silver could very well outperform gold over the next several years by investing in the precious metal physically, through mining companies, ETFs and other means.
I don't think we have to make that distinction so much, as more than likely gold and silver over the next several years will both perform well, with quite possibly gold being the winner in general, although it would depend on how you invest in gold to determine that for each individual investor.
Now long term I think silver could break away form gold when it is largely looked upon for its growing industrial use and demand, but that could take a little while, and the slow (if any) economic recovery over the next several years could easily keep it from doing so.
For 2010, again depending on how you choose to invest in the two precious metals, gold will probably outperform silver, at least in futures trading.
Gold or Silver?
Saturday, January 16, 2010
Jim Rogers | Buy Silver
Silver Prices Going Up
Talking about base metals recently, the best commodity play in that sector, according to Jim Rogers is probably silver.
While most base metals like copper have been driven up in price recently, silver largely remains at low levels, making it a good buy at this time.
Even though Rogers has no interest in base metals at these prices, he does say it would be a good idea to keep your investment in them and not sell, as there's little or no activity in production which would change the base metal production in the years ahead, while demand is sure to increase, driving up prices.
But as of now, silver prices are one of the best base metal buys, and should make investors a lot of money over the long term if they buy low.
Jim Rogers and Silver Prices Going Up
Talking about base metals recently, the best commodity play in that sector, according to Jim Rogers is probably silver.
While most base metals like copper have been driven up in price recently, silver largely remains at low levels, making it a good buy at this time.
Even though Rogers has no interest in base metals at these prices, he does say it would be a good idea to keep your investment in them and not sell, as there's little or no activity in production which would change the base metal production in the years ahead, while demand is sure to increase, driving up prices.
But as of now, silver prices are one of the best base metal buys, and should make investors a lot of money over the long term if they buy low.
Jim Rogers and Silver Prices Going Up
Monday, December 14, 2009
Chinese Investing in Silver
Considering silver a much better investment than gold at this time, Chinese investors have been flocking to the industrial metal in hopes of generating some significant profits in the years ahead.
Reasons for shunning gold by the Chinese are the high cost of the yellow metal at this time, which is prohibitive to a large number of Chinese.
Even though gold prices should continue to rise, silver should have a lot more upside, making it an idea investment and one many Chinese can afford to make.
Along with the upside potential of silver prices going up, it also is a better bet in short-term swings, making it more stable than its gold cousin, which many fear can make huge price swings, making it more volatile in price during the short term versus silver. That may be true, although smaller price decreases can cause equal price and percentage swings in silver, so I'm not sure that's the proper way to think about the reason for investing silver rather than investing in gold.
While I agree that silver is a better investment at this time than gold, the reason is demand rather than price alone. Demand for silver is both industrial and as a safety hedge, making it a great play going forward, as well as being off significantly from its inflation-adjusted highs. Gold is too, but it's the price difference in the two as far as it concerns the Chinese which make it so attractive.
with that in mind, we may want to watch Chinese consumption of silver as one of the market indicators and price drivers over the next several years.
Gold isn't going to go down in price for a long time, so we can count on silver remaining an attractive alternative investment choice to the Chinese, which allows us to know prices in silver will eventually start to skyrocket on that alone, but also including demand and the factor of being a safety hedge as well.
Reasons for shunning gold by the Chinese are the high cost of the yellow metal at this time, which is prohibitive to a large number of Chinese.
Even though gold prices should continue to rise, silver should have a lot more upside, making it an idea investment and one many Chinese can afford to make.
Along with the upside potential of silver prices going up, it also is a better bet in short-term swings, making it more stable than its gold cousin, which many fear can make huge price swings, making it more volatile in price during the short term versus silver. That may be true, although smaller price decreases can cause equal price and percentage swings in silver, so I'm not sure that's the proper way to think about the reason for investing silver rather than investing in gold.
While I agree that silver is a better investment at this time than gold, the reason is demand rather than price alone. Demand for silver is both industrial and as a safety hedge, making it a great play going forward, as well as being off significantly from its inflation-adjusted highs. Gold is too, but it's the price difference in the two as far as it concerns the Chinese which make it so attractive.
with that in mind, we may want to watch Chinese consumption of silver as one of the market indicators and price drivers over the next several years.
Gold isn't going to go down in price for a long time, so we can count on silver remaining an attractive alternative investment choice to the Chinese, which allows us to know prices in silver will eventually start to skyrocket on that alone, but also including demand and the factor of being a safety hedge as well.
Friday, December 11, 2009
Henry Kaufman Clueless on Commodities
So-called economist Henry Kaufman said recently that commodities are in a bubble, a general statement so far from the truth it's surprising he even made, as it makes him look clueless and irrelevant.
Even more clueless, Kaufman wrongly stated that gold is in a bubble, again showing, he has no idea what a bubble is in order to define what he bases his assertions on.
A gold bubble, as with other bubbles, is when the regular guy on the street starts to buy up a certain type of investment because they heard it was making everyone else money. Normally it's identified by main street investors when the peak of the investment and why it was good is past. That drives a bubble and not a price that is high. High prices can call for a temporary correction, but a bubble has nothing to do with that, something Kaufman evidently is confused about.
Kaufman based much of what he said on people using leverage to buy commodities.
All Kaufman is referring to there is the carry trade, where low interest rates encourage investors to use that leverage to buy better returns. Based on that it's nonsense to speak of a bubble because carry trade is growing, with people using that leverage to acquire commodities.
The truth is, huge sectors of commodities are down, like agriculture in general, silver and palladium. They are far from in a commodity bubble.
Speculators, overall, aren't driving the commodity markets, but safety, a weakened U.S. dollar and inflation are part of the overall picture which is the major impetus behind the interest in commodities, although even there something like gold, which relatively few investors are actually investing in, is far from a bubble as well. All it has done is gone up in price; not what a bubble is defined by.
Kaufman is using faulty reasoning and understanding about commodities and bubbles to make his assertions, which are nonsensical at minimum. Commodities aren't in a bubble, as not only the areas I mentioned are down in price, but energy commodities are down as well. His commodity bubble statements make no sense whatsoever, as he's only taking into account carry trade, which has little bearing on the issue at all.
Even more clueless, Kaufman wrongly stated that gold is in a bubble, again showing, he has no idea what a bubble is in order to define what he bases his assertions on.
A gold bubble, as with other bubbles, is when the regular guy on the street starts to buy up a certain type of investment because they heard it was making everyone else money. Normally it's identified by main street investors when the peak of the investment and why it was good is past. That drives a bubble and not a price that is high. High prices can call for a temporary correction, but a bubble has nothing to do with that, something Kaufman evidently is confused about.
Kaufman based much of what he said on people using leverage to buy commodities.
All Kaufman is referring to there is the carry trade, where low interest rates encourage investors to use that leverage to buy better returns. Based on that it's nonsense to speak of a bubble because carry trade is growing, with people using that leverage to acquire commodities.
The truth is, huge sectors of commodities are down, like agriculture in general, silver and palladium. They are far from in a commodity bubble.
Speculators, overall, aren't driving the commodity markets, but safety, a weakened U.S. dollar and inflation are part of the overall picture which is the major impetus behind the interest in commodities, although even there something like gold, which relatively few investors are actually investing in, is far from a bubble as well. All it has done is gone up in price; not what a bubble is defined by.
Kaufman is using faulty reasoning and understanding about commodities and bubbles to make his assertions, which are nonsensical at minimum. Commodities aren't in a bubble, as not only the areas I mentioned are down in price, but energy commodities are down as well. His commodity bubble statements make no sense whatsoever, as he's only taking into account carry trade, which has little bearing on the issue at all.
Commodity Correction Won't Last Long
Don't be fooled at all by the slight correction in commodities, as going forward, no matter what happens to the global economy, commodities will be a solid place to put investment capital, as emerging markets should start buying again sometime soon, and even if they don't, many investors will flock to certain commodities as a safe haven; such as gold and silver.
Other areas to look at would be agricultural commodities, along with some of the foreign currencies poised to move on the ongoing weakening of the U.S. dollar. And even if there is a upward movement of the U.S. dollar, which could happen in the short term, overall we'll see the continuing collapse in value of the greenback, ensuring a number of commodities will be important hedges against that behavior.
Another thing to consider is in grains, there have been an enormous amount of production and supply, and so demand hasn't kept up with it, keeping prices down. Energy has been the same, as people have cut back on driving and monitored their home heating to keep things in line with their incomes.
If inflation surges in 2010, a real strong possibility, from the ongoing debasement of currencies around the world from central banks printing extraordinary amounts of money and throwing it into the market, you'll see commodity prices rise along with it, participating in the inevitable increase in prices of raw materials.
Commodity investing legend Jim Rogers recommends looking for commodities with depressed prices at this time, and staying away from purchasing gold until it drops in price; although Rogers is a long-term bull on the price of gold. Other areas he's recommending to buy commodities is silver, palladium, natural gas and agriculture, all of which have had downward price pressures on them.
Where commodities will really take of is when a real recovery emerges, and large middle classes in China and India generate huge demand for raw materials and products; especially the more predictable emerging middle class in China.
Other areas to look at would be agricultural commodities, along with some of the foreign currencies poised to move on the ongoing weakening of the U.S. dollar. And even if there is a upward movement of the U.S. dollar, which could happen in the short term, overall we'll see the continuing collapse in value of the greenback, ensuring a number of commodities will be important hedges against that behavior.
Another thing to consider is in grains, there have been an enormous amount of production and supply, and so demand hasn't kept up with it, keeping prices down. Energy has been the same, as people have cut back on driving and monitored their home heating to keep things in line with their incomes.
If inflation surges in 2010, a real strong possibility, from the ongoing debasement of currencies around the world from central banks printing extraordinary amounts of money and throwing it into the market, you'll see commodity prices rise along with it, participating in the inevitable increase in prices of raw materials.
Commodity investing legend Jim Rogers recommends looking for commodities with depressed prices at this time, and staying away from purchasing gold until it drops in price; although Rogers is a long-term bull on the price of gold. Other areas he's recommending to buy commodities is silver, palladium, natural gas and agriculture, all of which have had downward price pressures on them.
Where commodities will really take of is when a real recovery emerges, and large middle classes in China and India generate huge demand for raw materials and products; especially the more predictable emerging middle class in China.
Tuesday, October 6, 2009
Silver Prices About to Explode?
Taking into account that about 150 million ounces of silver have been officially acquired this year, which represents about 20 percent of all silver production in 2009 so far, as well as 25 percent of all silver mine production. (The difference is recycling.)
Unofficially, it's thought that tens of millions of ounces of silver has been acquired since the beginning of the year, besides direct buying by investors.
Even more extraordinary, this represents approximately 15 percent of all known silver bullion known to exist at this time.
Taking into account the rising number of industrial uses silver is increasingly being used for, and some of the products it can't be recovered from, and we could have the perfect storm for increasing silver prices for a long time to come.
Unofficially, it's thought that tens of millions of ounces of silver has been acquired since the beginning of the year, besides direct buying by investors.
Even more extraordinary, this represents approximately 15 percent of all known silver bullion known to exist at this time.
Taking into account the rising number of industrial uses silver is increasingly being used for, and some of the products it can't be recovered from, and we could have the perfect storm for increasing silver prices for a long time to come.
Saturday, February 7, 2009
Commodities: Silver - Prices Going Up
The current economic crisis has people faltering a lot concerning their money and what to do with it, and the usual havens of silver and gold during times like these haven't been acting in the usual predictable manner, but prices of silver and gold are starting to rise, and that should go on for some time.
Most of that has been because of the forced liquidation period where companies sold off their silver and gold positions, among other commodities, in order to get their hands on much needed cash. That in turn caused the U.S. dollar to remain inordinately high even though the underlying fundamentals pointed to it being weaker.
When it comes to commodities, don't get fooled or confused about the current economic situation where all the various market forces seem to be makeing it hard for people to make sound decisions on where to put their money.
Gold and silver will start to perform strongly again as the forced liquidation period unwinds, and investing the gold and silver will be very profitable going forward. The one thing about silver prices that are nice is they are lower than gold, and so investing in silver has a much higher probability of moving much more up in percentages than gold. Of course it depends on what your investment risk comfort zone is, as if you're just trying to hold on to your money, gold during these times should be the preferred investment, even if silver futures and prices have a better chance of going higher.
To me there's no doubt silver prices across the numerous ways of investing in silver will move upward significantly in 2009, no matter what the demand for its use as a raw material. Safety is one of the key factors in investing this year, and commodity prices like in relationship to silver and gold prices will be the safest and probably best investments as well in the near term.
What are some of the many ways you can invest in silver in 2009 and beyond? There's of course silver futures, silver bar, silver eagle coins, silver dollars, silver coins in general and silver bullion, among many others.
The key now is to understand fear will drive the market for some time, and gold and silver prices will rise as a result of that fear, whether its deserved and accurate or not. We don't have to figure that out, we just need to know that silver prices will rise going forward, and keep that in mind as make our silver investment.
Some people are even concerned about their safety, with the idea that things could fall apart. To that end their not only buying silver and gold coins, but silver and gold bullion as well.
So silver as an investment, no matter what form you want to buy silver in, will do well for those interested in buying commodities, and will be among those commodities prices going up. Silver, along with gold will be safe, and give a return as well; something not many other investments will be able to say in 2009, and probably even 2010.
Many people are asking which way silver prices are going, and the answer is up, up, and up. The reason why, as mentioned earlier, is the safety factor and the winding down of forced liquidation by companies usually buying gold and silver in large quantities and futures at times like these.
Keep looking at the silver prices going forward, and don't wait too long before participating in buying up silver futures, coins, bullion or bars.
Silver prices and futures are going to continue going up in 2009, be in the silver market to enjoy that upward movement.
Most of that has been because of the forced liquidation period where companies sold off their silver and gold positions, among other commodities, in order to get their hands on much needed cash. That in turn caused the U.S. dollar to remain inordinately high even though the underlying fundamentals pointed to it being weaker.
When it comes to commodities, don't get fooled or confused about the current economic situation where all the various market forces seem to be makeing it hard for people to make sound decisions on where to put their money.
Gold and silver will start to perform strongly again as the forced liquidation period unwinds, and investing the gold and silver will be very profitable going forward. The one thing about silver prices that are nice is they are lower than gold, and so investing in silver has a much higher probability of moving much more up in percentages than gold. Of course it depends on what your investment risk comfort zone is, as if you're just trying to hold on to your money, gold during these times should be the preferred investment, even if silver futures and prices have a better chance of going higher.
To me there's no doubt silver prices across the numerous ways of investing in silver will move upward significantly in 2009, no matter what the demand for its use as a raw material. Safety is one of the key factors in investing this year, and commodity prices like in relationship to silver and gold prices will be the safest and probably best investments as well in the near term.
What are some of the many ways you can invest in silver in 2009 and beyond? There's of course silver futures, silver bar, silver eagle coins, silver dollars, silver coins in general and silver bullion, among many others.
The key now is to understand fear will drive the market for some time, and gold and silver prices will rise as a result of that fear, whether its deserved and accurate or not. We don't have to figure that out, we just need to know that silver prices will rise going forward, and keep that in mind as make our silver investment.
Some people are even concerned about their safety, with the idea that things could fall apart. To that end their not only buying silver and gold coins, but silver and gold bullion as well.
So silver as an investment, no matter what form you want to buy silver in, will do well for those interested in buying commodities, and will be among those commodities prices going up. Silver, along with gold will be safe, and give a return as well; something not many other investments will be able to say in 2009, and probably even 2010.
Many people are asking which way silver prices are going, and the answer is up, up, and up. The reason why, as mentioned earlier, is the safety factor and the winding down of forced liquidation by companies usually buying gold and silver in large quantities and futures at times like these.
Keep looking at the silver prices going forward, and don't wait too long before participating in buying up silver futures, coins, bullion or bars.
Silver prices and futures are going to continue going up in 2009, be in the silver market to enjoy that upward movement.
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