Gold is Strong … Oil is Stronger … Silver is Strongest!

Here are three charts you may find interesting.

You know that gold is doing very well, right?  This morning it was at $1,436.80a troy ounce, near the intraday record it set last month of $1,447.70.  That’s good. However, crude oil – which saw the U.S. benchmark price climb over $108 this morning – is doing even better, performance-wise.

Now here’s something else interesting.  The news in silver is especially bullish.  It just hit a new 31-year high this morning.  And this extends silver’s outperformance compared to gold.  In fact, the gold-silver ratio is at least at at 20-year low, and I could show you lower than that, but the charts from Stockcharts.com don’t go further than that. Take a look …

.  Some analysts believe the gold/silver ratio will go back to 16 – the ratio of silver to gold in the earth’s crust is 16-to-1 – others think further.  I think 16 is likely longer-term, though we may see gold play catch-up in the shorter term as the world realize that Europe hasn’t fixed its financial woes, which grow worse with every passing day.

So how about the relationship between silver and oil?  Here’s a chart of that …

Clearly, silver has been winning the race with oil, too.  The trend is your friend – until it ends – so this tells us where we want to put money for short-term outperformance.

Tagged as: crude oil, gold, silver

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Silver Reaches New 31 Year High At $38.50/oz - Backwardation Ends But COT Data Is Bullish

From GoldCore

The positive momentum of gold and silver continue with both higher in European trade as oil prices have risen due to geopolitical tensions in oil rich nations and the euro has fallen on Eurozone debt concerns.

Focus will be on interest rates this week with the ECB likely to increase interest rates and renewed speculation as to whether the Federal Reserve will attempt to increase interest rates or embark on QE3. Contrary to some misinformed analysis, rising interest rates will be bullish for gold and silver as they were in the 1970’s.

Silver for immediate delivery has gained another 1.7% to $38.50 an ounce, the highest level since February 1980, the year silver reached a record of $50.35/oz. An ounce of gold bought as little as 37.32 ounces of silver in London today, the lowest level since September 1983.

Silver has come out of backwardation and returned to contango with longer dated future prices again higher than nearer month contracts and spot for delivery (see table below). This suggests that default on the COMEX, as warned of by some analysts, is not imminent and the tightness seen in the physical silver market may have abated somewhat. 

However, the Dec12 contract trading at only cents over spot for delivery (less than 10 cents) suggests that tightness remains. Given the degree of tightness in the physical silver market, silver may return to backwardation  sooner rather than later.

While silver is overbought in the very short term, silver’s outlook remains bullish.

Momentum remains very strong with a series of higher weekly, monthly, quarterly and annual price gains. Silver remains the preserve of a handful of contrarian and hard money advocates and is only beginning to enter the consciousness of the mainstream. Allocations remain tiny compared to allocations to conventional investments.

Finally, speculative fever is not only missing from the mainstream public (most of whom would not even know the price of an ounce of silver) but it also remains subdued on the COMEX on Wall Street. Little or no irrational exuberance or “piling in” being seen in the trading pits. The latest COT report shows speculative long positions, or bets prices will rise, outnumbered short positions by 37,139 contracts (see news and chart below). This is a level of net longs by hedge fund managers and other large speculators that was seen as long ago as 2002.

Silver Large Speculators, Futures

Thus, despite silver’s sharp gains in recent months, speculative fever remains very tame. This suggests that much of silver’s gains in recent weeks may have been short covering by Wall Street banks being investigated by the CFTC for holding massive concentrated short positions.

There is also evidence that some hedge fund managers are choosing to bypass the COMEX and buy actual physical silver bullion in allocated accounts.

NEWS

(Bloomberg) -- Silver Climbs to $38.23 An Ounce, Highest Since February 1980
Silver for immediate delivery rose 1.1 percent to $38.23 an ounce by 7:52 a.m. in London, the highest price since Feb. 13, 1980.

(Bloomberg) -- Gold May Advance on Geopolitical Risks, Outlook for Inflation

Gold, trading little changed, may advance as investors buy the precious metal to shield their wealth from geopolitical risks and rising inflation.

Immediate-delivery bullion traded at $1,430.95 an ounce at 1:57 p.m. in Singapore compared with last week’s close of $1,428.80. Gold for June delivery in New York rose 0.2 percent to $1,431.80 an ounce.

“Geopolitical risks linked to the Middle East and Japan, as well as the European debt crisis, have yet to show an improvement,” said Hwang Il Doo, a Seoul-based senior trader at KEB Futures Co. “These, coupled with the inflation outlook, will continue to power gold.”

Libyan leader Muammar Qaddafi’s acting foreign minister, Abdul Ati al-Obeidi, met with Greece’s prime minister yesterday to seek a political solution to the nation’s crisis, Greek Foreign Minister Dimitris Droutsas said. The U.S., Britain and France have been enforcing a United Nations-backed no-fly zone over the country as rebels battle Qaddafi’s forces for control.

In Japan, Tokyo Electric Power Co.’s attempt to clog a cracked pit with sawdust, newspaper and plastic failed to stop radioactive water leaking into the sea from a crippled power plant, which was damaged in the March 11 quake and tsunami.

Marc Faber, publisher of the Gloom, Boom & Doom report, said last week investors should have 10 to 20 percent of their portfolio in gold as an inflation hedge. The unemployment rate in the U.S. unexpectedly fell to a two-year low of 8.8 percent in March, adding to evidence that a recovery in the world’s largest economy is gaining traction.

Survey Outlook

Eleven of 25 traders, investors and analysts surveyed by Bloomberg, or 44 percent, said that bullion will rise this week. Nine predicted lower prices and five were neutral. Spot gold reached an all-time high of $1,447.82 an ounce on March 24.

Hedge-fund managers and other large speculators increased their net-long position in New York gold futures in the week ended March 29, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 193,121 contracts on the Comex division of the New York Mercantile Exchange, the commission said in its Commitments of Traders report. Net-long positions rose by 18,284 contracts, or 10 percent, from a week earlier.

“We believe prices will remain supported as long as real interest rates stay low and trepidation over global growth prevails,” Hussein Allidina, head of commodity research with Morgan Stanley Research, wrote in a note to clients.

Cash silver rose 0.6 percent to $38.025 an ounce, approaching the highest level since 1980. The metal last touched $38.165 an ounce on March 24.

Palladium for immediate delivery increased 0.3 percent to $775.75 an ounce, while platinum was little changed at $1,763.13 an ounce.

(PTI) -- India's gold demand to rise over 1,200 tonnes by 2020: WGC

Gold demand in India will continue to grow  and is likely to reach 1,200 tonnes or approximately Rs 2.5  trillion by 2020, at current price levels, according to a  research by World Gold Council (WGC).

"The rise of India as an economic power will continue to  have gold at its heart. India already occupies a unique position  in the world gold market and, as private wealth in India surges  over the next ten years, so will Indian demand for gold", WGC  Managing Director for India and the Middle East Ajay Mitra said  in a statement here.

Indian gold demand has grown 25 per cent despite 400 per  cent price rise of the rupee in the last decade, making the  country a key driver of global gold demand, the research said.  Gold purchases in India accounted for 32 percent of the global  total in 2010.

Further, the council expects an increase by over 30 per  cent in real terms.

"India's continued rapid growth which will have significant  impact on income and savings, will increase gold purchasing by  almost 3 percent per annum over the next decade," the council  said in a statement.

It added, "In gold terms, India is a market with  significant scale. In 2010, total annual consumer demand reached  963.1 tonnes. As seen in the last decade, Indian demand for gold  will be driven by savings and real income levels, not by price".

According to Mitra, in parallel to growth, socio and  demographic challenges will need to be addressed given its  immense diversity.

"This also applies to the gold market. Nevertheless, gold purchasing will continue, underpinned by India's long-standing and deep cultural affinity for gold; a love affair which  transcends generations and makes India unlike any other gold  market," he said.

At more than 18,000 tonnes, Indian households hold the  largest stock of gold in the world.

'India: Heart of Gold' is the second in a series of WGC  research with focus on India.

The first paper, 'India Heart of Gold: Revival' was released in November 2010, and focused on the historical demand of the past 10 years and the revival in 2010.

Together they form a compendium, with the latest research  including forecasts from the Centre for Monitoring the Indian  Economy (CMIE), as well as contributions from leading academics  and industry experts, Dr. D. Pattanaik and Dr. R. Kannan, which have been specially commissioned for the World Gold Council.

(Bloomberg) -- Silver Traders Increase Bets on Price Rise, CFTC Data Shows
Hedge-fund managers and other large speculators increased their net-long position in New York silver futures in the week ended March 29, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 37,139 contracts on the Comex division of the New York Mercantile Exchange, the Washington-based commission said in its Commitments of Traders report. Net-long positions rose by 364 contracts, or 1 percent, from a week earlier.

Silver futures rose this week, gaining 1.8 percent to $37.73 a troy ounce at today's close.

Miners, producers, jewelers and other commercial users were net-short 55,295 contracts, an increase of 113 contracts from the previous week.

Each Friday the CFTC publishes aggregate numbers for long and short positions for speculators such as hedge funds and institutional investors, as well as commercial companies that buy or sell futures to protect against price moves. Analysts and investors follow changes in speculators' positions because such transactions can reflect an expectation of a change in prices.

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Sales of American Eagle Silver Coins EXPLODE

Here’s the chart of the day, from Clusterstock …

Do you see a trend there?  Clusterstock says: “Annualising sales for the first two months of 2011 is indicative of over 54m oz in sales.”

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Sales of American Eagle Silver Coins EXPLODE

Here’s the chart of the day, from Clusterstock …

Do you see a trend there?  Clusterstock says: “Annualising sales for the first two months of 2011 is indicative of over 54m oz in sales.”

View the original article here

Buying Silver and Avoiding the Sharks

03/29/11 Tampa, Florida – I keep pounding, pounding, pounding the table that silver is the biggest bargain out there, for, at last count, a jillion reasons, and that anybody who does not buy silver Right Freaking Now (RFN) is making the mistake of a lifetime, and the family is all, like, “Will you please stop pounding the table? It is irritating and is making things spill, aside from the fact that we don’t have any money with which to buy silver, and you know that!” which devolved into a lengthy discussion about who among them was the most irritated with me and everything I say or do.

So, to make these idiots happy, I stopped pounding, losing a lot of my spark of emphasis in the process.  It just wasn’t the same, and my breakfast cereal was getting soggy, too, so without using my trademark pounding to buttress my arguments, I decided to just let Jason Hommel, of the Silver Stock Report newsletter, highlight my “Buy silver or you are a moron!” theme with notices of a few serious delivery problems in the silver market, indicating shortages, to which he surmises that “the futures market is about to default on silver and gold deliveries. There is a growing market awareness that the banks have sold short over $200 billion to $400 billion in silver, while all the world’s silver mines only produce about $30 billion of silver annually.”

The lesson seems to be that there is shark-infested water everywhere, and “Market participants are now taking on the cornered banks, putting them into an epic short squeeze of having to deliver silver that does not exist in quantity even remotely compared to the amount of money that exists that can buy silver.”

Now, as a cynical, paranoid ordinary trader/investor kind of guy who has been around long enough to have been eaten by financial sharks a few times, I am sure that they exist, and even today, baby sharks nibble at me, eating me, bite by bite, taking 1.5% of assets in fees and expenses every freaking year!

On the other hand, I never thought that I could be on the side of the sharks, and prove that “what goes around comes around” to my advantage, for a change!

And the good news from a “buy silver and prosper from inflation, Pilgrim!” standpoint, inflation and money-inspired growth ain’t a-gonna stop, neither, as I was reading a Bloomberg.com article that brought up the Federal Reserve perhaps ending their long series of monetary stimulus programs one day soon.

It ain’t a-gonna be, because but “While the Fed hasn’t committed to the specific methods it will use to exit, or in what order, it has been releasing details about its progress in building new programs and expanding its ability to drain reserves.”

Making a little joke of this, I note that this is, of course, akin to the fire department buying fire extinguishers instead of putting out the fire, so that in the future, if they do decide to put out the fire, they will be able to put out the fire! Hahaha!

Of course, I know this is not a fair analogy, and it’s not very funny, either, despite my pathetic use of “Hahaha!” to try and convince you otherwise.

To try to correct that serious shortcoming, and to perhaps make it more apt, let me expand to say that first the volunteer firefighters would have to set a lot of houses on fire so that there would be both a demand for a permanent fire department paying high incomes to full-time employees, and there would be a big need for new housing to replace all the charred rubble, both seemingly stimulating the economy, but, alas, as the Austrian School of economics shows, not, although they end up accumulating a lot of fire extinguishers.

Okay, I can see that it’s more apt, but still not funny, and getting un-funnier all the time, a deplorable condition that will undoubtedly be made worse when I continue to expand the analogy to the corrupt city council counterfeiting money to pay the firefighters and themselves, and pay for that spiffy new firehouse and City Hall, and pay for all that shiny new government gear and programs, thus creating a continual addition of money to the economy that drives prices up, drives the riffraff like me out, and drives the economy into the toilet.

With a start, I recoiled in horror, showing what a wussy coward I am about inflation, as the analogy became all too frightening when it included the inflation in prices that an inflation in the money supply brings!

That was, however, not the actual part that made my eyes open wide and the skin on my head draw back in fear, although I must warn you that it doesn’t look that way when it happens, as I ruefully noted when the kids said to each other “Hey, look! Dad’s ears are wiggling!”

This, of course, started the predictable domino effect from, “Why do you need ears when you never hear anything we say?”, to “We keep saying that we need you to give us more money!”, to “You’re a cheap, horrible person!”, to “I hate you! I hate you! I hate you!”

No, the part that really, really REALLY scared me was when the Journal followed that up with the sentence “This includes increasing the number of its counterparties.” Gaaaahhhh!

It’s the idea of derivatives all over again!  “Spreading the risk”! Yikes! Run for it! We’re Freaking Doomed (WFD)!

If you are NOT running in fear, then you are either stupid (and thus you cannot learn that you should be buying gold and silver when the Federal Reserve is creating so monstrously much money) or it means that you are smart (and thus you already have a lot of gold and silver).

It’s just that easy to distinguish between the two! Whee!

The Mogambo Guru
for The Daily Reckoning

Richard Daughty (Mogambo Guru) is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the writer/publisher of the Mogambo Guru economic newsletter, an avocational exercise to better heap disrespect on those who desperately deserve it. The Mogambo Guru is quoted frequently in Barron's, The Daily Reckoning , and other fine publications.

View articles by The Mogambo Guru

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Buying Silver to Combat the Vampire Craze

03/28/11 Tampa, Florida – Dominic Frisby of Money Morning newsletter quotes Nick Laird of Sharelynx as saying that the situation in silver is such that “since 1950, almost 925,000 tonnes have gone into demand with 570,000 tonnes of this having come from production. This leaves a shortfall of 350,000 tonnes, which has come from central bank sales, stockpiles and scrap. This deficit equals approximately 16 years of production.”

Even more surprisingly, as statistics go, the deficit in silver “is equal to the entire global production of silver in 1982!” which you’ll notice is already punctuated with an exclamation point, as everybody can see the exceptional, startling, scary nature of the statistic!

Jeff Clark, in his essay “How Much More Demand Can Silver Handle?” here at The Daily Reckoning, notes that “The numbers for silver demand are starting to make some market-watchers nervous. The US Mint sold over 6.4 million silver Eagles in January, more than any other month since the coin’s introduction in 1986.”

Well, playing the devil’s advocate, I say that “Maybe it’s because economic things are worse than at anytime since 1986, and there are so many more vampire-related things in the popular media than there were in 1986, so it is only natural to expect more people to be buying silver!”

Mr. Clark, obviously having been instructed to ignore me, ignores me, and goes on to trump my stupid theory with the awesome fact that “China’s net imports of silver quadrupled in 2010, to 122.6 million ounces, roughly 13.7% of global production.”

Already “mine production can’t meet worldwide demand,” and since I never hear of central banks dis-hoarding silver, nor of any stockpiles of silver being drawn down, maybe that is why he says, “the only way demand gets fulfilled is from scrap supply.”

As to what this means in precise dollars and cents, I don’t know, but he may be giving us a hint when he reminds us to “Remember that silver rose over 3,646% from trough to peak in the last precious metals bull market; it’s up about 630% in our current run. A return matching the 1970s advance would push the price to $152.”

From $33 an ounce to $152 an ounce? Wow! That seems like investing at its best, while the truth is that the gains in silver just get better from there, because the evil Federal Reserve is going to keep creating more and more money from there, which explains why I was spending more and more time alone in the Mogambo Big, Bad Bunker (MBBB) a few weeks ago, nervously watching the Federal Reserve creating another $28 billion in credit, which means that the Fed is creating more inflation in prices, which means that the time when people get desperate is not far away.

And this $28 billion in bank credit turned, seemingly magically but actually just a coincidental accounting thing, into $26 billion in cash with which to buy $26 billion in government debt! All in One Freaking Week (OFW)! Astounding!

The reason I bring this up is because it means, We’re Freaking Doomed (WFD) to die a horrible, horrible economic death because of inflation in prices that must necessarily result from all this creation of new money, which is obvious once you strip away all the confusing jargon, acres of spreadsheets and idiot editors rejecting your work with caustic comments like, “Utter trash” and, “Thank you for your recent submission. However, we have no present need for worthless ramblings of a paranoid lunatic.”

Paranoid lunatic, eh? Ha! Sharp Junior Mogambo Rangers (JMRs) are instantly on alert at a “dog that didn’t bark” – as in this case the sentence fragment “to die a horrible, horrible economic death because of inflation in prices that must necessarily result from all this creation of new money” did not end with an exclamation point, or two, or three, as would seem to be indicated.

The reason is that the long-forecasted inflation, which the use of an exclamation point would indicate as an impending calamity, is not only impending, but it is here, which does merit an exclamation point thusly!

I involuntarily looked around the bunker in a kind of scared paranoia when I read The 5-Minute Forecast boiling it down to, “Wholesale prices jumped 0.8% in January, according to the Bureau of Labor Statistics. The Producer Price Index has now jumped 3% over the last four months. And no, that’s not an annualized figure.”

Suddenly feeling nervous and paranoid again, The 5 continues, “Note that the PPI headline number is for ‘finished goods’ – stuff that’s ready to be sold direct to consumers. In the category of ‘crude goods,’ the figures are far worse – up 3.3% in January, and up a staggering 15.8% over the last four months.”

This is the ugly start of the price inflation horror that results from the horror of the Federal Reserve creating so excessively much money, and if ever there were a clearer signal to buy gold and silver with the last of your Federal Reserve Note money, I never heard of it.

And I am a guy who has heard many, many things over his lifetime that will curl your hair, or, if already curled, straighten, and I am not even talking about any of that REALLY scary stuff about genetic mutants being manufactured for the Pentagon (which is under control of UFOs from outer space) that are computer-controlled and can shoot laser beams (“zzzzt!”) out of their eyes.

And if that last stuff turns out to be true, too, then it will be just one more reason, on top of the other thousands of reasons, to buy gold, silver and oil, and which would perhaps add just that little bit extra jollity to your jaunty step as you realize, as you walk along, “Whee! This investing stuff is easy!”

The Mogambo Guru
for The Daily Reckoning

Richard Daughty (Mogambo Guru) is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the writer/publisher of the Mogambo Guru economic newsletter, an avocational exercise to better heap disrespect on those who desperately deserve it. The Mogambo Guru is quoted frequently in Barron's, The Daily Reckoning , and other fine publications.

View articles by The Mogambo Guru

The articles and commentary featured on the Daily Reckoning are presented by Agora Financial.

Sign Up for The Daily Reckoning e-letter and receive a copy of our newest report How to Survive the Fall of Social Security… at NO CHARGE.

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Silver

Kinda pricey, personally I'm leery of anyone "securely storing" my silver for me. I'd rather just have it in my safe.

Looks interesting though. If you're wanting to buy silver purely for investment purposes (meaning, turn it into cash later) it might be a good deal. Buy at spot + 7.8% (give or take a bit), turn it back into cash with a few clicks and (apparently) no fees.

Numbers from the website:

"You accumulate .999 pure physical silver at a 7.8% premium over the SilverSaver Base Prise after your instant rebate"

So, with today's spot at $37.32/oz, you're paying $40.23 per oz
But, the "SilverSaver Base Price" is not necessarily equal to spot. For example, today's SilverSaver Base Price is $37.59, or about 0.7% above spot

"Silver stored at the depository will be assessed a monthly storage cost of 0.05% (0.60%/year)

You get to pay (in SILVER not dollars) 0.05% of your ounces per month for them to store your silver.

" An exchange cost is applied when taking delivery"

You get to pay 5% (0.05 per oz -- in SILVER not dollars) to take physical delivery of your silver. So, to take delivery of 20oz, you actually withdraw 21oz, they keep 1oz. Fortunately this appears to include shipping charges so you don't have to pay for that. That is the price for Buffalo Rounds; if you want ASE's or other certified rounds/bars it costs more (up to 0.12 or 12%!!!!)

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Urgent Market Update on Gold, Silver, Oil, Dollar!

Today was a landmark day in market history. Before late-session corrections …

Gold futures surged to the highest level in world history — $1,449 an ounce.

Silver hit $38.18, the most since the Hunt Brothers cornered the silver market in 1980.

Crude oil touched $106.69, a few nickels short of the highest level since September 2008 … corn jumped more than 3% a bushel … and cattle futures jumped to $1.16 a pound, just shy of the highest level on record.

Meanwhile the dollar continues to plunge, losing ground again against the euro … the Swiss franc … plus the Australian, New Zealand, and Canadian dollars. The broad Dollar Index is now within a whisker of a fresh 15-month low.

What’s going on?

Exactly what we’ve warned you would happen: The mad monetary scientists at the Federal Reserve are trashing the value of your dollars, driving up the price of commodities, and completely ignoring the rampant inflationary pressures each and every one of us can see in our daily lives!

I hope and pray …

That Washington will finally wake up to the urgency of our budgetary lunacy …

That Ben Bernanke will stop destroying the value of your hard-earned savings …

That America can somehow avoid a financial Armageddon.

But hopes and prayers alone are not enough. We also must heed the FACTS, and those facts point to a financial disaster of biblical proportions.

For precisely how to protect yourself — and profit — I urge you to see Martin Weiss’ amazing video, American Apocalypse.

The place is here and the time is now. That’s what today’s markets are telling you. And they’re right.

Click here, and it will begin playing on your screen without further ado.

Best wishes,

Mike

Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money, Interest Rates Profits and LEAPS Options Alert. He is often quoted by the New York Sun, Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.

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Silver Stocks Rally

The broad market took a kick in the teeth on the news of a bombing in Israel, but the silver stocks I follow are up – strongly.  So glad I added two silver picks to the Red-Hot Global Resources portfolio yesterday.

Why are silver miners doing so well? Because silver is doing so well.  Look at this chart of the iShares Silver Trust (SLV: 36.47 +0.9325 +2.62%), which holds physical silver …

The Israel bus bombing pushed the US dollar higher today on a flight-to-safety play (it was also oversold) but gold and silver both are heading higher today.  Hmm …

Tagged as: silver, slv

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Hyperinflation solution: Gold and Silver

Here’s a few reasons why Gold and Silver are good solutions for the upcoming financial collapse. This is a very basic overview of a very detailed subject. If what you read interests you – please do more research. I’m not a financial advisory.

Gold and Silver are a global currency.

Because of their natural rarity and value, Gold and Silver are more like a legitimate currency than anything else.   They have been the core of most of civilizations mediums of exchange. Their natural rarity, their ability to withstand decay, their natural beauty and extreme density have all helped them achieve this status. Yes, fiat paper currencies have been operating strong for several years now. But that’s a historic anomaly.  Ours is the only currency that has been separated from Gold or Silver and has lasted longer than 30 years.

When people lose faith in fiat currency – they regain faith in precious metals.

When paper money stops supporting its value in Gold or Silver, it opens itself up to countless problems. While its value seems in good shape for a time – the money is living on a false premise. Paper money has no intrinsic value. It can only work as a medium of exchange as long as people have faith that it is valuable. A currency backed by Gold or Silver links paper money to something that is naturally rare and naturally impossible to fake. If its not backed by Gold or Silver – the money is no long forced to be rare (valued) and can be abused. Our government can print more money. Consistent printing of money devalues the dollars in existence and an abuse of printing always leads to a loss of faith in the value of the exchange.  Gold and Silver have, repeatedly in history, been the safety net from a financial collapse that occurs when people stop treating the paper in their hands as valuable.

Future demand

When people lose faith – they lose it fast. When you compare Gold and Silver to other asset groups they are  massively undervalued. This is because of the crash of the value of Gold and Silver in the 1980's -and the resulting surge of value in the stock market and real estate since that time. People have placed their wealth into stocks and houses the last 20 years – not Gold and Silver. But not anymore.  There is a strong move back into the precious metals market.  Significant economic trouble at home, a real estate collapse and a growing concern over inflation has triggered the public to start the move back into the Gold and Silver asset class. While the demand is growing, its still relatively small compared to the future potential demand.  The new demand will come quick and fast. It will also come from a variety of places. Be sure to have an exit strategy in place when investing – because Gold and Silver will bubble during the financial collapse.

Here are a few of the areas of future (and current) demand.

Industrial (silver especially),Investors taking massive positions,Mutual funds moving into Gold and Silver,the public seeing Gold and Silver as a viable option,and the ‘Cost to mine’ creating a perceived supply shortage.

The biggest factor will be the public moving into “poor man’s Gold” (Silver) as their fears over inflation increase.

Value moves through asset classes

This article is an overview. Wealth through market trends is a detailed idea to comprehend. I will try to make it simple – and I’m filming a quick video to explain the concept in more detail.

In essence: true wealth flows in and out of asset classes on a long term scale. Whole classes (Real Estate, Stocks, Gold, etc…) follow a cycle of four phases as time passes:

1. overvalued 2. crash 3. undervalued 4. valued rationally…. 1. overvalued… (repeat).

Wealth is never destroyed, it is only transferred. When one asset class is overvalued, another is undervalued. When one is collapsing, another is growing. A smart investor compares asset classes to each-other and determines which classes are in what stage. Currently Gold, but especially Silver, are in the “growth” stage – while stocks and real estate are still overvalued (comparatively). This is a strong argument for Gold and Silver even if we weren’t experiencing economic turmoil or hyperinflation possibilities.

False Market suppression

There has been extensive studies done that document the larger banks and central banks have been using their holdings in Gold and Silver to falsely manipulate the market so that the price of both Gold and Silver are artificially low. Their motive? Strong Gold and Silver means a weaker dollar.

This means Gold and Silver are still on “sale” – their ability to artificially suppress the markets works for a short term fix, but if consumer demand continues they won’t be able to keep it up. Just recently JP Morgan took a massive loss attempting to keep the price of Silver down. Though this area requires research – trust me when I say the current Gold and Silver prices are not a reflection of the true value found in this asset class. It is a manipulated low, and the manipulators are losing the battle to suppress the price.

Eliminate extra Risk

In times of economic collapse, it is extremely significant that you hold the goods in your hands. Its big that you have your wealth stored in something material that doesn’t rely on paper and the law to uphold and doesn’t require a third party surviving.

Gold or Silver?

When making the choice between Gold or Silver its important to note the following:

Silver is more undervalued than Gold – so likely has more future growth.

Silver has more industry demand than Gold – so its not only an asset, its a commidity used in products like cellphones, laptops, and batteries.

Silver is known as “the poor man’s Gold”. It’s cheaper to get into. But the rich are investing in it anticipating the middle class running into Silver during a time of collapse – which would drive the prices super high.

Some basic advice

Don’t invest until you learn and have a plan.

So what kind of potential growth are we talking? Some people are expecting Silver to hit 100 – 150 an ounce. (Its in the mid 30's right now). If it just hits a bit above $100 bucks you tripled your investment. Not bad.

But it all depends on if we experience financial collapse.  Gold and Silver are foundational investments – they are not get rich quick plans. It might take our economy five years to collapse. 300% return doesn’t sound as good when it consumes your capital for five years.

My main goal in this article is getting you to think about what will happen to your wealth during this collapse and how you can work to preserve it. If you are thinking Gold and Silver might be good choices and have decided to research it some more – awesome. I feel both (but especially Silver) are huge opportunities and you should consider it in your plans.

Here’s to your future.

~ Jonathan

P.S. I will be doing more articles on this topic and giving links to resources soon. Email me if you have any specific questions on the matter.

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The Astonishing Secret of Mexico’s Long-Lost Silver Treasure Maps

Tomorrow is the last day to sign up for the new mining stock recommendations I’m released on Tuesday. Plus, it’s also your last chance to save $1,195.

Meanwhile, just as some pundits were saying silver was overdue for a decline, it surged AGAIN this week, shattering previous highs and chalking up still more profits for investors.

So now, more than ever, it’s time to pay attention to the most fascinating story any silver miner has ever told me.

The story begins 507 years ago. That’s when a restless, arrogant and mischievous 18-year-old Hernán Cortés left his small provincial Spanish town to find adventure and riches in the New World.

And sure enough, within a couple of years, the young man was already rich in both land and slaves — and had also earned great favor with the Spanish crown by participating in the conquest of Cuba.

As a result, Cortés was given the honor of establishing a colony in mainland Mexico in 1518. The next year, he set out to conquer the huge country with just six ships, 14 cannons, 16 horses, 110 sailors and 773 soldiers.

After arriving in Veracruz, Cortés famously scuttled his own ships to make it impossible for anybody in his small party to desert and return to Cuba.

Over the next three years, Cortés and his men cut a swath through the center of the country, crushing the Aztecs and formally claiming Mexico for the Spanish crown. In return, Charles V of Spain appointed Cortés as governor, captain general and chief justice of the newly conquered territory.

Many of the areas conquered by Cortés quickly proved to be rich in silver, and by 1527, Spanish mines, worked by Native American slaves, dotted the region.

Those mines quickly became Spain’s primary source of precious metals in the New World, and for the next 383 years, they produced untold thousands of tons of silver and other valuable metals.

But then, during the Mexican Revolution in 1910, the mines were suddenly abandoned — NOT because the silver had played out, but because the peasants in the area chased the people who had run the mines out of Mexico.

For the rest of the 20th Century, Cortés’ silver was virtually forgotten. The mines and the refining plants were left deserted until 2006, when a virtually unknown Canadian mining company quietly acquired nearly 400 square miles of the richest mining land in this region on the cheap …

And quickly found that the silver ore that had been discarded centuries ago is unbelievably rich by today’s standards.

According to the company’s geologist:

“They (the Spaniards) were mining grades of 1 kilo of silver per ton of ore and above. They left the 500-gram-per ton silver behind.”

The great news is, thanks to modern mining techniques, veins like these that contain 500 grams of silver per ton of ore are considered to be remarkably rich in today’s world!

Many of the ancient buildings still mark the spots where thousands of tons of silver were processed.

The miners quickly stumbled upon a second bonanza — NOT in the ground, but in the private collection of a local resident:

Ancient maps showing the exact location of more than 2,000 old, abandoned mines on the company’s land — some dating from the days of the Spanish conquistadores!

Almost immediately, the geologist noticed that the veins of ore in the northern part of the district lined up almost perfectly with the veins farther south, but …

There was a huge gap of unexplored land in-between — land that could be … SHOULD be every bit as rich as the land that surrounds it!

Now here’s the bombshell: Just recently, drilling between these two zones demonstrated that they are the part of the same deposit!

That “empty space” on the map is loaded with previously unexplored veins that are far richer than any of the ore the Spaniards left behind.

While the silver in and around the old abandoned mines is rich by today’s standards at up to 500 grams of silver per ton of ore …

The company is opening a new mine this year in an area that has already been shown to have staggeringly rich deposits: 4.8 KILOS of silver per ton of ore!

That’s nearly TEN TIMES RICHER than the richest ore left behind in the old mines!

Put simply, this tiny, little-known mining company now has a virtual MONOPOLY on 2,000 abandoned mines containing ore that is rich at up to 500 grams per ton of ore …

PLUS the rights to build new mines to fully exploit the virgin territory — and far RICHER ore — in the areas around them …

All in one of the RICHEST silver districts that the world has ever seen!

This one discovery could transform this small stock, which recently traded at $1.50 a share, into a $5 stock pretty quickly … and over time, I expect to see it trading at $25 or even more.

Silver and other metals valued at $357 million discovered in less than ONE-THIRD of the company’s land holdings!

This rock is a piece of quartz that contains silver ore — the black rock intruding into the quartz. The black color comes from other minerals that mix with the silver.

Recently, the mining company determined that mineral resources in just ONE-THIRD of the company’s holdings include …

Silver valued at $207.4 million …

Zinc valued at $103.7 million, and …

Lead valued at $47.7 million.

The total value of the silver, zinc and lead in this one portion of the company’s land, before mining costs, is 5.5 TIMES the entire market capitalization of the company’s stock …

And the company controls more than THREE TIMES that much land in the area!

Gains of at least 276% are likely!

In another service a few years ago, I recommended the parent company that owns this firm.

Same company, same CEO, the works! Since then, that stock is up a whopping 276%. If this stock does well, you could invest $15,000 and walk away with as much as $56,400!

But when news about this great silver stock and the amazing finds it has made gets out, I see it eventually going to at least $25 per share, based just on the current above-ground value of their metal reserves alone!

Now, if you’re skeptical that this stock could explode to more than $25 per share, I certainly understand. But the simple truth is, other, very similar junior silver producers — the kinds of silver stocks I specialize in — have done even better.

Take Silver Standard, for instance: A few years ago, you could have bought this stock for less than $1.50. But after its first mines went into production in 2009, the stock exploded to more than $25 per share!

Meanwhile, this company I’m set to name for you now is already producing silver, lead and zinc. Plus, it is increased production at the blistering pace of 30% per year and opens a new mine every 18 months on average.

There’s so much more
I need to tell you about
this remarkable company.

And it’s all in your free copy of
Three Red-Hot Silver Plays for 2011!

The last time I published an Intelligence Briefing on an opportunity like this one, 1,296 investors each paid $595 for copies of that report. But in a moment I’ll invite you to get the Intelligence Briefing I just completed on this silver bonanza — and two others — for free.

First, though, let me tell you why I believe it is absolutely critical that you get your copy of this remarkable profit guide immediately …

The inescapable truth is that silver is red hot.

Just think of it: In January 2001, you could have bought 5,208 ounces of silver for just under $25,000 …

And when the clock struck midnight this past New Year’s Eve, your $25,000 investment would have been worth a staggering $186,000.

That’s right: Silver prices soared 544% — posting a 5.4-fold increase from $4.80 per ounce to $30.91 per ounce!

And now, this highly profitable trend is accelerating wildly: In the past five months alone, the price of the white metal has exploded from $18 to a new all-time high of $30.91. That’s a phenomenal 71.7% price surge in less than one-half of one year!

Even more telling, gold only rose 18.3% in price during the same period. That means silver is outperforming gold by a margin of nearly FOUR to ONE!

And despite the fact that silver is leaving gold in the dust, it’s still FAR more undervalued: While gold is already 62% ABOVE its 1980 highs, silver is still nearly 30% BELOW the levels it reached that year!

But if you stock up on silver bullion
coins and bars now, you will
leave huge amounts of money
on the table. Because …

There’s a far more profitable way: With the shares of underpriced miners on the verge of major discoveries. Their stock can rise much, MUCH faster than the white metal does itself!

For instance, if you had invested in a few silver bullion coins last year, you would have seen a gain of about 32% minus the premiums dealers charge when you buy and sell your bullion. Not too shabby.

But if you had invested that same money in a few of my favorite silver miners, your gains could have been far greater. You could have grabbed …

A 73% gain in Pan American Silver Corp (PAAS) … A 94% gain in Silvercorp Metals Inc. (SVM) … A 159% gain in Silver Wheaton Corp. (SLW) … And many more!

Of course, you can’t travel back in time to grab these gains and neither can I. But no worries — because I am now convinced that the greatest gains are still ahead.

In your free copy of
Three Red-Hot Silver Plays for 2011,
I’ll introduce you to two more silver stocks
I expect will explode in the year ahead.

In addition to the miner cashing in on the silver bonanza in Mexico, I’ll also introduce you to …

RED-HOT SILVER PLAY #2: I’ve recommended this tiny mining stock a few times already …

I opened this position in December 2005 and sold by the following May for a gain of 116%. That’s like turning $10,000 into $21,600 in less than 6 months! I jumped back in during January 2006 and sold four months later for a gain of 120.8%, and … I issued another buy signal in March 2006 and sold 60 days later for a gain of 58.3%.

And now, it’s time to go after another killing!

I just made a return visit to the company’s offices and was blown away by what I saw. They’re ramping up production in two main mines — my estimates show they’ll hit 3.8 million ounces of silver equivalent by 2012.

Plus it won’t be long before this Vancouver-based miner announces results of their latest strike. At about 4.7 kilometers long, this huge ore body stretches on forever, and it’s really, really rich!

Only one catch: You’ll need to act quickly to grab the greatest profit potential.

For details, see your free copy of my report: Three Red-Hot Silver Plays for 2011!

RED-HOT SILVER PLAY #3: I just spotted another silver and gold producer that’s also offering a very limited window for substantial gains.

It’s a company that brings us back to one of my favorite places in the world to hunt for buried treasure: The Sierra Madre Range in Mexico. The company’s flagship project is an open pit gold and silver mine. It is also in the exploration stages at other properties.

In the last quarter of 2010, production should be up to 12,000 ounces of gold worth $15.9 million … and up to 600,000 ounces of silver, valued at $16 million. Total production for fiscal 2010 is now estimated at between 51,000 and 52,000 ounces of gold and 1.2 million and 1.3 million ounces of silver.

At today’s prices, that comes to $104 million in precious metals production in a single year — 1.6 times the stock’s total market value!

Plus, the company just raised $150.6 million to expand production.

And if that isn’t enough to make this one of the greatest stock values of the year, the company recently had two pieces of news that weighed on the stock, giving us a chance to get in at bargain-basement prices.

My forecast: I think this stock is going to soar at least 70% in the next 12 months. If I’m right, your $10,000 investment could soon be worth $16,744 with low probability of a significant decline.

And you’ll find this company name and details in my report: Three Red-Hot Silver Plays for 2011.

Three Red-Hot Silver Plays for 2011
— a $595 value — is yours, free
with a zero-risk trial membership in
my Red-Hot Global Resources!

Normally, my field reports on the best resource plays I inspect go for as much as $595 per copy. In fact, 1,296 investors paid that much for a comparable report I wrote on opportunities in the uranium industry.

But I want you to have THIS brand-new field report — Three Red-Hot Silver Plays for 2011 — absolutely free when you accept a risk-free trial of my Red-Hot Global Resources investment service.

As a member, you get plugged in to the most profitable stock market money machine I’ve ever seen:

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Junior miners and small-cap resource stocks that control proven and estimated reserves of natural resources worth many times their total market cap. When you buy them, it’s almost like you’re getting gold, silver, copper, oil and other valuable commodities for free!

That’s why it’s not unusual for shares of these companies to CLIMB at least 3 or 4 TIMES FASTER THAN THE PRICE OF THE COMMODITY ITSELF.

Royal Gold is a case in point: For every $1 advance in the price of gold since 2001, Royal Gold’s share price has shot up by $4.30!

Now, as a sophisticated investor, I don’t have to tell you how challenging it can be to find big winners today. Or that nobody, including me, can boast a perfect record of 100% winners with no losses; that every investment carries some risk of loss. Or that no matter how good you’ve been in the past, the future is another matter entirely; past results are no guarantee of future profits.

And that’s precisely why I check out the stocks I recommend in Red-Hot Global Resources with far greater care than any other investment analyst I’ve ever seen. For one thing, while the vast majority of analysts never leave their ivory towers, I get my hands dirty.

It’s about time those analysts face the facts: The only way to get the REAL scoop on these amazing opportunities is to get off your butt …

Hop on a helicopter … visit the site in person … hike a new claim … examine ore and core samples first-hand … inspect a mine … trace the rich veins of ore personally … and meet face-to-face with the CEOs, engineers and geologists behind each stock.

And that’s precisely what I do!

And I can tell you flatly: If you don’t have someone doing all this for you … well, yeah … maybe you’ll still make some money thanks to the commodity tide that lifts all boats … but you’re going to miss out on the opportunities for the truly BIG winners that I’m finding for my subscribers.

My quests have taken me beyond the Arctic Circle, to the jungles of Dominican Republic … and to Chile’s most remote mountains.

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HINT: I expect the price of copper to rise 50% over the next 18 months. I’ll tell you how best to capitalize!

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HINT: I’ll tell you about an agribusiness investment that could turn your $10,000 investment into $15,510 this year!

And here are three MORE advantages you’ll enjoy when you join me in Red-Hot Global Resources:

You get a solid cushion against downside risk. The companies I follow own billions of dollars-worth of silver, uranium, nickel and gold reserves. These metals will always have value. And that value is often FAR GREATER than what you pay for the stocks!

You get great investments that can only be called “downright cheap!” Great news for you, because, as you probably know, it’s a HECK of a lot easier for small, up-and-coming companies selling at $1 per share to enjoy rapid growth and double in value than for mature companies selling at $70 per share.

You get stocks that are prime targets for big companies on the prowl. With bright futures and so much pent-up value — these small-caps are almost irresistible. When a huge company makes a bid, our profits can explode overnight.

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With your membership in Red-Hot Global Resources, you get ALL the tools you need to help grow your wealth exponentially in 2011, including …

My “Boots on the Ground” Alerts Straight from the Field: It’s only because I’m a globetrotter that I can bring you the inside scoop on small-cap mining treasures. I never know when I’ll find a situation so unique — and dripping with profit potential — that it simply won’t wait. So keep an eye out for my Flash Alerts any time of the day or night … and act quickly for truly massive gains. Weekly Investor Briefings: Once a week — no matter where I find myself — I’ll hop on the Web to give you an audio or video briefing on my latest discoveries in the exploration and natural resources arena. Regular Portfolio and Market Updates: You’ll always know exactly where we stand on our select portfolio of current recommendations … Stop-Loss Bulletins: It’s as important to know when to get OUT as get in. When it’s time to lock in a gain — or stem a loss — I send you an urgent email bulletin with exact instructions for exiting.

Join today and you can SAVE 54%!

Normally, a one-year membership in Red-Hot Global Resources is $2,190 — more than fair, considering that you’re getting my exclusive reports from the field … and that each trade you make could help you turn $10,000 into $21,400, $28,100 … and the potential to turn $15,000 invested in my favorite silver mining stock into more than $56,400!

But if you apply for a one-year Introductory Membership in Red-Hot Global Resources today, during this Charter enrollment period, you get a full year for just $995. You SAVE $1,195 and get every recommendation I release for just $2.73 a day!

Or call TOLL-FREE 1-800-898-0819
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You risk NOTHING by giving

Red-Hot Global Resources
a fair trial!

Just click here to apply for membership now. Your free copy of Three Red-Hot Silver Plays for 2011 will be in your inbox within minutes. Use it to grab huge profit potential beginning immediately.

Then, USE Red-Hot Global Resources to go for even more profits for two full months. Then, and ONLY then, YOU tell ME if it’s for you.

If you agree that my service has the potential to return the entire membership fee to you many times over, do nothing. Just continue enjoying your membership benefits. Otherwise, simply cancel and I’ll rush you a 100% refund on your membership.

And even in the unlikely event that you decide to cancel, I’ll insist that you keep your free copy of Three Red-Hot Silver Plays for 2011 and everything else you’ve received from me in the meantime.

Join me now — you have absolutely nothing to lose.

Minutes from now you could be on your way to a 276% windfall.

Simply click here to get started immediately.

Best wishes,

Sean

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8 Reasons Why Silver Is the Investment of the Decade

If there’s one asset that’s heated up over the last several months amid tensions in the middle east and a second round of the Federal Reserve’s quantitative easing, it’s silver. The price has risen so dramatically, some 20% since January 1, 2011 through today, that investors may be wondering what actions they should take. For those who have not acquired the precious metal, the obvious question is, should I buy now or is silver in bubble territory? Those fortunate enough to have seen the crisis writing on the wall in 2008 and before, and have seen a 200% or more increase in the value on their holdings to date, may be considering selling and locking in profits.

No one can predict what happens next. The fact that silver has “gone to the moon” as metals bugs like to say, should raise awareness and caution in any diligent investor. After all, the last time we saw such meteoric price rises in the summer of 2008, when stocks, commodities and home prices were reaching all-time highs, and precious metals were pushing higher than they had in twenty years, it ended very badly for anyone invested in just about any asset other than the US dollar.

Is there cause for alarm today? Are silver and gold, along with equities and commodities, destined to see yet another massive correction or collapse, as they did when the markets bottomed out in late 2008 and early 2009? The trigger for the last asset crash was blamed, in part, on rising oil prices and food costs, and we are very clearly approaching similar territory today. If gas prices reach that $4.50 mark like they did before many experts, both mainstream and contrarian, have voiced their opinions  that the economy will revert back to no-growth or negative growth, completely disintegrating any semblance of recovery that has been perpetrated on the American people and global populace.

The end result, as in 2008, will likely be a collapse in asset prices.

But will precious metals once again collapse along with equities and commodities, or have we reached the long awaited ‘decoupling’ phase, where tangible assets and historical monetary instruments diverge from traditional paper investments like stocks, or debt based assets like real estate? A similar decoupling occurred in the 1930's, when the Dow Jones and gold assets went their own way:

According to the chart below, silver versus the Dow Jones has outperformed significantly, with the Dow experiencing a collapse versus silver of 86% over the last ten years:

The above chart indicates that we are already seeing a decoupling in terms of value.

Whether you are a new investor deciding whether or not you are going to buy silver at today’s prices, or are currently holding silver related assets and considering whether or not to sell or buy more, we suggest watching the following interview with trusted analyst and financial manager Eric Sprott, whose Sprott Physical Silver Trust is one of the very few “paper” investments that is physically backed with vault-stored (never to be leased) precious metals.

In his latest interview with Canada’s Business News Network, Sprott provides some key reasons for why silver, although priced much higher today than ten years ago, will continue to rise and likely become one of the top performing investments of this decade. According to Sprott, there are various data points that “scream at you that the price of silver has to go higher.”

Before you sell, consider the following reasons for why silver may be the best investment of the decade:

1. Demand is not only up, but still rising. The US Mint in the months of January and February sold as many dollars of silver as they sold dollars of gold. The Chinese used to export 100 million ounces of silver – they now import 112 million ounces – and that’s in a market that’s a total of 800 million ounces, or a 20% shift in just Chinese demand.

2. Supply and Delivery Challenges for Physical Bullion. In a market that trades roughly 400 million (paper) ounces a day, when Sprott Asset Management was preparing to open their physical silver trust they had difficulty acquiring just 15 million ounces. Other evidence direct from the US Mint further solidifies this point. The Mint recently advised potential investors that it can longer coin the popular Silver American Eagle saying, “The United States Mint will resume production of American Eagle Silver Uncirculated Coins once sufficient inventories of silver bullion blanks can be acquired to meet market demand for all three American Eagle Silver Coin products.”

3. Technological demand for silver is increasing. In 2010 industrial production of silver was up 18% due to rising demand from the technology sector. Among other things, silver is increasingly being used in computers, cell phones, and solar panels. Health care, alternative and traditional, is another market segment that will see silver demand increase because of silver’s antibiotic properties. It’s already being used in bandages, clothing, and medical devices.

4. Silver is closing the margin on the gold-to-silver ratio. Historically, though not in recent decades, silver has traded at an average ratio of about 16-to-1. It is currently trading at about 40-to-1, and just recently was trading at nearly 70-to-1. If the historical ratio of gold to silver holds up, then if gold is priced at $1600 an ounce, silver would need to be trading at about $100. If gold were to trade at $3000 an ounce, a prediction made by several contrarian precious metals analysts, silver would trade at $300 if the gold-to-silver ratio returned to historical norms.

5. There is a silver shortage. We’ve already discussed the supply issues that many investors taking large deliveries may be experiencing. But, there is also a pricing disconnect occurring, that indicates supply problems, at least in the short-term, are prevalent. According to Sprott and other analysts, forward looking silver prices indicate that a silver shortage exists. The phenomenon of price “backwardation” is one way of being able to identify this. Though there are millions of ounces in the ground, backwardation can mean there is simply not enough of an asset available right now. Sprott, for example, says that when they purchased the aforementioned 15 million ounces of silver, some of it wasn’t even minted until two weeks after they made the purchase, suggesting that existing inventory is simply not available.

6. More (Paper) Money. As the US Federal Reserve and central banks around the world continue to deal with fiscal issues through monetary means, more and more paper currency hits the global marketplace. As a result, more money is chasing fewer goods, with silver being one of those goods. For the reasons above, as well as the fact that there is more money available, the price of silver will continue to “inflate,” just like other hard assets. Over the last 100 years, since the Federal Reserve was established, the US dollar has lose some 95% of its value. This is a long-term 100 year trend, and given the current policies of the Fed, which are no different than the policies of the last century, the US dollar will continue to depreciate.

7. Gold for Main Street. While an ounce of gold may cost $1500, silver is significantly cheaper, giving working individuals and families the ability to invest without having to spend this month’s mortgage on a coin. Silver is available in various weights and mintages, from one ounce government issue coins like silver eagles to one-hundred ounce poured bars from Johnson Matthey. In addition, for newer investors, though fake silver exists, the risk to the investor is much lower because of the price, and investors can choose US “junk silver” coins like pre-1965 half dollars, quarters and dimes for easily identifiable and tradeable instruments. With silver, anyone who has a desire to do so can become their own central bank.

8. Crisis. Inflation is often identified as the single biggest reason for why precious metals like gold and silver rise. However, this is not always the case. During the 1990's, a period where inflation was anywhere from 1% to 6% annually, the price of gold and silver barely moved. There was simply no investor demand. One of the reasons for this may have been because during the 90's, the US was experiencing a period of boom. It was the advent of the internet and the general mood was positive. Stocks were rising and were the primary investment vehicle of choice during the technology boom. Gold and silver took a back seat. After the technology crash and September 11th, however, sentiment changed. As boom times gave way to recession, precious metals rose. They continued to rise as governments, namely in the US, passed more restrictive laws on everything from personal liberty to capital investment. When countries start restricting freedoms, people tend to shift capital. Throughout the first decade of the 21st century, this may have been the primary reason for gold and silver’s powerful rise. After the collapse of 2008, more and more investors began to realize that crisis is upon us. The government, failing to mitigate the problem, and likely making it even worse, forced those in traditional investments into the safe haven historical assets of choice – gold and silver. Thus, while inflation may play a part in the rise of precious metals, it is the perception that government is unable to deal with crisis that has been the real driving force. As the economic crisis continues to deepen, civil unrest breaks out around the world, and citizens lose faith in their government’s ability to manage crisis, the prices of precious metals, the last vestige of monetary security, will continue to rise.

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Silver stock gains: 104%, 275%, 720%! What to do …

In the last 12 months alone, select silver stocks have surged by 104%, 275%, even 720%! (More details in a moment.)

These opportunities are so remarkable, I’ve taken some unusual steps to make sure you don’t miss out on the next ones:

First, I’ve just recorded a brand NEW video, focusing on ANOTHER one of my favorite silver stocks, which has NOT YET made its big move.

Second, today starts my three-day sprint at the Prospectors & Developers Association of Canada (PDAC) conference, one of the world’s great Super Bowls of mining.

I’ll have a first-hand look at the movers, shakers and power players who will be making those deals …

I’ll be talking to the CEOs, geologists and chief engineers of some excellent, little-known companies …

And I’ll be putting together my list of the next great companies I want to buy — most of which I’ve already inspected in the field.

The timing couldn’t be better:

The price of silver has shot up 108% from the start of 2010. In the past six months, the value of the white metal has jumped nearly 80%, to more than $34 an ounce from around $19 an ounce. In the last month alone, its price has increased nearly 23%.

Wow!

Look. The mood in Toronto is positively electric, and for good reason. Just look how much precious metals stocks have soared in the past year:

Gabriel Resources is up 104.5% … Cangold is up 125% … Hinterland Metal is up 150% … Mirasol Resource is up 184.1% … St. Eugene Mining is up 227.3% … U.S. Silver is up 275.8% … Silver Sun Resources is up 338.9% …

Plus …

Silver Mines LTD is up 449.3% … Sabina Gold & Silver is up 484.8% … Arian Silver is up 679.6% … and Huldra Silver is up a mind-boggling 720%.

All in just 12 short months!

So be sure to watch your inbox for my dispatches from this landmark mining conference.

In the meantime, if you want an advance peek at THREE of my current favorites, you really MUST to see my new video which I just posted to the web yesterday.

Turn up your computer speakers and click this link to view it now!

Yours for trading profits,

Sean Brodrick

View the original article here

Investing in Silver Instead of Toilet Paper Currencies

03/04/11 Tampa, Florida – I was intrigued by an essay titled “What You Need to Know About Buying Silver Today”‘ which came as the result of Jeff Clark, of Big Gold, being interviewed by The Daily Crux.

Of course, Mr. Clark knows all the reasons to buy silver, and deftly ticks them off, one after another, as I would do if they ever asked me, instead of everyone always rudely shouting at me, “Hey! You can’t come in here!” and “Don’t eat that!” and, “Stop yelling at me to buy gold, silver and oil stocks as protection against the suicidal lunacy of the Federal Reserve creating so much money!”

Mr. Clark never actually gets to the point of hysterical raving that people should buy, buy, buy silver, silver, silver, and calling people idiots – idiots! – if they are not buying silver, which is convenient for me because that is exactly what I do. Idiot! You’re an idiot if you are not buying silver! See?

Anyway, The Daily Crux asks the Big Question On Everyone’s Lips (BQOEL), which is, “Just how high do you think silver could go?”

I was hoping that he would, as I would, immediately launch into “attack mode” and say, “What kind of stupid question is that to ask? The whole thing depends on the purchasing power of the dollar, which is literally headed towards zero because of the constant, massive, unbelievable over-creation of dollars by the evil Federal Reserve, which would mean that the price of an ounce of silver would be, literally, infinity dollars! That’s how high silver will go, you moron, as will the prices of everything go to infinity, when the dollar has zero purchasing power left, and is, finally, like all fiat currencies, worth Exactly Freaking Zero (EFZ)!”

I could mention Zimbabwe because Zimbabwe is a very recent example, of the thousands and thousands of fiat currencies through history that have gone to zero value because of over-creation, of a currency that went to zero value because of its over-creation.

As a case in point, and in a particularly pointed-yet-distasteful way as befits the whole subject of currency destruction, massive inflation, bankruptcy and ruination, I remember a photo of a sign posted in a Zimbabwe toilet, advising users as to what could be properly be used as toilet paper in this particular crapper.

It read, “No cardboard. No cloth. No Zim notes.” How disgusting! Money that is not even usable as toilet paper!

So, the question for today’s Mogambo Pop Quiz (MPQ) is, “What is the price of an ounce of silver, priced in Zimbabwe dollars?”

Well, since the Zimbabwe dollar is not officially worth zero, the MPQ is an easy one: The price, in Zim notes, is, literally, infinity!

This means that one ounce of silver – one lousy ounce of silver! – now costs more than all the Zimbabwe dollars ever printed! Ever!

And, more horrifically and closer to home, since the American dollar is on the same sorry path, the fate of the US dollar will be that of the Zimbabwe dollar, making silver a screaming bargain, and if you are not buying it, then you are an idiot!

At this point, I would usually degenerate into a Patented Mogambo Brand (PMB) of raw, in-your-face aggression on how the American dollar is a Big Piece Of Crap (BPOC) because of the Federal Reserve creating so staggeringly many of them, or a rant about how we Americans are a big bunch of idiots, or how the ultimate price of one ounce of silver is, like Zimbabwe, more than all the American dollars ever printed, making silver, at less than $35 an ounce, such a screaming bargain that to not buy silver is to proclaim yourself an idiot.

Mr. Clark, sensing my underlying motive, appeals to our greed! “Good choice!” I say!

He says, “Many people don’t realize this, but silver rose 3,646% in the 1970s, from its November ’71 low to its January 1980 high. If you were to apply the same percentage rise to our current bull market, silver would climb another 500% from here, and the price would hit $160 an ounce.” Wow!

Of course, all of these fabulous gains in silver presume a dollar with a relatively consistent buying power, which ain’t going to happen, and instead the dollar will continue to fall in purchasing power and thus everything will become more and more expensive, all the time more and more expensive, all because the despicable Federal Reserve is continuing to create So Freaking Much Money (SFMM).

But you won’t care! Your buying gold, silver and oil stocks all along the way, as the evil Federal Reserve kept creating so much money, will have made you rich, rich, rich! And so what is a horror of life-or-death misery for others is of no consequence to you, and you just say to yourself, “Whee! That investing stuff was easy!”

The Mogambo Guru
for The Daily Reckoning

Richard Daughty (Mogambo Guru) is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the writer/publisher of the Mogambo Guru economic newsletter, an avocational exercise to better heap disrespect on those who desperately deserve it. The Mogambo Guru is quoted frequently in Barron's, The Daily Reckoning , and other fine publications.

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