Silver 'Misbehaves' in Recent Rally: Time to Buy

Investors familiar with the precious metals sector are used to seeing a pattern in each short-term rally in this market. Silver begins these rallies especially undervalued versus gold, then gains back much of its lost ground by outperforming gold for the duration of the rally.

However, with gold's recent surge we have not seen this typical pattern repeat, which begs the question: why not? Clearly, investors need to gain some understanding of this new, recent behavior in order to decide when/if to increase their investment in what is arguably the most under-priced commodity on the planet.

The easy “answer” is that silver has been held back by its additional status of being an “industrial metal”. Copper, often referred to as an indicator of the strength of the global economy, has leveled-out over the past few weeks – after marching steadily higher for most of the year. By itself, this answer seems inadequate, as silver's superior performance (versus gold) in past rallies has occurred irrespective of moves in the copper market, yet in the current precious metals rally silver is only outperforming gold on days where there is a broader rally in commodities.

I recently saw some interesting speculation from precious metals commentator, Jim Willie – who reported a rumor that India had paid the IMF for its 200 tons of gold with silver. However, on the surface at least, this rumor seems to lack any plausibility. If the purpose of selling some of the IMF's gold was to increase liquidity for its lending programs, then simply swapping gold for silver would be an utterly pointless exercise.

Perhaps the appropriate way to view this recent scenario is not that silver has under-performed, but rather that gold has over-performed (over the immediate term). It is interesting to note that prior to the announcement of the IMF sale of gold to India that several (legitimate) precious metals commentators had been predicting short-term weakness for gold – after India's gold-buying holiday (“Diwali”) passed on October 17^th , and before Indian buying for its “wedding season” heats up in the 4^th quarter.

With the “surprise” sale of gold to India, some commentators are suggesting that the surge in gold is not so much a matter of the sale being seen as a “bullish indicator” for the sector, but rather that it caused some panic, short-covering – as there remain a group of foolish traders who seek to emulate the shorting behavior of the infamous bullion-banks (but lack the governmental “backing” which props up that crime syndicate).

This interpretation of the market would seem to provide the most cohesive explanation of recent price movements. Rather than gold behaving as expected, and silver under-performing, it is silver which has behaved predictably, while gold has defied expected behavior due to the consequences of the IMF gold-sale.

Before leaving our analysis of what has happened to focus on what will happen, I would like to make a few more observations about recent market behavior – for markets as a whole. The vast majority of the market is apparently accepting the recently-announced U.S. GDP estimate of +3.5% for the 3^rd quarter, despite the inherent absurdity of the U.S. experiencing strong “growth” in GDP while its economy continues to collapse (see “U.S. Economy is NOT Growing”).

However, since that announcement, we have seen both commodities and equities markets deteriorate slightly – rather than the news igniting more manic buying, as has been the pattern earlier this year each time the U.S. announced “good news” for the economy. This atypical behavior suggests two possible scenarios, but unfortunately they have opposite implications for the precious metals market.

The first scenario is that Wall Street banksters have begun bailing out of the market with their ill-gotten gains. This entire “rally” has been artificial in every sense of the word. Not only do real economic fundamentals support little if any of the improbable gains in U.S. equities, but (as regular readers have heard on several occasions) insiders have been increasing their selling throughout this huge “rally”. Thus we have one of the fastest, steepest rallies in U.S. market history at the same time that the people running U.S. corporations have little faith in their own companies and the economy continues to steadily deteriorate (although admittedly at a slower pace).

Keep in mind that with the wealthiest 1% of U.S. society holding 55% of all stock, that Wall Street literally controls a majority of all U.S. equities. Indeed I've seen estimates that Wall Street controls as much as 70% or more of all U.S. equities trading. All it takes is for this cabal of oligarchs to conspire to buy at the same time (after loading up on taxpayer hand-outs) and the markets go up irrespective of what is actually taking place in the real world.

Naturally, the reverse is true as well. An agreement by the oligarchs that now is the time to sell means that U.S. markets (and likely global equity markets) are heading lower. If a sell-off has been secretly decreed by Wall Street, we can certainly expect spill-over into the commodities markets – as the “fast” hedge-fund money which piled into commodities can be expected to (temporarily) flee from these sectors once these Pavlov's Dogs get their cue from Wall Street.

The other interpretation of events is quite literally a totally opposite perspective. Instead of recent market behavior being an “early warning sign” of another orchestrated manipulation by Wall Street oligarchs, we could view recent behavior as the beginning of a collapse in confidence of the economic fantasy-world depicted by both Wall Street and the U.S. media propaganda-machine.

Supporting this view is the fact that we have recently seen U.S. markets weaken when “bad news” is announced. This is a total break from the pattern of the previous eight months, where the propaganda-machine managed to “sweep” one item of bad news after another “under the carpet” - with the U.S. equities juggernaut steaming higher irrespective of such news. It was only terrible news which derailed that “rally” - and even then, only for one or two days.

If, in fact, the markets are beginning to reject/disbelieve the “don't worry, be happy” message of market charlatans like “Helicopter” Ben, and Tim-the-tax-cheat, then the upcoming sell-off in U.S. markets will likely not be duplicated across all other markets. Specifically, if the markets are starting to shrug off U.S. propaganda, it also implies a further erosion of confidence in the U.S. dollar.

In this scenario, what we should expect is some bona fide “decoupling”of markets. The U.S. dollar will move lower with U.S. equities – reversing the pattern which has been seen for most of the year. Not only will this escalation in dollar-weakness be good for all commodities, but it would further cement the status of the U.S. dollar as the new “carry trade” currency.

With the carry-trade being a vehicle which supports greater economic activity and thus tends to push markets higher, we could finally witness a genuine demarcation between the equity markets of the weakest economies (i.e. the U.S., the U.K., and a few other developed economies) and the strongest – such as Brazil, China and India.

This scenario would provide a dual “push” higher for precious metals. Rising commodities-inflation would be certain to push precious metals higher, while an acceleration in the collapse in confidence in the U.S. economy would also be very bullish for gold and silver.

As a matter of personal disclosure, I added to my own holdings of silver bullion this week, in some respects following my own advice. In “Gold: Is NOW the time to buy?”, I suggested to readers that while from a long-term perspective gold should still be viewed as “cheap”, that with silver being dramatically under-priced versus gold (along with the shares of precious metals miners), that investors may want to channel their current investments in this sector into the areas which currently have the best risk/reward profile.

I also based my decision to add to my own holdings on the extremely bullish behavior of precious metals throughout most of the year. The normal sell-off which takes place in this sector during the “seasonal weakness” of late spring and summer never materialized this year, while the fall rally began weeks earlier than normal.

Given that fundamentals for precious metals continue to get stronger week-by-week, I see no reason for the pattern this year of superior performance to end. Thus, even in the face of a potential (short-term) bearish scenario for precious metals, my own view of the risk/reward parameters is that the risk of being “underweight” in this sector (and ending up “chasing” the market) exceeds the risk of buying prematurely.

As always, I'm comforted by the knowledge that even if I'm currently misreading the market – and precious metals should weaken over the short-term, that I can rely upon our morally- and intellectually-bankrupt “leaders” to continue to take the easy way out: continuing their utterly reckless monetary policies, which can only end in a devastating wave of inflation (and long-term strength in gold and silver).

Continuing with this longer term perspective, for reasons I've itemized in many previous commentaries silver is certain to rise to many multiples of its current price. Given the extremely fragile and over-leveraged position of the anti-gold cabal, the likelihood is that either the silver market or the gold market (or both) will finally shake-off decades of manipulation in dramatic fashion: with some form of major default in either the fraudulent, Comex market or with the equally-tainted bullion-ETF's.

Such an event can never be predicted through “technical analysis”. As a result, those investors sitting on the sideline holding money which they want to invest in this sector, but waiting for the “perfect” buying opportunity are likely to be their own worst enemies. Given that much of the pain which investors have experienced in markets recently is a direct result of greedy behavior, investors cannot allow a continuation of that greed to prevent them from taking prompt action to repair their damaged portfolios through adding to their precious metals holdings.

While even pension funds like CALPERS have responded to their portfolio-losses through increasing their amount of high-risk investing, this is not the time for sane investors to mimic such recklessness. Even if we accept the U.S. economic fantasy-world depicted by the media propagandists, their own forecasts call for a very uneven “recovery” in the months ahead.

Investors are currently presented with a rare opportunity in markets. The safest form of investment (precious metals) also represents the sector with the most-favorable parameters for real gains. Take advantage of this “golden opportunity” while it lasts – and buy some silver.

Comments

[Bernie2:]

Thanks for this article. I have been looking for a way to buy physical bullion or funds backed by physical bullion and was wondering if you or anyone else has any advice.

One place I found is bulliondirect.com. They store your metals for free but the spread is quite high between buying and selling. Any thoughts?

Then I came across the Canadian Silver Bullion Trust SBT which is backed more than 90% by physical bullion and seems to be managed by the same people as CEF and GTU. Does anyone have any thoughts on that? Is that a safe way to buy silver? From a tax point of view (if one takes advantage of the PFIC status) long term gains would be like regular stocks not collectibles like the etfs or physical bullion. The trust just seems to have started this summer. See: silverbulliontrust.com

The other thing I noticed was that SBT offers warrants to buy trust units for USD 10 plus the cost of the warrant (currently about 1.50 CAN) anytime between now and end of April 2010 when the warrants expire. The warrants seem quite cheap to me and would limit the loss in case silver should fall dramatically. However, it seems that when the trust was formed this summer they issued a lot of warrants. What concerns me is that over 2 million warrants have been issued but only 25.000 sold so far. Is that a risk? Or, as warrants are bought, do they simply buy silver options for when the warrants expire in April 2010.

The units and the warrants trade on the Canadian exchange (but can be bought through etrade for example) and the units also trade as svrzf.pk on the OTC exchange.

Any advice would be appreciated

Cheers
Bernard

Nov 09 08:39 AM

[Jeff Nielson:]

Hi Bernard.

There ARE reputable bullion-ETF's, but certainly in dollar terms they are a tiny minority. I have not studied the bullion-ETF's myself - as I always wanted physical possession of my bullion.

When/if buying a bullion-ETF, be clear on your strategy. If you're simply buying these funds to TRADE bullion then you can probably afford to be less selective.

However, if you want bullion for security/wealth possession, there is no substitute for the physical metal. When it comes to premiums, there are three ways to reduce them.

One, (for those with a large amount of dollars) you can buy from the source: the Comex. It requires a substantial investment to purchase a "contract" - however this is possibly an option for several family members to ante-up collectively.

You can purchase bars/coins though private purchase/option - whether it's on E-bay or a coin "show" or something similar.

There are also some discount-retailers - who will sell gold/silver for lower premiums.

Call me 'paranoid', but I would rather pay an extra couple of dollars an ounce, and buy them in person - where I can be certain I'm obtaining the genuine items. I have read some reports of "counterfeiting" - and of course there is the internet rumor that even some of the gold bars turning up in bank vaults were tungsten-filled forgeries.

My own approach is to acquire bullion for security, and to trade the miners for the bulk of my "paper profits". Each person should clearly decide on their own strategy - and then stick with it.


On Nov 09 08:39 AM Bernie2 wrote:

> Thanks for this article. I have been looking for a way to buy physical
> bullion or funds backed by physical bullion and was wondering if
> you or anyone else has any advice.
>
> One place I found is bulliondirect.com. They store your metals for
> free but the spread is quite high between buying and selling. Any
> thoughts?
>
> Then I came across the Canadian Silver Bullion Trust SBT which is
> backed more than 90% by physical bullion and seems to be managed
> by the same people as CEF and GTU. Does anyone have any thoughts
> on that? Is that a safe way to buy silver? From a tax point of view
> (if one takes advantage of the PFIC status) long term gains would
> be like regular stocks not collectibles like the etfs or physical
> bullion. The trust just seems to have started this summer. See: www.silverbulliontrust...
>
>
> The other thing I noticed was that SBT offers warrants to buy trust
> units for USD 10 plus the cost of the warrant (currently about 1.50
> CAN) anytime between now and end of April 2010 when the warrants
> expire. The warrants seem quite cheap to me and would limit the loss
> in case silver should fall dramatically. However, it seems that when
> the trust was formed this summer they issued a lot of warrants. What
> concerns me is that over 2 million warrants have been issued but
> only 25.000 sold so far. Is that a risk? Or, as warrants are bought,
> do they simply buy silver options for when the warrants expire in
> April 2010.
>
> The units and the warrants trade on the Canadian exchange (but can
> be bought through etrade for example) and the units also trade as
> svrzf.pk on the OTC exchange.
>
> Any advice would be appreciated
>
> Cheers
> Bernard

Nov 09 10:15 AM

[Liverdiefree:]

Bernard: It really comes down to how much you trust your government. In a smoothly running world with the stocks and paper products actually being honest products you would be safe with them (although the largest silver short also runs the silver ETF SLV so you decide how honest that relationship is)! In a crisis anything but physical possession of your asset is subject to interference in a myriad of ways and even physical possession is subject to a forceful confiscation attempt. You takes your pick and you makes your choice. Personally, I trust nothing about the market or, in particular, government at this point in time and for a long time to come. They will be glad to repossess your hope and leave you with a tiny bit of change. Forewarned is half an octopus. Cheers.

Nov 09 10:45 AM

[jimbo's gra...:]

Jeff - Bernard asked you where is the best place to buy silver bullion at a good price (without too many fees) and you babbled through your answer without ever giving a direct answer to the question. Your article was quite filled with babble as well. Reading some of these stock related articles I find online I get the feeling that the writers think the longer and drawn out their articles are, the more significant their opinion. I'd much rather read a two paragraph article that gets to the point than sift through a two pager where three-quarters of it is the author's effort to impress rather than simply get to the point. So let's get back to the original question by Bernard. If we want to obtain physical (legitimate) silver bullion without too much extra cost, where do we go? (and please don't say ebay again. I think I'd rather buy my silver from a legitimate source).

Nov 09 11:07 AM

[Silverbull21:]

Hi Bernie2,

I'm a physical bullion broker in B.C. I can certainly offer some insight.
my email is [e-mail], website wwpmc.com

Thanks Bernie.

Rob


On Nov 09 08:39 AM Bernie2 wrote:

> Thanks for this article. I have been looking for a way to buy physical
> bullion or funds backed by physical bullion and was wondering if
> you or anyone else has any advice.
>
> One place I found is bulliondirect.com. They store your metals for
> free but the spread is quite high between buying and selling. Any
> thoughts?
>
> Then I came across the Canadian Silver Bullion Trust SBT which is
> backed more than 90% by physical bullion and seems to be managed
> by the same people as CEF and GTU. Does anyone have any thoughts
> on that? Is that a safe way to buy silver? From a tax point of view
> (if one takes advantage of the PFIC status) long term gains would
> be like regular stocks not collectibles like the etfs or physical
> bullion. The trust just seems to have started this summer. See: www.silverbulliontrust...
>
>
> The other thing I noticed was that SBT offers warrants to buy trust
> units for USD 10 plus the cost of the warrant (currently about 1.50
> CAN) anytime between now and end of April 2010 when the warrants
> expire. The warrants seem quite cheap to me and would limit the loss
> in case silver should fall dramatically. However, it seems that when
> the trust was formed this summer they issued a lot of warrants. What
> concerns me is that over 2 million warrants have been issued but
> only 25.000 sold so far. Is that a risk? Or, as warrants are bought,
> do they simply buy silver options for when the warrants expire in
> April 2010.
>
> The units and the warrants trade on the Canadian exchange (but can
> be bought through etrade for example) and the units also trade as
> svrzf.pk on the OTC exchange.
>
> Any advice would be appreciated
>
> Cheers
> Bernard

Nov 09 11:36 AM

[Silverbull21:]

Hi Bernie,

I'm a physical bullion broker in B.C., I'd be happy to offer some insight.
feel free to shoot me an email [e-mail]

Thanks Bernie,

Rob

Nov 09 11:37 AM

[SilverHog:]

I've purchased from Monarch Precious Metals, First Majestic Silver Corp., and NorthWest Territorial Mint.

If you want chunks of silver (bars) go with Monarch.
If you want 1 oz coins (silver rounds), if you watch their prices every day and catch them right, you can do well with First Majestic.

If you want it now, and are willing to pay $1 premium per oz, go with Apmex or Golden State Mint (I think GSM includes shipping and insurance in that $1 markup).

Nov 09 11:48 AM

[GoldLovingT...:]

I have had to fight my son-inlaw (who works for a big financial company whom I won't name) to get my saving into gold and silver. He has reluctanly put me in gld & sld (i think). I beleive after reading your articles most of the people in these organzations are out for themsevles and their own pocket books. I beleive my son-in-law now falls into that category and am looking to run from him and his compnay as fast as I can. Who can I trust to manage my savings and retirement and get me in the the physical ownership instead of the paper farce he currently has me in?

Thanks

GoldLovingTurtle

Nov 09 11:59 AM

[The Recusant:]

Kudos for a great and detailed article. One of the scenarios that might also occur is the "banksters" dumping the equities and buying up gold. Although they hate PMs because it devalues the very source of their wealth even they must see the handwriting on the wall. I would not doubt that sometime in the future they jump big time into the PMs. And silver would ride the crest of that wave.

Nov 09 12:19 PM

[Boxed Merlot:]

After reading the article, I was struck by the notion of 1% of society controlling 55% of the wealth as being the reason for Au's rise and the apparent lack of appreciation of Ag. This makes since in that one oz or 1K oz of either in physical possesion requires the same space and possible degree of security, why go to the trouble for tip money? It would seem the "big fish" are exiting the casino and a cashing in of their chips is underway. They are at least doing it in an fairly orderly fashion, possibly so as not to arouse the other 99% that the vault has been cleaned out by allowing the Ag in the floor slots to remain in circulation.

Nov 09 01:05 PM

[Grumley:]

It's not surprising that silver is lagging behind gold and holds much more upside potential. Consider that when speaking with friends and family, NO ONE is talking about buying gold. Yet at least to many of these same friends, gold is still accepted as a monetary medium, even if the importance is diluted by the media.
Silver is lower for two reasons; first, of the people who accept gold as having a monetary role even fewer would put silver in the same category. This is especially true amongst the general public that I talk to. Secondly, silver has a much stronger industrial use which facilities this lack of monetary feeling in the metal.
I suspect that as gold continues to rise silver will follow suit. But when people finally accept gold as the survivor of the currency crash, silver will finally be accepted as money as well. When that happens don't be surprised at an explosion in silver as it suddenly becomes the "poor man's" gold.

Nov 09 01:23 PM

[5142152-337:]

Very nice piece on silver Jeff. Thanks. Oh, if that 200 tonnes of gold was paid with silver...undoubtedly it was with silver CERTIFICATES, because what I have been told is that the DOLLARS are flying out of India, China, etc. because the devaluation is costing them BIG TIME!

As to buying silver, you are 100% correct, as I have encouraging posters for many months to buy PHYSICAL silver. Paper silver is fine--IF YOU TRUST YOUR GOVERNMENT--there, that ends that conversation, and debate on what our poster, Bernard, inquired about.

Yes, Bernard, you have choices, but PHYSICAL is the way to go. The reasons are obvious. You have it in hand, you know its real, and you can dispose of it at a moments notice (at a coin dealer, a mint, Ebay, etc.

How much is enough? You can NEVER have enough silver. I have two safes full and I am buying more every chance I can.

Nov 09 01:44 PM

[Jeff Nielson:]

Thanks to everyone for the comments - especially those offering suggestions for those seeking "physical" bullion.

For those who didn't think my own advice was helpful enough, I would hope such people would understand my reluctance to FORMALLY ENDORSE one source over another - especially when restrained by the context of a "comment".

As "Silverhog's" comment indicated, there is no ONE "best answer" to such inquiries.

Nov 09 03:24 PM

[Jeff Nielson:]

Hi Grumley.

Something that we in North American have to guard against is our OWN ignorance of this sector.

Keep in mind that the orthodoxy which preaches that GOLD is "money" but SILVER is not is a Western viewpoint - coming at a time when the West is ceding economic domination of the planet to the East (where both gold AND silver are considered "money").

How many people here know that the U.S dollar is defined in the Constitution as a measurement of SILVER. To the best of my knowledge this has NEVER been repealed - meaning the paper Americans carry in their wallets is NOT a valid form of "money" (as defined in the Constitution).

Mexico has openly discussed re-introducing silver money into their own monetary system.

Meanwhile, across the Atlantic, the Germans (to name just one country) have a DEEP, cultural attachment to silver - and view it equally with gold as a "store of value".

And this is just information from the WEST - which does NOT respect silver (at least supposedly so). Just as many have been shocked by how quickly that "barbarous relic", gold, has regained its luster in our society, I expect to see an equally surprising speed in our society re-discovering that silver is "money" too.


On Nov 09 01:23 PM Grumley wrote:

> It's not surprising that silver is lagging behind gold and holds
> much more upside potential. Consider that when speaking with friends
> and family, NO ONE is talking about buying gold. Yet at least to
> many of these same friends, gold is still accepted as a monetary
> medium, even if the importance is diluted by the media.
> Silver is lower for two reasons; first, of the people who accept
> gold as having a monetary role even fewer would put silver in the
> same category. This is especially true amongst the general public
> that I talk to. Secondly, silver has a much stronger industrial
> use which facilities this lack of monetary feeling in the metal.
>
> I suspect that as gold continues to rise silver will follow suit.
> But when people finally accept gold as the survivor of the currency
> crash, silver will finally be accepted as money as well. When that
> happens don't be surprised at an explosion in silver as it suddenly
> becomes the "poor man's" gold.

Nov 09 03:33 PM

[Johnny Oxygen:]

Jimbo your response was kinda rambling. What was your point?

Nov 09 03:43 PM

[pungent:]

Jeff,

Thanks for the article. We share the same strategy: "My own approach is to acquire bullion for security, and to trade the miners for the bulk of my "paper profits". " A previous article that you wrote gave me sufficient reason to sell off all my SLV shares at a peak and pick up many more shares of SLW on the silver pullback last week. This has given OUTSTANDING results. Thanks! What is your answer to the secure storage of physical assets?

Nov 09 04:36 PM

[Jeff Nielson:]

Hi Pungent.

Thanks for the support - though I can't claim any credit for a shrewd trade.

Storage is (again) totally an issue of probabilities, with particular risks/advantages varying from person-to-person - and (of course) different levels of cost.

1) Store it at home and insure it? How secure do you consider your residence to be? How good a rate could you get from your insurer?

2) Keep it in a safety deposit box? Do you trust your bank? Do you trust your government? Personally, I consider the risk of government confiscation low even in the U.S. What is the justification for seizing gold/silver IF our monetary system is a fiat currency system with (supposedly) no economic value in holding precious metals? Now if our government(s) should begin 'musing' about going BACK onto a "precious metals standard"...?

3) Bury it in a well-hidden, but carefully marked spot near your summer cottage (preferably during the winter)?

Then are other private-sector sources of storage, with greater/lesser degrees of security. Ultimately this is an issue of personal peace of mind - with probably enough educational value for me to do a more detailed examination of the issue in the future.

Sorry that I have no "pearls of wisdom" to offer here.


On Nov 09 04:36 PM pungent wrote:

> Jeff,
>
> Thanks for the article. We share the same strategy: "My own approach
> is to acquire bullion for security, and to trade the miners for the
> bulk of my "paper profits". " A previous article that you wrote
> gave me sufficient reason to sell off all my SLV shares at a peak
> and pick up many more shares of SLW on the silver pullback last week.
> This has given OUTSTANDING results. Thanks! What is your answer
> to the secure storage of physical assets?

Nov 09 05:04 PM

[Grumley:]

Hi Jeff, I certainly agree. The ignornance of silver as a monetary medium is very much a western mistake. Ron Paul speaks often of gold and silver listed in our constitution as the only legal forms of money.

I think it will take some time for people to come to grips with the wisdom of our founding fathers. In the end, while silver should continue its upward push, by way of deeper appreciation from other cultures, I fully expect it to explode upwards when people in the US and UK eventually realize that the jig is up and try desperately to save whatever value they have left.

A number of pundits have scoffed at the idea of owning gold asking sarcastically whether people plan to just "chip" off a piece to buy bread with. Clearly they cannot be dumb enough not to realize that gold will be the storage medium and silver the exchange medium.

Finally when we see silver approach its old ratio with gold people will realize that silver was the real play here.

Nov 09 05:28 PM

[Gold Miner:]

Bravo "Clap Clap Clap" I love this guy. I balance my holdings with equal $ for $ gold to silver "Physical" In Silver American Eagles. Gold Buffalos, Krugerrand, Maple Leaf whatever my coin shop has to sell.

Keep up the brave good work Jeff. { : - ))

Nov 09 09:46 PM

[picman:]

"MY RESPONSE WAS RAMBLING" ???

That's your idea of humor I guess. If anything was rambling, it was the original article. All I wanted to know when I first found the article was good direction on how to buy silver bullion without paying extra fees through the nose and by the end of the article, I had no answer... it was a long, boring, rambling article about very little... something I see quite a bit of on these websites. Why do these writers feel it necessary to babble for 8 paragraphs when they can deliver the point in 2????


On Nov 09 03:43 PM Johnny Oxygen wrote:

> Jimbo your response was kinda rambling. What was your point?

Nov 09 10:05 PM

[Marcus Aure...:]

I'm looking into purchasing silver. I have found a local jeweler to be willing to sell bullion -- was not able to guarantee a regular amount but would keep my name on a list and call when the goods are in (and on the day I was in I was okay with his ask). I'ld probably arrange to buy X oz.s/month. In addition, I have been watching E-Bay and there are a number of people out there selling bullion. Talking with the local jeweler he vouched for the mint from which the silver the EBayer was pushing comes from.

He was kinda pushing me into the silver content coins (as opposed to collector coins) but I'm more comfortable buying bullion.

My motives are mostly to guard against inflation and in my belief that the industrial use of silver (even though it is considered to be "dirty") is a huge and underestimated destructive consumer of silver.

As far as storage, of course, thievery is a risk but I plan to keep pretty much absolutely mum about it (sharing the info with wife, parents, brother, and perhaps an attorney) put it in a safe that is fire proof as well as thieve proof. In addition, I have some other ideas about storage.

Once I started to pile up significant amounts I'ld probably convert the silver from smaller pieces into larger ones and then into gold. Even though I am "buying" the current conventional wisdom that silver is more significantly undervalued gold is a more concentrated store of wealth.

LOL when young and playing D&D our characters always got lots of "gold pieces" to start off with -- even though the Player's Manual or the Dungeon Master's guide stressed that it was far more likely beginning adventurers would probably have mostly copper pieces and maybe a silver piece or two. Well, it was "fantasy" role playing, right?

I've never felt the notion that silver is a "dirty" metal and have always considered it a (not so) precious (as gold) metal. When I was in the Middle East they were mostly about gold but I've seen a lot of silver over there too.

Nov 10 12:53 AM

[Marcus Aure...:]

Jeff,

I was up north at the cottage of a buddy's father. He took me outside and removed the cap of one of the metal tubes of the firewood racks -- full of quarters. Intriguing but one has to wish he hadn't done that if my buddy's Dad is robbed I am immediately a suspect.

Nov 10 01:22 AM

[chux08:]

Look at Peter Schiff's company, Euro-Pacific Capital europac.net I've had a retirement account there for a couple of years now and I couldn't be more happy with how they've managed it. I would call them and inquire about what they recommend for your exact situation and comfort level as everyone's different and I'm sure they'd have several viable options for you to get out of the dollar and do more to protect your wealth. Unlike your son in-law, they'll do EXACTLY what you tell them should you be a knowledgeable investor or they can actively manage your account too if that's what you desire. They have done an outstanding job in managing that retirement account of mine and I would recommend them to anyone, with a BIG thumbs up!!
Good luck!

europac.net/videom...

On Nov 09 11:59 AM GoldLovingTurtle wrote:

> I have had to fight my son-inlaw (who works for a big financial company
> whom I won't name) to get my saving into gold and silver. He has
> reluctanly put me in gld & sld (i think). I beleive after reading
> your articles most of the people in these organzations are out for
> themsevles and their own pocket books. I beleive my son-in-law now
> falls into that category and am looking to run from him and his compnay
> as fast as I can. Who can I trust to manage my savings and retirement
> and get me in the the physical ownership instead of the paper farce
> he currently has me in?
>
> Thanks
>
> GoldLovingTurtle

Nov 10 02:56 AM

[oilgas:]

I suggest you get delivery of the physical. Store some AMark silver 1 oz rounds in a bolted down safe or safe deposit box. The best place I've found to purchase is tulving.com. You have to buy 500 oz at a time though.
God Bless


On Nov 09 08:39 AM Bernie2 wrote:

> Thanks for this article. I have been looking for a way to buy physical
> bullion or funds backed by physical bullion and was wondering if
> you or anyone else has any advice.
>
> One place I found is bulliondirect.com. They store your metals for
> free but the spread is quite high between buying and selling. Any
> thoughts?
>
> Then I came across the Canadian Silver Bullion Trust SBT which is
> backed more than 90% by physical bullion and seems to be managed
> by the same people as CEF and GTU. Does anyone have any thoughts
> on that? Is that a safe way to buy silver? From a tax point of view
> (if one takes advantage of the PFIC status) long term gains would
> be like regular stocks not collectibles like the etfs or physical
> bullion. The trust just seems to have started this summer. See: silverbulliontrust...
>
>
> The other thing I noticed was that SBT offers warrants to buy trust
> units for USD 10 plus the cost of the warrant (currently about 1.50
> CAN) anytime between now and end of April 2010 when the warrants
> expire. The warrants seem quite cheap to me and would limit the loss
> in case silver should fall dramatically. However, it seems that when
> the trust was formed this summer they issued a lot of warrants. What
> concerns me is that over 2 million warrants have been issued but
> only 25.000 sold so far. Is that a risk? Or, as warrants are bought,
> do they simply buy silver options for when the warrants expire in
> April 2010.
>
> The units and the warrants trade on the Canadian exchange (but can
> be bought through etrade for example) and the units also trade as
> svrzf.pk on the OTC exchange.
>
> Any advice would be appreciated
>
> Cheers
> Bernard

Nov 10 10:15 PM

[Bill S. Friend:]

Very lively discussion! I would agree that holding the physical metal is the only way to go. I have about 20 years before I retire and I dont trust the government to provide a stable investment climate (as is one of their primary responsibilities). I have been burned in equities and real estate and simply seek a dependable store of wealth for my golden years. I think a one ounce American (silver) Eagle should maintain at least some of its value. A big dog is still the best deterrent for thieves. Long physical silver, guns, and ammo.

Nov 10 10:35 PM

[Jacob Wilms:]

Only purchase physical metal. Accept no substitutes. Everything else is just a contract upon which you are relying the other party's honesty.
I once tried to take delivery on a 100 oz silver certificate from TD Canada Trust - upon which I was paying storage fees, and TD was unable to produce the metal.
The only thing you can be sure of is what's in your hands now.

Nov 11 08:11 PM