Wednesday, December 28, 2011
Saturday, December 24, 2011
Get ready. We are now entering the final stages in the collapse of the U.S. dollar...
And it's not going to be pretty.
The massive increases in money supplies will tank the value of the dollar and erode the very fabric of America's economic security.
As a result, gold and silver prices are will no doubt skyrocket, despite the short-term major volatility we've recently seen.
Many investors have been rushing to me asking if it's too late to buy precious metals with gold in the $1,500/oz range and recently spiking to nearly $50/oz. I keep telling them the same thing...
Despite whatever the price of gold or silver is today, both metals will be worth more than twice as much within 12 months.
That means $3,000 gold this time next year! After that, I think gold could break $6,500 an ounce.
And as you know, silver's gains will be much greater. When the bull market is all said and done, there's no doubt we could be looking at silver prices exceeding $600 an ounce.
And we can all thank the crooks in D.C. for it...
In his first ever press conference after a policy meeting two weeks ago, Bernanke told us all the ways he has saved our economy.
What a crock!
The Federal Reserve can't prevent the coming financial meltdown.
So far this year, the U.S. Treasury has raised $293 billion in net cash by selling debt securities. And so far this year, the Federal Reserve has purchased a net $330 billion of Treasury notes and bonds.
This translates to the Fed providing 100% of the net new cash the Treasury has raised this year — plus another $37 billion needed to mop up even more mess!
But who will buy Treasuries when the Fed doesn’t? China? Germany? Japan? You? Me?
Going to Hell in a Hand Basket
We are now getting very close and even accelerating toward the end game for the U.S. dollar and the American Empire as we know it. Have your life boats ready.
It won't be much longer before people really start buying both gold and silver to protect themselves from this enviable collapse.
The only way out of our dilemma, absent very large entitlement cuts, is to default in one (or a combination) of four ways:
Outright via contractual abrogation (surely unthinkable)
Surreptitiously via accelerating and unexpectedly higher inflation (likely, but not significant in its impact)
Deceptively via a declining dollar (currently taking place in front of our very eyes)
Stealthily via policy rates and Treasury yields far below historical levels (paying savers less on their money and hoping they won’t complain)
I would bet on a combination of deception, betrayal, and trickery.
Following the Smart Money
This past month, the University of Texas bought a billion dollars' worth of gold and is having it stored in a private depository. This is huge news.
More and more, the intelligent group of our population is starting to figure things out. Unfortunately, however, the unsuspecting masses are being led perfectly by the well-oiled government/media propaganda machine like sheep to the slaughter.
This is going to be a terrible reality for so many unfortunate Americans who have no idea as to what is coming shortly down the road.
And you can rest assured the politicos in Washington will do what all politicians do when they are trapped in such a manner: lie, cheat, steal, spin the facts, cover their asses at all costs, abuse their power, and misinform on a massive scale.
But even with the help of the government-controlled media, the time of consequences can no longer be held at bay.
Free market forces will win; governments, banksters, and their power structures will come tumbling down just as we have been seeing elsewhere around the world these past six months.
The spoils will go to those who were prepared and understood the debacle years before it hit.
The precious metals and the junior mining shares will reward those who understood, and punish those who didn’t.
Yes, the precious metals market will be extremely volatile in both directions at times, but buy the dips as gold and silver will keep heading to higher and higher ground.
As long as the Fed and U.S. government follow the course of “Quantitative Easing” or anything like it, you can rest assured that gold and silver prices will soar!
If you leave your money in U.S. banks in dollars, you will lose most of the purchasing power of your money.
Use the downside volatility to buy any dips you see in the metals. Whether you bought gold at $600, $1,000, or $1,500 an ounce, it really won’t matter much when gold is trading at $6,500 an ounce or more.
The same thing can be said for silver. Don’t worry so much whether you bought at $25 or $50; silver will be priced in the hundreds of dollars an ounce, possibly $600 or more as the silver to gold ratio descends to 15 to 1, and possibly even 10 to 1.
In fact I believe silver stocks will actually be one of the biggest winners over the next 24 months.
Time is of the essence.
The lies of the Fed and the U.S. gov't are becoming bigger and more complex, their noses growing longer and longer as the fiat currency-economic-insanity comes to a head.
Analyst, Wealth Daily
Investment Director, Mining Speculator
Tuesday, December 20, 2011
Last week, I told you about the scramble among investors for American Silver Eagles. These coins, minted by the U.S. government, contain exactly one troy ounce of 99.9% pure silver.
Twice between 2008 and 2009 the U.S. mint had to suspend sales... and demand has almost doubled since then. All-in-all, in the past five years, demand for Silver Eagles has grown 31% annually. Roughly 40 million of these coins will be snapped up this year alone.
Meanwhile, silver has been in one of the biggest bull markets of the decade. During a roller coaster period for the broader market, silver has seen gains in eight of the past 10 calendar years.
So how high will silver go?
To be honest, trying to nail down a specific target number is tough to do. In this case, I think it's best to simply look at what could happen... and why.
That's where things get interesting. In 1980, silver spiked to about $143 per ounce in today's dollars -- roughly $110 dollars, or 393% higher, than today's price.
But things were different then. Back when silver peaked in 1980, it was primarily due to a few investors snapping up as much silver as they could.
Thirty years later, the silver story has changed. That's because silver is needed in just about every electronic device modern society runs on -- from TVs to computers to cameras to MP3 players to iPads... and that's on top of millions of investors snapping up silver as a hedge against uncertainty.
Meanwhile, silver consumption keeps climbing. About 70% of the world's annual silver output is gobbled up by industry. This percentage is rising every year, and once that silver is used, it's rarely recovered.
Since 1999, consumption in electronics has increased 120%. And many new products contain such small amounts of silver that they're not worth recapturing. More than half of all silver in TVs and computers ends up in landfills.
And it's not just U.S. consumers that need more silver. Developing countries such as China and India are using it by the truckload. After all, it takes a lot of silver to equip 2.5 billion people with cell phones.
That's why China's silver imports increased four-fold last year. In fact, in 2005, the Chinese exported 100 million ounces of silver. But by 2010, they were importing 120 million ounces.
The basic problem is that we simply use more silver than we mine.
Every day, the world takes roughly 1.75 million ounces of silver from the earth. But we consume more than 2 million ounces. This kind of consumption is quickly drying up our dwindling silver reserves.
In 1900, there were 12 billion ounces of above-ground silver on the planet. By 1990, we were down to 2.2 billion ounces. Today, we're down to about a billion ounces.
That's a drop of 92%. A vital material, prized by man since the time of the Pharaohs, is literally disappearing before our eyes... used up in industrial products. It has taken 65 years to obliterate the silver inventory that it took the world 5,000 years to accumulate.
It's a different story for gold though. Since 1950, the amount of gold above ground has surged from 1 billion to 7 billion ounces.
Action to Take -->Yet despite these dynamics, silver remains dirt cheap relative to gold. Assuming you use recent prices ($29 per ounce for silver and $1,575 per ounce for gold), you can buy 54 ounces of silver for every one ounce of gold. Seeing as silver is only 17 times more abundant on Earth than gold, these numbers seem highly disproportional.
No wonder investors seem to be snapping up all the silver coins the government can mint.
*Post courtesy of Paul Tracy, Street Authority.
SOURCE : http://www.wealthwire.com/news/metals/2400?r=1
Thursday, December 15, 2011
Article written by Shaun Connell
We are living in extremely exciting times. The Europeans are struggling to get their economy back on track and they have made some recent decisions that might cause silver prices to continue to drop like a rock.
The details that matter
First, Europe has a total of 9 countries on its credit watch. They will be adding 6 more. These 6 currently have a triple AAA rating and make up much of the traditionally core “good” economies of Europe, so being added to the watch list will effect the economic outlook of Europe negatively.
Second, the European Bank has again stated they don’t want solve this problem by printing money. If they maintain this position, three countries will likely default on their debts: Greece, Italy and Spain. If even one of these countries default, there will be a massive credit crunch throughout the world – not unlike 2008.
Third, while this is a sovereign countries debt liability, the bigger issue is the “insurance” banks across the globe carry on the bond’s within these countries. If the banks are required to pay out on the insurance for the debt that these countries carry, it would have a massive global ripple effect and squash available credit supply, especially when cash reserves are liquidated for the insurance of the bonds.
If this becomes a global problem, we might see some under the table finagling from the Federal Reserve with the banks that back the bonds. While this is pure speculation, its not a long shot considering how the Fed floated trillions of printed money to banks in Europe during the ‘08 crisis.
As it stands – we need to watch the European Central Bank. If they won’t print, at least one of the three countries will likely default on its debt (as long as our Fed doesn’t get involved).
How prices may continue to drop…
If a country defaults and the European Central Bank doesn’t print money to save them, the resulting credit crunch will drive down silver prices. Why?
Significant debt default has forced the precious metal markets down throughout history.
Most people will have to liquidate their assets (silver) to cover their shorts and debts in other areas.
Also, as the ripple effect of the debt default moves throughout Europe, many people will begin seeing the dollar as a safe haven from the euro. This rise in the dollar will likely cause downward pressure on the metal markets.
Why Silver Prices won’t stay down…
From 1950 to now we’ve gone from an estimated 10 billion ounces silver to 700 million ounces in above ground available physical silver. That’s a 93% drop.
But demand is still surging.
For example, in 1999 we had around 100 million ounces in the electronic industry. Today we have closer to 250 million. In the solar industry silver wasn’t really used in 1999. 2014 projections are expecting the industry to use 130 million ounces a year.
Investment demand of physical silver is also rising. In 2010, there were 35 million American Silver Eagles sold. That nearly equaled the entire physical silver mined that year. This year, 22 million American eagles were sold by June.
Production seems to have peaked in silver as well. A recent report (seen here: http://www.scribd.com/doc/68287518/Peak-Silver-Revisited) shows that of the top eight states in the U.S. have peaked in silver production. There are several reasons, but one is because silver is mostly a by-product of copper mines. Copper supply has peaked worldwide and is exponentially getting harder to supply. This means silver focused mines take much more financial investment to get a return of silver – in both energy, capital and time.
The fact of the matter is simply this: despite advances in technology and machinery, it is taking more resources and time to mine less silver that it did in the past.
Even though we can mine ten ounces for every one ounce of gold (10:1) and silver has more industrial demand than gold, silver is still valued (on average) at 1:53 the price of gold.
Physical silver supply is diminishing, but demand for silver across industry and as an investment is growing.
Those who know and foresee the results of silver’s future will likely jump into the silver market with extreme energy when the European default causes downward pressure on the silver price. (If only to buy up a needed commodity for the production of their industry products.)
But immediate depression in our economy will be stronger than long term supply.
It is even possible, especially if a European country defaults, that silver goes under the mid-twenties before the industry buy-up begins.
Article by : Shaun Connell
Gold is down, copper is down, gasoline is down, oil is down, stocks are down, heating oil is down… and the dollar is up.
The reason for this is because cash is the ultimate /short-term/ safe-haven for investors. Over time, cash will lose value, but during times of short bouts of economic turmoil and insanity, cash’s value goes up because everyone is trying to rush to that cash. The US dollar is a good example of this as the world’s reserve currency.
The dollar is up 2% for the year, and is up significantly for the day as well. Considering the US got downgraded, that should tell you something about how much uncertainty exists.
There are plenty of reasons for what’s going on. Liquidation, year end caution, a credit slowdown in China — whenever a market drops in price, there are usually millions of reasons why, with a few “big” reasons leading the charge. With the current drop, here’s what’s likely:
Liquidation. It’s near the end of the year, and investors are looking for good investments to sell so they can salvage profits for the year on some level. This makes them look better on paper to people who are investing with them. Mutual funds are especially susceptible to selling off a long-term winning asset when it begins to “crash” — they want to make sure they get at least some of those profits.
Fear. People are horrified of what’s going on in Europe and Asia. The idea that there’s a possible new recession on the horizon means many investors are going to the one short-term asset that generally does fine during a crash or recession — cash. The dollar is up 2% so far this year, actually.
Reflexivity. Reflexivity means that whatever the market does, the market usually does a little too much because of speculation. This is especially true for commodities, because commodities don’t provide an income.
This means that gold and silver will probably drop “too much” before bouncing back whenever they do bounce back. That could be today or next week or next year. I’m thinking within a few weeks, assuming this isn’t “the crash” that I’ve talked about. There’s no telling.
For the record, I’ve spent the last year explaining that gold and silver are both susceptible to these sorts of crashes, and that’s why everyone should stay away from leverage, and also have cash, bonds, and dividend stocks in their portfolio. Anything else is just too risky.
It’s also possible we’ll see a long period of low gold/silver prices before the “big one” inflationary event that’s inevitable.
This is also another reason you should invest in gold and silver gradually over time, rather than all at once.