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Copper Catcher
Administrator
USA
2092 Posts |
 Posted - 07/10/2008 : 11:28:24
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I thought the forum might find this interesting!
.........CBS Marketwatch published an article in March 2007 entitled ‘Silver may shine brightest among metals’, in which Kevin Kerr wrote that “Due to current supply/demand trends, the amount of silver above ground is projected to shrink to a critically low level in 2010. As supply shrinks, prices will keep rising steadily to new highs. Many in the investment world are unaware of this part of silver's story. Industrial demand has been outstripping mining supply for the past 15 years, driving above ground supply to historically low levels.”
Silver production was flat this year and is expected to be flat again next year. Incredibly, the amount of mined silver has been less than its demand every single year for the last 15 years. This hasn't resulted in significantly higher prices yet because the world has been able to fill the gap from inventories and official government stockpiles.
However, today the U.S. government's stockpile is all but gone, and sales from other official sources, such as China, Russia and India, are declining, too. The decline in refined silver stocks, from around 2.2 billion ounces in 1990 to around 300 million ounces today means that silver stocks are near an all time low.
The supply of silver is inelastic. Silver production will not ramp up significantly if the silver price goes up. Supply didn't increase in the 1970’s when silver rose 35 fold in price – from $1.40/oz in 1971 to a high of nearly $50/oz in 1980. Importantly, silver is a byproduct metal and some 80% of mined silver is a byproduct of base metals. Higher prices for silver will not cause copper, nickel, zinc, lead or other base metal miners to increase their production. In the event of a global deflationary slowdown demand for base metals would likely fall thus further decreasing the supply of silver.
There are only a handful of pure silver mines remaining. This inflexible supply means that we cannot expect significant mine supply to depress the price after silver rises in price. It is extremely rare to find a good, service, investment or commodity that is price inelastic in both supply and demand. This is another powerfully bullish aspect unique to silver......
Silver price: significant and increasing investment demand
According to the CPM Group, there are some 300 million ounces of refined silver in the world. That means that with silver priced at $14/oz., there is about $4.2 billion (300 million oz x $14) dollars worth of silver in the world. This means that the total silver market capitalization is a very small $4.2 billion.
The increasing demand caused by investment demand is very compelling. Especially due to a number of key investment factors - the introduction of the iShares Silver ETF, the huge short position, the global liquidity bubble, the significant growth in the global money supply, the proliferation of millionaires, ultra high net worth individuals and billionaires, the proliferation of hedge funds and the exponential growth in derivatives.
ETFs
Investment demand for silver has also been rising rapidly the past few years with investors hedging themselves against rising inflation, possible currency devaluations and geopolitical and macroeconomic risk.
The silver market is currently in a transitional period where investment demand is starting to have a real impact on silver prices. Much of the new demand comes from iShares Silver ETF launched in April 2006. The fund has so far attracted 120 million ounces of silver investment. It is up nearly 30 million ounces since the start of 2007. It's important to remember that the silver market is very small - only some 300 million ounces.
That means the ETF alone now accounts for more than one-third of the global silver market, and growing investment into the iShares ETF should drive prices much higher. If even a small amount of money flows into the silver market from investors, ultra high net worth individuals (ultra-HNWIs), hedge funds, pension funds and institutions around the world, silver will almost certainly reach the nominal non inflation adjusted high it reached in 1980 of nearly $50 per ounce.
Huge short position
Perhaps the foremost analyst of the silver market today is Mr. Theodore Butler. He believes that gold and particularly silver are the laggards in the commodity complex due to price manipulation. At over 300 million ounces, the largest 8 traders on the COMEX are short more silver bullion than exists in total known world inventories, including total SLV holdings and total COMEX inventories.
Butler sums it up succinctly, ”If there is one thing that separates silver from any other asset class, or any other item in any asset class, it is the presence of an unprecedented concentrated short position in COMEX silver futures. It is the existence of this concentrated short position that will, at some point, launch the silver price to the heavens. This short position has grown so large, and is held by so few entities, that it no longer matters how it will be resolved. It must be resolved and, whether that resolution involves default or buying by short covering, it will have the same bullish impact on price. You don’t have to look any further than the concentrated COMEX short position as to why silver has not outperformed every other commodity. Just as it explains price under performance, it is telling you why there must be over performance in the future. At some point, the price of silver must accelerate upward to price levels that are truly shocking.”......this in information from May of 2007
Source: You must be logged in to see this link.
Read a more recent report here next: You must be logged in to see this link.
If what this guys says is true then Wow.....What say you?
Lastly, don't count the Hunt Brothers out of the picture just yet!
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misteroman
Administrator
USA
2565 Posts |
Posted - 07/10/2008 : 11:41:24
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I think silver is undervalued and that is why I decided to keep mine.Getting VERY close to hitting that big silver milestone and I just started buying in March/April.
In MY opinion Silver is WAAAAAAAYYYY undervalued.Hear me out:
Gold is used very little for anything other then value.Yes there are a few commercial uses for it and of course jewelry,but not much.
Silver is used in MANY commercial uses and now with the price of gold and platinum being so high,they are finding many more uses where silver will work.
I also believe some investors/collectors would buy a roll of Walking liberty halves before they bought a $5 gold piece.Maybe you only have $40 one week to buy some PM's.You go to coin store and pick up a couple of ASE or a few morgans/peace.No one is going to buy a few 14K rings.
Just my opinion of course but seems like a no brainer to me |
Buying CU cents!!!! Paying 1.2 unlimited amounts wanted. Can pick up if near Ohio area. |
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TenBears
1000+ Penny Miser Member
USA
1021 Posts |
Posted - 07/10/2008 : 12:19:37
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quote:
Originally posted by misteroman
I think silver is undervalued and that is why I decided to keep mine.Getting VERY close to hitting that big silver milestone and I just started buying in March/April.
In MY opinion Silver is WAAAAAAAYYYY undervalued.Hear me out:
Gold is used very little for anything other then value.Yes there are a few commercial uses for it and of course jewelry,but not much.
Silver is used in MANY commercial uses and now with the price of gold and platinum being so high,they are finding many more uses where silver will work.
I also believe some investors/collectors would buy a roll of Walking liberty halves before they bought a $5 gold piece.Maybe you only have $40 one week to buy some PM's.You go to coin store and pick up a couple of ASE or a few morgans/peace.No one is going to buy a few 14K rings.
Just my opinion of course but seems like a no brainer to me
I'm in there with you. For some reason, if TS ever did HTF, I like have the older halves, Walkers and Franklins, just because I feel like people would more readily recognize them as being valuable. |
"Rich," the Old Man said dreamily, "is not baying after what you can't have. Rich is having the time to do what you want to do. Rich is a little whiskey to drink and some food to eat and a roof over your head and a fish pole and a boat and a gun and a dollar for a box of shells. Rich is not owing any money to anybody, and not spending what you haven't got." Robert Ruark
there are too wild Indians...
there are too wild Indians...
there are too wild Indians...-----still taunted
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kavajava
Penny Collector Member
USA
490 Posts |
Posted - 07/10/2008 : 13:13:13
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I think (and hope) that silver is one of the best investments, and one of the best hedges against inflation right now.
(But if you can get copper pennies at face that is a great investment/hedge as well!) |
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misteroman
Administrator
USA
2565 Posts |
Posted - 07/10/2008 : 14:10:37
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| ^^^ agreed |
Buying CU cents!!!! Paying 1.2 unlimited amounts wanted. Can pick up if near Ohio area. |
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jadedragon
Administrator
Canada
3788 Posts |
Posted - 07/10/2008 : 14:41:19
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^^^^^^ agreed too - plus nickel is a great hedge. I stockpile Pure Canadian Nickels for thier value now, and CuNi nickels for the longer term play, plus copper and silver.
What would constitute a "big silver milestone" misteroman? |
“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” – George Bernard Shaw.
Why Copper Bullion ~~~ Interview with Silver Bullion Producer Market Harmony
Passive Income blog |
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kavajava
Penny Collector Member
USA
490 Posts |
Posted - 07/10/2008 : 15:22:11
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quote:
Originally posted by legacypac
^^^^^^ agreed too - plus nickel is a great hedge. I stockpile Pure Canadian Nickels for thier value now, and CuNi nickels for the longer term play, plus copper and silver.
I do like those .999 nickels--something cool about the fact that it is a pure metal...too bad the only way I can get them is to buy them on ebay...but with the price of nickel being on the lower side these days, I may try and pick up a few more before it takes off again... |
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misteroman
Administrator
USA
2565 Posts |
Posted - 07/10/2008 : 23:14:03
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quote:
Originally posted by legacypac
^^^^^^ agreed too - plus nickel is a great hedge. I stockpile Pure Canadian Nickels for thier value now, and CuNi nickels for the longer term play, plus copper and silver.
What would constitute a "big silver milestone" misteroman?
1,000 ounces  |
Buying CU cents!!!! Paying 1.2 unlimited amounts wanted. Can pick up if near Ohio area. |
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jadedragon
Administrator
Canada
3788 Posts |
Posted - 07/10/2008 : 23:27:41
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quote:
Originally posted by misteroman
quote:
Originally posted by legacypac
^^^^^^ agreed too - plus nickel is a great hedge. I stockpile Pure Canadian Nickels for thier value now, and CuNi nickels for the longer term play, plus copper and silver.
What would constitute a "big silver milestone" misteroman?
1,000 ounces
That is what I figured - and that is my goal too. Hopefully get there before Silver hits $20. I got past the little milestone of a hundred ounces. I keep a spreadsheet on it of course. |
“The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” – George Bernard Shaw.
Why Copper Bullion ~~~ Interview with Silver Bullion Producer Market Harmony
Passive Income blog |
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misteroman
Administrator
USA
2565 Posts |
Posted - 07/11/2008 : 00:06:04
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| I might have to go check on that.1000 0z would be 88lbs of 90% right? |
Buying CU cents!!!! Paying 1.2 unlimited amounts wanted. Can pick up if near Ohio area. |
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Lemon Thrower
1000+ Penny Miser Member
USA
1588 Posts |
Posted - 07/11/2008 : 05:29:21
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quote:
Originally posted by misteroman
I might have to go check on that.1000 0z would be 88lbs of 90% right?
62.5 lbs. of .999. I would guess that 90% is about 10% heavier.
some analysts expect that silver will hit $100 eventually - w/in 5 years. |
Buying:
Peace/Morgan G+ at $15.00
copper cents at 1.3X
wheat pennies at 3X
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Edited by - Lemon Thrower on 07/11/2008 05:36:38 |
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fb101
Administrator
USA
2856 Posts |
Posted - 07/11/2008 : 05:36:52
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| I hope I get to my milestone before silver gets there, but I think silver will be back over $20 before years end. |
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NotABigDeal
1000+ Penny Miser Member
USA
3890 Posts |
Posted - 07/11/2008 : 06:34:57
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I don't know exact totals for any of my metals except my gold. I'm checking out a small "coins and collectibles" event tomorrow. Every opportunity to buy can yield good results. You never know....
Deal |
Live free or die.
Plain and simple.
"If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your council or your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen."
- Samuel Adams |
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misteroman
Administrator
USA
2565 Posts |
Posted - 07/11/2008 : 11:07:24
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quote:
Originally posted by Lemon Thrower
quote:
Originally posted by misteroman
I might have to go check on that.1000 0z would be 88lbs of 90% right?
62.5 lbs. of .999. I would guess that 90% is about 10% heavier.
some analysts expect that silver will hit $100 eventually - w/in 5 years.
Sweet I should be already there then!!!!! |
Buying CU cents!!!! Paying 1.2 unlimited amounts wanted. Can pick up if near Ohio area. |
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norcal
Penny Pincher Member
USA
107 Posts |
Posted - 07/11/2008 : 18:12:41
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| I predict silver hits $40-$50 within 2 years. |
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JerrySpringer
Penny Hoarding Member
669 Posts |
Posted - 07/11/2008 : 20:06:53
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| What do you all think about buying junk silver -ie- war nickels and other silver coins? The reason I would go that route is you have a known percentage of silver per coin. The other factor is it is rather easy to find silver on Ebay right now. |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 07/11/2008 : 20:39:09
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Buy war nickels and junk silver to sell to the last ones in on the silver surge-
buy when the fools are selling
sell when the fools are buying.
(Now is the time to buy with so many fools selling to get cash to pay for gas.)
Remember: Real cash-in-hand profits trump paper profits every time.
Remember this also, no investment is great all the time. No tree that grows reaches the moon, all investments have their bull and bear years, or sometimes bear decades.
Never be afraid to sell when you think it is time to get out, Warren Buffet made a great deal of money selling, in his own words "too soon".
Exit strategies are just as important, if not more so, than knowing when to get in. |
Edited by - pencilvanian on 07/11/2008 20:43:07 |
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JerrySpringer
Penny Hoarding Member
669 Posts |
Posted - 07/11/2008 : 21:43:37
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| An ounce of silver at 2% the value of an ounce of gold? Has that been the average ratio since the beginning of history? That said, anyone here remember when silver traded for less than $5/ oz? I'd be curious to hear how the market attitude was for precious metals in 2001. |
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NotABigDeal
1000+ Penny Miser Member
USA
3890 Posts |
Posted - 07/11/2008 : 22:21:02
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quote:
Originally posted by NotABigDeal
I don't know exact totals for any of my metals except my gold. I'm checking out a small "coins and collectibles" event tomorrow. Every opportunity to buy can yield good results. You never know....
Deal
I stopped by the show tonight. I think I did okay. Here is some of what I got: 2-10oz bars $155 each. He wanted $350 for both and I offered $300. (JM and A-Mark bars). A few of nice Indians with Liberty visible for $1.50 each, 28 Canadian nickels 1963 and older for face value, and from his 5 for $1 box I got a 1960 Canadian dime, 1962 Canadian dime, some cool looking unidentified tiny coin, some Mexican coin, and my favourite find of the night. An 1864 two cent piece. It was pretty dirty. I could only see the 2 and part of the word "STATES" on the other side. Just ran it under water to clean it off. Looks nice to me. Probably not that big of a deal to most but awesome to me. I didn't have one. Anybody know anything about them? It's fairly worn but you can read most all print except the "WE" in "IN GOD WE TRUST". Deals can be found, you just have to look.
Deal |
Live free or die.
Plain and simple.
"If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your council or your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen."
- Samuel Adams |
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kavajava
Penny Collector Member
USA
490 Posts |
Posted - 07/12/2008 : 00:13:44
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quote:
I stopped by the show tonight. I think I did okay. Here is some of what I got: 2-10oz bars $155 each. He wanted $350 for both and I offered $300. (JM and A-Mark bars). ... 28 Canadian nickels 1963 and older for face value, and from his 5 for $1 box I got a 1960 Canadian dime, 1962 Canadian dime, some cool looking unidentified tiny coin, some Mexican coin, and my favourite find of the night. An 1864 two cent piece. Deal
OK??? I think you did great--the 10 oz bars are worth $188.40 each, the nickels almost a dime, and the dimes are worth a buck each...and yes--the two cent coin is also very cool...Wow...excellent night...guess you are "keepin' the hope alive" for the rest of us... . |
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misteroman
Administrator
USA
2565 Posts |
Posted - 07/12/2008 : 00:30:09
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| the 2 cent is worth about $20 and I'm sure you paid less then thta.But now the coin has been 'cleaned' lol |
Buying CU cents!!!! Paying 1.2 unlimited amounts wanted. Can pick up if near Ohio area. |
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Lemon Thrower
1000+ Penny Miser Member
USA
1588 Posts |
Posted - 07/12/2008 : 06:24:26
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quote:
Originally posted by JerrySpringer
An ounce of silver at 2% the value of an ounce of gold? Has that been the average ratio since the beginning of history? That said, anyone here remember when silver traded for less than $5/ oz? I'd be curious to hear how the market attitude was for precious metals in 2001.
you can google this for a precise answer but here goes.
first, silver tends to move with gold, but often lags it. And it moves imperfectly. I would not put a lot of stock in "the ratio."
That said, for eons the ratio was very steady, 15 or 16 oz of silver to 1 oz gold. When the new world and its silver was discovered, the value of silver declined to 17 to 1.
Around the time of the creation of the fed in 1913, the ratio was much higher. For the last 100 years its been around50 to 1. But if you look more recently its been 70 or 90 to 1, and has varied over a wide range. if you look at say the last 40 years, it got as valuable as 50 to 1 only at silver's height in 1980 when it spiked during the Hunt Bros episode. I was 10 yrs old then collecting silver proof sets - very exciting times.
i would spend too much time on silver's fundamentals. they are compelling but largely irrelevant. they have been ignored for a long time, so just becauses they are compellingly favorable does not mean you will make any money.
as for when to get out, Doug Casey says we are in the wall of worry stage. When everyone is in PM's and the price is quoted on the nightly news, then start getting out. That will be when gold is north of $1600 or or more and silver $100. That sounds crazy but that day will come. With any investment, you should have a firm idea of when you will sell at the time you buy it. My expectation is that silver and gold will form a bubble in the next 5 years and when it hits those prices I will start lightening and redeploy the proceeds, to pay down my mortgage if not a better investment. I'll sort of dollar-cost average my way out, lol. Some will hold out for the last penny but the risk is probably not worth the reward. |
Buying:
Peace/Morgan G+ at $15.00
copper cents at 1.3X
wheat pennies at 3X
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kavajava
Penny Collector Member
USA
490 Posts |
Posted - 07/12/2008 : 08:55:30
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quote:
Originally posted by Lemon Thrower
I'll sort of dollar-cost average my way out, lol. Some will hold out for the last penny but the risk is probably not worth the reward.
Better to be a a month early than 5 minutes too late...good strategy--don't get too greedy. I also like to average my way out--don't have to liquidate all at once. |
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Ant
Penny Hoarding Member
USA
894 Posts |
Posted - 07/12/2008 : 08:59:58
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quote:
Originally posted by NotABigDeal
I stopped by the show tonight. I think I did okay. Here is some of what I got: 2-10oz bars $155 each. He wanted $350 for both and I offered $300. (JM and A-Mark bars).
That is a great deal! |
Lovely dimes, the liveliest coin, the one that really jingles. --Truman Capote
Coins are the metallic footprints of the history of nations. --William H. Woodin |
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NotABigDeal
1000+ Penny Miser Member
USA
3890 Posts |
Posted - 07/12/2008 : 10:27:46
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The bad thing is that I'm thinking about going back to the show today....
Deal |
Live free or die.
Plain and simple.
"If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your council or your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen."
- Samuel Adams |
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NotABigDeal
1000+ Penny Miser Member
USA
3890 Posts |
Posted - 07/12/2008 : 10:37:56
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quote:
Originally posted by misteroman
the 2 cent is worth about $20 and I'm sure you paid less then thta.But now the coin has been 'cleaned' lol
Paid $0.20 for it. Yep, cleaned with water. I really like the coin though.
Deal |
Live free or die.
Plain and simple.
"If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your council or your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen."
- Samuel Adams |
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Silver is destined to increase big time!!!
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