..by Biz Bluetree
More than enough has been written about silver’s myriad industrial applications, and exploding investor demand; that U.S. and Royal Canadian mints are setting sales records, electronics this, and anti-bacterial that, and solar power initiatives and so on, therefore I’ll spare you the redundancy.
However, one could (and should) ask, with so many important uses and with such high demand, why then is silver so cheap?
Here, I’ll try to present a fresh perspective as to what drives silver to the contrary of all popular theories that abound and you’ll see perhaps what causes its perplexing volatility.
First, I am one of those who for now leans on fundamentals as basis for my unwavering belief in the salvation of silver. I rarely use technical analysis. I am not a day trader, I buy and hold physical silver for one reason.
And too, when it comes to technical analysis, not only do I lack a sufficient enough understanding, but all those lines, numbers and candlesticks cause my eyes to glaze over – however, that said, if I’m about to make a size-able, physical silver purchase I want to buy at the best possible price.
So, if a guy like Avi Gilburt writes that silver should drop to $17 or $18 again before it takes off for new highs – I’m listening, and I’ll hold off buying today until I see those teen numbers materializing and then pull the trigger on my purchase, as Gilburt is right more often than not through his deep understanding of technical indicators.
However, I’m of strong opinion that technical and fundamental analysis as well as other analytic indicators will eventually play less of a roll as the future nears as to when and why to buy. The case for physical silver ownership should become obvious, apparent and clear across the board for everyone, sooner than later. Why?
First my disclaimer:
I do not know Mr. Gilburt except through his writing and analysis. So, I am absolutely in NO WAY suggesting that he concurs with the less than rosy economic scenario I am about to put forth. Please do not send him your messages of discord. Send them to me. I fully expect some of you will want to nail a note to my forehead explaining why you think I am wrong.
You see, for me it does not matter if the Fed increases its quantitative easing or completely shuts down the QE program. I don’t care. My positive case for silver will have the same outcome except to exist in a different time frame depending on when the “stuff hits the fan.”
And I strongly believe the stuff will smatter into those spinning blades spewing stink around the world regardless of what the Fed does at this point. In my humble opinion the damage is already done, whether they stay the course, employ some level of taper, or increase the monthly dose, it won’t matter.
The truth about silver is that its price has always been manipulated by “powers that be” since the dawn of money and state. And its manipulation has become even more finite and intense of late with the help of high frequency trading. And, that over time, the elites have gotten pretty darn skilled at their game, as well as having become tightly and secretively organized. For a more clear understanding of this assertion I suggest reading “You’ll Never Look At Silver Price Manipulation The Same Way Again” here, just below.
In this opinion (and I’m confident not to be alone) the jig is almost up. The powers that be will not be able to suppress the price of silver forever as geopolitical and economic circumstance will leave little room for its practice.
Silver will become a runaway train and its manipulation will have run out of track.
A telling current indicator, if you care to include covert bank action into your equation (as you should) is that “short seller of last resort” JP Morgan (JPM), now maintains a huge long position in silver, and its bank vaults are suddenly over flowing with silver bullion. This should tell us something – and contrary to what you may think, that particular silver is not for the benefit of iShares Silver Trust ETF (SLV) customers. It’s for JPM.
Speaking more than two years ago of the manipulation fraud perpetrated by the large commercial banks, John Hommel of Silverstockreport.com said:
“All frauds eventually fail completely. In the end, holding silver in accounts with large banks will not help you. You need real silver in your own real vault that you have personally lifted and stored away. Any other kind of silver that others hold for you is likely fraud, and will not protect you in the event of the collapse of the dollar or the collapse of the financial system or the collapse of your brokerage company. By the time this fraud is exposed fully, and by the time a mere 1% of people or money in America starts buying silver, such as only about $180 billion in the banking system, the silver price will exceed $500/oz. and large firms such as JP Morgan will either be bankrupt, or they will be bailed out to the tune of trillions to keep the financial system together, which will create further inflation that will drive 2% of people into silver, and create the very runaway metals market that will just not stop until all paper money and paper accounts are destroyed for generations.”
Of course Hommel’s comments of JPM’s potential bankruptcy were made before the reversal of its silver shorts to long?
In any event, it is my belief that as the Federal Reserve continues to conduct its gooey business of secretly handing out mop-ups, prop-ups and swaps to the TBTF banks and select EU nations the dollar’s demise is in clear sight. If you can’t see it yet, keep your eye on the shiny ball and be ready to swing for the fences. (You should already be warming up.)
The more “world reserve currency” the Fed creates, the less it is worth.
Nations such as China, Russia, Brazil, Japan, Iran, South Africa, India, South Korea and others are already trading among themselves using their own currencies and barter arrangements. This is all public knowledge as a quick google search will confirm. These nations are already sidestepping the USD. For them the writing is on the wall; the dollar is growing weaker.
And what would you expect to happen when USD becomes the world’s pariah currency and nobody, not even the tinyest nations trust it?
This opinion sees life in America changing dramatically. And it is then that you’ll see the inflation that has been hidden in plain sight, thus far. For those who today question “what inflation?” and repeat like so many parrots that QE and the recovery is working, severe inflation, perhaps even hyperinflation will rear its ugly head and we’ll be paying many multiples more for everyday items – if we can find them on the shelves of our local Wal-Marts and Piggly Wiggly Stores. And that’s if their doors stay open.
I say now is time, if you haven’t already begun, to move your wealth and savings out of Federal Reserve Notes and into something that will not only retain its value but soar to astronomically new highs.
I buy silver to hold. I do not buy silver to sell. Not yet anyway, and when that time comes, my silver will not be traded for fiat. It will be used to purchase or barter for necessities and to facilitate transfer into a new, non-fiat currency, and gain other important assets as opportunities arise.
Physical silver is failing economy survival insurance.
But let us not forget other choice commodities worth having to hold including the yellow metal, agricultural land, water, copper and other obvious resources.
And lastly – and this is just my personal preference – I also judicially maintain modest positions in small cap metal miners and explorers – those I feel have the greatest upside, strongest books, best potential for success, resources/reserves and strong enough legs to still be standing when the dust settles. And I admit to crossing my fingers that compensation will be doled out in a medium that is fungible. To name one such credible explorer in my portfolio: Paramount Gold and Silver (PZG).
Though nothing beats hold-in-hand-silver in a crisis.
However, other strong silver mining investments are Excellon Resources (EXLLF) boasting the highest grade silver mine in Mexico and Fortuna Silver (FSM), realizing astoundingly rich, new drill results in southern Mexico. Exposure to both of these companies and others can also be gained through shares of the PureFunds ISE Junior Silver ETF (SILJ).
For me, there is no need for sentiment charts to know which way the wind blows. I already have strong convictions of a certain silver tailwind. The lower the sentiment of silver traders now, the lower the prices today, which indicates the greater my current buying opportunity. And I will continue to stack until it is time to put my pile to work for me.
Conclusion: You’ll soon be able to throw all advice and indicators out the window, be they fundamental, technical, future, war, industrial and every other driver cited so far, because the world is going to change and we’re all going to have to change with it or be left as financial road kill. The collapse of a too big to fail economy is on the horizon.
Be as long silver as you can. It makes strong sense to be in possession of as much physical silver as possible when the hammer drops. Also, don’t forget the importance of other critical resource commodities and necessities, and I’ll hope to see you on the other side of the wealth transfer.