Do You Own Physical Silver?

[Scottj88]

Do you own physical silver? I think there is going to be systemic default in the silver futures market, which are primarily the comex futures for silver. The Comex issues paper silver (called a future) promising the good (silver) for a certain price by a certain time. The thing is, usually the physical part of the silver trading has been bypassed for the past decades. The market has been flooded with paper contracts, as the CFTC chairman has admitted of on the record of 100:1 paper contracts per real asset to be delivered.

There is a major problem going on, as the silver market has just entered physical backwardation. If you have never heard of this term, please follow some of the experts that I link in my gold/silver links for a full explanation, but in short it is the following: Backwardation is when the future price of a an asset (silver) is worth less than the current spot price of the good. This can be interpreted as demand for the product now instead of later, as there grows a disconnect between the price in the future due to the systemic risk inherit in this ponzi scheme. This is nothing but our fractional reserve banking cousin bullion reserve banking. However, there is about to be a run on the bank...

In short, physical silver is about to become the hottest commodity on the market becuase it has been suppressed for so long. It will regain its status as a monetary metal as our dollar continues to spiral into the abyss. I think that the next best thing that you can do besides being in physical (which is an absolute must if you can), is to be in mining equities in your 401ks/stocks. Mining equities will become a sort of "safehaven" as there will be physical backing the value of the share you own. The most exposure to the physical market you can possibly get without owning physical. That is why I believe that my investment advice is going to have massive returns. (1000%-10,000++)

I am talking the end of our fiscal system, are you looking?

http://thehardrightedge.com/50-physical-silver-by-april-2011/
http://thehardrightedge.com/my-investment-journal/
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I am open to discussion, I would love to talk about this subject with the community.
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Scott J

What this means is a lot of things....
Some of the more notable ones are that SLV and GLD are not sound institutional funds. SLV has custodian privileges and

 

[cubical]

Yes I do own physical.

Profits in silver and gold will be misleading. It will be great if my silver goes to $1000, but if bread now costs me $500 that will suck. I do think silver/gold will rise faster than other prices because it is held by so few right now, but unless you have 10s of thousands in the physical you won't become rich(though you will "survive" nicely).

 

[cbc58]

agreed. physical silver will likely go up but right now it's a buying frenzy and the "in" thing to get into. alot of people overpaying based on spot but that's part of the mania. silver in and of itself does not have the useful value as a commodity and that was reflected by it dropping to $4.50 or so way back when. it's become the "investment de jour" and alot of people are promoting it and pumping it to make money. certainly running up faster than inflation but we all know what the endgame is.

the thing with buying bullion is that if the shtf bigtime, and the dollar becomes worthless - i wonder what the true value of silver will be in the market outside of investments. if i am starving and go to a farmer who has a bushel of corn and i have 1000 ounzes of silver or a chainsaw to trade - chances are that farmer will take the chainsaw over the silver. so what does that make a chainsaw worth an ounce?

 

[muzzled dogg]

Duh

 

[pmbug]

Do you own physical silver? ...

Maybe... Maybe not... Who's asking?

agreed. physical silver will likely go up but right now it's a buying frenzy and the "in" thing to get into. alot of people overpaying based on spot but that's part of the mania. silver in and of itself does not have the useful value as a commodity and that was reflected by it dropping to $4.50 or so way back when. it's become the "investment de jour" and alot of people are promoting it and pumping it to make money. certainly running up faster than inflation but we all know what the endgame is.

the thing with buying bullion is that if the shtf bigtime, and the dollar becomes worthless - i wonder what the true value of silver will be in the market outside of investments. if i am starving and go to a farmer who has a bushel of corn and i have 1000 ounzes of silver or a chainsaw to trade - chances are that farmer will take the chainsaw over the silver. so what does that make a chainsaw worth an ounce?

1. Physical silver is not in a buying frenzy yet. Not even close. I'll bet that not even 1% of the people living in my neighborhood own any silver bullion.

2. Overpaying based on spot? No, spot is ridiculously depressed versus actual supply/demand. The premium to spot you see in the physical market is an indication of how far removed the paper market is from reality.

3. Silver does have numerous industrial and medical uses. I'm not sure how you can claim it has no commodity value. The $4.50/oz. valuation is reflective of where the Fed and other central banks wanted the spot priced after they broke the Hunt's back. There weren't many big investors willing to take on the central banks and government again.

4. There are a lot of people promoting PMs as a means to preserve wealth - not to realize "gains" or make money. It's protection against a crumbling dollar (and other global fiat). The real hucksters are the ones on CNBC and other MSM outlets trying to get people to invest in equities and bonds. I feel sorry for the poor souls who are still trapped in the Matrix.

 

[Scottj88]

Yes I do own physical.

Profits in silver and gold will be misleading. It will be great if my silver goes to $1000, but if bread now costs me $500 that will suck. I do think silver/gold will rise faster than other prices because it is held by so few right now, but unless you have 10s of thousands in the physical you won't become rich(though you will "survive" nicely).

I dont think the proportions will reach these levels. I think that silver will come near a 3:1 price ratio sooner than later, as silver is used in all industry alongside its value as a monetary marker throughout history. Historically, it has been set at 16:1 (with current price of gold that means silver could run to 90$), as I think 2011 will just spike back to this level. My case for 1000$ silver in the future is that a physical supply shortage of a monetary marker along with industrial/technological supreme asset (learn about the properties of silver and amaze yourself), will eventually lead its demand to be more than physical gold (as there is no shortage of physical gold, all the banks have it stockpiled). Silver has been manipulated by the banking elite for the past 40 years, and only now is the scheme unraveling itself. Nobody knows for sure, but I bet you it exponentially grows as it becomes mainstream.

Bread would be about 10-20$ in my 1000$ silver scenario....

 

[SilentBull]

Why are some buying silver as a form of investment?? I own gold and silver, but only to protect my wealth from inflation. Unless the price of silver and gold keep rising, while the cost of food, energy and everything else, stays the same (which they won't), you shouldn't look at metals as an investment. When inflation comes, the price of everything will go up. Buying commodities is just a way to protect your wealth, not a way to make money.

 

[Scottj88]

agreed. physical silver will likely go up but right now it's a buying frenzy and the "in" thing to get into. alot of people overpaying based on spot but that's part of the mania. silver in and of itself does not have the useful value as a commodity and that was reflected by it dropping to $4.50 or so way back when. it's become the "investment de jour" and alot of people are promoting it and pumping it to make money. certainly running up faster than inflation but we all know what the endgame is.

the thing with buying bullion is that if the shtf bigtime, and the dollar becomes worthless - i wonder what the true value of silver will be in the market outside of investments. if i am starving and go to a farmer who has a bushel of corn and i have 1000 ounzes of silver or a chainsaw to trade - chances are that farmer will take the chainsaw over the silver. so what does that make a chainsaw worth an ounce?

I appreciate your input, let me see if I can debate a few of your points.

-Silver "buying frenzy" and people are overpaying...
Silver holds the value that the market assigns to it. There are a few things that you have to understand about the conditions of the world since it last plummeted to 7$ an oz in 08. One thing that has changed is that china and russia are gobbling up physical gold and silver and dumping the US T-bonds in a flurry. They have also signed agreements to cut the US-Dollar out of intra-currency trading (between themselves). This is the first step towards removing themselves from the dollar standard. Silver has historically been a metal of value (monetary marker) for the previous 2000 years, and you can do a little research on this subject if you don't believe me. The whole reason there is a "buying frenzy" is because people are buying Physical Silver. Over the past 1.5 months, the US Mint has sold over 8million reported oz of silver as seen here
http://www.usmint.gov/mint_programs/american_eagles/index.cfm?action=sales&year=2011

In case you didn't know, the total production of the U.S. for silver is 40 mil oz a year. Do you see where this is going?

The price has been manipulated for 40 years, and has never been in a free market. When you say the price has run up, it is not you and me that are running it up. Individual investing has almost no factor for the price of silver movement, don't kid yourself. The only reason the price of silver is rising now is because the ponzi scheme is running out and the world market is buying the silvery stuff (along with the gold) as much as they can with their fading Federal Reserve Notes.

The 08 crash had to do with the markets being overloaded by futures. If you know anything about shorting, your mind should quickly be able to understand that the big banks such as HSBC, JP Morgan, and many previous banks all hold huge commercial short positions no silver. There were able to successfully manipulate it down big time in 08, as the paper silver was sold and sold until nobody wanted it anymore. If you tried buying physical at 9$, you had to wait 3-6 months in order to receive it, because nobody was selling it at these levels. That is why all these miners went out of business and now that silver has recovered and broken free from that manipulation, I expect this whole industry to just take off.
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Here is a statistic you probably are not aware of:
Gold and gold mining stocks represented 26% of all global assets in 1981 (high inflation), and 20% in 1932 (high deflation). Today, gold and gold mining shares represent about 1% of global assets.
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Scott J

 

[Scottj88]

Maybe... Maybe not... Who's asking?



1. Physical silver is not in a buying frenzy yet. Not even close. I'll bet that not even 1% of the people living in my neighborhood own any silver bullion.

2. Overpaying based on spot? No, spot is ridiculously depressed versus actual supply/demand. The premium to spot you see in the physical market is an indication of how far removed the paper market is from reality.

3. Silver does have numerous industrial and medical uses. I'm not sure how you can claim it has no commodity value. The $4.50/oz. valuation is reflective of where the Fed and other central banks wanted the spot priced after they broke the Hunt's back. There weren't many big investors willing to take on the central banks and government again.

4. There are a lot of people promoting PMs as a means to preserve wealth - not to realize "gains" or make money. It's protection against a crumbling dollar (and other global fiat). The real hucksters are the ones on CNBC and other MSM outlets trying to get people to invest in equities and bonds. I feel sorry for the poor souls who are still trapped in the Matrix.

Spot On, thanks for spreading the good information

 

[Scottj88]

Why are some buying silver as a form of investment?? I own gold and silver, but only to protect my wealth from inflation. Unless the price of silver and gold keep rising, while the cost of food, energy and everything else, stays the same (which they won't), you shouldn't look at metals as an investment. When inflation comes, the price of everything will go up. Buying commodities is just a way to protect your wealth, not a way to make money.

Whatever you want to call it, buying silver is a hedge against a failing currency. I personally am planning on holding my physical silver until I need to 1) trade it in out of necessity or 2) trade it in when we have a new currency. When you are investing in silver, people don't realize it has been suppressed for the last 40 years by algorithms that the rigged market goes off of. If you bought gold 10 years ago, you would be up about 800%, same with silver... where do you see these returns anywhere else due to such a fundamental reason.

I am just trying to warn people about the loss of purchasing power that we are all about to go through, and hoping that others protect themselves with a commodity that is surely poised to take off given unprecedented scenario we are stumbling upon. When you end the Federal Reserve, you end the Federal Reserve Note... think about it...
The market is leading the way for our policy changes that we all desperately want!
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Scott J

 

[SilentBull]

Whatever you want to call it, buying silver is a hedge against a failing currency. I personally am planning on holding my physical silver until I need to 1) trade it in out of necessity or 2) trade it in when we have a new currency. When you are investing in silver, people don't realize it has been suppressed for the last 40 years by algorithms that the rigged market goes off of. If you bought gold 10 years ago, you would be up about 800%, same with silver... where do you see these returns anywhere else due to such a fundamental reason.

I am just trying to warn people about the loss of purchasing power that we are all about to go through, and hoping that others protect themselves with a commodity that is surely poised to take off given unprecedented scenario we are stumbling upon. When you end the Federal Reserve, you end the Federal Reserve Note... think about it...
The market is leading the way for our policy changes that we all desperately want!
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Scott J

I completely agree. I was just making the point that people need to look at this in terms of preserving your wealth.

 

[jclay2]

Watch the Open Interest People!

This could get interesting folks. As of Tuesday, there were 58,000 contracts on the march delivery month. According to many sources, the comex inventory is around 20,000 contracts. The last trading day for the march contract is next Monday, the 28th. If open interest in the contract stays relatively high into next week, we could see some extreme fireworks in the silver market.

 

[pmbug]

I just posted a thread about that. Hope the COMEX has a good roofing contractor.

 

[Scottj88]

This could get interesting folks. As of Tuesday, there were 58,000 contracts on the march delivery month. According to many sources, the comex inventory is around 20,000 contracts. The last trading day for the march contract is next Monday, the 28th. If open interest in the contract stays relatively high into next week, we could see some extreme fireworks in the silver market.

Indeed, and this is only the reported number. There is speculation that Comex is not releasing the real information, so things could be much worse than they appear... it is not like we are dealing with a trustworthy organization, I tend to not take everything they say at face value...

They raised 50% maintenance margin rate today, which I believe is because they are trying to see who is going to stand for delivery to see how much silver they are gonna have to dish out. This could get interesting.

GLD and SLV are NOT SAFE. PLEASE DO NOT HAVE LARGE AMOUNTS OF FUNDS IN these investment vehicles. SLV has JP Morgan as its custodian, and GLD has its physical from the Bank of England (swap). Read Harvey Organ for information on day to day activities in these funds....

I see 35$ silver by the time gold is 1430 (soon).

50$ by april... inflation is coming to America... hope you are all ready..

 

[devil21]

Why are some buying silver as a form of investment?? I own gold and silver, but only to protect my wealth from inflation. Unless the price of silver and gold keep rising, while the cost of food, energy and everything else, stays the same (which they won't), you shouldn't look at metals as an investment. When inflation comes, the price of everything will go up. Buying commodities is just a way to protect your wealth, not a way to make money.

This is true however the other side of this is that during hyperinflation, not only does the paper currency lose value, it also becomes an "asset" that few want to accept, simply because they know the value will continue to crumble. That's the point when the faith is lost. Metals then become VERY attractive barter assets and are then in demand as currency. If you want to buy something (of real worth) during hyperinflation, your PMs are a much better currency than the dying paper. Remember the anecdote about people being able to buy city blocks in Berlin with ounces of gold during Weimar hyperinflation? I betcha those that did that ended up extremely weathly.

 

[Schiff_FTW]

If you do own physical silver you better be careful about who you tell or you could end up like this poor guy: http://www.theprovince.com/cars/Chilliwack+shaken+after+home+invaders+take+silver/4296387/story.html

 

[Scottj88]

This is true however the other side of this is that during hyperinflation, not only does the paper currency lose value, it also becomes an "asset" that few want to accept, simply because they know the value will continue to crumble. That's the point when the faith is lost. Metals then become VERY attractive barter assets and are then in demand as currency. If you want to buy something (of real worth) during hyperinflation, your PMs are a much better currency than the dying paper. Remember the anecdote about people being able to buy city blocks in Berlin with ounces of gold during Weimar hyperinflation? I betcha those that did that ended up extremely weathly.

You have an extremely good insight, I agree with this statement 100%... especially the fact that people will not want to attract a currency in which they know will be devaluing... try buying land with a piece of paper that is trending towards no value, good luck!

 

[Kelly.]

silly question,
at the point i can trade 1 ounce of silver for $100, wont the dollar be essentially worthless [from a purchasing power perspective]

also, what happens in a short squeeze situation? i see in the early 80's silver spiked, but then came back down eventually?

i am just running through these questions in my head, and would like some input from others.
thanks in advance.

 

[Dr.3D]

silly question,
at the point i can trade 1 ounce of silver for $100, wont the dollar be essentially worthless [from a purchasing power perspective]

also, what happens in a short squeeze situation? i see in the early 80's silver spiked, but then came back down eventually?

i am just running through these questions in my head, and would like some input from others.
thanks in advance.

I believe it came back down pretty fast, after the government told the Hunt brothers they couldn't own so much silver.

Silver will go up in price, more due to the fact there is less of it above ground than there is gold and it is getting used up faster than they can mine it.

 

[cubical]

Gold and silver will eventually be what back currencies, so I don't know if the prices will necessarily come down. I feel like they will get locked in to one or multiple currencies when things restart.