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We are at the beginning of a major shift out of
paper assets into real assets. Those
that are starting to come to this revelation have no real understanding what
they are doing when they are buying gold. Sure they might get that it is rare
and might remember their grandfather saying buy to gold, but they have not
gone through the educational process necessary to truly grasp what they are
doing. When I wanted to get out of paper assets, I bought gold as a gut
reaction. The more I learned about silver, the more I realized that silver
was the smart decision.
When I first started my awakening process in March
of 2005, I studied credit cycles and finally understood that the Federal
Reserve is a privately and foreign owned bank. I wanted to get my wealth out of their casino. In fact, I recently
warned paper investors that it is insanity to be betting in the paper casino,
because the entire system is coming down. (Who Cares
About Your Bet, If The Casino Is Demolished?!) Now that people are starting to see this insanity, they want out. So
where do people who have trusted the paper market first go when they have
their awakening? Gold. Gold is the largest precious metals market in the
world and has the most advertising behind it. People have seen it in movies
as pirate treasure and maybe heard it was confiscated may years ago. I think
gold so impressive to hold and feel, it is hard not
to make it your first purchase. In short, gold is the gut reaction for most
paper investors who want out of the casino. I think this is the reason why we
see so much activity in gold versus silver right now.
The more I learned about silver, the more I saw that
it was the only investment for me and my family. I am more bullish now in 2011, than I was when I bet the house on
silver in 2005. When you truly understand the fundamentals behind silver, you
will see that it is simply the best investment out there. I challenge anyone
to find me a better investment. I love a challenge.
First and foremost the reason for investment into
silver is that it is a physical tangible asset. When I say invest in silver, I DO NOT mean anything else but the real
stuff in your hand. If you don’t hold it, you don’t own it. Stay
away from SLV, unallocated bullion accounts, mining shares, etc. stick to the physical. I
would hate for you to be right on silver and wrong on the form of silver.
We are entering a generational shift out of paper
assets into real tangible assets.
As I have stated many times in the past, the dollar is going to collapse and
it basis for the entire world economy. It is a mathematical certainty. This
dollar collapse will be the single largest event in human history and will
dramatically touch every human being on earth and will leave a scar on
generations to come. Yes,
it is going to be that big.
When the mathematically inevitable collapse of the
dollar happens, all paper assets will be destroyed. This goes for Dollars, Yen, Euro, CDs, Munis,
T-Bills, Money Markets, Insurance Policies, Pensions, Privately Owned
Businesses, Structured Settlements, Social Security, Dividends, 401ks, IRAs, Stocks, Options, Bonds and even Real Estate. Without a functioning currency and the uncertainty it brings, credit
grinds to a halt. Payments grind to a halt. Markets grind to a halt. The
world economy grinds to a halt. People panic. This ALWAYS leads to war.
This naturally leads investors to tangible assets
like commodities. Commodities are real things we use in
our everyday life like pork, cotton, corn, oil and steel. The problem with
most commodities is storage. I know for a fact that the two best assets to be
in in terms of real inflation adjusted returns will be food and fuel. They
are the most essential to humanity and the hardest to live without. I
strongly recommend people stocking up on preparations before they buy silver.
You will need at the very least
3 months supply of food per person as a
buffer for the massive social upheaval we are going to go through with the
collapse of the dollar. The problem with investing in most food and fuel is
storage issues. Most food and fuel deteriorates and becomes worthless. Also
storage can be prohibitive especially if we are talking about some big
dollars. I don’t know about you, but I don’t have a grain silo or
storage tanks.
In extreme conditions those that invest in food and
fuel, put their life at risk. People’s
violent response to those moneyed interests that tried to speculate with
people’s food during times of crisis is something to consider. In 1565
one of Antwerp’s richest men, Pauwels van
Dale, bought large amounts of grain with hopes of driving up the prices. When
the starving people found out about the stash, they rioted all over the city.
Speculators and the rich were targeted with violence for their arrogance and
greed.
Unless you are a farmer or oil baron this usually
rules out many commodities for the average investor. This brings us to metals
because they don’t deteriorate. For most metals, storage again is a big
issue. $8,000 will buy you a ton of copper but just over 4 ounces of gold.
This is why precious metals are so sought after, because of their rarity and
the ability to store so much wealth in a small space.
One of the biggest reasons why people invest in
precious metals is that there is no counter party risk. Its value is derived from its intrinsic value of rarity and potential
uses. With precious metals you do not have to worry about someone paying a
dividend or earnings in a depression or a currency collapse. In fact the
worse things get in the economy, the more people
will escape to precious metals and drive up its price.
Once you see that precious metals are the place to
be, then you need to choose between the big 4 precious metals; Gold, Silver,
Platinum and Palladium. Platinum and Palladium
have rarity and industrial use going for them, but they have not ever been
used as money in history. With a currency collapse, I want something that
will have the most demand to drive up the price the most. I want my metal to
have industrial, investment and monetary demand. (Read the 3 Demands of Silver.)
This leaves us with gold and silver as the only two
rational choices for investment in the face of a mathematically inevitable
world-wide currency collapse. So
let us go through the competitive advantages of silver over gold .
1) Silver the second most versatile commodity,
second only to oil. With its growing technological and
medical uses, its demand is vital to any recovery we will see. Silver’s
unique anti-microbial, reflective and conductive qualities make it a vital
element in many high ticket projects. Since it is so vital and used in such
small quantities, its price is inelastic. If silver goes to a $1,000 an ounce
and Apple Computer needs a 1/10 of an ounce to make their $2,000 computer
work at the highest quality, they will simply raise the price $100 to make up
the difference.
2) Silver is cheap enough for the common man to buy. With gold at $1755 an ounce it is not really conceivable the average
American, much less most people in the world, will ever have enough money to
buy one ounce of gold. People are struggling to make mortgage payments, much
less buy an ounce of gold. With silver at $38 dollars an ounce, a husband
could buy a couple of coins without consulting the wife. If he blew $1,755 on
one ounce of gold, he might have some explaining to do. Since silver is
relatively cheap, the higher the price of gold goes, the more demand will
naturally flow into silver.
3) Gold is treasured, silver is thrown away. Since the dawn of man, gold has been treasured. In more recent times,
silver has been trashed as an industrial commodity and not valued as a
precious metal. With the rise of technology, silver has been literally thrown
away in such small quantities that is may never be recovered. In fact, the
USGS said that if this current trend continues, silver will be the first
element to become extinct on the periodic table.
4) There are no large stock piles of silver left. Over the past decades we have been consuming more silver every year
than we mine. This is only possible because we used up all of
humanity’s previously mined silver. In 1950, it was estimated that
there was 10 billion ounces in major stockpiles, today there are none left.
So even though gold is 10 times more rare than silver when mined out of the
earth, the fact that gold has been treasured and silver has been trashed,
makes the silver that is left much more rare than the 10 to 1 ratio that
naturally occurs.
5) The gold to silver ratio is at 1:45. It takes approximately 45 ounces of silver to buy one ounce of gold.
If throughout all of history silver has been mined a gold to silver ratio
1:10, how much longer can a 1:45 ratio exist? If silver has been trashed for
decades and gold treasured, how much longer can the 1:45 ratio exist? If the
amount of dollars invested in gold and silver at Sprott
Asset management and GoldMoney is 1:1, how much
longer can the 1:45 ratio exist? At some point the market is going to
recognize the incredible opportunity. When it does, it will most likely
overshoot and could make silver more valuable than gold. So if you really want gold, buy silver.
You can buy 45 ounces of silver now and if the ratio falls to a 1:1 ratio you
can trade 45 ounces of silver for 45 ounces of gold. (Read the 3 Big Charts I Watch for Silver.)
6) Silver has the largest and most persistent short
position in any commodity, ever.
The only reason why the 1:45 ration exists is because the banksters
sell paper silver into the paper markets to suppress the price of silver to
give strength to the dollar and the quadrillion dollar paper empire they
rule. Last May, when they crashed the silver market, they sold something like
8 billion ounces of paper silver into the market in 5 days. There is only
about 1 billion ounces of silver mined a year globally. This massive naked
short will unwind the day that they cannot deliver on the silver they
promised. Crash JP Morgan; Buy Silver. (Read Blythe Master’s Rides The Silver Rocket.)
7) The banksters are
running out of silver and time.
The COMEX registered inventory now stands at 27 million ounces. I knew when
the May smack down came that it was all BS. Logic would dictate that if the price
of silver dropped that significantly there must be more physical silver in
their vaults. When the inventory numbers came out, there was actually less silver. Not only
was more silver delivered to buyers, sellers cancelled their warrants and
shrunk the inventory from the supply side like OPEC does. (Read the 11 Mentality Shifts of Silver
Investors.) When this massive fraud is
discovered, there will be panic buying as the sharks smell blood in the
water.
The silver market is so small. With
only 27 million ounces in the COMEX, a little over a billion dollars would
completely empty that largest stock pile of silver. Last Wednesday the
Treasury added $240 billion dollars to our debt in just one day. If you see
that quadrillions in paper assets are going to fail and that most commodities
are not suitable for investment and how small the silver market is, it does
not take a very large stretch of the imagination to think what will happen
when people try to get into this market. Since the gold market is so large, I
think that is why we see central banks and major institutions are buying
gold. If they dumped a billion into silver, they would explode the market. A
billion into gold would hardly make a ripple. I believe this is why we have
seen gold react, while silver sits.
9) The majority of gold owners are the banksters. If
you look at the largest stockpiles of gold owners it falls mostly on the
central banks of the world. The very guys that are destroying the paper markets, are the largest owners of gold. There is no
central bank that I know of that even owns an even an ounce of silver. Since
silver has been used more times as money throughout history as money than
gold, logic would dictate that at some point banks are going to want to own
silver.
10) Gold bullion is more reported on than Silver
bullion. Gold is reported on twice as much in
the media as silver. I would bet if you only looked at major media reporting,
Gold is probably reported 100 times more than silver, since silver is almost
completely ignored. The only time I have seen silver reported is when we get
a major smack down in price and the main stream propagandists strike fear in
to their consumer slaves about how scary the silver market is.
I have many, many more reasons why you should be
buying silver right now. I recently compiled
11 of my best reports on silver called the Ultimate Silver Investor. One of
the reports has been read 400,00 times and has been
translated into 7 languages that I know of. It is all free by clicking
here.
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