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How to Increase your number of Silver Ounces by trading the physical

IMG Auteur
Published : March 12th, 2012
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Category : Gold and Silver





For some time we’ve wanted to share with others what we do to acquire additional ounces of silver bullion without spending more FRNs (Federal Reserve Notes). No packaging or shipping costs, but immediate selling/buying 24/7.

Yes, it is risky, and this endeavor could leave you with droopy suspenders if you do not have a disciplined plan. We all know silver is still in a long term bull market – FRNs dropping in value and purchasing power. We don’t know any better than anyone else’s guess when and at what FRN price the bull will tip over.

First of all, you should already have set up US silver 90% ‘junk’ coin core holding. This is your Core, and mine will never be offered for a fiat paper swap in my lifetime. You should also be holding gold bullion coins. Your percentage allocation is up to your own temperament. Ditto for the gold coins – no sale. Store off your premises and disclose to only one person.

Now, let’s get to it.

Many experts who I respect discourage with emphasis the ‘science’ of Technical Analysis. Bob Chapman, for one, vehemently disparages TA. We can certainly understand and agree with his logic - - that bankers through paper COMEX manipulation are destroying hedges for speculators and legitimate industrial users. So true.

But, with this in mind, and with all the violent ups and downs there will always be indicators that hint of impending reversals in FRN price. That’s what we’re talking about.

These silver-for-FRN swaps are not conducted by lugging your bullion down to your local shop, or through any coin dealer. In periods of silver price peaks, the refiners can be deluged with supply to the extent that they will offer to buy at below melt price. Then, when “swapping” back to bullion, you’re caught with a 4% sales charge. You want a Spot price transaction as your own TA forecasting decisions will be positioned for those prices.

We’re probably making this explanation more complicated than it should be, but we’re hoping to furnish you with an outlet to actually delight in the pain of a silver plunge, for you’ll be rewarding yourself on the rebound with more ounces than you “swapped”! Hey, a 20 oz. gain is about a FRN$600 gain which will enable you to ride the next wave up with more silver than the last surge!

We use silver rather than gold because of silver’s greater leverage both ways.

Turn off the CNBC carney barkers and rodeo clowns and use your own visual and ‘scientific’ wits with your personal charts. Block out news events, you’ll see anything significant in the metal’s chart price action. We have knowledge of the fundamentals, but they’re not in the fore of our mind. Block out emotional influences – they can be fatal!

Here’re the tools you’ll need:

1.       A bullion trading depository such as Sprott or GoldMoney. Some have no minimums, so open an account and send them your FRNs.

2.      A free charting service. I use Netdania’s Chart Station Application.

Here’s what mine looks like:

Confusing, huh? I had a heck of a hard time with 9th grade Algebra & Geometry, and I muddled through; so can you. This is NOT the time to sell and try this! As you can readily see the bottom two indicators, Williams%R and Full Stochastics are plumbing for bottoms although they can rattle around the floor while the price continues down. Just to break even we will have to see a spot price of $32.02 to buy back with a 4% sales charge! Yes, this time I missed the +$37 peak.

I watch the 4/7-day mov. avgs. closely as a trigger, then the SAR dot then for confirmations from the lower indicators – especially the MACD which is a widely followed indicator. As an aside, but not viewed here, is the G/S had inverse reversals to the upside on the 14th for the SAR and MACD! At the top of this image you can see the different workspace tabs I go to. All free service.

So then, the buyback trade jury is still out for us. I do also still hold some junior silver miners, but under NO circumstances should you ever leverage your positions for bullion or stocks by SHORTING! I am not a registered investment advisor by any definition, so it’s your own money at risk, not mine. I just feel more secure relying on myself rather than brokering investment jobbers. I have no one to fault but me.

I like being able to not get caught completely in the multi-year cyclical downdrafts.

This is a great time to backtest, experiment, obtain a comfort level, and prepare to put some more silver ounces in your own vault. For the first time you’ll be sitting in the banksters’ cheering section!

For those who track the COT for Silver, here you go:



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