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(*the
following article has been revised and updated to reflect an even more
bullish Silver case than originally argued in May 2008…note I had to add 20 more Silver coins to the above graphic
demonstration of the Gold to Silver ratio since May 2008!)
Attention GOLD Investors:
What would you do to take down the Gold market riggers? What would you
sacrifice? How hard would you work if you KNEW that the culmination of your
effort would end the long term manipulation of gold? As for me, I am very tired
of fighting the Gold Cabal, but I am also tired of watching all that I love
about my country get washed out to sea by the Manmade Monsoon of Market
Manipulation that is currently sloshing over the United States of America.
LET’S FINISH THIS THING!
I’m going to say it flat out…SELL ALL YOUR GOLD INVESTMENTS
NOW AND BUY PHYSICAL SILVER! This is not a joke and don’t get me
wrong, I am the biggest “gold bug” you’ve ever meet, but it
is time we ended their evil game. The Cabal has shown their Achilles Heal
over the past few years and it is not gold but the depletion of physical
Silver available for delivery that will ultimately lead to their demise. Many
of us figured out long ago that physical Silver will likely run out before
physical gold simply due to the tiny size of the Silver market compared to
Gold, but most of us have not ACTED on this knowledge to accelerate the
demise of the Gold Cabal due to our affinity for Gold and all that Gold
represents… sound/honest money, freedom, liberty and justice for all!
Recently, I have been thinking a lot about Gold as money and why I personally
believe that Gold is the best form of hard money. Why not Silver or platinum
or copper or zinc? I must admit that most of my knowledge on this subject
comes from the writings of other people. I have read hundreds of books and
articles by brilliant economists, sound money advocates and other monetary
philosophers who have dedicated their lives to the study of monetary theory.
I am truly amazed at the vast amount of intellectual capital that has gone
into the analysis of Gold as money with each monetary thinker building upon
the knowledge passed down by others through the ages.
BUT WHAT DO I THINK?
If I had no idea about monetary theory and history, what would my conclusions
be? How have these writings influenced my affinity towards gold as opposed to
other hard metals? Is it possible to NOT be influenced by information passed
down over the years and clear my mind enough to use my own cognitive
reasoning on this subject?
This is what I have been pondering since the 2008 “GATA
Goes to Washington” conference and my
conclusions have shaken me to my Gold Bug foundations! Although the
facts and fundamentals of gold as the best form of hard money may have been
true 50 years ago, the world of Gold and Silver has changed dramatically
since then such that now SILVER is hands down the best hard money investment
compared to all other metals….even GOLD!
THE FACTS
The following is a list of facts and reasons to switch all your Gold
investments into Physical Silver:
1) Due to the tiny size of the Silver market and the lack of physical Silver
available to the manipulators, the Silver battle is much easier to win than
Gold. Ted Butler’s recent discovery of massive
Silver market manipulation should
highlight the size, scope and importance of Silver to the current financial
crisis.
2) Central banks have NO physical Silver to assist in the manipulation
of the Silver market but they still have a lot of physical Gold (although
much less than they claim).
3) The majority of Silver mined every year is consumed as an industrial
metal in very small amounts and will never return to the market whereas the
amount of above ground Gold grows year after year.
4) Silver has developed, due to its low price and superior physical
properties, into a vital and necessary industrial commodity that makes it
mandatory for modern life. If we woke up tomorrow and gold vanished from the
face of the earth, life would continue pretty much as it was the day before.
Without silver, modern life would change.
5) Due to the relative very low price of silver and very high price of gold,
the man in the street, around the world, is in a position to buy silver in
much greater quantities than gold.
6) In various forms there is an estimated 5B oz of above ground Gold and 5B
oz of above ground Silver but Gold trades at $900/oz and Silver trades for
only $13/oz. Both metal prices are obviously manipulated but Silver appears
to be manipulated more. As for Silver bullion that is “in play”
for the manipulators, I estimate that less than 400M oz remain (COMEX
Inventories + SLV Inventories) with a current market value less than $6B.
7) Silver has been in a supply deficit for over 50 years! Governments held
approximately 10B oz of silver in 1950 and have been supplying that physical
stock steadily into the market. Today there is no more of that surplus silver
left to sell.
8) At current Silver consumption rates there are only 18 years of known
Silver reserves remaining in the world. AFTER THAT SILVER WILL BE GONE
FOREVER! Think about it.
9) Demand for Silver is “inelastic” in its industrial
applications because it is used in such small quantities per application. An
increase in price does not translate into a decrease in consumption.
10) The COMEX Silver short position is the largest concentrated short
position of any commodity, on any exchange in the history of financial
markets.
11) Throughout human monetary history the Silver to Gold ratio hovered in the
10-1 range until the invention of futures and options trading in metals. When
I originally wrote this article that ratio stood at 50-1 but in the last 12
months after the massive manipulation maneuvers by
JP Morgan the silver-gold ratio now stands at over 70-1.
12) The US Dollar as defined in the Coinage Act of 1792 is Silver, not Gold,
and contains “three hundred and seventy-one grains and four sixteenth
parts of a grain of pure, or four hundred and sixteen grains of standard
silver.”
13) Silver is massively under reported in the media vs. Gold. Even Jim
Rogers, the commodity guru, purposefully ignores Silver entirely in his best
selling book “Hot Commodities” even though Silver exceeds all
other commodities using his metrics on what makes a strong commodity.
14) Very few investors have physical Silver in their possession. Reasoning:
because they claim it is “too hard to store”. Does that
mean when Silver trades at over $1,000 oz people will be more willing to buy
and store physical Silver? It is difficult to make up a more bullish reason
to take delivery and store physical Silver TODAY…when the Cabal price
rigging scam finally fails you can always buy your own Fort Knox
to store all that pesky Silver you bought!
15) Gold’s strong fundamentals are only exceeded by Silver’s so
when the gold manipulation stops and the Gold price takes off investors will
be looking for the next under-priced investment with similar characteristics.
16) 470M oz of Silver owned by the US Treasury and used in the Manhattan
Project for the construction of the atom bomb have all been melted down and
sold into the physical market to support the “Strong Dollar
Policy”
http://www.silverbearcafe.com/private/silvermystery.html
17) Silver mineral deposits, as opposed to Gold, are usually very
shallow in the earth’s crust due to the nature of the geology so most
of the large deposits of Silver have probably already been found and/or
already mined limiting future discoveries.
18) There is a significant problem with counterfeit Gold bullion
because of its high price. Silver bullion has not, to date, had as much of a
counterfeiting issue because its price did not justify the effort. (although there is a problem with counterfeit Silver jewelry which may significantly suppress Silver scrap
recovery in the future…oddly bullish by-product of counterfeiting
Silver!)
19) The total dollar value of the Silver market is a fraction of the total
dollar value of the Gold market.
20) Most flat screen televisions use Silver in their internal
electronics/screens and the US transfer from analog
to digital signals by June 12, 2009 should temporarily increase the demand
for new TV’s when the switch is made.
https://www.dtv2009.gov/AboutProgram.aspx
21) Retail physical shortages of Silver are already beginning to appear
around the world. The list of announced delays/curtailment by Government
owned Mints now includes EVERY MAJOR SILVER COIN PRODUCING COUNTRY IN THE WORLD!
22) Hedge funds are bleeding from the credit crunch and they are looking for
ways to save themselves. A single hedge fund can scoop up the remaining
physical Silver and blow the price sky high.
23) In the US,
Gold confiscation laws are still on the books but there are currently no
silver confiscation laws.
24) In March 2008 the Gold price breached $1,000 or 120% of its historical
high. Silver, on the other hand, only approached $21 or 40% of it’s
historical high suggesting that Silver has a long way still to go.
25) Un-backed paper Silver programs such as silver certificates and
unallocated pooled accounts are the “industry standard” these
days and will be scrambling for metal when redemptions are called in by the
investors.
26) In the past 2 years the massive global money creation by central banks
around the world has created huge reservoirs of cash sloshing around the
asset markets looking for a safe haven. Although most mainstream press have
discussed Gold as being a likely bucket to fill with this monetary firehouse,
SILVER has all the same monetary metal properties as Gold except the Silver
market is SO small it would be like FILLING A DIXIE CUP WITH THE FIREHOUSE!
27) And finally, believe it or not, the CFTC has an open investigation into
the manipulation of the SILVER market that is being conducted not by their
investigative division but by the CFTC “Enforcement Division”.
Although the final conclusions have been purposefully
delayed by the CFTC, the final outcome may finally
be the END OF THE 50 YEAR MANIPULATION OF THE SILVER MARKET!
Hopefully, that’s enough pro-Silver data to convince you to make the
switch.
WHAT ABOUT GOLD?
There are some pro-Gold items which, in fairness, should be weighed against
all the pro-Silver arguments:
1) Gold does not tarnish. (That’s nice but hardly a reason not to make
the switch)
2) Gold is promoted and perceived by the world as the “Greatest
Monetary Metal”….at least for now!
Don’t worry about Gold….really. Gold, like Silver, will
find its rightful place in a freely traded market. It should take less than a
few $Billion of physical Silver purchases to buy up all of the available
Silver bullion, and that would only mean switching out of about 200 tons of
Gold on a physical basis. 200 tons would not significantly damage the price
of gold. Now $5B removed from GLD/SLV, Gold/Silver Pooled Accounts,
Gold/Silver mining stocks, etc. would be much better for the price of Gold
should also not cause any permanent damage to the gold investment community.
As a matter of fact, can you think of anything more positive for the price of
gold and gold investments than the destruction of the Cabal?!
SO WHAT IS THE TRUE PRICE OF SILVER TODAY?
I don’t know but I do know that the price quoted on the COMEX today is
not even close to its Fair Market Value. It makes more sense to me to
estimate the true price of Silver in relation to another “Monetary
Commodity” such as Gold since gold is currently “perceived”
as the best monetary metal.
- Based on my estimates of total above and below ground Silver (17Boz)
and Gold (8Boz) the Silver/Gold Ratio should be 2.1-1. With Gold trading at
$900/oz Silver should be trading at $428/oz or is 33X UNDERVALUED!
- Based on my estimates of total
above ground Silver (5Boz) and Gold (5Boz) the Silver/Gold Ratio should
be 1-1. With Gold trading at $900/oz Silver should be trading at $900/oz
or is 69X UNDERVALUED!
- Based on my estimates of total
monetary bullion above ground Silver (1Boz) and Gold (3Boz) the
Silver/Gold Ratio should be 1-3. With Gold trading at $900/oz Silver should
be trading at $2,700/oz or is 208X UNDERVALUED!
Of course all this is predicated on the assumption that gold is fairly valued
at $880oz today which almost everyone agrees is a joke. Since the USA holds a
little over 8,100 tons of gold in reserve it is logical to assume that Gold
will back the US dollar when the fiat money system fails (not hard to imagine
the failure of the US dollar). With theUS M3 money
supply currently estimated to be in the $15 Trillion dollar range, the price
of a redeemable gold backed US dollar would be about $60,000/oz IF the US stopped
printing dollars today.
The $60,000/oz Monetary Gold price would put the value of monetary above
ground Silver bullion, as analyzed in the last bullet point above, at….
…. $180,000 per oz!
Crazy, I know, but it really doesn’t end there!
- Based on the FACT that Silver is being consumed 120% faster than it is
currently being mined/produced and the Gold above ground supplies are growing
at 2% per annum the Silver/Gold Ratio Formula should be [(Above Ground
Silver)(80%) to (Above Ground Gold)(1.02%)]. With Gold trading at a massively
manipulated low price of $900oz, Silver should be approaching INFINITY AND
IS INFINITY(X) UNDERVALUED!
Wow….chilling conclusions…have you traded your Gold for Silver
yet?
TIME TO END THE CABAL
….MELT THE __ITCH!
Bix
Weir
Read
the other essays written by Bix Weir
Bix Weir is
a freelance author and analyst dedicated to exposing the long term
manipulation of the gold and silver markets. He has worked closely with the
Gold Anti-Trust Action Committee helping to pull the curtain away from the
Cabal of International Bankers that have taken control of our free market
system.
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