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In my
best dreams I didn’t believe that you, the silver investor, would make
me so happy that you bought almost twenty million US Silver Eagles in 2008. That
almost doubled the record of the previous best year ever. I wrote many
articles in which I said silver eagles are the most promising investment and
I congratulate you in agreeing with my belief.
Nothing
has changed from last year. Silver Eagles are still the most promising
investment for two reasons. One, the day will come when the Mint will stop
minting these coins and they will have a numismatic value. Two, when silver
prices will be in the sky with a shortage situation, the demand for one ounce
Silver Eagles will be tremendous. Why? Because the price of silver will be so
high that people won’t be able to afford to buy 100 or 1000 ounces of
silver. One ounce of silver will be of real substance.
The
prices lately are artificial, produced by the one or two big short sellers. As
long they can satisfy the market with physical silver, they will be able to
control prices with their paper short sales. But watch out when they will
lose control and then you will become rich by holding silver. This loss of
control can happen on any day with no prior notice. Don’t think you can
predict it. Just prepare and be ready for it.
Already
we have started 2009 with big sales of U.S. Eagles and I hope you will clean
up like in 2008 when there were sell-outs and the Mint had to allocate
supplies every week. Even though the Mint has increased their production
capacity, the demand has continued to exceed supply.
The
forces in the market that control silver cannot control the interest that
you, the smart investor, has in buying Silver
Eagles. There is a tremendous pressure on the short sellers to supply silver
for the production of Silver Eagles. It is no joke when 20 million ounces of
silver get taken off the market by one force in a year. I hope you clean out
everything the Mint produces in 2009 as you did last year.
I can
tell you that the real silver value is increasing by the day, but is not
reflected in price. If you speak about value, look at the price of gold at
over $900 and silver only $12. Take into consideration supply and demand. Do
you think silver prices reflect true value? In my opinion, no. I see the true
value of silver at close to the value of gold or maybe more.
Ask yourself
where are the profits more promising, gold or silver? I’d say silver. It’s not that far away when silver will be past gold
prices, then you will make a fortune. I know that many think that is crazy,
but I ask you to think of this. Not to sound immodest, I don’t know of
anyone who wrote that Silver Eagles would go to a big premium. Look what
happened. I was right with the Silver Eagles. I will be right about the
silver gold price as well. I read where many people say the premiums on
Silver Eagles (and other forms of retail silver) must fall. But I ask these
people to be honest and say whether they predicted premiums on Eagles would
rise? Then why should we listen to them now? Mr. Butler told me that when I
first wrote about Silver Eagles more than a year ago, he received an e-mail
from a well-known silver guru saying I was all wet. Only when I take a
shower.
I have
an intellectual question that I ask myself with no clear answer. In what
range the price will silver and gold cross? I can see two scenarios. In
deflation, they will cross in the hundreds and in inflation,
they will cross in the thousands. I stress to you don’t play the ratios
on a leveraged basis as the prices are controlled on the COMEX.
In
this moment we must have patience and strength and know that the time is
working for us. Silver was always intended as a long-term investment and that
is no different today. Things seem to move faster for us, but families grow
and age at the same pace as always. Keep that pace in tune with your silver investments.
In my opinion, today’s prices for the long-term investors are the best
ever to clean out the reserves of the shorts. Once they are cleared away,
then the express road will be open for higher prices.
I am
happy to see the tremendous interest in silver and congratulate my friend Mr.
Butler who is doing a fantastic job by writing weekly. His work on the silver
manipulation is truly heroic. Don’t forget that the futures market is a
casino and that you will be much better off buying real silver, like eagles
and bullion bars.
Probably
most are asking when the explosion in prices will come?
The only answer I have is when the shortage will come. With all the forces
that Mr. Butler has brought against the manipulators, it is amazing they
still don’t run. That’s because they have connections and no
choice because they will lose so much. Theirs will be no minor retreat.
Shortage will mean total defeat.
We see
lately some signs that they are struggling. They have not had the power to
increase the total visible stocks of silver much over the past 3 months. Up
until then we were growing at 15 to 20 million ounces a month and now the
growth seems flat. This is a very good sign that their troubles can come any
moment.
What
will the powerful shorts do before they give up? They will go to the
government like crybabies and ask the Mint to stop
producing Eagles and the government will give in. Then those who hold Eagles
will profit tremendously. Many people are concerned with confiscation, but
that is not my big worry. I can tell you for sure one thing. Any
confiscation, should it come, will come long after the Mint has stopped
producing Silver Eagles. And Eagles will be the last form of silver ever
confiscated. Today the Silver Eagles are selling at a premium of 30% or so,
and I will not be surprised that the premium can go to 100% and much higher. After
all, premiums hit over 70% this past year with no wholesale silver shortage
and with the Mint still producing. What will the premium be when a wholesale
shortage comes and the Mint says no coins any more?
All
the available physical silver in the world is moving out of the big
shorts’ control and into the control of the long-term investor. Once
this shift is complete, you will be in control and you and your children will
set the price of silver.
Israel Friedman
www.investmentrarities.com
Israel Friedman is a friend and mentor to Theodore Butler.
He has followed silver for many decades.
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