Auction: 24 Bags of 90% Silver
Silver Stock Report
by Jason Hommel, October 16th, 2008
There are numerous auctions now at
seekbullion.com, a site run by Peter Spina, of goldseek.com and
Auctions run by others, include:
monster boxes of Eagles are closing in 9 hours.
20 Gold Maple
leafs closing Sunday night.
20 Generic Brand 100 oz. silver bars
closing Sunday night.
--THOSE ARE NOT MY AUCTIONS, but the prices
for those items right now are GREAT, some of the best in the
The 125 bars sold in my last auction, that
closed yesterday on Wednesday, were sold for an average price of
$15.56/oz., and, at the time, silver was
$10.33, so the premium was $5.23 per
ounce for Engelhard bars, a premium of 50.6% over
spot. The 26 separate auctions were won by 16
different bidders. One person won 70 bars in the
auction! 95% of the silver was shipped out today, to
everyone whose wire came in.
People are asking me about Jim Sinclair's 3 comments on
silver, points 11-13:
11. Sliver will demonstrate the fact
that it is more industrial a metal than precious.
12. Silver is not a
currency because it is simply too HEAVY to settle debts or to be
13. Silver performs best when there is reasonable
industrial demand and distrust of currency. When this happens
rounding up the gang and their money will have a lot to do with which
party is elected.
Regarding #11. What
silver IS, is a function of philosophy. What silver is mostly used
for, is a function of statistical surveys.
I have long
parroted the CPM Group's surveys that say that of silver demand, about 90%
is industrial, and 5-10% is for investors, or only about 100 million
ounces. This is rapidly changing. Investment interest was
so small, that it recently increased by 10 fold this year, as inflation
expectations are now mainstream, and many potential silver investors
cannot find any silver at their local shops. Yet, despite the
mainstream expectaion for inflation, still less than 1 person in 1000 is
buying silver, by my own estimations.
What this means to me is that
if investment demand increases only a little, the price must go up.
But investment demand for silver is usually siphoned away into paper
silver, such as Silver Futures Contracts, and the SLV. Thus, silver
prices are often driven by billion dollar funds who don't own silver, but
only paper silver.
The billion dollar funds should
understand that there is less than a billion dollars of silver to buy, in
a year, and they should review my report on how to get into silver, for
How to Get Into Silver, for
Billionaires February 27, 2008
Immediately after my report, silver shortages began to
get extremely bad. Note the date:
Silver Shortage: 19 dealers reported "Sold
Out" March 19, 2008
For most of my
readers, it is TOO LATE for them to buy silver under $20/oz. My mere
84,000 readers must own or control about $8 billion of capital, and most
of that is locked up in illiquid, and declining, real estate. There
is no way that $8 billion of physical silver could be purchased for
investment, without driving silver prices up about 8 times higher, to
Yes, most silver per year goes to industry.
But investors are now proving that they are demanding silver for savings,
more than "industry" can provide!
industry. Investors will be more attracted to silver as the
price moves higher, as everyone is a trend investor. And low prices
are also attracting investor demand, as inflation can be seen by blind
Regarding Jim's #12. I think Jim means
to say that for a given value of silver, the weight is too heavy. I
agree. I lifted a lot of it today. HEAVY! But that shows
that it is cheap! You get so much for your money! If you have
ever held silver, you know that part of the allure is the density, or the
heavy weight, which is unusually heavy for an object so small. A bag
of $1000 face 90% silver weighs 54 pounds.
But oil is
heavier. $10,000 worth of oil, at $72/barrel, is 138 barrels.
Now tell me, which is easier to lift and store? Will the general
public ever buy 100+ barrels of crude oil to store on their front lawn,
and have it delivered in 18 wheelers to the suburbs? Or will they go
to their local coin shop to buy a bag of silver, or whatever they can
I've been saying that for years. I was
right. They cleaned out the coin shops, and the major
wholesalers, until there was nothing left! Probably not one
person in 300 million has bought 100 barrels of oil to put on their front
lawns! Thus, the difference between silver and other commodities is
self-evident to all thinking men.
And copper is also much
heavier. Copper is $2.27 pound today. Thus, $10,000 worth of
copper is 4405 pounds. Which amount of equal value is easier to
lift? the 54 pound bag of silver, or the 2 tonnes of copper?
Silver is not an industrial metal, it is a monetary metal, and copper is
the industrial metal.
Regarding Jim's #13. I
have no idea what he is saying. I have an opinion about old
men. They over value their own personal experience, and
undervalue the lessons of history. For over 100 years, silver has
been going through a process of demonetization. Nations have been
abandoning silver's use as money. There is not another nation that
can do that again, they have ALL stopped using silver as money. This
process must reverse. There are no historical examples to even
show us what is going to happen. Both history and experience are
useless. You need vision. You have to imagine what will happen
to silver prices as monetary demand returns to silver. Silver will
be an excellent store of value, and it already is! Real silver
prices are increasing much faster than the prices of silver
SILVER PRICE NEWS UPDATE: As some
of you know, I've been buying COMEX bars. My contact man to
help me source a new supply of COMEX bars reports to me that
Kennecott wants over $3/oz. over spot for 1000 oz. bars, AND you have to
show them 3 years of audited finanancial statements! Clearly, I
won't be buying 1000 oz. bars from them, and I will stick to my usual two
MY NEW AUCTION:
24 Bags of 90% U.S. Silver Coin:
8 individual bags in 8 different auctions.
Then, 2 bags, then 3, then 5
bags. That's 18 bags total of Roosevelt Dimes.
Then, 6 bags
of 90% silver Quarters, in one auction.
My 90% Auction ends Monday, October 20th,
Noon Eastern time, or 9AM, Pacific.
So, it's a series of 12 auctions
scheduled, running over the course of 13 minutes..
Here's a picture of 20 of my bags for this
auction: (they crushed the folding table, right before I warned it would
happen) (See, nobody listens to me!):
I can ship
receiving the wire transfers from the customers, after the auction.
Wires must be sent within 24 hours
after the auction's close!
About 90% bags:
90% US Silver Coins come in "bags" of $1000 face value, which consist of
10,000 dimes, or 4000 quarters, or 2000 half dollars. The coins were
regularly minted, circulating U.S. silver coinage dating 1964 or
earlier. Usually, a "bag" is split up into two or four actual canvas
sacks to make it easier to carry. The coins exclude silver dollars,
which are another product. The silver is 90% silver, the rest, the
other 10% is copper, to help harden and toughen the coinage. There
is 0.72 of an ounce of silver in each $1 face value, or 10 dimes, 4
quarters, or 2 half dollars, but the industry counts it as if it's .715
ounces, due to coin wear. A full $1000 bag weighs about 54.5
pounds. The most common form is quarters, about 70% of the
time. 20% of the time, you get dimes, and 10%, half dollars.
Seems that the dealers hold back the dimes and half dollars because they
might be more interesting.
I wrote about 90% silver back in May,
when 90% silver was among the cheapest form of silver out there.
90% US Silver Coin Bags, $1000 Face
May 31, 2008
But one of the best things about 90%, is
that they don't make any more! It is now
among the highest price silver out there. This changed about 2 weeks
was rumored to have "about 1000" bags for a long time this year. It
appears they are running out, or are very close. They used to have a
spread of about $300 per bag, among the lowest spread in the
industry. It's changed. Look here:
spread has increased to over $2500 between their buy and sell
Right now, they are selling at $9873 per
bag! Divided by 715, that's $13.80 per ounce.
now, silver spot is $9.69/oz.
So, fidelitrade's bags sell for $4.12
per ounce over spot, or a premium of 4.12/9.69 = 42%.
Given the premiums, which
show a desperate market need, I will sell out of most of my bags
of silver, and I don't anticipate ever being able to buy any more. I
will buy COMEX bars instead, and I will keep about 10 of my best bags
for myself, in reserve.
Every rich man ought to have AT LEAST
ONE BAG, just in case times get really rough. A bag of silver dimes
holds $1000 face value of silver, which is 10,000 dimes!
dime used to be a day's wage in many places and times in most of human
A Silver Dime Worth a Day's Wage?
'Buy' Louder than Anything Else
a man works 250 days a year for 40 years, that's 10,000 days worked during
a lifetime. Think about that bag of 10,000 silver dimes, and what it
I did something new this auction, since some people
were confused about how proxy bidding works. I set the proxy bid
increment at $1.01.
In a normal auction, if you are sitting there,
bidding on anything, as you begin bidding, you know, in advance, how high
you will bid, but you don't reveal that to the other participants, you
just start bidding, and bid higher and higher, until you get to your
"reserve" price, the highest you want to bid.
The online auction
works the same way. You just put in one bid, your reserve bid.
This bid is hidden from all others, and if yours is the highest, you
become the leading bid, but your top bid is not shown. Then, the
software takes over. If another person bids higher, but not higer
than your price, the web site automatically bids for you, just enough so
that you automatically bid over their bid, immediately, but never
over your bid price. They are told that their bid did not win, but
their bid pushes up the price you'd have to pay.
to set this bid increment at $1.01. I made it an unusual number,
specifically so that people can detect and understand when
an automatic bid has taken place, and easily see that.
not deceptive for the system to "hide" the top reserve, or proxy,
bid. People do that all the time during auctions, they don't "show
their cards" so to speak, that's a normal feature of auctions.
You don't have to enter a high reserve bid right away. You
can always enter a higher bid later.
The bidding system at seekbullion.com uses PROXY BIDDING!
IS PROXY BIDDING?
First, register at http://www.seekbullion.com!
Proxy bidding at seekbullion.com works
similar to ebay.com, however, the "bid increments" at seekbullion are much
The high bid wins, but is never what is
paid. The second highest bid mostly determines the
The highest bid is always hidden from view. The bid
you see is nearly always the second highest bid, plus a small increment over that, due to the automatic
proxy bidding of the highest bidder.
For example, if by the
auction's close, one person has bid $10,000 for a bag, and the next highest
bid is $9000 for a bag, then the auction software lists the highest bid as
$9001.01, and the person who bid $10,000 is the highest bidder, but will
only pay $$9001.01. The person who bid $9000 will not win, and their bid
is only used as a base for the automatic proxy increment bid of $1.01
over that price.
Thus, it's like each
bar is bid at least twice at very near the price you
This really prevents price gouging, because the bids
have depth--at least two buyers are willing to pay very similar prices.
If you want a
free market in silver, then please tell people about the auctions at:
In case you miss an email,
check the archives:
You can buy silver in
lots of 100-500 oz. at my auctions at www.seekbullion.com
Auctions end M-Th, Sat, At 7PM Pacific, but you can place bids anytime, 24/7.
Wires only. USA Shipping only.
You can also buy silver at www.momsilvershop.com
ship overseas, and also in lots of more or less than 100
See us also at:
4870 Granite Drive, Rocklin, CA 95677