CIBC is Bearish on silver

(While Canadian Banks have no silver!)

Silver Stock Report

by Jason Hommel, February 9th, 2009

9500 ounces of silver tonight, Monday Night, 7pm Pacific

We have listed at

3500 Buffalo Rounds
500 Obama Rounds - these came from a bag of 500 that was moved around too much, and contain a few nicks.
1500 oz. of 100 oz. Academy Bars
3000 oz. of a new style of Buffalo with a 1929 Indian on the reverse.
1000 oz. of a new style of a Pirate Skull with Palm trees on the reverse.

Many are wondering what kinds of designs we will have next.  We have at least 7 more designs in the works.  If you have any coin ideas you would like to share or see made into rounds, please send your ideas to our extraordinary artist who sends near-finished designs to various sculptors:

Many of our auctions are being bid right at the reserve price, and on some days, we only sell half of what we have listed.  That means that now is the perfect time to buy, since your bid will likely win!

Our shipping procedures are beginning to run more smoothly now, and thus, it's a perfect time to register at for our auctions.

Commentary on commentary on commentary:

My commentary on the dumbest commentary of the day:

"After a disastrous late 2008, we feel that silver's downside beta to gold will remain higher than its upside beta," the analysts asserted. "At the first sign of a decline in the price of gold, investors will likely sell their silver holdings, but retain more of their gold holdings, since gold has a superior reputation as an insurance policy compared to silver. Therefore, for 2009, we believe that silver will likely offer lower returns than gold, with higher volatility," according to CIBC.

I'll tell you exactly why that opinion is misguided, and therefore wrong.  That analysis suggests that the main drivers in the silver market, both up and down, are investment demand.  But investment demand is about 10-20% of the silver market these days, ranging from 50 million to 70 million ounces per year, and possibly as high as 100 million ounces for 2008 by my own ballpark estimate.  Mine supply, by contrast, ranges from 550 million ounces to 650 million ounces per year, and other supply consists of scrap and government selling, which adds about another 250 million ounces so that the total supply ranges from 800 to 900 million ounces. 

Furthermore, according to my own research and view, silver investors are far smarter and wiser than gold investors, so that if anyone is going to sell precious metals in a foolish panic, it is far, far more likely to be gold investors, not silver investors. 

In point of fact, it's not "investment" demand that is driving the silver price all over the place.  It's paper futures contract selling, as I've pointed out over and over again.  When a large bank can sell up to 130 million ounces of paper silver in futures in a month, with no action by the CFTC, which causes other funds who hold long paper positions to close out their positions due to margin calls, which also adds no silver to the market, price swings to the downside can be volatile, as we have seen.  But such manipulations, including issuing foolishly bearish commentary, will not work with wise silver investors who buy physical silver. 

The foolish commentators at CIBC go on to say that rising base metals prices will soon flood the market with silver by-product production.  Exactly the opposite has taken place!  Copper was as high as $4 and is now at $1.60.  Zinc was as high as $2, now at $0.53/lb!  Lead was as high as $1.10 now at $.54.  If the high base metals prices of the past two years did not flood the market with silver, what in the world are they predicting?  Copper to run to $10/pound?  If the world will see such hyper - inflation, silver is likely to run to $100/oz.!  Idiots. 

But they are bankers, what can you expect?  They are not idiots, they are purposeful, willful, malicious liars!  In their view, of course paper money is sound, even though they have so much now from the baiouts, they don't know what to do with it all!  Hey, try buying a little silver!  Good luck finding it in quantity!  I just had to wait 2-3 weeks to get a mere 35,000 oz. from my largest supplier!  Maybe that's why prices were going up for a couple weeks last week as I could not get bar numbers for my silver that I ordered!

Meanwhile, coin shops around the nation continue to be nearly sold out of silver, and have more gold.  What does that tell you about where prices are going? 

Yes, silver dropped a bit today, time to buy on the dip!


Smaller quantities of rounds, such as between 1-20, can be found at my mom's ebay shop:

My mom is also taking pains to ship overseas.


    Jason Hommel