Ten Topics on Silver
(Each in exactly 101 Words!)
Silver Stock Report
by Jason Hommel, May 24th, 2010
Lending at interest (usury) is the bane of our era, the highest crime of the ages, condemned by prophets, regulated by God, and ignored by modern man. God said no usury, unless you loan to other nations, but every seventh year is supposed to be a time of debt forgiveness, thus, it's a plan to teach the nations about God, yet abused instead to enslave people into perpetual bondage. Usurers want the whole earth, plus 6%! Lending is not so much a problem as is the interest! When gold is money, gold grows more valuable over time, so "increase" is built in!
The Big Picture for Silver.
No nation on earth uses silver or gold as a circulating medium of exchange, or common currency. This trend to not use silver started over 150 years ago, and has come to an end. If monetary demand for silver changes, it can only go up. Money is also a store of value, and people are recognizing that more and more. About 65 years ago, at the end of WWII, the world entered the age of electronics, and the demand for silver in electrical contacts soared tenfold. This has consumed more than half of all the silver ever mined since the beginning of time.
Supply and Demand for Silver.
The world annual mine output for silver is about 600 million oz., with about another 200 million oz. from recycling, and another 100 million oz. from selling from other sources. Industrial consumption is about 45%, jewelry consumes about 25%, photography is down to about 15%, leaving about 15% for investor demand. Investors buy about 100 to 150 million oz. of silver per year, which is barely $2 billion. Yet the BIS estimates that most all of the worlds' banks have $200 billion in "other precious metal" (or silver) notional value worth of derivatives on the books, indicating that all paper silver is all fraud. Paper money, unbacked by silver, is fraud, too.
Eternal Properties of Silver.
Silver is rare, dense, fungible, divisible, transportable, non perishable. These qualities unique to both silver and gold make them both an excellent store of value, unit of account, and medium of exchange. Silver is the best reflector, and the best electrical conductor in the world, and is a great germ killer, too. These qualities make silver valuable in tiny quantities to industry. Gold conducts less well than silver, does not kill germs, is too expensive to consume, and is not a viable alternative. Neither is paper. Gold coins smaller than 1/10 of an oz. are not practical, making silver essential as money.
Exchange Traded Silver Funds.
JP Morgan is the custodian of the silver for the silver ETF, SLV. JP Morgan is also the largest trader of derivatives on the earth, and the holder of the large excessive and concentrated short position in silver on the COMEX, and is being investigated by both the CFTC and the US Justice Department. The proof is not on me to prove they don't have the silver. Proof should be on them to prove that they are an honest custodian. SLV's silver is not able to be audited, and you can't take delivery. Silver is payment in full, not a promise.
Many people are deceived by greed, thinking they can earn more money if they buy silver on leverage, putting only part of the money down as payment, to enable them to "control" more silver. But if they don't take delivery of silver, then they are not buying silver, and not controlling any silver, but only get a phantom promise of silver from entities who could not possibly have enough silver to make full delivery. It's like the fraud of fractional reserve banking, but business as usual today. I believe it is a moral failure to be deceived by these con games.
Certificates and storage programs are a worse con. Pay full price to be conned with storage of silver that does not exist! Canadian banks and Morgan Stanley have both been caught selling non existent silver to clients in the past ten years, and their defense is that it is business as usual; that everybody does it. Sending brokerage statements showing silver amounts, when no silver exists, should be one count of mail fraud for every customer! It amazes me that many people do not have the courage and responsibility that is required to guard their silver. No work equals no results.
Many investors are lured into the precious metals market by dealers such as Goldline who is advertised on Glenn Beck. They mark up "collector" coins anywhere up to 30-100% over spot. There is no crime in charging a high price, but the scheme is borderline criminal. By selling older coins as "non-confiscable," they confiscate nearly half of an investor's money right off the top! By selling those same coins through a leverage program, they don't even have to deliver if the customer does not come up with all the money, and thus, may be selling collector coins that do not exist.
I was guilty of talking up silver stocks, as a way to gain leverage to the rising price of silver. What the market gave, it took away. Even my extremely profitable newsletter that showed a look at my portfolio is now in the dustbin, a relic of internet history. But new internet investors have popped up, claiming great gains as they bought on the dip in 2008. Too late to chase such gains now. Stocks are subject to capital gains, nationalization risk, mismanagement risk, debt risk, funding risk, futures market hedging risk, mine collapse risk, strike risk, tax risk. Why risk it?
When you buy physical silver, it comes in the form of actual shapes, which we call products. Popular forms of 99.9% pure silver are 100 oz. bars, 10 oz. bars, 1 oz. rounds, 1 troy oz. silver Eagles. There is also 90% silver coinage dated from 1964 and earlier. Occasionally, we get odd weight silver bars, 5 oz. silver bars, 1 oz. silver bars or other odd shaped silver pieces. And there are also the 1000 oz. COMEX bars, each one varies by weight up to 10%, with the exact weight stamped on the bar. Ten oz. bars are popular; they used to be the most expensive form, but now, the cheapest.