In my mind, I am very glad Eric can say silver will be $100 an oz in a few years. I just hope I can buy some gas, food and a shirt.

The manager of the world’s largest private hedge fund, in an interview on CNBC on Thursday morning, basically said that investors should own more gold, about 3 separate TIMES! As I recall, he said stocks will be OK this year, but expect inflation to start to head up during 2012. I think he said something bad would begin to happen in 2013, but no one can predict that far in advance anymore. With what is going on in the Middle East, we could be living in an entirely different world by then.

In some ways silver is already trading around US$85 per ounce !

“Our group was detemined to stand for delivery going into Monday because we were not going to take a 30 percent premium on a price of $33.50. It was reported that Blythe from JPM offered a 50 percent premium. That was not even close in our case. We got over 80 percent premium. That’s right. Over $50 per contract on the condition that our group sell all our contracts. Our counterparty even threatened us with the ghost of Herstatt. They openly admitted that they could not deliver even 20 million ounces to us but that if we stood for delivery they would be sure that they make delivery to everyone else before they defaulted on us which would make us ‘unsecured creditors’.”

If you want to hedge the depreciation of the dollar with precious commodities, I would go long gold rather than silver. Silver is at all time high against Gold. If you are long gold you would have the tailwind at your back rather than facing the headwind.

Silver Update

Holy cow.. Check out the volume and activity for the April $40 calls for April 16th
http://www.google.com/finance/option_chain?q=NYSE:SLV

@ Jeremy:

Very interesting!

It appears that Blythe is “dealing” with many others who also settled for the very high cash premiums, although I’ve heard that the premiums were in the neighborhood of 30%.

One has to wonder what the end of March will bring!
=====================

@ Steve:
At the rate silver is going, it’s possible that, by early next year, one might be able to buy a full tank of gas, some food, a pair of slacks plus a shirt for the grand sum of 1 US Silver Eagle!

Silver is nowhere *close* to an all-time high vs. gold…

Both these metals are entering a field of acceleration in upward price discovery due to multiple reasons: former manipulation by the banking cartel who are losing their grip holding down real prices, and public awareness that they are being had through currency debasement. It’s a potent mixture. When the other 99% of the eventual buying public wake up, the curve at some point goes exponential.

Silver will rocket upward to some overwhelming figure. The media hasn’t caught on to one missing word in their vocabulary yet, but they will. The word is ‘monetizing’. It’s a verb. The PM media, including kitco’s writer’s are still referring to silver as an investment, a noun. Analysts continue to analyze silver against the backdrop of its historical price points coupled with inflation. They are missing an important point, silver possession has become a movement based on an idea, one that is yet in the birth stages. The idea? Paper is no longer ‘real’ money.

In 1979/80 silver was a casino commodities play. No one knew or understood why they were hoarding silver, only that it was valuable because it going up. It was nothing whatsoever related to the weakening of paper money. This time its much different. There is an earth wide group consciousness as to the facts. and the fact are that silver, like gold is monetizing; and incidentally, there is none to speak of, no reserves. Demand for physical deliver is on, and its unprecedented. Let your imagination go. The upward bound is in multiples of ten.

Today, more so than yesterday, it doesn’t matter what price you got in at. It only matters that you are in. Worry about how you get out next year, or the decade after that. You are buying the idea, not the price price point.

Disclaimer: i own silver

@ J.Mcluhan:

Interesting comments! There are many folks in the world that have finally “woken up” to the fact that their paper money is just “paper”, and that their government as well as the bankers have been manipulating them.

In my remarks above, I mentioned that many folks are waking up to the fact that paper money is, well, just paper. Now Greenspan weighs in on this topic.

Greenspan Admits The USD and EURO are “Faulty” Currencies:
Now this is getting interesting!
Link: http://www.zerohedge.com/article/oil-gold-rise-and-silver-surges-record-mena-contagion-and-greenspan%E2%80%99s-%E2%80%9Cfaulty%E2%80%9D-fiat-currency

Hang on, because it’s gonna get volatile!

Comment to Intrinsic Value,

Silver is not at an all time high against gold. The gold/silver ratio is only ~40.
Traditionally, during monetary metal times, gold was 15 to 1 or less.

Okay, Silver goes $100 oz. or goes 15 to 1. Everyone is asking the big question, “How high will Silver go?” My question is, how long will Silver maintain that high? If the bull market ended next month, where will the price of silver go?

Thanks to all the above for your comments. Much food for thought.

There seems to be one glaring fault in the comments, however.
It is this : pricing real money, gold & silver, in fiat paper currencies
that are doomed to extinction. It appears that if we are really going
back to real money, it would be better to price it in terms of real
goods. The standards of ancient times were bushels of grain and
fixed amounts of lamp or cooking oil.

Updating that time-tested concept, I find that a tenth ounce of silver
buys me a nice loaf of bread or a U.S. gallon of motor fuel. When
bread and gasoline prices inflate to $10, I fully expect my one-tenth
ounce of silver will still buy me that same loaf or gallon. The dollar
price will become irrelevant to those paying in fractional silver rounds.

Another way to look at this is to imagine yourself living in Austria in
1923. Next door, German currency is falling rapidly in buying power.
Being smart, you keep your cash under your bed in the form of silver
coins. You find that each ounce of silver buys you the same quantity
of German goods every month while prices in the German currency
are rising exponentially. Germans are experiencing run-away inflation
while you are not. Same with Argentina, Yugoslavia, Hungary, Chile,
Russia, Poland, etc. at various times throughout the last century.

Getting back to here and now, imagine you are living in a land of silver
coinage and the goods you need to buy are priced in a foreign currency
called federal reserve notes. Actually, no imagination is necessary if you
only read the definition of a dollar in the U.S. Constitution and trace the
owners of the Federal Reserve Bank to foreign lands. Any doubts about
silver re-entering the commercial trading world can be dispelled by doing
a search on “fractional silver rounds” and seeing that such would not be
available if there was no demand for them.

So, I put it to each of you : either convert your paper fiat into spendable
silver to live on or just keep posting your hopes and dreams of increasing
amounts of ever more worthless “ghost of money” currency. As for me,
I am leaving shortly to buy my week’s organic produce at the farmers’
market using fractional silver rounds. Then it’s off to my chiropractor for
a monthly tune-up at a cost of two silver ounces. Finally, a nice lunch at
a family-owned restaurant where I pay half in paper and half in silver.

And you?

@Denarius:
Excellent points, all!
Several investment experts suggested that we not try to “value” our ounces of silver in US dollars, but rather in “ounces”. But people around the world have been “conditioned” to use the USD as a measure of comparison. This is actually comical during these times, when the USD is deliberately being devalued rapidly.

The main “drawback” to your suggestion (i.e. using silver for all transactions) is that silver is heavy, and therefore not practical for folks to carry around, when they wish to make a large purchase (e.g. a washing machine, or a car, etc.). I remember long ago the US one dollar bill was actually a “Silver Certificate” which was redeemable in silver (collectors still have these “Silver Certificates”… I wonder what they are worth today!). I believe that there were also $5 dollar Silver Certificates, but I’ve never seen one.

@Denarius

Unless you have already accumulated more silver than you or your children can spend in your lifetimes, it seems kind of foolish to be spending it now at $38 oz when it could be at $100 or at $1000 in the not too distant future. Wealth is measured in number of oz you have, not number of $. So right now while prices of food, etc., are still affordable in paper $, you should be adding oz not spending them. Seems to me you are getting poorer everyday if your number of oz is decreasing. Okay you paid $6 for that oz of silver, big deal, if you need to replace it in the future will you pay $100 for it, $1000? While it may feel cool to spend silver rounds now, why not use the green gov toilet paper as long as it’s still accepted and as long as hyperinflation has not yet hit? If you spend your silver on something of real value, gold, rental property, natgas shares, etc., okay. But not on food and restuarants at current prices. For everyday living items, I think we are still in the silver accumulation period, not the spending period.

@obewon:

Good point. Under that condition, silver IS a “drawback”.
But isn’t that what gold coins are for? Just asking.

Not to belabor the point but here’s a post
I made elsewhere back in Feb 2011:

===================================

“I recently advised some folks to convert their small silver
bars into coins so they could be more easily spent. Well,
they did not take my advice. No, they just presented the
bars to the proprietor of a business and he immediately
accepted them as cash payment.

“A day or two later, the coin shop in that city was asked by
that proprietor about the USDollar price of those silver bars.
The shop confirmed the bars were indeed priced equal to
the sale for which he accepted them as cash.

“As I keep telling folks, you just have to ask if silver is okay.
You will be met with either stunned silence or a pleasant
surprise. Where is the down-side?”

===================================

The bars were 10 oz each and the purchase was over $1000.
More than that I don’t know; what else is there to know?

@Larry

You are right. I have accumulated enough silver to live on
for the rest of my remaining years, imo. It took me from
birth to about the 3/4 point of my expected life span. It was
purely circumstances that put me in the time and place to
go from working for money to having money work for me.

So the rest of your comments don’t apply to me any more.
To you and others, maybe, but not to me. Put simply, my
days of relying on INcome to cover OUTgo are over. Choose
wisely and you also may achieve that modicum of nirvana.

To become wealthy, do what wealthy people do.
To remain poor, keep doing what you have been.

I have no emotional attachment to spending silver as you imply.
Quite to the contrary, I have been thoroughly annoyed for the
better part of the last decade that I have been forced to cope
with the results of a century of criminal sociopaths ruling this
planet. Converting a lifetime of accumulated paper savings into
real money has been a monumental effort that has robbed me
of some very valuable years.

I could not have made such a transition without this marvelous
WWW. All I needed was freely available for the endless days and
nights spent discovering what-is-what and implementing a plan
to survive the criminal malfeasance we are all subjected to.

The one pleasure I do take is putting a competing currency into
circulation as a poke in the eye to the Money Masters at the FED.
It’s all I can do so that is what I do. That and posting here and
there to show others there is hope in taking independent action.

You younger guys will have to make your own financial model
to live by as conditions change. Repeating my process is not
possible now because it is a whole new world. Invent your own
ways to cope with the challenges you are now facing. In that
regard, you may find these quotes from others useful:

Gold is the currency of Kings,
Silver is the currency of Gentlemen;
Barter is the currency of Commoners,
and Debt is the currency of Slaves.

Everything tends to become unreal
once the money becomes unreal.

Paper is not money, it is the ghost of money.

In fifty-five languages, ancient and modern,
the word for money and for silver is the same.

Throughout history, silver has been the monetary metal, not gold.

Gold cowers in government vaults, waiting to fund the next war.
Silver circulates freely among the people, filling their every need.
~ Denarius

@ Denarius the Sage:
Great commentary about how to “survive the criminal malfeasance we are all subjected to.”

As a retired person, I am pleased to see a rapidly growing number of people around the world who have “suddenly awakened” to the dark and sinful ways of central banks, governments, and their agents, the big banks around the world all of whom have been defrauding the masses.

Criminal Malfeasance Goes Into Overdrive:
This FED “criminal malfeasance” went into overdrive on that dark day in late December 1913, when the Federal Reserve was illegally formed by a very small group of very wealthy men. Those interested in details should read “The Creature from Jekyll Island”, a real eye-opener, and a “must read”, for those who wish to understand what central banks and their agents are all about.

It is clear, that silver will outperform gold, long-term. Why? Because, 99.999% of the earth’s population are POOR. They, like investors in India, cannot afford much gold. They can, however, afford silver (currently). Chinese buyers are (currently) favoring gold, although, they are buying both gold and silver – in droves. Eventually, Chinese investors will favor silver, too.

Still MORE reasons why SILVER will outperform gold, over the next decade:

I’m A Crazy Silver-Bug…Why Aren’t You?, by Bix Weir
(Or, 33 Reasons To Buy SILVER Instead of Gold)
http://www.roadtoroota.com/public/597.cfm

The Silver Bullet and the Silver Shield
http://dont-tread-on.me/the-silver-bullet-and-the-silver-shield/

Crash JP Morgan – Buy Silver (Episode 96, Keiser Report)
http://www.youtube.com/watch?v=wN0rcNJXFfI

What is needed, are U.S. Treasury-issued (ie, Sovereign-issued) Notes, NOT Rothschild-Goldman-Sucks’-’Fed’-issued Notes. We DO NOT need a return to a ‘gold-standard’ as is often bandied-about. This would simply allow the self-proclaimed ‘elites’, to regain control over the new gold-backed currency, since they already own all the gold… (Thus, the correct answer is: U.S. Treasury-issued Notes. Period.) Until this happens, LOAD UP ON SILVER.

How about this: We, the (Plebs) of the Planet, enforce a TOTAL REPUDIATION of gold – by NOT BUYING gold – by ONLY BUYING AND/OR BARTERING using SILVER… Eventually, the following would occur: 1) JP Morgue, and affiliated banksters stock would go to ZERO, 2) U.S. Dollar would totally collapse, 3) self-proclaimed ‘elites’ would attempt to buy bread with gold – only to be told ‘we only accept SILVER’…this is totally within the realm of possibility – if, as Max Keiser has stated – we can ‘GET THIS GLOBAL PARTY STARTED!’