“The investment opportunity of a generation” and, therefore, of a lifetime is ignored by the professional investment experts!

They’re as bad as the professional religious experts and are similarly unaccountable for the false information they impart to the rest of us.

Good thing you started ArabianMoney a year ago, Ed. So little truth around, so thanks for the light here.

Chaps bit of advice for a first time investor.

Is there a preferred silver billion dealer in London. Had a chat with Baird & Co yesterday. They were offering VAT free deal on unallocated silver in their warehouse, 3.5% above spot, min investment 5K. I am nervous about entering close to all time highs, just wondered if the silver gurus would pass on some of their wisdom. Nothing goes up in a straight line, should I sit on the sidelines and wait for a dip, or plunge in. Don’t worry I won’t hold anyone to account, but the silver chart for the last 12 months is scary..

Ed Note: sign up for the ArabianMoney newsletter – we cover all this.

in a correction, silver, straddling both precious metal and industrial commodity markets, will correct down more in a downturn…..temporaily only.

we will eventually buy the DOW for an ounce of gold….or 16 ozs. of silver.

I’m thinking Silver heads to around $49-50 before correcting. If we clear $50 and hold then we head to $60 to make sure that $50 mark holds ground as a new base.

Most of the large economies keep a minimum ratio of gold to silver..as and when the ratio gets disturb above a certain limit…they vill strive to balane the ratio by either selling the silver or going for aggressive buying in yellow metal. The reason for the ratio is that some countries are rich with Gold mines and are controled by say X nations and on the other side Countries are rich in Silver are controlled by say Y nations.And also the nations with silver mines will start to gain importance suddenly which vil nt b welcomed by Crude rich countries or gold rich countries. So to get going the political balance….major imbalance in the gold and silver ratio is not going to b sustained for the long run. Hence stay away from silver…and more paticular once it touces $50…

The way that silver is rising rapidly, whilst gold is remaining static, suggests to me that Max Keiser’s campaign to get people to buy silver, in order to bankrupt JPM because it has got its short position so wrong, is paying off.

And somehow JPM is the FED in this matter, in a way I don’t really understand but Obewon does, so that JPM’s bankruptcy is going to embarrass the FED as well as US economics overall.

Hey ho!

As Eric Sprott recently said in his investment newsletter:
“Silver is much more of a “precious” metal than the current ratio of 35-to-one would suggest.” Further, Sprott Asset Management, one of the largest bullion investment firms, believes that the silver/gold ratio is headed sharply lower, perhaps even lower than 10 to 1.

Just the Facts, Ma’am:
1. In-Situ Reserves: The U.S. Geological Survey estimates that there are current in-situ reserves of approximately 16.4 billion ounces of silver versus 1.6 billion ounces for gold (for details, see the USGS Mineral Commodity Summaries for 2011)

2. Demand for Gold and Silver Coins: The US Mint recently reported that their dollar sales of silver coins is equal to their dollar sales of gold coins.

3. Total Available Supply: The total supply of silver in 2011 is estimated at approx. 900 million oz (this includes “new” silver from mines plus recycled scrap) vs. approx. 140 million oz of total supply for gold

4. Silver Mines Dig Deep Now: Most of the silver being mined today comes as a by-product of the copper mining industry (and from the gold, zinc, nickel mining industries, as well). Additionally, the “new” silver being mined today from silver mines is being pulled from areas that are 2 miles under the ground. In other words, all of the “low hanging fruit” has been picked, and new silver is much harder to pull out now.

These are just a few of the many supply/demand factors that are pulling on the price of silver.

Then there’s the global hedge funds, who have been piling into silver over the past 3 months; no doubt, when silver hits $50, there may well be a big correction, and if this occurs, the correction will be a healthy one. Healthy corrections are what is needed occasionally, in order for silver to get past $100.

@ gary turtle
I can relate to your situation. I just doubled my silver position today, selling off some corporate bond fund units in the trade. Using cost averaging my buy price is now mid $30’s, so i felt reasonably safe, all things considered. Another factor is a hedge in the form of other asset capital gains liabilities on the books (if i sell off other assets). This might also apply to you. let’s just suppose I take a bath on silver, i can use the loss to offset gains in other classes (assuming they still exist going forward). So, in my case there’s little downside risk. I’m a bit heavy weighted with 24% in PM now but I feel good about it. I’m exactly equal now in gold/silver balance. For the record, i’m a small portfolio investor well under a million in assets, in my 50’s with another 10 years of earnings potential (i hope).
Being honest about it, the reason i’m buying silver is good old fashioned greed. I believe it’s going up, and i want to win. But i don’t think i’m excessively greedy! Just a healthy amount lol.
I believe you have to analyze your motives honestly and be prepared to take the loss if the trade goes against you because really, buying silver is a speculative play based on the notion of windfall profits. Can you afford to speculate? If so, then silver definitely qualifies. I also happen to agree with Sprott’s take in the matter. If you need a good rational behind your decision, his is a good argument.

From listing to others, and researching it a bit, it seems to me that the average small investor is not in PM’s yet (and for sure not at the 25% level) so i’m probably in a very small minority. I take comfort in that, meaning i’m looking for a long steady increase, hoping PM’s don’t go parabolic. I have no trouble seeing silver at $125. But then i also lost a boat load on Nortel ten years ago, so listen to my words, but don’t heed. It’s just another opinion, stacked on the heap.

Ed Note: the volatility is the killer and you will have to ride that out with silver, that is the price for the higher return.

I appreciate these figures on supply because I seem to have been told at this time that silver is scarce and difficult to get hold of.

I suppose JP Morgan has most of the 900 million ozs of silver on short contracts.

@ Just the Facts Ma’am

Great handle and excellent facts.

The PM Investor’s Dilemma

Is silver a runaway train from here?

Should I pile in with more of my savings? I am currently 10% invested in silver & gold. Should that be 25% as suggested by Marc Faber?

Or should I wait for a summer correction?

I missed mentioning the fundamental reason why i agree with buying PM’s today, at whatever price. According to my view at least, the fiat global monetary base is crumbling. In simple terms, the debt of the US is beyond the point where its manageable. The evidence is everywhere. Municipalities are broke, jobs and income in real terms are sinking. Residential real estate will continue to drop, despite the little flurry of good news this week in starts, its going to come off another 15% to 25% in my view. This outcome is fundamental and affects the whole equation of jobs and income for at least the next 5 years, not to mention banks marking to market their real losses and how that finally rattles through the derivatives obligations. Then there’s the down grade in US credit this week. You don’t have to wonder why silver just went straight up.
Back to the crumbling. What 99% of people are not fully understanding (yet), is that gold and sister silver are monetizing, slowly but surely being reckoned as money again. It’s like coming out into the light, from being in a dark place. The concept is dim and forgotten in the west, but not in the east. Especially when China is just coming off a long period where it was illegal to own gold. That alone should be good for a doubling (or two) in the price of gold.

I believe the price of gold right now is being fought at a higher level between the sovereigns. There is a global currency at stake. The argument is between the big players of BRIC plus certain of the Arab league and against the hegemony of a fiat currency gone wild. The average investor is not in gold, not yet, but they are piling on silver based on the greed factor. Once people begin to recognize that gold and silver are money, the decision whether to own it is an obvious one.

When silver reaches $50 per oz, there may be a big fall in its price. If it is currently too low in price and falls further for a short period of time before rising upwards to where it should be, it will not have been a correction.

To correct something implies that it is wrong or too highly priced, but a temporary fall has to do with supply and demand at that moment, and not to an error which needs correcting.

Sanyam If the long term ratio is 16-1 gold-silver price can you not see a big correction to get back towards the norm?

I am assuming a price correction on silver will be short and sharp?

@ JamesM’s comments today

Thanks for sharing. You have put your money where your mouth is.

I personally know no one else who owns PM’s. Nice to know you are not alone.

James M, thanks. I too sold out of corporate bonds a week ot two ago and went into natural resources. I know I don’t have enough in PMs. but looking at the recent silver increases in the last few days, is there not a direct linkage with the fall in the dollar? Anyone think the dollar might be due for a surprise rebound? Looking at the state of finances in Europe and the opportunities for US exporters am I alone in thinking that come June USD could start to recover and impinge on the short term price of gold and silver?

I think I am going to wait and see if silver can hold a price of 50USD, if it does and pushes on I am going to plunge in.

I am new to this arabian money, have to say I wished I’d found it a year ago!!

@ James M:
Gotta be patient here, and don’t let the evil investment banks get to you!

Watch Out When it Hits $50:
I’ve been saying for the past month or so that when silver hits $50, we should see a sharp but swift correction, unless another black swan arrives (e.g. bottom falls out of the US treasury bond market, or the USD suddenly drops another 5%, etc. It wouldn’t surprise me to see silver drop to $40 or so; but then again, it wouldn’t surprise me to see it snap back a short time later.

For those who hold physical silver, the strategy is obviously to “hang on”, because if you sell your physical silver, you may never be able to buy it back; for those who hold paper silver (e.g. the SLV ETF), a reasonable strategy might be to sell off a portion (e.g. 10%, or 20%) when it hits $49.50, and wait 30 days to buy some back. If it zooms to $60, then wait for the bigger correction.

Silver is in a Long Term Bull:
This blog has some very good commentaries on this subject; while I’m confident that silver will do extremely well in the long term (i.e. well over $100/ oz.), as Peter has stated, most small time investors don’t have the stomach for high volatility, and volatility is what the so-called big investment firms (e.g. JPM, GS, HSBC, DB, etc.) do, to make money in commodities. So it seems that you

How Much to Allocate to PM:
Lots of different answers here, depending upon who you wish to listen to.
Doug Casey: “hold 33% in gold and silver”
Marc Faber: “hold 25% in gold and silver”
Corrupt Investment Houses and Stock Brokers: “hold a very small percentage” (… otherwise, we won’t be able to make money off you!)
George Soros: “don’t hold gold, it’s in a bubble” (but then he secretly buys over $400 million in gold bullion)

Personally, I agree with Marc Faber & Doug Casey. Fiat currencies are doomed.
==============================
philcu said: “@ Just the Facts Ma’am”
That’s my wife’s handle, not mine! I didn’t know that she added some nice details to my commentary!

JPM’s Woes:
Poor JPM. They’ve consistently been shorting the silver price, and are now stuck with a short position of approx. 170 million oz. It’s bad enough if you’re Jamie Dimon, and you’re having trouble coughing up $1 billion USD every time the silver price goes up by $1 USD. But now there’s several video clips on youtube that are spoofing Dimon and JPM’s head commodity trader, Blythe Masters. Poor Blythe; she’s runnin’ scared now!

A Hilarious 5 Minute Video on What Must be Going On at JPM:
Here’s an epic, and absolutely hilarious 5 minute video spoof of what Jamie Dimon (CEO of JPM) is probably going through, since the COMEX is almost out of physical silver and JPM is having a hard time meeting their silver delivery “obligations.”

Go here for youtube:
http://www.youtube.com/watch?v=cmxE7ydkaI8&feature=player_embedded

If you go to ZeroHedge, there’s references to prior video spoofs as well:
http://www.zerohedge.com/article/hitler-and-comex

Max Must be Very Happy Now:
For those of you who are already invested in silver, this clip will be very meaningful. There are many names mentioned here besides Dimon & Bernanke. There’s Blythe Masters (JPM’s head of global commodities, and the lynch-pin behind JPM’s massive silver shorts. OUCH!; she’s also a central JPM figure behind the phony paper credit derivatives, now in the trillions of USD).

But ArabianMoney.net Didn’t Get Mentioned:
There’s a lot of other great references to rather famous blogs on the internet that have consistently been exposing the truth (e.g. ZeroHedge, Ed Steer, Eric King, etc.) about precious metals. Sorry, Peter, the movie failed to give you credit as well! We’ll have to talk to the Director about that.

My Favorite Line in the Movie:
My favorite Line from Hitler (i.e. played by Jamie Morgan):
“Round up the rest of the remaining silver that’s in the SLV ETF, and use that silver to make the silver deliveries.” The response from Hitler’s Field Marshall is equally entertaining!

I get the feeling that the only people following the silver story on websites such as arabian money dot net are those who have already joined and are singing in the choir. Yet the silver story seems like ‘the’ investment story of the 21C thus far and i am dead sure only a very small, call it an insignificant number of investors have caught on. Anyone disagree? I just read a Feb/11 interview with Ted Butler titled: ” Ted Butler: Silver soon may be the rarest earth”. Its entirely fascinating. He makes the so many good points but two in particular struck me as above all important. That the silver manipulation (JPM) is about to end due to price increase point being reached and that the hedgies will eventually enter the market. And when they do… silver really takes off. I realize these points are being made by others also, but to hear Butler tell the story, its much more clinical and low key than most silver advocates.

I am wondering if we have finally a reached that point where JMP shorting is exhausted by price movement, and the hedgies are entering on the long side. That being the case, $50 silver might well look like a sign post whizzing by on the express lane.

And Friday, Obama called out a big country for helping repress the demonstrators in Syria. Tick, tick, tick, BOOM ? His reelection is in serious trouble with gas above $3.67 a gallon. These fruitcakes over here might elect ‘The Donald’ who vows to seize oil fields in Libya & Iraq, and then straighten out those 1.2 BILLION Chinese with a 25% tariff. You can’t make this stuff up.
In a crash, (Help! Spain needs a bailout?) I would think that silver, having industrial uses, would fall a greater percentage than gold would. But I’m no expert. They could both go way up.
Happy Easter everyone. Give the kids a silver coin. Gold if you’ve got them.

@ obewon, yep, hilarious video.

It just occurred to me, and because i am usually the last one to get the joke, i think i just got it. Max is right, JPM is actually short enough silver to break them, and silver follows the price of gold. But who is driving the price of gold? The sovereigns on the other side of the table. So, this IS a major battle in the currency war, if not the major battle. And I thought Bernanke was winning. So this means silver is going to the moon, and someone (the fed?) is going to have to cover JPM. How does this end?

Comment by philcu – 22 April 2011
@ JamesM’s comments today

Thanks for sharing. You have put your money where your mouth is.

I personally know no one else who owns PM’s. Nice to know you are not alone.

Reading these comments, it’s obvious that when it comes to investing, all of you are “experts” compared to me.
I’m a middle aged man who left school with minimum qualifications , earns less than$40k pa and live in a TINY bedsit with wallpaper peeling off the wall,it’s VERY rundown .However , at the beginning of 2011 I decided to stop wasting what little money I earned chasing women , reading newspapers that focus on Simon Cowell, Lebron James,50cent, Britney Spears etc and instead felt the need to financially educate myself by reading publications like arabian money . The vast majority of people in a similar financial situation to me don’t invest in gold/silver because they care more about or are mentally conditioned to;

*Reading about the sex lives of people who they see on television
*Caring about whether a person/act gets through to the next round of The X-Factor
*Which well known person is going to be a judge on the above mentioned show
*Spending money going to watch their team and lining the pockets of multi millionaire sports “stars”as opposed to investing in gold/silver.
*Going to the movies and lining the pockets of the film “stars”

I no longer worry about having the latest ipad/iphone/trainers etc but invest what little money I have in metals and hope that if I’m still around whenever this “thing” peaks, I’ll be in a far better situation than I am now.

@grey Turtle…

Thanks for your views on my article…I agree dt there vil be short but very sharp correction in Shinning metal

@ Bob

Welcome aboard the PM express.
An expert is a guy from out of town with a briefcase.

Have you noticed how many experts disagree about the state of this economy? and whether gold is going to go up or down? And whether quantitative easing is a bad bad thing, the end of the world versus Bernake is a genius doing the best he can, or whether silver is a commodity or money, or both. etc etc.

In my personal view, this economy is one darn difficult thing to understand. I don’t think you need to be highly educated to see the forest from the trees either. Stay with it. The resources to learn are available to everyone, in that sense is a very level playing field. Thanks to the Internet we can have conversations with people here and share our experience and our opinions, for what they are worth. This advantage has no historical precedent. Its a very exciting time.

@ John Mark:
JPM has lost well over $3 billion in the silver market for “margin calls” in the past few months; throughout this same period, JPM has been furiously shorting, to drive the market down, then covering their shorts and hiding their tracks (these actions are very evident, if you watch the daily price action). Since they are “doing the devil’s work”, the devil, Bernanke, will secretly re-imburse JPM for all losses. Their “re-imbursement” from the FED will be considered “revenues”, since they have been doing the devil’s work.

James M. Asked:“who is driving the price of gold?”
That’s a relatively easy question to answer. Over the past 3 months, gold’s price hasn’t really surged like silver has. Over the past two years, sovereign nations and their central banks (e.g. China, Russia, India, etc.) have been large buyers of gold bullion; this has “awakened” the smart investor, who is just now beginning to get into gold. So while the smart investor has some gold, most investors have none. Ditto silver. So the giant tsunami in PM buying is ahead of us.

The Masses Don’t Own it Yet:
This is an amazing fact! I know a great many people; some are mult-millionaires, some make a good living and have good savings, some are just average Americans. In my sample polling of these people, very, very few of them have any positions in gold and silver. This is shocking; it’s especially shocking to me that those who have a ton of money have no positions in either the physical metal or in the PM mining shares. Many of them frequently say to me “I shoulda bought some gold and silver several years ago, when you mentioned it.” As an experiment, ask 10 of your neighbors; my guess is that, unless you live in the Middle East, 9 of them will say they have “no positions” in gold or silver. I wonder what the stats are for the Middle East region.

P.S. Ted Butler is without a doubt, the most knowledgeable silver expert on the planet. His commentaries are always helpful, and most interesting.

@ James M

Thanks!

@ obewon

Who is this Ted Butler fellow? Mr Google doesn’t produce much.

Dubai Gold Souk

I popped in the Dubai Gold Souk this morning to perform my monthly conversion of salary into silver. As usual the main Souk was packed with people shopping for jewellery, while the backstreets containing the bullion dealers were empty.

Lakhoo was out of kilo bars! They had no idea when stocks would be replenished. Managed to get some around the corner. Each month it costs me 15-20% more than the previous.

I can find no silver coins in the Souk, except Lakhoo where they have coins stamped with Indian Gods.

Bernard (MA Doff), you have been advised to invest between 25%-33% of your investable wealth in gold and silver. Two gurus have been quoted to reinforce the “wisdom” of such a course of action.

I am writing to challenge this view! Whilst I don’t go as far as one expert mentioned on ArabianMoney as advising people to sell their house to buy bullion, I do think that 25%-33% is ridiculously small.

The Editor here has told us that for the decade up to 2010, shares made the investor a return of 67%, bonds 94% but gold 400-450% and silver 500%. So, why put into bullion a measly 25%-33%? Why not put in 75%-90% of your investable wealth?

For me, the eBullion dealers allow me to invest all that I want to invest in such a way that I can divest myself so easily, at a click of a mouse button, whilst not having to return my bullion from storage in my garden. These dealers will store it all for you in vaults, and you yourself buy and sell over the internet without touching the valuable stuff.

These folks here who have advised you to put 25%-33% into bullion, what have they said you should do with the remaining 67%-75%? Where do they suggest you put all that? Into bonds, into shares before a predicted stock market collapse, into greenbacks which are inflating, into property which is not rising? Where? Just where?

Buy silver especially and gold over the internet and buy as much as 100% of your investable monies.

@ philcu:
There’s many internet references to Ted Butler; for example, go here:
http://news.silverseek.com/TedButler/

or go to:
http://www.silverseek.com
=============================

@John Mark:
Yes, gold has provided a very handsome return of approx. 450% over the past 10 years. But hindsight is always 20-20.
You stated: “Buy silver especially and gold over the internet and buy as much as 100% of your investable monies.”

One of the very first investment rules is to understand the imperative for diversification. With that in mind, I personally believe it would be very foolish for anyone to allocate more than 33% of their investment portfolio in any “one thing.”
How you would feel if silver suddenly dropped a precipitous 40% over a short period of time?

So, JPM gamble on silver not rising too high, too quickly. They fail in this gamble, losing billions of dollars as a result but don’t go bankrupt! Why? Because Ben Bernanke uses taxpayers’ money to reward them for gambling on silver and for failing in this gamble.

Will Ron Paul, Max Keiser, anyone in the American press and media placard this to the rest of the world: “JPM saved from going bankrupt because taxpayers’ money used to let them gamble again and again and again and…”

Sick! Sick when S&P is giving the US economy a sick notice. Let’s hope that the blogosphere publishes this quasi-criminal bankrolling of JPM by John and Mary Doe.

I think this qualifies as silver mkt NEWS, silver hit 70620 rs/kg yesterday in the Indian market.. $50 USD. Does this suggest silver shoots through COMEX $50 tomorrow?

Hello $50. Party time for my SLV calls. Up almost 3% here in Asia this morning at $48. This is not bad considering that Hong-Kong’s market is closed today and most Jewish traders and Silver manufacturers are closed Monday and Tuesday due to Jewish Holiday. Silver is very bullish again today in Asia. In Thailand many Silver traders and manufacturers are closed and on Holiday today due Jewish Holiday.

So where does it go from 50$? Are we predicting a temporary correction? Or is this the start of the parabolic phase? It is incredibly bullish today considering many markets are closed as andy said!

Ed Note: Looks like the final assault on $50 – but watch mid-week for a reversal on Q1 US GDP figures… but if we get past this then $60-70 beckons, well we need another article on this…

@ Ed ” but if we get past this then $60-70 beckons”

I was just thinking the same thing. Its $60 – next stop on the bus.

As this blog and several of its regular readers have been saying for a long time now: Got physical gold? Got physical silver?

Don’t Confuse Paper Silver with real, Physical Silver:
Admittedly, the paper derivatives of the real thing (e.g. SLV and GLD) have been good investments, but with each passing day, more and more physical silver is being drained from the SLV ETF, and is subsequently replaced with “leased” silver. Eventually, the smart investors in SLV will head for the exits.

Consider:
Consider this: since August 2010, silver has risen over 161%! Wow!

And this: From last week’s last trading day to today, silver has risen 9%! Wow!

For an interesting read, go here:
http://www.zerohedge.com/article/what-does-largest-move-higher-silver-years-mean