It's been a while
Yes. it's been a while since I updated my blog. Why? Simple. Nothing really has changed. But I have to say that I am still very BULLISH on silver. Gold to a smaller extent, but definitely silver.
Why, you may ask? Simple..... Silver is by far the most undervalued of all the metals. In real terms historically, it should be around 16:1 vs gold. That means that as of today, Silver should be at around $70-$75 an ounce. If we go more conservative, Silver should be at the least, 20:1 which would put it at around $60 an ounce.
Is it being manipulated? Hell yes. So is gold. The governments are not stupid. They will do anything in their powers; especially the United States; to preserve the value of the "Dollar". Especially with the dollar still being the "Reserve Currency". Based on non-Dollar currencies, silver is much higher than the $17.23 dollars as I write this blog.
When you consider than the mining companies have said that currently, anything less than $19 an ounce means they are producing silver "AT A LOSS", should immediately ring a bell for you. Of course the question must then be asked, why do they continue to produce silver and sell at less than it's costing them. That's quite simple; albeit many people don't understand economics. The companies are "CASH STRAPPED". Their only choices are: 1) Sell at a loss so they can have "CASH" on hand to pay their bills and hope the prices go up and they can make profit "LATER"; or shut down their operations completely. Obviously, they will take the loss and hope for profits later.
Remember; almost 70% of the silver mined, is done as a BY-PRODUCT of other metals such as copper and gold. So they are "Hedging" their risk. But make no mistake, silver is very much undervalued. It is tied, as is gold, heavily to the U.S. Dollar. If silver prices go up to high, then the value of the dollar MUST FALL. So, where or when does the manipulation end?
That depends on numerous factors. Silver, unlike gold and many other metals, is heavily needed in the industrial world. If the silver producers produce less because of the loss they are taking, and the industry's demands remain high, then the value of the dollar will become insignificant. The price of silver will go higher because the industry will need it and they will pay whatever they have to to have it. Secondary is the value of the "Dollar". If the United States continues to go into debt, and create dollars; thus reducing their value, the price of silver will again have to rise. It won't matter.
So, what am I saying in a NUT-SHELL????? Silver is at a very low price. Based on inflation, it is lower than when it was $10 an ounce make in the 2007 time frame. The price of silver is definitely going to rise. I believe we are close to the end of the lows. How high will it go and how long will it take? That, I will never speculate or say up front. If I knew that answer, I'd me a Billionaire and wouldn't writing these posts. But that takes me back to the beginning of my days posting. This is the time where you should be buying silver if you have any "SPARE CASH". I wouldn't take a loan out to buy silver. I wouldn't compromise paying your debt in order to buy silver. But if you have spare cash, then you should be buying silver. The BIG-BOYS are definitely playing the game. Sell a BILLION to shove the price down to $16; Buy the BILLION back at $16; let it go to $18; make a 15% profit; Sell a BILLION to force the price back down, and start all over. The thing is; this can only happen so long.
WHY????? This is the best part of WHY YOU SHOULD BUY SILVER!!!! Most reports show that there is approximately 200-250 TIMES more PAPER SILVER than there is PHYSICAL SILVER. What does this mean? Simple. If all the people holding PAPER SILVER was to turn it in and request PHYSICAL SILVER that they can hold in their hands, there wouldn't be enough physical silver to give all those people the silver that they have in paper. So, what would happen. The fine print says that the company that has to reimburse the PAPER SILVER, has the option of paying the holder in "DOLLARS". Well that sounds fine, except the Dollar isn't backed by anything other than trade. And being the trade deficit is so great, hyper-inflation would occur, and the dollars would be worth even less. But the chance of every single person holding paper silver wanting to cash in for physical silver is quite slim. However; this is what is going to start the major upturn. The price of silver is going to start going up. Paper holders will take cash because they see it as a "QUICK BUCK". But there are going to be many who start seeing the inflation and also the potential of continued rise. They will ask for the Paper Silver to be converted to Physical Silver. This is also going to make the price of silver rise because these individuals won't accept the "DOLLARS". They will accept the clause whereby the company reimbursing has up to 90 days to produce the Physical Silver. All of this is going to start a chain reaction
As more Physical Silver is demanded, and less paper silver (Used mainly by the GET RICH QUICK investor), the price of silver is going to be broken into two parts. PHYSICAL and PAPER. Currently, you can buy paper silver at the going price. Example: If the price of silver is $17 an ounce, then that is the price you will pay for paper silver. Maybe 2% over for processing. So maybe you pay $17.34 an ounce. But if you buy PHYSICAL silver today, at $16.50, a SILVER EAGLE will cost you $20. That's almost a 20% premium. Silver rounds will cost about $18. Roughly a 10% premium. In time, people are not going to want any paper silver. Inflation of paper currency and the fear of not being able to reimburse is going to scare people into wanting PHYSICAL SILVER and GOLD ONLY. Something they know they can get reimbursed immediately at TODAY'S PRICES.
I'm not asking you to take my word on anything. I don't make a penny off of this blog or providing you will opinions and insight. But I do know how the system and the manipulation works. I don't believe in investing more than 20-25% in ANY INVESTMENT. You should be diversified. There are a couple of minor exceptions. For tax purposes, I have about 40% of my assets in stocks, 401K, IRA, etc... I have another 30% invested in Real Estate. You don't have to buy EXTRA Real Estate like Land. If you house is PAID OFF and you have no mortgage payment, that counts as real estate. I have about 15% in Silver/Gold and the final 15% in Cash assets. Personally, I may be a little too high in the stocks, IRA, type investments. The stock market is also very volatile. I probably could go to about 30% stock/ira and bump up the silver and gold to 25%. But I have time on my side, so I am willing to risk the stocks a little more. Either way, I'm not asking you to do what I do or to trust me with money you NEED TO SURVIVE. I'm simply recommending that if you have some "EXTRA CASH", that you would be wise to invest it in Silver. We aren't talking about making a million dollars in a year. We're talking longer term, but MOSTLY as an insurance policy against hyper-inflation and a currency crash. If you look in history where during WWII it could cost $100 for a loaf of bread in Germany because the currency had totally crashed; a 1 ounce silver coin, at about $0.70 an ounce during WWII, could buy a lot more than a loaf of bread. Bottom line, during hyper-inflation and currency deflation, the PRICE PER OUNCE of silver or gold won't matter. What will matter is what can you buy. In those bad times, a 100 ounces of silver (Bought at $17 an ounce today - $1700), will buy you 10, 20.....50 times more than $1700 will be able to buy you if the currency crashed and inflation kicks in.
So; how much silver should you own??? Very personal question. Hard to say considering I don't know what your current wealth is; what your standard of living is; and what your assets are. But in the MIDDLE-INCOME category; with a person who has little and basic debt like a mortgage, possible a car payment, and very little credit card type bills; I'd say you need about 1000 ounces of silver. You don't need to buy it all at once. But in time, that would be my minimum suggestion. If you are a little older, are debt free, have no mortgage, and have some steady income, I'd say you need a minimum of about 500 ounces of silver. Again; a minimum and just a ball park average. As I've written in the past, I buy silver for MULTIPLE PURPOSES. Some is for what I've written here about inflation, devaluation of currency, and economic crash. That's the 500-1000 ounces. I also buy silver for investment purposes. I turn it around quick. I use it to pay off debt. I will say however, that the price has been pretty stable for almost a year, so I haven't really sold any recently. But I have some that I sell at the 25-30% margin. And then, I also have at least a $100+ in FACE CURRENCY of silver coins like quarters, dimes, and half dollars. I don't count this as part of my silver ounces. This is my SURVIVAL silver. It is in SMALL ENOUGH increments that I can buy goods and services with it.
Anyway; it's been a while and I wanted to let you know that as we speak, it's a perfect time to buy silver. In the long run, you are going to do quite well with it. Even if you bought silver when it was $25-$35 an ounce, you will do fine. But at $17 an ounce ($20 with premium), I would take at least 30% of any EXTRA MONEY you received from birthday gifts, christmas gifts, yard sales, extra part time job, etc.... and I'd look into buying silver. Take Care: CYA: SE
Why, you may ask? Simple..... Silver is by far the most undervalued of all the metals. In real terms historically, it should be around 16:1 vs gold. That means that as of today, Silver should be at around $70-$75 an ounce. If we go more conservative, Silver should be at the least, 20:1 which would put it at around $60 an ounce.
Is it being manipulated? Hell yes. So is gold. The governments are not stupid. They will do anything in their powers; especially the United States; to preserve the value of the "Dollar". Especially with the dollar still being the "Reserve Currency". Based on non-Dollar currencies, silver is much higher than the $17.23 dollars as I write this blog.
When you consider than the mining companies have said that currently, anything less than $19 an ounce means they are producing silver "AT A LOSS", should immediately ring a bell for you. Of course the question must then be asked, why do they continue to produce silver and sell at less than it's costing them. That's quite simple; albeit many people don't understand economics. The companies are "CASH STRAPPED". Their only choices are: 1) Sell at a loss so they can have "CASH" on hand to pay their bills and hope the prices go up and they can make profit "LATER"; or shut down their operations completely. Obviously, they will take the loss and hope for profits later.
Remember; almost 70% of the silver mined, is done as a BY-PRODUCT of other metals such as copper and gold. So they are "Hedging" their risk. But make no mistake, silver is very much undervalued. It is tied, as is gold, heavily to the U.S. Dollar. If silver prices go up to high, then the value of the dollar MUST FALL. So, where or when does the manipulation end?
That depends on numerous factors. Silver, unlike gold and many other metals, is heavily needed in the industrial world. If the silver producers produce less because of the loss they are taking, and the industry's demands remain high, then the value of the dollar will become insignificant. The price of silver will go higher because the industry will need it and they will pay whatever they have to to have it. Secondary is the value of the "Dollar". If the United States continues to go into debt, and create dollars; thus reducing their value, the price of silver will again have to rise. It won't matter.
So, what am I saying in a NUT-SHELL????? Silver is at a very low price. Based on inflation, it is lower than when it was $10 an ounce make in the 2007 time frame. The price of silver is definitely going to rise. I believe we are close to the end of the lows. How high will it go and how long will it take? That, I will never speculate or say up front. If I knew that answer, I'd me a Billionaire and wouldn't writing these posts. But that takes me back to the beginning of my days posting. This is the time where you should be buying silver if you have any "SPARE CASH". I wouldn't take a loan out to buy silver. I wouldn't compromise paying your debt in order to buy silver. But if you have spare cash, then you should be buying silver. The BIG-BOYS are definitely playing the game. Sell a BILLION to shove the price down to $16; Buy the BILLION back at $16; let it go to $18; make a 15% profit; Sell a BILLION to force the price back down, and start all over. The thing is; this can only happen so long.
WHY????? This is the best part of WHY YOU SHOULD BUY SILVER!!!! Most reports show that there is approximately 200-250 TIMES more PAPER SILVER than there is PHYSICAL SILVER. What does this mean? Simple. If all the people holding PAPER SILVER was to turn it in and request PHYSICAL SILVER that they can hold in their hands, there wouldn't be enough physical silver to give all those people the silver that they have in paper. So, what would happen. The fine print says that the company that has to reimburse the PAPER SILVER, has the option of paying the holder in "DOLLARS". Well that sounds fine, except the Dollar isn't backed by anything other than trade. And being the trade deficit is so great, hyper-inflation would occur, and the dollars would be worth even less. But the chance of every single person holding paper silver wanting to cash in for physical silver is quite slim. However; this is what is going to start the major upturn. The price of silver is going to start going up. Paper holders will take cash because they see it as a "QUICK BUCK". But there are going to be many who start seeing the inflation and also the potential of continued rise. They will ask for the Paper Silver to be converted to Physical Silver. This is also going to make the price of silver rise because these individuals won't accept the "DOLLARS". They will accept the clause whereby the company reimbursing has up to 90 days to produce the Physical Silver. All of this is going to start a chain reaction
As more Physical Silver is demanded, and less paper silver (Used mainly by the GET RICH QUICK investor), the price of silver is going to be broken into two parts. PHYSICAL and PAPER. Currently, you can buy paper silver at the going price. Example: If the price of silver is $17 an ounce, then that is the price you will pay for paper silver. Maybe 2% over for processing. So maybe you pay $17.34 an ounce. But if you buy PHYSICAL silver today, at $16.50, a SILVER EAGLE will cost you $20. That's almost a 20% premium. Silver rounds will cost about $18. Roughly a 10% premium. In time, people are not going to want any paper silver. Inflation of paper currency and the fear of not being able to reimburse is going to scare people into wanting PHYSICAL SILVER and GOLD ONLY. Something they know they can get reimbursed immediately at TODAY'S PRICES.
I'm not asking you to take my word on anything. I don't make a penny off of this blog or providing you will opinions and insight. But I do know how the system and the manipulation works. I don't believe in investing more than 20-25% in ANY INVESTMENT. You should be diversified. There are a couple of minor exceptions. For tax purposes, I have about 40% of my assets in stocks, 401K, IRA, etc... I have another 30% invested in Real Estate. You don't have to buy EXTRA Real Estate like Land. If you house is PAID OFF and you have no mortgage payment, that counts as real estate. I have about 15% in Silver/Gold and the final 15% in Cash assets. Personally, I may be a little too high in the stocks, IRA, type investments. The stock market is also very volatile. I probably could go to about 30% stock/ira and bump up the silver and gold to 25%. But I have time on my side, so I am willing to risk the stocks a little more. Either way, I'm not asking you to do what I do or to trust me with money you NEED TO SURVIVE. I'm simply recommending that if you have some "EXTRA CASH", that you would be wise to invest it in Silver. We aren't talking about making a million dollars in a year. We're talking longer term, but MOSTLY as an insurance policy against hyper-inflation and a currency crash. If you look in history where during WWII it could cost $100 for a loaf of bread in Germany because the currency had totally crashed; a 1 ounce silver coin, at about $0.70 an ounce during WWII, could buy a lot more than a loaf of bread. Bottom line, during hyper-inflation and currency deflation, the PRICE PER OUNCE of silver or gold won't matter. What will matter is what can you buy. In those bad times, a 100 ounces of silver (Bought at $17 an ounce today - $1700), will buy you 10, 20.....50 times more than $1700 will be able to buy you if the currency crashed and inflation kicks in.
So; how much silver should you own??? Very personal question. Hard to say considering I don't know what your current wealth is; what your standard of living is; and what your assets are. But in the MIDDLE-INCOME category; with a person who has little and basic debt like a mortgage, possible a car payment, and very little credit card type bills; I'd say you need about 1000 ounces of silver. You don't need to buy it all at once. But in time, that would be my minimum suggestion. If you are a little older, are debt free, have no mortgage, and have some steady income, I'd say you need a minimum of about 500 ounces of silver. Again; a minimum and just a ball park average. As I've written in the past, I buy silver for MULTIPLE PURPOSES. Some is for what I've written here about inflation, devaluation of currency, and economic crash. That's the 500-1000 ounces. I also buy silver for investment purposes. I turn it around quick. I use it to pay off debt. I will say however, that the price has been pretty stable for almost a year, so I haven't really sold any recently. But I have some that I sell at the 25-30% margin. And then, I also have at least a $100+ in FACE CURRENCY of silver coins like quarters, dimes, and half dollars. I don't count this as part of my silver ounces. This is my SURVIVAL silver. It is in SMALL ENOUGH increments that I can buy goods and services with it.
Anyway; it's been a while and I wanted to let you know that as we speak, it's a perfect time to buy silver. In the long run, you are going to do quite well with it. Even if you bought silver when it was $25-$35 an ounce, you will do fine. But at $17 an ounce ($20 with premium), I would take at least 30% of any EXTRA MONEY you received from birthday gifts, christmas gifts, yard sales, extra part time job, etc.... and I'd look into buying silver. Take Care: CYA: SE
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