My Silver Forcast 2015
This could be a lengthy post, so bear with me.
Where do I think Silver is heading? That is definitely a question being asked by many people. As those of you who have followed me for a long time know, I have bought "AND SOLD" a lot of silver for various reasons. I've bought and sold silver to pay down debt and to hedge the cost of high priced purchases. I've bought silver to invest with. I've also bought silver in case of economic catastrophe. So where do I stand now on silver and what do I think the future holds? That is the million dollar question. But I'm not going to say that silver is going to go to $30+ an ounce in the coming year. But I'm writing this because I truly believe silver is at a point where it's definitely the time to be buying. Actually, it's been pretty flat for the second half of 2014, and that's why I've bought a lot in the last 6 months.
Currently, all of the silver I hold and continue to purchase, is as a hedge against inflation, economic turmoil, and as a surge investment. That doesn't mean I am taking all of my "Dollars" and putting them into silver. I still only recommend a portion of your portfolio be in silver and other precious metals. What that portion or percentage is, is your decision. I still believe you will "NEVER LOSE" by purchasing silver and gold, but you have to be willing to hold it. You can't be buying silver at $17 today, and selling it in 2 months at $15 an ounce because you "Need" the money. If you are in that boat, you'd be better off not buying silver or metals and spending the $2 an ounce you would lose towards a new tv or other luxury. We don't buy silver and gold to lose money. And again; I don't believe you will EVER LOSE MONEY investing in silver and gold, IF you're willing to "HOLD IT" and wait it out. There are some who buy silver specifically because they believe there is going to be some sort of economic "Armageddon", and they have no intention of ever selling ANY of their silver. That's not me. That's not to say that it's not a good idea to maybe have 100 ounces of silver; or equal value of 90% junk silver FOR this possibility. I think that is a good idea. Just not discussing that type of silver buying in this blog.
So, as I've said in past posts, blogs, and articles, I think it would be a good investment in silver to have in the ball park of between 500-1000 ounces of silver. As I just mentioned, another 100 ounces in 1 ounce coins and 90% junk silver could be also set aside for any type of Armageddon type of scenario too if you'd like. (I recommend it). Is there anything wrong with having more than 1000 ounces? No, not really. But even at today's prices, a thousand ounces of silver is worth about $16,000 US Dollars. If you are investing hundreds of thousands of dollars in stocks, mutual funds, 401K, real estate, etc... then having more than 1000 ounces of silver as an investment is also fine. If you only have a fraction of that much in investments, then having more than 1000 ounces of silver may be a little too much. But again, this is your call. Like I've always said, I believe you need to diversify your investments. (No matter the reason for investing). And remember, you BEST INVESTMENT is still the "ABSENCE OF DEBT". If you have your house paid off and don't need to pay $1000 PER MONTH in mortgage payments or rent; especially if you lose your job or some economic "Shit Hits the Fan" scenario approaches; then that is a LARGE RETURN on your money that you don't have to worry about. Reduction of DEBT is ALWAYS your BEST INVESTMENT.
Ok..... So let me get to the meat of this post. Where do I think Silver is going to go heading forward? I have said in the past, and I still truly believe, that silver and gold are "HEAVILY MANIPULATED" in their prices. Why??? 3 main reason. Governments NEED to strengthen their currency; Big banks and investors NEED to keep people in debt and creating loans; and Big Investors, Banks, and even Countries are wanting to BUY and HOARD more and more gold and silver. If you have the ability to buy and sell gold and silver in such quantities as to influence the price, you're going to do it. Sell LOTS of silver at $18 an ounce and force the price to drop to $15 an ounce, then take all that money you made selling, and BUY IT ALL BACK at $15. Then, start all over again. Doesn't sound like much, But buying at $15, selling at $18, buying again at $15 and selling again at $18, EACH TIME is a 16% PROFIT. With almost NO RISK being you are the one manipulating the price.
Of course the BONE they throw at the average investor, because of commission and fees, may result in a 3-4% profit. BUT, because most average investors aren't investing the quantity that makes a 3-4% profit "Significant", they leave their investments alone in the hopes of compounding profits. The problem is; MOST of these average investors are buying PAPER Silver and Gold. NOT the REAL THING. This is one of the main reason I believe in investing in REAL Silver and to an extent gold. Paper silver is about 250 times more in quantity than there is physical silver. That means, if all those with PAPER SILVER investments wanted to convert it to PHYSICAL SILVER, they couldn't do it. And the "FINE PRINT" in the investments says that the investment broker doesn't HAVE TO swap it out for physical silver. They can simply pay you in "DOLLARS". Well, that's great unless the dollar is useless. (Remember history and a wheel Barrow full of German Marks just to buy some food during world war II). So, this manipulation by the BIG BOYS, the Governments, and the PAPER SILVER/GOLD, keeps me strong in the belief that Silver prices are going to climb and climb and climb. Will it be tomorrow, or next week, or next month, or even in 2015? I don't have the exact date. But remember, I always EMPHASIZE that silver and gold are something you invest in that you have no problem HOLDING. You can play the Stock Market game by buying and selling rapidly and make some money. But silver and gold aren't like that. You WILL make money in silver and gold. (Money; meaning VALUE/WORTH). But you have to be willing to hold it. Remember, 100 years ago, you could take a $20 bill or a $20 gold piece and buy a really nice suit of clothes. Today; that $20 bill won't even buy you a neck tie; but that $25 gold piece (Half ounce = $600) will still buy you that really nice suit of clothes. Silver and Gold ARE MONEY/VALUE/WORTH. Dollars and Currency ARE NOT.
Next..... Based on historic OIL-SILVER ration; as well as gold to silver ratio, silver should currently be at $50 an ounce. This is a fact. What does that mean? It means that silver is SO UNDERVALUED. This is another reason I believe silver WILL and MUST go up in price. (VALUE/WORTH). You can only hold back the manipulated price so far. With gold, it's easier to manipulate the price. It's basic purpose in life if for investment and luxury. Silver on the other hand actually has WORTH. Worth meaning a PURPOSE. It has more industrial uses than gold or almost any other metal. Sooner or later, what's written on paper won't mean anything. What will matter is the demand for the PHYSICAL SILVER because there will be a NEED to actually USE IT. Not for Jewelry or coins, but for Solar Panels, Electronics, health care, batteries, etc. So, what does this have to do with why the value of silver SHOULD be currently at $50 an ounce? Because the DEMAND for physical silver is still rising for all these and other industrial uses. Unfortunately, the SUPPLY of silver is not keeping up. And MOST silver that is USED for these industrial uses, can not and are not RECYCLED!!! So much is used, but at such small quantities PER USE, that it's cost to recycle is too high. So basically, one silver is used, it's gone. The forecast is that industrial demand for silver will increase by approximately 28% within the next 3 years. But what about the SUPPLY??? At current prices, it's not worth mining. Silver most times is a byproduct of other mining such as gold and copper. But as industrial uses continue to expand, they are going to need to produce more silver. That means costs will go up to produce it, and the price of silver will therefor need to go up.
Again; unlike gold, silver actually has a purpose. Gold pretty much is for investors and vanity. Imagine if there was a major industrial upswing need for silver and the production couldn't keep up? I saw a couple years back when photography was still big and silver was used a lot for that. It took a lot of the silver out of the market for other purposes. In Albuquerque, I had Jewelry vendors who made silver jewelry, who were willing to pay me 30-40% OVER SPOT to buy silver bullion off of me so they could melt it down and make jewelry to sell. This isn't too far fetched. Part of the price manipulation can be seen in just buying silver coins and bullion. It is not uncommon TODAY, for Silver Eagles to be sold at $23 an ounce. That's a 30% markup. On PAPER in the quotes, Silver MAY show a price of $15.50 - $16.00. But can you buy at that price? The cheapest silver eagles online are about $3 over spot. That's about a 20% premium. And of course you'll have all those trying to sell something as SPECIAL or COMMEMORATIVE like a special "Christmas" 1 ounce round for $28 per ounce. And all those other NATIONAL coins like the pandas, dragons, etc.... The point is, the PHYSICAL SILVER MARKET KNOWS that the price is depressed and that it should be MUCH HIGHER. So sellers can convince buyers to pay a high premium, because they know that when the price does correct, it will still have been an excellent investment. However; when the price of Silver goes back to $50 an ounce; or even closer to $100 (Which I believe it will); that Silver eagle, panda, christmas, etc... will STILL only be a few dollars more vs a 1 ounce round. So percentage wise, they are a terrible investment.
So yes, I do expect the price of silver to go up. I expect the silver to gold ratio to close the gap. I see gold being over $2000 an ounce and I see silver over $70 an ounce. Do I see it in the coming weeks or months? No. Maybe not even in the next 1-2 years. But I am bringing all this up because I believe that silver is at a big time LOW in price and is a PRIME TIME to BUY. I do think it may go down to around $15 an ounce during the first quarter of 2015. I believe it will rebound to the $18-$20 towards the end of the year. But those $3-$5 difference vs today is minute compared to where I believe it will eventually go to. And that's why silver is such a great investment if you are willing to hold onto it. And currently, the prices are so good for buying.
So, my recommendations if you're not already there is to have 3 GROUPS of silver.:
1. Have about $50 Face value of 90% junk silver and about 50 ounces of silver on hand for any "possible" economic "Armageddon" type scenario.
2. Have about 15% of your Liquid Cash in Silver. (Meaning, if you have $10,000 in your SAVINGS account, have about $1,500 in Silver also)
3. Have about 10% of your Non-Liquid investments either directly in physical silver/gold or associated mining companies; (Meaning your stocks, mutual funds, 401K, etc. if you have $100,000 in your investments, $10,000 should be either in physical metals "held by a reputable broker" or in mining industry)
This is NOT a MUST DO recommendation. You may decide that you prefer to ONLY HAVE physical silver, and you don't want ANY in your 401K, mutual funds, stocks, etc... Maybe you compromise and have 20% physical on hand of you liquid cash and none in the 401K. That's fine. Maybe you think economic Armageddon is more realistic than anything else and you want to have $500 face value of 90% junk silver an 500 ounces of silver. That's cool too. REMEMBER: It's your money and you can do with it anything you want. ALSO; just because you bought 100 ounces of silver for one particular purpose or reason and your thoughts and opinions change, doesn't mean you can't change what you're allocating your silver for. Maybe you build up enough silver that if you sold it all today, only making a 2% profit, you could turn around and PAY OFF your house!!! Remember, the best investment is to become "ABSENT OF DEBT". Even if you have a 1% or 0.05% loan, what happens if you run into financial hardship because you lost your job or a major medical situation happened? You could lose you house and any saving you have. If you OWN YOUR HOUSE and CARS, and you lose your job, you can always make enough spare money to buy food and keep the electric bill paid. You could have a yard sale every weekend and keep food on the table. You can't do that and make $1000 per month mortgage or rent payments.
So; if you have the spare cash, or want to readjust your investments, I truly believe now is the time to buy silver. Is it a problem if you don't buy now and you wait? No, not really. But people are always asking me when to buy. I personally buy on a CONTINUAL BASIS. I buy just like 401K monthly investments. "DOLLAR COST AVERAGING". I bought some silver yesterday at $17 an ounce (With premium). I also have some silver I bought when it was $20, $25, $30, and $35 an ounce. I also have some I bought when it was $8 and $10 an ounce. So, my AVERAGE price today, is probably around $25-$27 an ounce. That may seem like a LOSS if I were to sell it, but that's only if I sold ALL OF IT. Remember, I bought some at $8-$10 an ounce. I have an extensive spreadsheet with every ounce I've ever bought and sold. Remember, I bought some silver to reduce the cost of buying a new vehicle. I bought some to reduce debt. I recommend the same to you. Buy what you're comfortable buying. Don't go into debt trying to buy silver or gold. If it's a choice of buying silver/gold and eliminating debt; ALWAYS ELIMINATE DEBT FIRST. Obviously, you're not going to wait 10+ years to buy silver until your house is paid off. But; if it's a choice of Paying the mortgage payment of $800 a month + $200 a month to buy silver; I'd find a compromise and pay the $800 mortgage and an EXTRA $100 a month to reduce the principal and invest only $100 a month for silver. You get the idea.
Best of luck to you. 2015 is going to be interesting. Take advantage of it. Remember, you will NEVER LOSE in buying Silver if you're willing to hold onto it until it's right to sell it. Take Care. CYA: SE:
Where do I think Silver is heading? That is definitely a question being asked by many people. As those of you who have followed me for a long time know, I have bought "AND SOLD" a lot of silver for various reasons. I've bought and sold silver to pay down debt and to hedge the cost of high priced purchases. I've bought silver to invest with. I've also bought silver in case of economic catastrophe. So where do I stand now on silver and what do I think the future holds? That is the million dollar question. But I'm not going to say that silver is going to go to $30+ an ounce in the coming year. But I'm writing this because I truly believe silver is at a point where it's definitely the time to be buying. Actually, it's been pretty flat for the second half of 2014, and that's why I've bought a lot in the last 6 months.
Currently, all of the silver I hold and continue to purchase, is as a hedge against inflation, economic turmoil, and as a surge investment. That doesn't mean I am taking all of my "Dollars" and putting them into silver. I still only recommend a portion of your portfolio be in silver and other precious metals. What that portion or percentage is, is your decision. I still believe you will "NEVER LOSE" by purchasing silver and gold, but you have to be willing to hold it. You can't be buying silver at $17 today, and selling it in 2 months at $15 an ounce because you "Need" the money. If you are in that boat, you'd be better off not buying silver or metals and spending the $2 an ounce you would lose towards a new tv or other luxury. We don't buy silver and gold to lose money. And again; I don't believe you will EVER LOSE MONEY investing in silver and gold, IF you're willing to "HOLD IT" and wait it out. There are some who buy silver specifically because they believe there is going to be some sort of economic "Armageddon", and they have no intention of ever selling ANY of their silver. That's not me. That's not to say that it's not a good idea to maybe have 100 ounces of silver; or equal value of 90% junk silver FOR this possibility. I think that is a good idea. Just not discussing that type of silver buying in this blog.
So, as I've said in past posts, blogs, and articles, I think it would be a good investment in silver to have in the ball park of between 500-1000 ounces of silver. As I just mentioned, another 100 ounces in 1 ounce coins and 90% junk silver could be also set aside for any type of Armageddon type of scenario too if you'd like. (I recommend it). Is there anything wrong with having more than 1000 ounces? No, not really. But even at today's prices, a thousand ounces of silver is worth about $16,000 US Dollars. If you are investing hundreds of thousands of dollars in stocks, mutual funds, 401K, real estate, etc... then having more than 1000 ounces of silver as an investment is also fine. If you only have a fraction of that much in investments, then having more than 1000 ounces of silver may be a little too much. But again, this is your call. Like I've always said, I believe you need to diversify your investments. (No matter the reason for investing). And remember, you BEST INVESTMENT is still the "ABSENCE OF DEBT". If you have your house paid off and don't need to pay $1000 PER MONTH in mortgage payments or rent; especially if you lose your job or some economic "Shit Hits the Fan" scenario approaches; then that is a LARGE RETURN on your money that you don't have to worry about. Reduction of DEBT is ALWAYS your BEST INVESTMENT.
Ok..... So let me get to the meat of this post. Where do I think Silver is going to go heading forward? I have said in the past, and I still truly believe, that silver and gold are "HEAVILY MANIPULATED" in their prices. Why??? 3 main reason. Governments NEED to strengthen their currency; Big banks and investors NEED to keep people in debt and creating loans; and Big Investors, Banks, and even Countries are wanting to BUY and HOARD more and more gold and silver. If you have the ability to buy and sell gold and silver in such quantities as to influence the price, you're going to do it. Sell LOTS of silver at $18 an ounce and force the price to drop to $15 an ounce, then take all that money you made selling, and BUY IT ALL BACK at $15. Then, start all over again. Doesn't sound like much, But buying at $15, selling at $18, buying again at $15 and selling again at $18, EACH TIME is a 16% PROFIT. With almost NO RISK being you are the one manipulating the price.
Of course the BONE they throw at the average investor, because of commission and fees, may result in a 3-4% profit. BUT, because most average investors aren't investing the quantity that makes a 3-4% profit "Significant", they leave their investments alone in the hopes of compounding profits. The problem is; MOST of these average investors are buying PAPER Silver and Gold. NOT the REAL THING. This is one of the main reason I believe in investing in REAL Silver and to an extent gold. Paper silver is about 250 times more in quantity than there is physical silver. That means, if all those with PAPER SILVER investments wanted to convert it to PHYSICAL SILVER, they couldn't do it. And the "FINE PRINT" in the investments says that the investment broker doesn't HAVE TO swap it out for physical silver. They can simply pay you in "DOLLARS". Well, that's great unless the dollar is useless. (Remember history and a wheel Barrow full of German Marks just to buy some food during world war II). So, this manipulation by the BIG BOYS, the Governments, and the PAPER SILVER/GOLD, keeps me strong in the belief that Silver prices are going to climb and climb and climb. Will it be tomorrow, or next week, or next month, or even in 2015? I don't have the exact date. But remember, I always EMPHASIZE that silver and gold are something you invest in that you have no problem HOLDING. You can play the Stock Market game by buying and selling rapidly and make some money. But silver and gold aren't like that. You WILL make money in silver and gold. (Money; meaning VALUE/WORTH). But you have to be willing to hold it. Remember, 100 years ago, you could take a $20 bill or a $20 gold piece and buy a really nice suit of clothes. Today; that $20 bill won't even buy you a neck tie; but that $25 gold piece (Half ounce = $600) will still buy you that really nice suit of clothes. Silver and Gold ARE MONEY/VALUE/WORTH. Dollars and Currency ARE NOT.
Next..... Based on historic OIL-SILVER ration; as well as gold to silver ratio, silver should currently be at $50 an ounce. This is a fact. What does that mean? It means that silver is SO UNDERVALUED. This is another reason I believe silver WILL and MUST go up in price. (VALUE/WORTH). You can only hold back the manipulated price so far. With gold, it's easier to manipulate the price. It's basic purpose in life if for investment and luxury. Silver on the other hand actually has WORTH. Worth meaning a PURPOSE. It has more industrial uses than gold or almost any other metal. Sooner or later, what's written on paper won't mean anything. What will matter is the demand for the PHYSICAL SILVER because there will be a NEED to actually USE IT. Not for Jewelry or coins, but for Solar Panels, Electronics, health care, batteries, etc. So, what does this have to do with why the value of silver SHOULD be currently at $50 an ounce? Because the DEMAND for physical silver is still rising for all these and other industrial uses. Unfortunately, the SUPPLY of silver is not keeping up. And MOST silver that is USED for these industrial uses, can not and are not RECYCLED!!! So much is used, but at such small quantities PER USE, that it's cost to recycle is too high. So basically, one silver is used, it's gone. The forecast is that industrial demand for silver will increase by approximately 28% within the next 3 years. But what about the SUPPLY??? At current prices, it's not worth mining. Silver most times is a byproduct of other mining such as gold and copper. But as industrial uses continue to expand, they are going to need to produce more silver. That means costs will go up to produce it, and the price of silver will therefor need to go up.
Again; unlike gold, silver actually has a purpose. Gold pretty much is for investors and vanity. Imagine if there was a major industrial upswing need for silver and the production couldn't keep up? I saw a couple years back when photography was still big and silver was used a lot for that. It took a lot of the silver out of the market for other purposes. In Albuquerque, I had Jewelry vendors who made silver jewelry, who were willing to pay me 30-40% OVER SPOT to buy silver bullion off of me so they could melt it down and make jewelry to sell. This isn't too far fetched. Part of the price manipulation can be seen in just buying silver coins and bullion. It is not uncommon TODAY, for Silver Eagles to be sold at $23 an ounce. That's a 30% markup. On PAPER in the quotes, Silver MAY show a price of $15.50 - $16.00. But can you buy at that price? The cheapest silver eagles online are about $3 over spot. That's about a 20% premium. And of course you'll have all those trying to sell something as SPECIAL or COMMEMORATIVE like a special "Christmas" 1 ounce round for $28 per ounce. And all those other NATIONAL coins like the pandas, dragons, etc.... The point is, the PHYSICAL SILVER MARKET KNOWS that the price is depressed and that it should be MUCH HIGHER. So sellers can convince buyers to pay a high premium, because they know that when the price does correct, it will still have been an excellent investment. However; when the price of Silver goes back to $50 an ounce; or even closer to $100 (Which I believe it will); that Silver eagle, panda, christmas, etc... will STILL only be a few dollars more vs a 1 ounce round. So percentage wise, they are a terrible investment.
So yes, I do expect the price of silver to go up. I expect the silver to gold ratio to close the gap. I see gold being over $2000 an ounce and I see silver over $70 an ounce. Do I see it in the coming weeks or months? No. Maybe not even in the next 1-2 years. But I am bringing all this up because I believe that silver is at a big time LOW in price and is a PRIME TIME to BUY. I do think it may go down to around $15 an ounce during the first quarter of 2015. I believe it will rebound to the $18-$20 towards the end of the year. But those $3-$5 difference vs today is minute compared to where I believe it will eventually go to. And that's why silver is such a great investment if you are willing to hold onto it. And currently, the prices are so good for buying.
So, my recommendations if you're not already there is to have 3 GROUPS of silver.:
1. Have about $50 Face value of 90% junk silver and about 50 ounces of silver on hand for any "possible" economic "Armageddon" type scenario.
2. Have about 15% of your Liquid Cash in Silver. (Meaning, if you have $10,000 in your SAVINGS account, have about $1,500 in Silver also)
3. Have about 10% of your Non-Liquid investments either directly in physical silver/gold or associated mining companies; (Meaning your stocks, mutual funds, 401K, etc. if you have $100,000 in your investments, $10,000 should be either in physical metals "held by a reputable broker" or in mining industry)
This is NOT a MUST DO recommendation. You may decide that you prefer to ONLY HAVE physical silver, and you don't want ANY in your 401K, mutual funds, stocks, etc... Maybe you compromise and have 20% physical on hand of you liquid cash and none in the 401K. That's fine. Maybe you think economic Armageddon is more realistic than anything else and you want to have $500 face value of 90% junk silver an 500 ounces of silver. That's cool too. REMEMBER: It's your money and you can do with it anything you want. ALSO; just because you bought 100 ounces of silver for one particular purpose or reason and your thoughts and opinions change, doesn't mean you can't change what you're allocating your silver for. Maybe you build up enough silver that if you sold it all today, only making a 2% profit, you could turn around and PAY OFF your house!!! Remember, the best investment is to become "ABSENT OF DEBT". Even if you have a 1% or 0.05% loan, what happens if you run into financial hardship because you lost your job or a major medical situation happened? You could lose you house and any saving you have. If you OWN YOUR HOUSE and CARS, and you lose your job, you can always make enough spare money to buy food and keep the electric bill paid. You could have a yard sale every weekend and keep food on the table. You can't do that and make $1000 per month mortgage or rent payments.
So; if you have the spare cash, or want to readjust your investments, I truly believe now is the time to buy silver. Is it a problem if you don't buy now and you wait? No, not really. But people are always asking me when to buy. I personally buy on a CONTINUAL BASIS. I buy just like 401K monthly investments. "DOLLAR COST AVERAGING". I bought some silver yesterday at $17 an ounce (With premium). I also have some silver I bought when it was $20, $25, $30, and $35 an ounce. I also have some I bought when it was $8 and $10 an ounce. So, my AVERAGE price today, is probably around $25-$27 an ounce. That may seem like a LOSS if I were to sell it, but that's only if I sold ALL OF IT. Remember, I bought some at $8-$10 an ounce. I have an extensive spreadsheet with every ounce I've ever bought and sold. Remember, I bought some silver to reduce the cost of buying a new vehicle. I bought some to reduce debt. I recommend the same to you. Buy what you're comfortable buying. Don't go into debt trying to buy silver or gold. If it's a choice of buying silver/gold and eliminating debt; ALWAYS ELIMINATE DEBT FIRST. Obviously, you're not going to wait 10+ years to buy silver until your house is paid off. But; if it's a choice of Paying the mortgage payment of $800 a month + $200 a month to buy silver; I'd find a compromise and pay the $800 mortgage and an EXTRA $100 a month to reduce the principal and invest only $100 a month for silver. You get the idea.
Best of luck to you. 2015 is going to be interesting. Take advantage of it. Remember, you will NEVER LOSE in buying Silver if you're willing to hold onto it until it's right to sell it. Take Care. CYA: SE:
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