Why I believe Silver is going to go up big time; and why you need to acquire more
Hey there friends. I have been watching not just the spot price, but the REAL PRICE of Silver. Also, the availability of silver. And the industrial requirements. I have many thousands of lower followers; but for those new here, I only believe in Physical Silver/Gold. If you can't HOLD IT, then you DON'T OWN IT!!!
I truly believe that Silver is going to do a major breakout in price. Why? You may ask. Well, there's all the normal economic indicators like the dollar falling, the USA printing more monopoly money, and the USA national debt going even higher. But that's not what intrigues me.
So, what am I getting to? Look at the premiums. Gold is about what it normally is. Between 6-9%. That's reasonable. The dealers, distributors, coin shops, etc. all need to make money. That's a fair markup. Gold spot as of this post is around $1830. Retailers are selling between $1932 and $2005. That's a 6% to 9% premium mark up. Again; that's fair.
Now..... let's look at Silver. The spot price is $27.50 as of this post. The cheapest you can find the most generic silver round; "If" you can find them, is right at $32 an ounce. That's a 15% markup premium. If you want to get an American Silver Eagle, "If" you can find them, it's going to cost you about $38.25. That's a 30% premium markup.
So, why is there a much greater markup on Silver compared to gold? If it was simply supply and demand, wouldn't the spot prices be higher? In an honest world, that would be correct. But when it comes to Silver and Gold, we don't really live in an honest world. The Comex, institutions like JP Morgan, and others control the price of Silver and Gold. Mainly Silver. Why? Because they want to be able to buy it at a low price and make money turning it around. But, because silver is a true physical metal, that has major industrial uses, there is a limited supply. If the let the price go to high, or go on a continued increase, more and more of the average person would be exchanging dollars for silver. That would take silver out of circulation for the "Big Boys". Also, you have to realize that these players are also playing the "PAPER GAME". The problem there is, there isn't even enough physical silver in the world to cover 30% of all the PAPER silver that's out there. If the price of silver goes to high, many of these paper silver owners will want/demand that they get physical silver exchanged for their paper. That's not physically possible. When the time comes that all paper silver holders demand physical silver, the price will go through the roof. However...... the companies holding the Paper Silver Accounts will exchange the paper to silver at the much lower rate, and promise a physical surrender in 6-12 months. This means, if you have 1000 shares of paper silver at $25 a share/ounce; that's $25,000 in value; and the price climbs and the demand climbs, all the way to $100, and people try to trade their paper for physical. They won't give you 1000 ounces of physical gold. They'll back date to the trade date, which means $25 or $25,000. Then, if the price on delivery date is $100 an ounce, they only have to give you 250 shares.
But those of use who have physical, will be looking at $100 an ounce. Me personally, I believe that silver is going to go much higher than $100. The premium markup of 15-30% tells me that they are at the point where there actually IS PHYSICAL SILVER available, but they are trying to hoard it so the common people can't or won't buy it up. Again; if it was a real shortage, the spot price would go up. Not just the premiums. Think of a private sale with me, right now. I do NOT WANT to sell my silver. It's currently spot price is $27.50, but I don't want to sell. But you are persistent and want some. I finally break down and say: "Fine, I'll sell you 100 ounce for $50 an ounce". Me charging you $50 doesn't change the spot price. I simply charged you $23.50 in premium. Basically a 95% markup.
Well, I believe that the spot price is being held low, because industrial is going to demand a lot more physical silver. The US Dollar is going to be worth even less. And the country is going to add even more debt to the economy. So, that means there's going to be a LOT of people who are going to want to sell out of or exchange their "Paper Silver" for "REAL Physical Silver". Well, wall street, Comex, JP Morgan, and the other players aren't going to want to pay you $50, $100, $300 an ounce. They want to pay you $25-$30 an ounce. So they can sill on your cash, and then when they are forced to give you physical, it will be less, because it will be given to you at $50, $100, $300 an ounce. The reason the premium markup is so high, is because NO ONE WANTS TO SELL their silver. The big boys can control spot price, but they can't control the actual physical price. If you want to give me $100 an ounce for silver, and I agree, it doesn't matter at all what the spot price is. And we the economy, green energy, other industrial uses, etc. the industry is going to demand silver. They need it. And they will pay whatever they have to, to get it. Doesn't matter what spot says.
Anyway; I have always suggested that at least 10-15% of your INVESTMENT money be in physical silver (and a little gold). Mind you, I said your investment money. I don't consider physical silver and gold to be an investment. I believe it's a "Store of Wealth". It maintains your buying power. An ounce of silver today (2021) can BUY the same things/quantity that an ounce of silver could buy 100 years ago. But, when it comes to having physical silver/gold, after you take out your emergency savings accounts, your cash accounts, and your home/real estate..... whatever money you have set aside for 401k, IRA, CD's, Bonds, etc... you should have between 10-15% of that in silver/gold. (Mainly Silver). Now, the actual dollar amount will change depending on the spot price; but that's ok. Ballpark it. If you have say $600,000-$700,000 in IRA's, 401k, CD's, etc... then you should have $60,000-$100,000 in silver/gold/cash. "In current dollars". Of course, that number will change daily based on the dollar, spot price, etc.
Is there a way to base how much you should have in ounces. Well, this is MY PERSONAL FORMULA that I give to those who seek my advice. I tell them that they should have about 100 ounces of silver, for every 100,000 in NET WORTH they have. So, if you have $20,000 in cash in the bank, $200,000 in 401k/IRA, a house with $100,000 of equity, and another $50,000 in possessions.... that's $370,000 in NET WORTH. So that means, you should have about 370 ounces of PHYSICAL Silver as PART OF THAT NET WORTH.
But always remember.... Elimination of Debt it one of the most powerful tools you have. Except for a mortgage and possibly a car loan, eliminate ALL other debt. Also; have at least 3-6 months of emergency cash for that broken water heater or clothes dryer or car repair, etc.
So, have a great day. Keep the faith. And consider my words. There's a lot of others that believe similar to me that Silver is on the rise. The good thing is, silver ALWAYS maintains it's value. You can't ever lose money. It's purpose is to preserve wealth. it's not an investment.
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