Gold has hit record highs this year at a time when a double-dip recession threatens the global economy and governments everywhere are pulling back from the spending binges used to blunt the 2008 financial crisis.
Austerity and economic slowdown hardly seem like strong arguments for buying an inflation-sensitive precious metal.
Still, gold bugs are bullish as ever. And some are predicting the metal will rise to $2,000 an ounce over the next year, nearly a third above the present level.
"The reasons for buying gold haven't diminished," said Jeff Clark, the Sacramento, California-based senior precious metals analyst for Casey Research. "Unless we change course of how we handle the debt and deficits, there is a good reason to buy gold."
The pervasive bullishness stems from lessons learned in the financial crises of the past decade.
Gold does have staying power during big fiscal dramas and financial meltdowns. Discredited as a serious investment during the stock market boom years, it's regained its shine at the worst of times over the past decade. It's especially attractive when the dollar declines, as it has been wont to do in the current era of fiscal imbalances.
But even if it has earned a place in portfolios, gold poses challenges: What form should you buy it in? And when should you buy it?
THE LONG RISE
Skeptics have called for a pullback at regular intervals -- and still it stands tall: Gold has appreciated 500 percent since mid-2001, a 17.5 percent annualized return. The top-performing U.S. mutual funds of the past decade had invested directly or indirectly in the metal which Cortes carried back from the New World by the boatload.
A deepening budget crisis in Washington has gold sailing high again in some buyers' dreams. The reason? A budget crisis could trim the currency further. Gold's strength comes largely from the erosion of the dollar, which has lost 37 percent of its value since its last peak in mid-2001.
And investors haven't missed the boat.
"Definitely still time and there always will be 'still time'" to buy gold, says Al Korelin, chairman of AB Korelin and Associates in Semiahmoo, Washington. "You buy gold as insurance and not necessarily as a short term investment."
Spot gold was last at $1,532.99 an ounce XAU=, down but not far off the May 2 record high of $1,575.79 an ounce, according to Reuters data. It fell later that day after news of the death of al Qaeda leader Osama Bin Laden.
HOW SOON TO $2,000?
Commodities often hesitate at key price points, owing to the heavy use of leverage in futures accounts and heavy reliance on stop-loss orders linked to key price points. Which begs the question: When might gold rise from its current peak to the next lofty level?
"Gold will eventually go up to $2,000 an ounce," said Mike Frawley, global head of metals at the Newedge Group in New York, though "probably not much before early next year."
Frawley said the price of the currency now has backing based on supply and demand fundamentals. But the currency factor could swing back into play.
"The value of the dollar vis-a-vis other major world currencies is considerably important," he said. "Global demand (for gold) is still strong from Asia Pacific, India and China in particular."
CitiFX Technicals, a note from Citigroup, said gold could test an all-time high in the weeks ahead, top $1,700 this year and rally to more than $2,000.
Todd Horwitz; the Chicago-based chief strategist for the Adam Mesh Trading Group is waiting for the metal to top technical resistance. "I would not become bullish on gold until it made new highs over $1580."
BULLION VS MINING SHARES
For investors who think gold is heading on another run, the pure play, bullion, is an option. The physical product is not hard to acquire.
Casey Research's Clark said investors should avoid gold bars, half ounce bullion coins or rare gold coins and stick to the well-known one ounce gold coins like the American Eagle or Buffalo, the Canadian Gold Maple Leaf or the South African Krugerrand. Better-known gold instruments are better to have when it comes time to sell, Clark says.
Buying the metal, as opposed to the shares or producers, has distinct advantages, Clark says. That's because companies carry the risk of bad management, inaccurate accounts of deposits and the costly pitfalls of mining.
On the other hand, buying bullion will entail storage and security costs whether you hold it at home, in a safety deposit box or at a managed storage facility.
However, others say buying the shares of producers is more productive.
"You should put up to 10 percent of your capital in the bullion, 55 percent in the senior producers and the remaining 35 percent in the smaller companies," says AB Korelin's Korelin.
His suggested senior producers are Goldcorp Inc. (G.TO), Newmont Mining Corp. (NEM.N) and Kinross Gold Corp. (K.TO).
Two favorite junior companies are International Tower Hill Mines Ltd (ITH.TO) and Extorre Gold Mines Ltd (XG.TO).
BUYING GOLD BELOW THE SURFACE
Bill O'Neill, partner of commodities investment firm LOGIC Advisors in Upper Saddle River, New Jersey with $200 million in total assets, says he is cautiously optimistic on gold.
The firm continues to be heavily involved in the producers as gold in the ground is cheaper than the spot price for bullion, he says.
Given the associated costs to store and secure the bullion, he said LOGIC isn't a big advocate of bullion, instead favoring the low cost scenario of ETFs such as Blackrock's iShares Gold Trust (IAU.P) and the SPDR Gold Trust (GLD.P), the world's largest gold-backed exchange-traded fund.
Buying the physical metal would only be to protect against a global monetary system collapse, he said.
But whether waiting for a strong technical signal, the dollar to fall further or U.S. political gridlock on deficit reduction to signal further gains ahead, the overwhelming consensus is that gold is going higher.
"Look at what the Chinese are doing in buying more precious metals," says AB Korelin's Korelin. Are they stupid?" (Reporting by Nick Olivari; Editing by Richard Satran and Bernadette Baum)
Source: http://www.reuters.com
Sunday, June 5, 2011
Dear Capitalists Of The World
The last time I challenged the Billionaires of the world to try to outperform silver, all failed, as I predicted. No billionaire reportedly doubled his wealth since September, 2010.
In September, silver was under $20/oz. Today, silver is $38/oz., and on a dip down from $49.50/oz.
I wrote, Dear Billionaires of the World
(The Silver Market is a tiny $1.9 billion)
Silver Stock Report
by Jason Hommel, September 2nd, 2010
http://silverstockreport.com/2010/billion.html
I wrote why silver would outperform, and I sent this information out to the top 25 Billionaires who had contact information via email that was available.
Since that time, billionaire Carlos Slim got into the silver market, but he sold 3 years worth of production already, and will likely miss out on much of the upside, unless he covers, and buys back that silver, on this dip.
http://www.businessinsider.com/carlos-slims-incredibly-smart-silver-sales-2011-5
Also, since that time, Eric Sprott, who manages billions, and who might be a billionaire himself, listed my name, along with David Morgan and Ted Butler as "the smartest guys in the room" when it comes to silver.
http://marcfaberchannel.blogspot.com/2011/01/david-morgan-interviews-eric-sprott-1.html
Why silver?
For over 100 years, silver has been demonetized -- meaning, silver is no longer used as money, which reduces demand, which has reduced value, which makes it a perfect undervalued asset.
For over 66 years, since the end of WWII, silver has been consumed in industry, mostly in electronics, to the point that most of the silver ever mined in all of human history has been consumed. This reduction and consumption of supply has made silver more rare, and has created a potential natural monopoly for those who buy silver now.
The world mines just under 10 times as much silver, as gold, each year, suggesting a price ratio of 10:1, showing silver may perform 4 times better than gold, given the current price ratio of 41:1.
In sum, the silver market remains very tiny, for billionaires. World silver mine production is about 700 million oz., yet industrial consumption of silver in over 10,000 different applications continues to increase faster than mine supply.
World investment demand, which is a small portion of overall demand, has vastly increased, but remains a tiny 250 million oz., which, at $40/oz., is a relatively tiny $10 billion, tiny in the scale of world finance.
By the time even a tiny 1% of U.S. paper money tries to buy silver to protect itself from inflation, that would be $180 billion dollars (1% of $18 trillion), or 18 times as much investment money went into silver last year.
Finally, the silver price has risen enough so that a billionaire now actually can buy $1 billion in real, physical, silver bullion.
But the logistics of buying that much will remain difficult. At $40/oz., that would be 25 million oz., which will weigh 1.7 million pounds, or 865 tons. Or, 865 massive truck loads. That's a lot of truck loads of silver, and a lot of fork lifting that needs to get done, and the construction of the vault needed to store all of that needs to get started on immediately.
To put 25 million ounces of silver into perspective, that is also about two and a half times as much silver as was produced by the US mint each year on average, which used to be only 10 million oz., until just the last few years where the US mint is on pace to produce about 35 - 40 million oz. this year.
Warning: Don't store your silver with any bankers or brokers, not anywhere in the world, not even Swiss bankers. And don't buy any ETF silver, either. Why not?
The BIS, the Bank of International Settlements, has a report showing that world bankers are short, or in other words, have silver liabilities, or owe other people or entities, up to $130 billion to $203 billion worth of silver. This is an admission of fractional reserve silver banking, and it's fraud. (Recently, the $203 billion number was revised down to $107 billion, after I began publishing links to their report!)
This BIS report is perhaps the best evidence of the biggest admitted fraud in the entire world. No conspiracy "theory" is needed. This is what the big boys themselves admit freely in their own reports!
Here is the BIS report (they change the location frequently):
Start here:
http://www.bis.org/statistics/derstats.htm
Click here:
http://www.bis.org/statistics/otcder/dt21c22a.pdf
There are two tables. See the second one, Table 22A.
Table 22A: Amounts outstanding of OTC equity-linked and commodity derivatives
By instrument and counterparty
In billions of US dollars
"Other Precious Metals" (IE, mostly silver, but also platinum and palladium, both tiny markets)
Notional amounts outstanding:
$123 Billion, as of Dec., 2010.
This silver debt cannot be paid back easily, if ever. As I mentioned, the world only mines 700 million oz. per year, which, at $40/oz., is only $28 billion. The world banks owe many years of world production of silver, more than could be obtained on the world markets.
Again, it will be very difficult to acquire $1 billion worth of silver, let alone up to $123 billion to $200 billion that the bankers owe.
Good luck trying to outperform silver!
Against this backdrop of the excellent fundamentals of silver, the United States is printing money like crazy, and the rest of the world is racing to print even more.
Last month, when the news was covering the potential government shutdown, while Democrats and Republican budgets were bickering over a mere $30 billion, while the US government is actually spending a whopping $1,600 billion more than they are taking in, the public woke up.
Many of our customers at www.jhmint.com said, "They are not remotely close to fixing the problem, and there will be inflation for years to come." People are waking up.
When horrible inflation hits, there are very few things to actually buy to protect your money. See the empty shelves after a currency crisis in Belarus, on May 23, 2011, three days ago, here:
http://www.stevequayle.com/News.alert/11_Photo_of_Day/110524.photo.of.day.html
Most things in the world have a horrible price spread, that is, a wide price between the buy and sell prices.
Silver and gold are the things to buy. What else is there? Copper? Plastic forks? Laptop computers that will be obsolete in a year or two? Food? No. No. No. And yes, maybe $10,000 for food, or enough for a year or so, enough to protect your life, but it won't protect your wealth.
Silver and gold are real money, even if they are not currently being used as a medium of exchange. In fact, their lack of use as a medium of exchange make them an even better store of value, because you are buying them prior to when the price goes much higher in value when everyone else will need to buy them to protect from inflation.
Soon, the government will need to discuss raising the debt ceiling. That debate will be in the news for a few weeks. People will, again, flock to silver.
Soon, the government will need to discuss a quantitative easing III, because QEII will run out in June, 2011, if it has not run out already. People, again, will flock to silver.
You will not beat the public to the punch, you are already a bit late to the party, and you will be lucky to get silver below $100/oz.
Why? Because the tipping point has already been reached.
Good luck!
Oh, by the way, this email is going out to 82,000 emails, and to the top 25 billionaires in the world. The 82,000 email recipients have an estimated combined net worth of over $10 billion.
=====
I strongly advise you to take possession of real gold and silver, at anywhere near today's prices, while you still can. The fundamentals indicate rising prices for decades to come, and a major price spike can happen at any time.
Follow me on facebook I have 3500 friends, and I hear there is a limit of 5000!
http://www.facebook.com/jason.hommel
Sincerely,
Jason Hommel
http://news.silverseek.com
In September, silver was under $20/oz. Today, silver is $38/oz., and on a dip down from $49.50/oz.
I wrote, Dear Billionaires of the World
(The Silver Market is a tiny $1.9 billion)
Silver Stock Report
by Jason Hommel, September 2nd, 2010
http://silverstockreport.com/2010/billion.html
I wrote why silver would outperform, and I sent this information out to the top 25 Billionaires who had contact information via email that was available.
Since that time, billionaire Carlos Slim got into the silver market, but he sold 3 years worth of production already, and will likely miss out on much of the upside, unless he covers, and buys back that silver, on this dip.
http://www.businessinsider.com/carlos-slims-incredibly-smart-silver-sales-2011-5
Also, since that time, Eric Sprott, who manages billions, and who might be a billionaire himself, listed my name, along with David Morgan and Ted Butler as "the smartest guys in the room" when it comes to silver.
http://marcfaberchannel.blogspot.com/2011/01/david-morgan-interviews-eric-sprott-1.html
Why silver?
For over 100 years, silver has been demonetized -- meaning, silver is no longer used as money, which reduces demand, which has reduced value, which makes it a perfect undervalued asset.
For over 66 years, since the end of WWII, silver has been consumed in industry, mostly in electronics, to the point that most of the silver ever mined in all of human history has been consumed. This reduction and consumption of supply has made silver more rare, and has created a potential natural monopoly for those who buy silver now.
The world mines just under 10 times as much silver, as gold, each year, suggesting a price ratio of 10:1, showing silver may perform 4 times better than gold, given the current price ratio of 41:1.
In sum, the silver market remains very tiny, for billionaires. World silver mine production is about 700 million oz., yet industrial consumption of silver in over 10,000 different applications continues to increase faster than mine supply.
World investment demand, which is a small portion of overall demand, has vastly increased, but remains a tiny 250 million oz., which, at $40/oz., is a relatively tiny $10 billion, tiny in the scale of world finance.
By the time even a tiny 1% of U.S. paper money tries to buy silver to protect itself from inflation, that would be $180 billion dollars (1% of $18 trillion), or 18 times as much investment money went into silver last year.
Finally, the silver price has risen enough so that a billionaire now actually can buy $1 billion in real, physical, silver bullion.
But the logistics of buying that much will remain difficult. At $40/oz., that would be 25 million oz., which will weigh 1.7 million pounds, or 865 tons. Or, 865 massive truck loads. That's a lot of truck loads of silver, and a lot of fork lifting that needs to get done, and the construction of the vault needed to store all of that needs to get started on immediately.
To put 25 million ounces of silver into perspective, that is also about two and a half times as much silver as was produced by the US mint each year on average, which used to be only 10 million oz., until just the last few years where the US mint is on pace to produce about 35 - 40 million oz. this year.
Warning: Don't store your silver with any bankers or brokers, not anywhere in the world, not even Swiss bankers. And don't buy any ETF silver, either. Why not?
The BIS, the Bank of International Settlements, has a report showing that world bankers are short, or in other words, have silver liabilities, or owe other people or entities, up to $130 billion to $203 billion worth of silver. This is an admission of fractional reserve silver banking, and it's fraud. (Recently, the $203 billion number was revised down to $107 billion, after I began publishing links to their report!)
This BIS report is perhaps the best evidence of the biggest admitted fraud in the entire world. No conspiracy "theory" is needed. This is what the big boys themselves admit freely in their own reports!
Here is the BIS report (they change the location frequently):
Start here:
http://www.bis.org/statistics/derstats.htm
Click here:
http://www.bis.org/statistics/otcder/dt21c22a.pdf
There are two tables. See the second one, Table 22A.
Table 22A: Amounts outstanding of OTC equity-linked and commodity derivatives
By instrument and counterparty
In billions of US dollars
"Other Precious Metals" (IE, mostly silver, but also platinum and palladium, both tiny markets)
Notional amounts outstanding:
$123 Billion, as of Dec., 2010.
This silver debt cannot be paid back easily, if ever. As I mentioned, the world only mines 700 million oz. per year, which, at $40/oz., is only $28 billion. The world banks owe many years of world production of silver, more than could be obtained on the world markets.
Again, it will be very difficult to acquire $1 billion worth of silver, let alone up to $123 billion to $200 billion that the bankers owe.
Good luck trying to outperform silver!
Against this backdrop of the excellent fundamentals of silver, the United States is printing money like crazy, and the rest of the world is racing to print even more.
Last month, when the news was covering the potential government shutdown, while Democrats and Republican budgets were bickering over a mere $30 billion, while the US government is actually spending a whopping $1,600 billion more than they are taking in, the public woke up.
Many of our customers at www.jhmint.com said, "They are not remotely close to fixing the problem, and there will be inflation for years to come." People are waking up.
When horrible inflation hits, there are very few things to actually buy to protect your money. See the empty shelves after a currency crisis in Belarus, on May 23, 2011, three days ago, here:
http://www.stevequayle.com/News.alert/11_Photo_of_Day/110524.photo.of.day.html
Most things in the world have a horrible price spread, that is, a wide price between the buy and sell prices.
Silver and gold are the things to buy. What else is there? Copper? Plastic forks? Laptop computers that will be obsolete in a year or two? Food? No. No. No. And yes, maybe $10,000 for food, or enough for a year or so, enough to protect your life, but it won't protect your wealth.
Silver and gold are real money, even if they are not currently being used as a medium of exchange. In fact, their lack of use as a medium of exchange make them an even better store of value, because you are buying them prior to when the price goes much higher in value when everyone else will need to buy them to protect from inflation.
Soon, the government will need to discuss raising the debt ceiling. That debate will be in the news for a few weeks. People will, again, flock to silver.
Soon, the government will need to discuss a quantitative easing III, because QEII will run out in June, 2011, if it has not run out already. People, again, will flock to silver.
You will not beat the public to the punch, you are already a bit late to the party, and you will be lucky to get silver below $100/oz.
Why? Because the tipping point has already been reached.
Good luck!
Oh, by the way, this email is going out to 82,000 emails, and to the top 25 billionaires in the world. The 82,000 email recipients have an estimated combined net worth of over $10 billion.
=====
I strongly advise you to take possession of real gold and silver, at anywhere near today's prices, while you still can. The fundamentals indicate rising prices for decades to come, and a major price spike can happen at any time.
Follow me on facebook I have 3500 friends, and I hear there is a limit of 5000!
http://www.facebook.com/jason.hommel
Sincerely,
Jason Hommel
http://news.silverseek.com
Tuesday, May 24, 2011
Price Corrections Are Healthy
Every market is due for a pullback in order to have a healthy adjustment. The uncertainty about the economy’s strength and the fears about rising prices, not to mention worries over global instability, will continue gold’s growth to super heights. Another wild card would be the newly “liberated” Arab nations’ anti-Israeli protests that could ignite turmoil and could send the price of oil and commodities much higher. Markets cannot continue to peak without a correction said President Ron Fricke of Regal Assets.It’s all about perspectives. Smart investors don’t need to second guess that inflation is here and that the world is in turmoil. Besides, you can’t get a handle on US economy issue, because there is no handle.
Specialist gold analyst, Jeffrey Nichols, has continually been ratcheting up the number of reasons he sees for being bullish on gold, however, as he told Mineweb on the sidelines of the New York Hard Assets Conference last week, some of these are expansions of the multitude of factors among them: The U.S. Fed’s policy of an unprecedented level of money creation coupled with zero (or effectively negative) interest rates, the difficulties in reaching agreement on the U.S. budget coupled with enormous U.S. sovereign debt and eroding creditworthiness, the move by Central Banks to become buyers of gold rather than sellers, the onset of vehicles like ETFs which make it easier for the investor to buy gold, plus the increasing acceptance of gold as an investment class amongst major investing institutions, and finally, the limited growth in global mine production of gold .
He reckons gold’s fortunes remain very bright. With all the supportive price drivers ready to burst forth, “look for new all-time highs in the months ahead.” He does stick his neck out on a specific price prediction and reckons “gold has every chance of reaching $1700 by the year end, $2000 in 2012 and “possibly $3000 or even $5000″ before a time when he feels the cycle may eventually reverse later in the decade.”
Source: http://goldcoinblogger.com
Chinese set new standard in buying gold
China overtook India to become the largest market for gold bars and coins in the first quarter of this year, as rising inflation inspired a surge in bullion investment.
Chinese investors bought 93.5 tonnes of gold between January and March in the form of coins, bars and medallions, a 55 per cent increase from the previous quarter and more than double the level of a year earlier, according to data released by the World Gold Council on Thursday.
The surge in Chinese buying has supported prices, even as some investors in the west were cutting exposure to gold amid expectations that improving economic conditions and rising interest rates would mark an end to the gold rally.
George Soros’s hedge fund sold almost all its holdings in the largest gold exchange-traded fund, SPDR Gold Shares, in the first quarter, according to a regulatory filing this week.
“You’re seeing eastern demand picking up any of the gold coming out of the hands of western investors,” said Marcus Grubb, managing director for investment at the World Gold Council, a lobby group backed by the gold mining industry.
India, the top buyer of gold jewellery, remains the largest overall consumer of the yellow metal, although Chinese jewellery consumption is rising rapidly.
Philip Klapwijk, executive chairman of GFMS, the consultancy that produces the statistics on gold supply and demand, said it would be “a close call” which of China and India was the largest buyer this year.
The apparent willingness of Chinese and Indian consumers to step in when prices fall could provide a floor for the market around $1,450 a troy ounce, he said, and underpin a rally to more than $1,600.
On Thursday, spot bullion was trading at $1,495, down from a nominal record high of $1,575.79 three weeks ago.
The rise in Chinese gold consumption has been stimulated by the deregulation of the country’s gold market, which has led to an increase in the number of banks importing gold and the number of specialist shops that sell it.
Imports of gold into China – the world’s top miner of gold – have risen more than fourfold to 245 tonnes last year, according to GFMS. In the first four months of this year, imports had exceeded 200 tonnes, Mr Grubb estimated.
Source: http://www.ft.com
Chinese investors bought 93.5 tonnes of gold between January and March in the form of coins, bars and medallions, a 55 per cent increase from the previous quarter and more than double the level of a year earlier, according to data released by the World Gold Council on Thursday.
The surge in Chinese buying has supported prices, even as some investors in the west were cutting exposure to gold amid expectations that improving economic conditions and rising interest rates would mark an end to the gold rally.
George Soros’s hedge fund sold almost all its holdings in the largest gold exchange-traded fund, SPDR Gold Shares, in the first quarter, according to a regulatory filing this week.
“You’re seeing eastern demand picking up any of the gold coming out of the hands of western investors,” said Marcus Grubb, managing director for investment at the World Gold Council, a lobby group backed by the gold mining industry.
India, the top buyer of gold jewellery, remains the largest overall consumer of the yellow metal, although Chinese jewellery consumption is rising rapidly.
Philip Klapwijk, executive chairman of GFMS, the consultancy that produces the statistics on gold supply and demand, said it would be “a close call” which of China and India was the largest buyer this year.
The apparent willingness of Chinese and Indian consumers to step in when prices fall could provide a floor for the market around $1,450 a troy ounce, he said, and underpin a rally to more than $1,600.
On Thursday, spot bullion was trading at $1,495, down from a nominal record high of $1,575.79 three weeks ago.
The rise in Chinese gold consumption has been stimulated by the deregulation of the country’s gold market, which has led to an increase in the number of banks importing gold and the number of specialist shops that sell it.
Imports of gold into China – the world’s top miner of gold – have risen more than fourfold to 245 tonnes last year, according to GFMS. In the first four months of this year, imports had exceeded 200 tonnes, Mr Grubb estimated.
Source: http://www.ft.com
Thursday, May 5, 2011
Silver to Soar as the Gold to Silver Ratio Stabilizes
During precious metal bull markets, gold usually gets all the media attention. But as investors are quickly learning, the biggest gains go to silver.
Truth is, silver prices have consistently outperformed gold during bull markets — doubling, tripling, even quadrupling the price of the yellow metal.
In the past 12 months, for instance, the price of gold has increased 27%; silver has climbed 164% over the same time.
Yet despite the recent swell in prices, silver should continue increasing, doubling within the next few weeks and vaulting the price of the white metal over $100 an ounce.
Here's exactly how that's going to happen...
4,500-year-old Ratio Shows Silver Will Catch Up to Gold
For gold bugs and other hard-asset investors, the gold-to-silver price ratio is well known. But most investors are unfamiliar with this metric.
In short, the gold-to-silver ratio represents the number of silver ounces it takes to buy a single ounce of gold.
Since silver is approximately 16 times more abundant than gold on Earth, markets have set silver prices at 1/16th of the price of gold in the past. And that gives us the historic gold-to-silver ratio of 1:16.
| To calculate the current gold-to-silver price ratio, simply divide the current price of gold by the current price of silver. |
Markets have used this 1:16 ratio to price silver for over 4,500 years. But there are periods when the gold-to-silver ratio gets thrown out of whack and rises or falls to extreme levels.
For example, at the beginning of the current precious metal bull market, the gold-to-silver ratio was over 1:60.
But these periods of statistically extreme gold-to-silver ratio levels don't last. And sooner or later, the time-tested ratio returns to the historic 1:16 level.
Just last summer, the gold-to-silver ratio expanded to 1:66. Gold was over $1,200/oz; silver sat at $18/oz.
However, the gap between gold and silver prices has rapidly begun to close...
Silver to Soar as the Gold-to-Silver Ratio Stabilizes
By the beginning of the year, the gold-to-silver price ratio had narrowed to 1:48.
Today, the ratio sits at 1:32, with gold at $1,534/oz and silver trading at $48.25/oz. But the metric is rapidly approaching its historic 1:16 level.
If the price of silver would catch up to the historic gold-to-silver ratio today, the price of silver would be $95.87/oz. And as gold prices continue to rise, the price of silver would easily exceed $100/oz.
Before this secular bull market for precious metals is all said and done, I think the ratio will not only return to its historic 1:16 level; but it will actually move toward 1:10 or even 1:5.
That would push the price of silver toward $200 or $300 an ounce.
Think I am crazy?
That’s okay. I’ve gotten used to it over the years...
But I've also been proven right time and time again on most (not all) of my calls for precious metals prices, going back 12 years.
The hard truth is the world is about to face an unprecedented period in its history as it relates to fiat currencies.
There are oceans of fiat money across the planet that will suddenly be rendered worthless... As the fiat currency dominoes begin to fall, it is not difficult to imagine the pandemonium that will take place as investors attempt to flood into the only currency known to protect one’s savings at such a time: gold and silver.
~~SIGNUP_WD~~
Be Prepared
The amount of fiat money in existence is absolutely staggering. Yet the precious metals markets are tiny. There simply aren't enough of these metals for everyone.
A major upheaval is already underway. But it's about to get much, much worse.
It's going to be a difficult time for all of us. Those who are prepared will not suffer as much as those who are not. And I need to remind everyone not to listen to the constant media buzz that silver and gold are in a bubble.
They are not in a bubble.
This is just another attempt by the deceptive media, doing what they always do to keep you from what you should be doing — which, in this case, is buying gold and silver.
From what I have seen in the markets since the beginning of the year, it appears both gold and silver have been given a green light because the worldwide economic plight has suddenly accelerated.
The slight downside market action in precious metal prices is short and very brief, so I continue my mantra to buy on the dip days or dip mornings.
By afternoon in many cases, the metals are already in recovery mode as major physical buying comes into the market.
I expect we will be pushing for higher highs for all precious metals, with the occasional pullback for the balance of the year if the fiat currencies don’t implode in 2011...
When they do implode, it will be off to the races for gold and silver.
Good Investing,
Source: http://www.wealthwire.com
Tuesday, May 3, 2011
Physical Silver Shortage Worsens Due To Mint Rationing and Surging Investment Demand
For the past several weeks the US Mint sales figures for Silver Eagle bullion coins have been essentially flat. The US Mint sells its bullion products in bulk to authorized purchasers (AP's). The AP's resell the bullion coins to dealers who then sell the products to the public. The US Mint has been rationing the 2011 Silver Eagle bullion coins to AP's, leaving one to conclude that the flat sales of Silver Eagles have been the result of Mint production constraints or supply shortages, rather than flat or reduced market demand.
On past occasions, the US Mint has cited the lack of adequate supplies of silver planchets as the cause for the continuing rationing of silver bullion coin sales. Earlier this year, the Royal Canadian Mint admitted that they were having significant problems in sourcing silver since huge demand was outpacing silver supply.
Combine rationing and surging demand and the obvious result is a severe shortage of physical gold and silver bullion products. Confirming this situation, American Precious Metals Exchange (APMEX), announced yesterday that they were seeking to purchase US Mint bullion products from their customers in order to meet "recent incredible demand for gold and silver bullion products".
The American public has been provided with plenty of evidence that out of control deficit spending and money printing policies by the Federal Reserve are destroying the value of the paper dollar and they are acting accordingly (see Why There Is No Upside Limit To Gold and Silver Prices). A loss of confidence in paper money is fueling the rise in gold and silver prices as people seek to protect their wealth. Any pullbacks in precious metal prices should be viewed as another major buying opportunity.
source: http://goldandsilverblog.com
RHB Islamic sasar RM20 juta
KOTA BHARU 28 April - RHB Islamic Bank yakin produk pembiayaan pajak gadai Islamnya atau Ar-Rahnu mampu mencatatkan jumlah transaksi sehingga RM20 juta pada akhir tahun ini, selepas lapan bulan dilancarkan.
Ketua Pegawai Eksekutif merangkap Pengarah Urusannya, Abd. Rani Lebai Jaafar berkata, perkhidmatan Ar-Rahnu yang dimulakan di cawangan RHB Islamic Bank Kubang Kerian di sini, berpotensi besar untuk dikembangkan berikutan minat tinggi masyarakat tempatan menyimpan barangan kemas.
Beliau berkata, jumlah golongan yang bekerja sendiri, peniaga kecil dan usahawan wanita yang ramai di negeri ini juga menjadi faktor kepada produk ini diperkenalkan di sini bagi membolehkan mereka mendapatkan pembiayaan alternatif dan modal.
Katanya, pajak gadai Ar-Rahnu itu akan diperluaskan ke cawangan lain dengan sasaran awal ialah Kuala Terengganu, Terengganu; Bangi, Selangor dan Kuching, Sarawak.
"Kelantan dipilih sebagai tapak awal produk Ar-Rahnu kami kerana melihat kepada minat mendalam masyarakat negeri ini terutama golongan wanita yang gemar menyimpan barang kemas.
"Pembiayaan Ar-Rahnu kami memberi peluang kepada mereka yang kesempitan untuk mendapatkan keperluan tunai dan juga modal perniagaan dengan pembiayaan sekurang-kurangnya RM100 sehingga RM50,000.
"Produk ini terbuka kepada semua warganegara Malaysia berumur 18 tahun ke atas dengan tempoh gadaian antara enam bulan sehingga setahun," katanya selepas Majlis Pelancaran Produk Pembiayaan Pajak Gadai Islam (Ar-Rahnu) dan Fiesta Perbankan Islam 2011 bank itu di sini, hari ini.
Hadir sama, Ketua Perbankan Transaksi RHB Islamic Bank, Tengku Panglima Raja Tengku Mohamad Rizam Tengku Abdul Aziz; Pengarah Wilayah Timur Kumpulan Perbankan RHB, Nazri Othman; Ketua Perbankan Runcit RHB Islamic Bank, Zulkahairi Zabiri dan Pengurus RHB Islamic Bank Kubang Kerian, Norliza Abdul Shukor.
Abd. Rani berkata, urus niaga pajak gadai Islam itu akan menggunakan empat jenis konsep syariah iaitu Qardhul Hasan, Ar-Rahnu, Wadiah Yad Dhomanah serta Al-Ujrah dan mereka menerima emas jenis 999, 950, 916, 875, 835 dan 750 untuk digadai.
Jelasnya, RHB Islamic Bank sehingga kini mempunyai 12 cawangan di seluruh negara dengan lebih 250,000 pelanggan dan perkhidmatan perbankan berasaskan syariah itu turut disokong oleh 196 cawangan konvensional Kumpulan Perbankan RHB lain.
Beliau berkata, RHB Islamic Bank mengunjurkan penambahan cawangan-cawangan bank itu di negeri yang belum ditembusi seperti Kedah, Melaka, Perlis dan Pahang.
Source: http://www.utusanonline.com.my
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