Silver: Little Brother, Big Potential

Wed, Apr 24, 2013 - 10:28am

This excellent summary of the case for silver comes to us from one of our bullion affiliations, Hard Assets Alliance. 

Please check out HAA for all your purchasing and storage needs. Fully allocated, safe and stored outside of the LBMA system, it's a great way to acquire, accumulate and even trade physical metal. Please use this link to get there: If you'd like to know more about HAA, here's the podcast from when I introduced the service back in August of last year:

Silver: Little Brother, Big Potential
Three Reasons Silver Could Outperform Gold

By Jason Sampognaro

By Jason Sampognaro, Hard Assets Alliance Analyst

When we think of gold, we think of the solid, safe-haven, value-holding, inflation-hedging, shiny, yellow metal that lets us sleep at night knowing the governments of the world cannot print it out of existence. Gold is the big cheese in the precious-metals investing community. There's no doubt that gold should be a part of everyone's investment portfolio, but it's important not to forget gold's little brother: silver.

Silver holds all of the same characteristics that make gold a great monetary metal. Silver is durable, malleable, easily recognizable, portable, divisible, and uniform (one silver coin is basically the same as the next). It is also scarce enough to make it valuable for smaller transactions. Most important of all, as with gold, no amount of money printing will reduce your physical holdings of silver by one bit.

What makes silver even more attractive than gold is its potential upside. There are several reasons why silver may outperform gold in the coming years. They are outlined below. After examining these reasons, we'll explore the recent shortage of Silver Eagles at the US Mint and what this all means for the price of silver in the long run.

Reason #1: The 16:1 Rule

Historically, silver has traded at about a 16:1 ratio to gold. At today's current spot prices, silver is trading at closer to 55:1. If we assume that silver will eventually return to its historic ratio, the current deviation could imply one of three scenarios:

1) Gold will drop off a cliff
2) Gold will fall significantly, while silver simultaneously rises
3) Silver will skyrocket to all-time highs

Frequent readers of the Hard Assets Alliance publications will know that the first two scenarios are unlikely, in our view. We've published several pieces on why gold is moving higher over the long term. However, if we entertain the idea and do the numbers, it will enable our readers to judge the likelihood for themselves.

For first scenario, let's assume that silver's price remains at current levels, and gold falls to assume the historic 16:1 ratio. At $30 per ounce of silver, gold would need to fall to $480 per ounce – a level not seen in almost nine years.

For the second scenario, let's assume that gold takes a significant hit. The most recent bearish estimates for the gold price have been around $1,200 per ounce. At a 16:1 ratio, silver would have to climb to $75 per ounce – more than double its current price.

For the third scenario, let's assume that gold maintains its current price, even though we at the Hard Assets Alliance think it is destined to move much higher. With gold at $1,600 per ounce, silver should be $100 – over three times its current price.

Of course, anything is possible, but if you believe that gold will rise as the dollar falls, what does that say about silver? Perhaps $100 per ounce does not seem so unreasonable.

Reason #2: The Metal of All Trades

Many of us think of silver as an investment metal, but silver's main source of demand comes from industrial uses. In 2011, coin demand only made up about 10% of total demand for silver. The rest was applied, in everything from photography to jewelry and electronics. There are even some instances of silver replacing platinum in catalytic converters.

Although demand for photographic film has declined in recent years, silver is finding new industrial homes. Applications include LED technology, RFID chips, solar panels, new and more effective batteries, water purification, washing machines, air conditioners, and refrigeration. (This is by no means an exhaustive list of silver's applications. There are literally dozens if not hundreds of ways silver can be used.) With emerging markets growing, the populations of these countries will demand more electronics, cleaner water, and cooler homes in the summer. As the standard of living increases for those previously living in poverty, the demand for silver's many applications will increase as well.

The sheer number of industrial applications for silver gives a very solid, diversified base to the market, and it is therefore less affected by swings in the economy. Even during the period between 2008 and 2009 – the worst of the financial crisis – industrial demand for silver only decreased by 6%, bounced right back the next year, and has increased every year since. The bottom line is that the industrial demand for silver is here to stay, and this has real implications for prices, as we'll discuss further below.

Reason #3: Silver Coin Bonanza

While the industrial market is an important piece of silver demand, we at the Hard Assets Alliance are also intently focused on investment demand. We see investment demand increasing. This may confuse some who've read recent reports regarding large hedge funds dumping precious metals. However, these reports are often referring to holdings of paper gold and silver, not the physical stuff. We've discussed the difference between the paper and physical markets before. Interested readers can get more information here.

Perhaps the best indication of the disconnect between physical and paper markets is the spread between the spot price, which can be highly affected by moves in the paper market, and the premiums paid for physical coins. Some reports are saying that premiums have doubled recently, indicating that physical demand is increasing despite the spot prices reported in mainstream financial media. The data below support this.

Purchases of physical metal the world over have increased by leaps and bounds since 2008. According the CPM Group's annual silver report, worldwide demand for silver coins reached just over 88 million ounces in 2011.

While we don't have CPM's annual data for 2012 as of the date this was written, we can use other sources to gauge where physical demand is headed in the future.

The US Mint – one of the most popular places to purchase silver in the world – publishes monthly statistics of silver coin sales. Buyers of US Mint coins have ignored the historic 16:1 ratio and have purchased silver at much higher multiples than gold. The graph below charts the historic ratio between gold and silver coins sold by the US Mint since January of 2012.

What explains this behavior? The answer is simple: silver is cheap relative to gold, and investors know it.

2011 and 2012 saw the highest and second-highest silver coin sales in the US Mint's history, respectively. In the first three months of 2013, the US Mint sold over 13 million ounces of silver, selling out of the 2013 Silver Eagles. That's more than 3 million ounces over the same period of 2012 and almost 4 million ounces more over the first quarter of 2011, a year in which the Mint sold nearly 40 million ounces. 2013 is off to a hot start!

Shortage at the US Mint

As readers may already know, the US Mint suspended the sale of its 2013 Silver Eagles after selling out of the 2012 vintage a few months ago. Some are attributing the early 2013 surge to the suspension and the resulting pent-up demand. However, the real question remains: How did the US Mint run out of silver coins? With 2011 being the best year for the Mint in history, why was it unable to plan for the appropriate volume in the following year?

Some are claiming that there is a shortage in silver, and that the Mint was unable to acquire enough raw silver to service all the demand. Speculations aside, the suspension highlights a potentially alarming scenario: What if the suspension had been for longer than only a few weeks? With 2013's hot start, can we count on the Mint to produce enough coins to satisfy the growing demand?

Keep that in the back of your mind for now and consider another point. CPM Group's reported total mine production in 2011 was about 775 million ounces. The report for total demand, including both coins and industrial applications, was 950 million ounces. Luckily, secondary supply (or scrap) provided 282 million ounces in the same year. However, as demand for coins increases, more and more silver will go into the storage vaults of investors and out of the hands of industry. Thus, the market could become more dependent on the scrap supply for its industrial needs, as more and more mine production goes toward minting coins. As the inevitable tug of war ensues between the industrial and investment markets, can we expect supply to be readily available for all of our investment needs? It's tough to say.

The shortage at the US Mint may have only been a short-term blip on the radar. However, it gave us a small taste of what may lie in our future if silver demand begins to take off. The question you will need to answer for yourself is: Was the suspension a one-time planning hiccup or the result of a real shortage?

Putting It All Together

Silver's potential for upside is huge, and the metal is only getting scarcer as coin demand increases worldwide. As living standards rise in the developing world, the industrial demand for silver will rise to meet the needs of the people. Currency debasement is showing no signs of slowing, and this only serves to fuel silver's upward trajectory. These factors have provided an interesting potential win-win situation for silver investors. If fiat currencies collapse, silver – along with gold – will serve as a secure way to preserve wealth. If the economy picks up, industrial demand for silver will increase, pushing prices higher. Either way, silver is going higher. We can't think of a better way to preserve your savings.

At this point, silver is a no-brainer. With a SmartMetals™ account from the Hard Assets Alliance, you too can purchase and store silver safely and securely from the convenience of your home computer. Members can take advantage of non-bank storage facilities in New York City and Salt Lake City, with international storage available in Melbourne and soon Singapore as well. Learn more about getting positioned in silver with a SmartMetals account today.


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About the Author

turd [at] tfmetalsreport [dot] com ()


Apr 24, 2013 - 10:34am


Who's your Daddy?!

Apr 24, 2013 - 10:36am


Yeah baby.


Apr 24, 2013 - 10:38am


stack till it hurts


The Springbok
Apr 24, 2013 - 10:38am


top five, and bought same amount of silver ounces at Goldmoney today!

Apr 24, 2013 - 10:39am

Question for the previous post...

Dear Turd, I would like to ask you this Q. What is in their interest of those who make the paper market disconnect from the physical market so much that the paper market eventually collapses and disappears ? This would be loosing a market where the prices can be controlled or manipulated? Why would them loose such power? Thanks and great post. A.B.

Apr 24, 2013 - 10:40am

I guess that's all about the

I guess that's all about the "end game", isn't it...

Apr 24, 2013 - 10:41am

This one is for...

...all the Turdites with "silver" and "Ag" in their names!

Apr 24, 2013 - 10:41am


I've been suggesting this for two years and at some point a gold backed/implied GFRN happens. 2-3 years is my guess.

Or Upon the October Release...... 


Apr 24, 2013 - 10:47am

REALLY good stuff from Jim Quinn

The concluding paragraph:

"The entire episode was an epic fail. The gang that couldn’t shoot straight needed an old man to find the bomber in his backyard boat. The people of Boston exhibited the passivity and subservience demanded by their government. Since the capture of the remaining terrorist, the shallow exhibitions of national pride at athletic events and smarmy displays of honoring the police state apparatchiks who screwed up – allowing the attack to occur and looking like the keystone cops during the pursuit of the suspects, has revealed a fatal defect in our civil character. We are living in a profoundly abnormal society, with millions of medicated mindless zombies controlled by a vast propaganda machine, who seemingly enjoy having their liberties taken away. Most have willingly learned to love their servitude. For those who haven’t learned, the boot of our vast security state will just stomp on their face forever. We’re realizing the worst dystopian nightmares of Orwell and Huxley simultaneously. This abnormalcy bias will dissipate over the next ten to fifteen years in torrent of financial collapse, war, bloodshed, and retribution. Sticking your head in the sand will not make reality go away. The existing social, political, and financial order will be swept away. What it is replaced by is up to us. Will this be the final chapter or new chapter in the history of this nation? The choice is ours."

Apr 24, 2013 - 10:49am

attack from outer space!

NEW HAVEN, Conn. – A Yale scientist says a rock that crashed through the roof of a home in Wolcott was a meteorite.

Sen. Dianne Feinstein introduces bill to regulate astrology.

Read more:
Apr 24, 2013 - 10:50am

Repost - Freedom Girl

I don't believe this has been posted but is important for those that bought Freedom Girls and not received them yet. Please click on the link to read the full article.

Update 4: I Have Severed ALL Ties With Rob Gray and Mulligan Mint

By Silver Shield, on April 17th, 2013

Screen Shot 2013-04-18 at 12.28.44 PMI originally met Rob Gray through a friend and member who introduced us both related to his testimony before Ron Paul’s subcommittee. Thereafter, we had conversations for several months about silver, etc. and even traveled to Silver Summit together. When I started business dealings with Rob Gray we had a business deal that I would design and promote my Silver Bullet Silver Shield medallions and he and his new Mulligan Mint would produce and fulfill them. Seemed like a very simple straightforward business relationship.

Nick Elway
Apr 24, 2013 - 10:50am

Silver Above Ground suggests GSR 4.5:1 possible


1.Silver is NOT scarcer than gold. If we use the consensus Gold-above-ground number of 166000 Tonnes and our number of 748000 Tonnes, then the ratio is 4.5 silver ounces above ground for every gold ounce above ground. For those that disagree with including silver jewelry and silverware in the silver total, please be reminded gold jewelry IS in the gold total.

Apr 24, 2013 - 10:51am

Physical-Paper Gold Dichotomy Endures As ETF Liquidation Reaches

Physical-Paper Gold Dichotomy Endures As ETF Liquidation Reaches 10M ozs. While Mint Runs Out Of Coins

Apr 24, 2013 - 10:52am

Keep Calm and Stack On...

Everything else is noise.

TexMetals, Apmex, Gainesville - No ASE, No Silver Maples. Rounds are low inventory or not available. Even junk silver is out. Did find some Canadian Antelopes at Apmex so I have a tube on the way.

Be right and sit tight.


Apr 24, 2013 - 10:53am

Great read on the market

From Cassey Reasearch

Physical Gold vs. Paper Gold: The Ultimate Disconnect

Bud Conrad, Chief Economist April 23, 2013 5:06pm GMT

How can we explain gold dropping into the $1,300 level in less than a week?

Here are some of the factors:

  • George Soros cut his fund holdings in the biggest gold ETF by 55% in the fourth quarter of 2012.
  • He was not alone: the gold holdings of GLD have contracted all year, down about 12.2% at present.
  • On April 9, the FOMC minutes were leaked a day early and revealed that some members were discussing slowing the Fed $85 billion per month buying of Treasuries and MBS. If the money stimulus might not last as long as thought before, the "printing" may not cause as much dollar debasement.
  • On April 10, Goldman Sachs warned that gold could go lower and lowered its target price. It even recommended getting out of gold.
  • COT Reports showed a decrease in the bullishness of large speculators this year (much more on this technical point below).
  • The lackluster price movement since September 2011 fatigued some speculators and trend followers.
  • Cyprus was rumored to need to sell some 400 million euros' worth of its gold to cover its bank bailouts. While small at only about 350,000 ounces, there was a fear that other weak European countries with too much debt and sizable gold holdings could be forced into the same action. Cyprus officials have denied the sale, so the question is still in debate, even though the market has already moved. Doug Casey believes that if weak European countries were forced to sell, the gold would mostly be absorbed by China and other sovereign Asian buyers, rather than flood the physical markets.

My opinion, looking at the list of items above, is that they are not big enough by themselves to have created such a large disruption in the gold market.

The Paper Gold Market

The paper gold market is best embodied in the futures exchanges. The prices we see quoted all day long moving up and down are taken from the latest trades of futures contracts. The CME (the old Chicago Mercantile Exchange) has a large flow of orders and provides the public with an indication of the price of gold.

The futures markets are special because very little physical commodity is exchanged; most of the trading is between buyers taking long positions against sellers taking short positions, with most contracts liquidated before final settlement and delivery. These contracts require very small amounts of margin – as little as 5% of the value of the commodity – to gain potentially large swings in the outcome of profit or loss. Thus, futures markets appear to be a speculator's paradise. But the statistics show just the opposite: 90% of traders lose their shirts. The other 10% take all the profits from the losers. More on this below.

On April 13, there were big sell orders of 400 tonnes that moved the futures market lower. Once the futures market makes a big move like that, stops can be triggered, causing it to move even more on its own. It can become a panic, where markets react more to fear than fundamentals.

Having traded in futures for over two decades, I want to provide some detail on how these leveraged markets operate. It's important to understand that the structure of the futures market allows brokers to sell positions if fluctuations cause customers to exceed their margin limits and they don't immediately deposit more money to restore their margins. When a position goes against a trader, brokers can demand that funds be deposited within 24 hours (or even sooner at the broker's discretion). If the funds don't appear, the broker can sell the position and liquidate the speculator's account. This structure can force prices to fall more than would be indicated by supply and demand fundamentals.

When I first signed up to trade futures, I was appalled at the powers the broker wrote into the contract, which included them having the power to immediately liquidate my positions at their discretion. I was also surprised at how little screening they did to ensure that I was good for whatever positions I put in place, considering the high levels of leverage they allowed me. Let me tell you that I had many cases where I was told to put up more margin or lose my positions. Those times resulted in me selling at the worst level because the market had gone against me.

The point of this is that once a market moves dramatically, there are usually stops taken out, positions liquidated, margin calls issued, and little guys like me get taken to the cleaners. Debates rage about the structure of the futures market, but my personal opinion is that a big hammer to the market by a well-heeled big player can force liquidations, increase losses, and push the momentum of the market much lower than the initial impetus would have. Thus, after a huge impact like we saw on April 13, the market will continue with enough momentum that a well-timed exit of a huge set of short positions can provide profits to the well-heeled market mover.

Moving from theory to practice, one of the most important things to keep your eye on is the Commitment of Traders (COT) report, which is issued every Friday. It details the long and the short positions of three categories of traders. The first category is called "commercials." They are dealers in the physical precious metals – for example, gold miners. The second category is called "non-commercials." They include hedge funds and large commercial banks like JP Morgan. Non-commercials are sometimes called "large speculators." The rest are the small traders, called "non-reporting" since they are not required to identify themselves. The ones to watch are the large speculators (non-commercials), as they tend to move with the direction of the market. Individual entities could be long or short, but in combination the net position of the group is a key indicator.

The following chart shows the price of gold as a blue line at the top, and the next panel down shows the net position of these large speculators as a black line. You can see that over the long term, they move together. When the net speculative position is above zero, this group is betting on rising gold prices. Of course, the reverse is true when it's below zero. In this 20-year view, the large speculators were holding net negative positions during the lowest point of the gold price, around the year 2000. As the price of gold rose, their positions went net long, and they profited.

An interesting thing about the chart above is that the increasing amount of net longs reversed itself before gold peaked in 2011, suggesting that these large speculators became slightly less bullish all the way back in 2010. The balance remains net long, but it remains to be seen how long that lasts.

What is not so obvious is that these large speculators are so big that they can affect the market as well as profit from it; when they initiate massive positions in a bull market, they drive the price of the futures contracts even higher. Similarly, when they remove their positions or actually go short, they can push the market lower.

So what happened a week ago was that a massive order to sell 400 tons of gold all at once hit the market. Within minutes the price plummeted, and over a two-day period resulted in the largest drop of the price for futures delivery of gold in 33 years: down $200 per ounce.

We don't have the name of the entity that did this. However, the way the gold was sold all at once suggests that the goal was not to get the best price. An investor with a position of this size should have been smart enough to use sensible trading tactics, issuing much smaller sell orders over a period of time. This would avoid swamping the market; and some of the orders would be filled at higher prices and thus generate more profit. Placing a sell order big enough to affect the overall market price suggests that someone with powerful backing wanted to drive the price of gold down.

Such an entity could have been a large speculator who already had a sizable short position and could gain by unloading some of its short position once the market momentum had driven the price even yet lower. Or it could be a central bank – one that might be happy to have the gold price move lower, as it would provide cover for its printing of more new money. Of course, it could be some entity that owned long contracts and wanted to get out of the position all at once. We don't know, but this kind of activity, resulting in the biggest drop in 30 years, raises more than just suspicion when we consider how important the price of gold is to many markets around the globe.

Can markets really be influenced by big players? Well, was the LIBOR rate accurately reported by huge banks? Have players ever tried to corner markets? The answer to all the above, unfortunately, is yes.

There's an even bigger problem with the legal structure of the futures market: even the segregated funds on deposit can be pilfered by the broker for the brokerage's other obligations. That is what happened to MF Global customers under Mr. Corzine. (I had an account with a predecessor company called Man Financial – the "MF" in the name. I also had an account with Refco, which is now defunct. Fortunately, the daggers did not hit my account, since I was not a holder when the catastrophes occurred.) My take: the futures market is dangerous, and not a place for beginners.

One last note: after the Bankruptcy Act of 2005, the regulations support the brokers, not the investors, when there are questions of legality about losses in individual investment accounts. Casey Research will be producing a report with much more detail on this subject in the near future.

So, what now? We aren't going to see a secret memo – no smoking gun to confirm that what happened on April 13 was an attempt to affect the market. Still, the evidence is suspicious. When big entities can gain from putting on big positions, the incentives are big enough for them to try – LIBOR, Plunge Protection Team, Whale Trade, etc., all support this view.

The Physical Gold Market

Previously, there was little difference between the physical and paper markets for gold. Yes, there were premiums and delivery charges, but everybody regarded the futures market as the base quote. I believe this is changing; people don't trust the paper market as they used to.

Instead of capitulating to fear of greater losses, the demand for physical gold has hit new records. The US Mint sold a record 63,500 ounces – a whopping 2 tonnes – of gold on April 17 alone, bringing the total sales for the month to 147,000 ounces; that's more than the previous two months combined. Indian markets, which are more oriented to physical metal, now have a premium of US$150 over the futures price in Chicago. Demand at coin dealers has increased as the price has dropped. And premiums are much bigger than they were as recently as a week ago.

Here is a vendor page that quotes purchase prices and calculates the premiums on an ongoing basis. It shows premiums of 50% and more in many cases. On eBay, prices for one-ounce silver coins are $33 to $35, where the futures price is quoted as $23. A look on Friday April 19 shows one vendor out of stock on most items:

Buy - Sell On Silver Bullion
2013 Sealed Mint Boxes Of 1 Oz. Silver American Eagles - Brand New Coins 500 Coin Min.
(1 Sealed Box)
Buy @
Spot + $1.80
Sold Out
2013 Sealed Mint Boxes Of 1 Oz. Silver American Eagles "San Francisco Mint" Brand New Coins 500 Coin Min.
(1 Sealed Box)
Buy @
Spot + $2.00
Sold Out
90% Silver Coin Bags (Our Choice Dimes Or Quarters) $1,000 Face Value Figured at 715 Ozs Per $1,000 Face $1,000 Face
Value Min.
We Buy @
Spot + $1.70
Per Oz (Spot
+ $1.70 X 715)
Spot + $4.99 Per Oz
(Spot + $4.99 X 715)
90% Silver Coin Bags 50¢ Half Dollars $1,000 Face Value We Ship in 2 $500 Face Bags $1,000 Face
Value Min.
We Buy @
Spot + $1.90
Per Oz (Spot
+ $1.90 X 715)
Sold Out
90% Silver Coin Bags Walking Liberty Half Dollars $1,000 Face Value We Ship in 2 $500 Face Bags $1,000 Face
Value Min.
We Buy @
Spot + $2.10 Per Oz (Spot
+ $2.10 X 715)
Sold Out
Amark 1 Oz. Silver Rounds ( Made By Sunshine ) Pure .999 BU 500 Coin Min. Buy @
Spot -15c
Sold Out

Clearly, the physical gold market today is sending different signals than the paper market.

The Case for Gold Is Still with Us

The long-term fundamental reasons to hold gold are undeniably still with us. The central banks of the world are acting in concert in "currency wars" or "the race to debase." As they print more money, the purchasing power of each unit declines. They are caught between the rock of having to keep interest rates low to support their governments' huge deficits and the hard place of the long-term effect of diluting their currency. If rates rise, even First World governments will be forced to pay higher interest fees, leading to loss of confidence in their ability to pay back their debt, which will bring on a sovereign debt crisis like what we have seen in the PIIGS or Argentina recently.

The following chart shows the rapid growth in the balance sheets as a ratio to GDP for the three largest central banks. I've extrapolated the expected growth into the future based on the rate at which they propose to buy up assets. One could argue about how long these growth rates will continue, but the incentives are all there for all central banks to bail out their governments and their commercial banks. I fully expect the printing game to continue to provide the fuel for hard-asset investments like gold and silver to increase in price in the years to come.

Buying Opportunity or Time to Flee?

So what does it all mean? The paper price of gold crashed to $1,325 in the wake of this huge trade. It is now hovering around $1,400. My first reaction is to suggest that this is only an aberration, and that the fundamentals of the depreciating value of paper currencies will eventually take the price of gold much higher, making it a buying opportunity. But what I can't predict is whether big players might again deliver short-term downturns to the market. The momentum in the futures market can make swings surprisingly larger than the fundamentals of currency valuation would suggest.

Traders will be looking for a significant turnaround to the upside in price before entering long positions. However, a long-term, fundamentals-based trader has to look at the low price as a buying opportunity. I can't prove it, but I think the fundamentals will drive the long-term market more than these short-term events. The fight between pricing from the physical market for bullion and that from the "paper market" of futures is showing signs of discrimination and disagreement, as the physical market is booming, while prices set by futures are seemingly pressured to go nowhere.

In short, I think this is a strong buying opportunity.

Apr 24, 2013 - 10:54am

repost: Could there be REAL gold in the printing ink?

How about with 50K per oz gold that the gold coloured ink used could contain $100 worth of gold. It would solve many of the problems of sound money and fiat currency. It would serve all the needs of currency, still be controlled by the elite, be of a high enough denomination to be a store of value and be limited in production due to the gold content. It would have to work along side a gold backed digital currency but possible?

Apr 24, 2013 - 10:54am

something about this stuff...

It just doesn't go out of fashion

Apr 24, 2013 - 10:54am

turd, re: jim quinn article

this one goes about the same place but has a real zinger at the end to wind it up.

tonyw TF
Apr 24, 2013 - 10:59am

REALLY good stuff from Jim Quinn

Terrorize the population so they look to the state for protection - classic.

It's hard but:

Think if the future of all human civilisation depended on me, what would I do, how would I be?
Did I do all that I could?

IMHO chanting USA! USA! is not the right answer.

John Galt SIlverbee
Apr 24, 2013 - 11:01am

@ Silverbee

Not likely.

There was real silver and real copper in the coinage once too, but those got pulled from circulation because they had REAL value.

I think tungsten would be a far more likely metal to be embedded in the $100 bill.

Apr 24, 2013 - 11:07am

GLD still circling and draining

Down another 7.52 metric tonnes yesterday


241,773 troy ounces


604 London bars


3 of these with 28 bars left over.

Apr 24, 2013 - 11:08am

Great article on silver

except that silver does not trade on fundamentals in a free market, unfortunately. Until unlimited FRNs are no longer being printed to allow unlimited naked short positions, it just won't matter.

Texas Sandman
Apr 24, 2013 - 11:10am

APMEX has 3 secondary market 100 oz engelhards for sale

That's all. And they're $2.50 above spot now. I remember a time not long ago when you could get a nice new one (Johnson Mathey or RCM) for 89 cents or at most a buck premium.

That's all they have.

Apr 24, 2013 - 11:18am

And as many of you already know

The U.S. Mint suspended production of 1/10 ounce gold coins yesterday.

Of course, The Mint was originally charged with "creating enough coins to satisfy demand" but that was changed in 2011 to "creating as many coins as the SecTreas sees fit".


Regardless, as of yesterday's update, The Mint has now sold 183,500 ounces of gold in April alone. Note this:

January: 150,000 ounces

February: 80,500

March: 62,000

The highest sales month on record is December 2009 with 231,500. With 8 days to go, we've got a shot!

Gold Dog
Apr 24, 2013 - 11:20am


Just ordered 50 Gold Buffs from Liberty. Two week delivery.

As info.


PS- Now to read the above!

Apr 24, 2013 - 11:21am

@Nick Elway Above ground Silver

Man o Man. I forgot about the data that I was trying to collect on Resources by country...honestly once Asutralia hit the mix the data was very hard to find.

Either way the in ground silver ratio between Canada Australia and the US preliminary data suggests 7.3 S/G to 1. Looking at the data there was a steady decrease from 2002 to now. The greatest fall in the ratio came from the USA, working from memory I believe it was 6.3 according the USGS. Canada came in next at 7.2 or 7.3.

Looks like I may have start the research again, but I do not doubt previous work done by others.

Apr 24, 2013 - 11:23am

4th possibility

The '16:1' rule could be nonsense?

The average ratio for the whole of the 20th century was 47:1 (source). That's an enormous difference, and suggests there is nothing currently out of whack. I don't know where 16:1 comes from, but I'll take 110 years of the most recent data over whatever 'historical' swath indicates a 16:1 ratio any day of the week.

Stack'em High
Apr 24, 2013 - 11:29am

gold's BIG brother: silver.

Milton Friedman stated "The major monetary metal in history is silver, not gold."

Stack'em High
Apr 24, 2013 - 11:31am


110 years vs 5000 years. You obviously can't see the forest for the trees...

Apr 24, 2013 - 11:36am

Gold/Silver ratio at 62

Gold/Silver ratio at 62 today, where does it go from here? I would think lower, hopefully into the low 50's at some point this year.

As far as going into the 20's or even teens, that is a far away.

Maybe if the paper market ended it would happen, but that's a big if.

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