Click here to get Web Traffic Infusion

Tuesday, September 30, 2008

Gold and silver dealer reports an ‘unprecedented’ shortage of metals PT II

I hope you're buying all of the silver and gold that you can! I am not currently able to buy gold, so I'm thankful for Silver Snowball.

Some of the largest wholesalers in the world are out of all bullion product except for exchange bullion product - 100 ozt and 400 ozt gold bars and 1,000 ozt silver bars. They cannot supply South African Krugerrands, American Eagles and Buffaloes, Canadian Maples, Austrian Philharmonics, Chinese Pandas, Australian Nuggets (all 1 ozt).

They cannot supply 1 oz or 10 oz gold bars or 1, 10 and 100 oz silver bars. And I have confirmed they cannot sell any European or world gold coins such as British sovereigns, francs, marcs, Mexican pesos etc. etc. They have confirmed that there is no physical supply at all from the primary marketplace - large refiners and government mints.

Worryingly they are being informed that this is not a temporary problem and there are no supply side commitments and there is little in the pipeline for the foreseeable future due to excessive and unprecedented demand. Secondary supply from the public and retailers is nearly non existent as there are nearly no sellers and nearly all buyers. Bullion shortages and the confluence of unprecedented supply and limited demand in conjunction with macroeconomic, inflation and systemic factors is leading to extremely bullish conditions for the gold market - probably even more bullish than in the 1970s when gold rose some 3,000% from $35 to over $850 in just 9 years.

Buy Silver Coins

~~~

Outstanding Work at home Opportunity
Recorded overview: 1-212-990-6973
Call Tracy for more information: 1-413-773-0779

Monday, September 29, 2008

Gold and silver dealer reports an ‘unprecedented’ shortage of metals

Another article on precious metals scarcity. Buy silver coins here.

Gold and silver dealer reports an ‘unprecedented’ shortage of metals 28 September 2008
By David Clerkin, Markets Correspondent

A surge for demand in gold and silver has resulted in an unprecedented shortage of the metals for retail investors in recent days, according to Gold and Silver Investments, a Dublin-based firm that allows retail investors to speculate on movements in the value of precious metals.

Gold and Silver Investments director Mark O’Byrne said the supply of gold and silver available for small retail investors suffered a dramatic deterioration within hours on Friday, as wholesalers reported that government mints and refiners, the primary suppliers of the metals, had stopped offering new supplies. ‘‘It’s absolutely unprecedented,” said O’Byrne, who said the shortages were likely to drive up the costs of gold and silver in the secondary market. ‘‘This did not happen even in the 1930s and the 1970s, and will result in markedly higher prices in the coming months.”

According to O’Byrne, gold and silver were now only easily accessible in the primary market, which consisted of central banks and other major traders of the precious metals. However, he said that minimum transaction sizes in this market were out of reach for most retail investors - at approximately $350,000 for gold and $135,000 for silver.

End

Why buy Silver Coins?

Thursday, September 18, 2008

Why Silver; Why Silver Eagles, written by Israel Friedman in December of 2007

An excellent article on why you would want to buy silver coins. enjoy!

Why Silver; Why Silver Eagles

I'm going to tell you why silver is the best
investment available today. The first question you
have to ask yourself is why silver should be good
for the future. Here's what determines that;

Is silver a necessary metal?
Are world stocks of silver lower than 5 years ago?
Are world stocks of silver likely to be lower in 5 years?
Is there a chance, at some point, to have a shortage in silver?

If the answers will be yes on those 4 questions,
the probabilities are that owning silver will
enrich you in the future.

Based upon this formula, the answers for gold are
"no" for all the 4 questions, so in the future,
we could see devastation for gold prices. And if
gold prices hold, or move higher, the comparisons
will even be better for silver. Take into
consideration this point ­ silver is a rare and
strategic metal and industry cannot do without
silver. Today we are left with a minimal supply and
this can produce a worldwide shortage of silver.

Money cannot solve a shortage of material, only
material can. When the industrial users come into
the market for real material, the shorts will be
destroyed. At that time we will have a bigger
scandal than the subprime mortgage crisis of
today. In my opinion, we need a shortage to put
silver in a free market. When this occurs the
real value will come and no one can predict what the
price will be.

Mr. Butler has a modest view on future prices,
and my opinion is more extreme. I can see very high
prices. If I tell you the price you will need a
seatbelt, not to fall from your chair. With this kind of
opinion on future silver prices, what is the best
single form for buying and holding real silver?
Looking at my crystal ball, considering that a
silver shortage is likely, and that silver prices
will then reach or exceed the price of gold; I
think silver Eagles are the best way to own
silver. Why?

I can see silver prices so high, that the risk of
imitation or phony silver coming to market will
be great. Great price increases always bring out
frauds and crooks. People will want to be sure
they are buying the real thing. Coins are more
difficult to counterfeit than paper instruments. At
current silver prices, there has been no big
incentive to counterfeit silver Eagles or other forms
of silver. Because the US Mint produces silver
Eagles, an added level of protection against
counterfeiting is present. The US Government does
not sit still on counterfeiting.

Because Silver Eagles are sold at a premium to
the price of silver from the Mint to wholesalers,
few if any of the 160 million regular silver
Eagles minted and sold since 1986 have been, or will
ever be melted for their silver content. The same
with millions of more expensive Proof Eagles and
commemorative silver coins issued by the Mint.
Silver Eagles that are sold by investors are bought
by other coin investors. Therefore, the silver
used in Eagle production is taken off the market,
in my opinion, forever.

But the premium on Silver Eagles will explode
someday, because the Mint will stop making them in
the future. When the silver shortage comes, and
prices start to escalate wildly, the US Government
will not wish to aggravate the shortage by
continuing to take silver off the market. By then, the
users will be screaming for relief from high
silver prices and the mint will see this.

According to Mr. Butler, before the gold and
silver Eagle program began in 1986, it was decided
that, in order not to hurt domestic miners, only
metal purchased from domestic miners would be
used in the Eagle program, so government owned
metal wasn't dumped on the market.

But the Silver Users Association, fearing higher
silver prices because of demand for Silver
Eagles, lobbied behind the scene to change things
to their advantage. They couldn't kill the
program completely, but the silver users were
still successful. Gold was left unchanged in that
domestic production was to be used, but silver
was changed so that only silver from the Strategic
Defense Stockpile was to be used for Eagles,
until it ran out, which it did in 2001. Since then,
the US Mint has had to buy more than 50 million
ounces of silver to produce silver Eagles.

It will not take much convincing by the silver
users to get the US Mint to cease production of
Silver Eagles, when the silver shortage hits. So
a premium could develop, if and when that
happens. The same kind of premium that develops
when an artist dies and it becomes known there
will be no more new works of art from him. Now
some may say, what kind of numismatic premium could
develop on a modern bullion coin with a total
amount in existence of more than 160 million? I say,
a very big premium. The Silver Eagle is no
ordinary coin. It is the world's leading silver bullion
coin. The US Government guarantees its purity and
weight. It is recognized everywhere. In the
years to come, people from all over, including
India and China, will want to buy them. It is, in
my opinion, the most beautiful coin in the world.

At any point in time, very few old Silver Eagles
are available for sale in any large quantities.
That's because Silver Eagles are widely held by
many small investors and coin collectors.
Many are given as gifts and hold sentimental
value. Grandparents, like me, set them aside for
their grandchildren. Silver Eagles are not a
trading vehicle, they are mostly held for the long term.
The market relies on the fact that new coins from
the Mint will always be available for sale, in
order to satisfy new demand. But always isn't forever.

When the shortage comes and silver explodes, the
price will be so high that most people won't be
able to afford even a 100 ounce bar. Then, there
will be much more demand for silver in one-ounce
denominations, just like there is for gold today.
That extra demand will put a bigger premium on
the smaller pieces compared to bigger bars. The
best small piece is the Silver Eagle and it will
have the biggest premium of any other one-ounce
choice. Also, it will be easier to sell in one-
ounce pieces when prices are sky-high.

I think the premium on Silver Eagles will go to
such crazy levels, that out of respect for Mr.
Butler, I will not say a number, because he
thinks it will sound too extreme. Instead, I will be
very conservative and just say that in the
future, when the silver shortage comes, the premium on
Silver Eagles to the price of silver will be much
greater than the total cost of an Eagle today.
If that comes true, it's like buying silver at today's price for free.

To those who are inclined to own silver, buy
Silver Eagles. To the gold investors, please change
some gold into Silver Eagles. If anyone is lucky
enough to buy, say, 1000 Silver Eagles or more,
in 15 years it will be worth a sum that will
shock you. Don't think for one minute that I have a
financial interest in selling Eagles. I don't
work for the Mint or for commissions. I write for
love of silver and my friend Ted Butler.

Taken from Ted Butler's archive http://www.investmentrarities.com/12-03-07.html

* * *


Silver Eagles - Get 'em while you can :-)
www.WhyBuySilverCoins.com