Tuesday, November 14, 2006

Where is silver going: Expert Quotes

Below is a series of quotes from some of the biggest voices in the pro silver camp on the peak silver price. I don’t expect you to accept anyone of these predictions as fact, they are just predictions. They are however useful in realizing just how much exuberance there is in the market. Silver once ignored is becoming a contrarians dream, an essential commodity that can be owned physically, is in supply deficit, has growing demand, and has a history of real money and retention of wealth, ideal in a time of inflation, and possible fiscal crisis. Silver is being ignored by most main steam investors and is still a very good buy if you can hold for up to 3 years.

Doug Casey, Chairman Casey Research

“Will silver hit its previous 1980 high? It was $48.70 then, but that's $120 in today's dollars-almost 10 times the current price. Given that just below the surface, the threats to the U.S. economy are even greater today than in the late 1970s, we can easily envision silver closing in on its previous high and even going way beyond it.

When will this come to pass? No telling. But, periodic and inevitable corrections aside, it's going to happen, of that we are confident. And, more to the point of our service, when it does, the silver stocks we follow on behalf of our readers won't just go to the moon, they'll leave the solar system. “

Howard Ruff of the Ruff Times Newsletter and author of one of the books you’ll find on my sidebar from Amazon.

“The worst financial decision you could make in 2006 is to ignore gold and silver. This one mistake will cost you more than all the dumb financial decisions you can make put together.
Gold and silver are now early in a historic bull market that will dwarf the 500-1700% profits we made in the 70's.
Gold will hit at least $2,172, and $100 silver is inevitable. Is it unreasonable to expect such returns? Those are not unprecedented numbers. In 1980, gold hit $850 and silver hit $50. If you adjust those numbers for inflation since then, the metals will not make new highs until $2,172 (gold) and $125 (silver).”

Jack Weber, Pres
Golden Eagle Enterprises

“In projecting the future prices of gold and silver, we believe that the foregoing factors have given us the basis for anticipating that between 2005 and 2010, the price of silver could very possibly exceed the price of gold. This is not an idle wish, but a carefully calculated "staking-our-reputation" conclusion, based upon the foregoing factors. We hope this essay has helped you to make a beneficial financial decision - to GET SOME SILVER!”

Israel Friedman,
Long time silver bug and occasion contributor to Butler’s Commentary.

“In stage one, pre-shortage, I think investors will be willing to sell 50 million ounces at a price between $20 to $30. Stage two, shortage, investors will sell 200 million ounces between $30 and $100. And the remaining 150 million ounces will be sold in stage three, super shortage and the prices will be truly shocking.”

Jason Hommel of the Silver Stock Report

“There is no need to fear a price spike in silver, or a drastic drop. The bigger fear ought to be that even though you know all of this, silver prices will rise swiftly past $100/oz., before you decide to buy all that you want, and will continue to grind ever higher, for decades to come”

“I like silver better than gold for a number of reasons. Mainly they can all be summed up in the ratio, which is about 52 to 1. You can buy 52 ounces of silver for the same price as 1 ounce of gold. I think this ratio will easily return to the historic ratio of 15 to 1 very easily, and as silver does that, it will outperform gold by about a factor of just over 3. You will make three times as much money owning silver, than gold by the time the ratio hits 15:1.

I think silver will do better than 15:1. It may hit 5:1, or even 1:1. If that happens, you will make far, far more money in silver than gold”
I think silver will head beyond $8000/oz., in less than 15 years.

I can’t help but comment on this site and the message. Under no circumstances do I believe that investing in silver because GOD said so, is a rational basis for investment. While the site agrees with the basics of silver supply deficit GOD is not an investment banker, to buy silver for that reason is as irrational as believing fiat currency is money. The silver story is one of manipulation, demand, supply and necessity; not burning bushes.

David Zurcuchen of Silver in Scripture

“Without serious dollar dilution, which seems unlikely, I expect silver to peak at around $200/ounce and gold at around $5,000/ounce.”

Similar to the above in some cases but most of the articles keep religion and investing separate. I can live with that.

Ted Butler , writer of Butler's Commentary

Butler is one of the most prolific and well written of all the silver bugs out there. Butler’s articles are well rounded and informative with the intent of showing investors that silver is manipulated and undervalued. There are mentions of silver price explosions but he never sets an actual price. So while I cannot give you a price quote, I could not mention silver bulls without mentioning the work of Ted Butler.

I respect actually Butler's unwillingness to set a price more than others who claim $8000/oz silver. Butler shows you the facts and let’s you set your own investment goals. Those claiming the highest prices would seem to be more intent on keeping demand high enough long enough to make sure they can sell their stakes without selling the price down. Butler gives his research and an opinion freely, never asks for subscriptions and never flogs stocks. While I did not find a target silver price from Butler’s articles, I have to say that his opinion carries a great deal of weight with me and was instrumental in my decision to buy silver. It’s too bad however that he never warned me about the stigma a metals bugs can generate. Are there people in his family who thinks he's nuts, like mine do?

Anyone who believes in the silver story usually believes that a return to the highs of 1980 adjusted to inflation is a reasonable goal. Many think it that a panic or fiscal crisis could force silver to go much higher but I don’t bank on that. I firmly think that a goal of $100-120/oz. is nothing to snicker at and it does not take $500/oz. silver to make this a good buy now. Prices beyond $120 would be gravy but why would you need more than 1000% increase to convince you silver would be a good investment. Personally, I’m usually quite happy to get into a stock, make 30% and get the hell out before greed makes me lose some of my gains. Supply and demand says silver will go up; 300% profits have already been made without any appreciable substitution effect, no great increase in production, recycling, or scrap. In the silver story we’ve only seen the trailer, the full feature is yet to be released.

The books I have listed for sale all tell the tale of the end of days for the U.S. dollar, weakness in the total economy, and the potential for metals as a safe haven investment. Silver is a twofer, you get an industrial metal that is a deficit situation and you get a form of real money that can not be inflated and devalued. I'm not making this stuff up, this real, it may be hidden by bankers, government and brokers, but then again they have a stake in the status quo. Don't get caught without at least a little piece of financial security, buy some silver.