Friday, February 27, 2009

New Silver Bugs and other stuff.

It would seem that the fear generated by all the failures, bailouts, evictions and graft is a great motivator in driving people to finally purchase silver. I’ve blogged for several years about supply deficits, historical ratios, the destruction of fiat money, inflation and general financial chaos but at no time have I seen so many people jump on board in such a short period of time as I have seen recently.

In the last two weeks I’ve had three acquaintances and one reader make their first silver purchase. I’ve also had several personal inquires asking for more information (apparently some work place sleuth has connected the real me to the web me). I’m glad to see this trend because in all honesty I’m all tapped out and can’t see myself accumulation very much more in the near future unless I suddenly become the best and most famous blogger in cyberdom and the ad revenue begins to reflects this. (Not bloody likely)
I’d really like to see this market pop sooner than later so I can turn my silver into land and finding others to absorb supply and spread the legitimacy of silver investments was the key reason to start this blog in the first place and I’m glad to see the recent growth.

Something I’ve told my friends who have bought silver recently is something like this. Even if you only bought a meagre 10 ounces you’ve now become a very rich person. World production sits at about 670 million ounces a year and world population is just over 6.7 billion, or 1/10 of an ounce per person per year. Your purchase represents 100x your share of the worlds silver money created this year. Estimates of the total world silver stockpile ranges from 1 to 10 billion ounces once again proving you have more than you share of the world’s real money. Silver is real money, silver is rare, silver is industrially vital and you have it.. In the famous worlds of Daffy Duck "I'm a Happy Miser"

I don’t have a lot to say these days as other concerns are keeping me busy but it looks like we might have a couple of weeks of correction, at least that’s what a couple of chart fetishers tell me. They say we are well overbought and that a correction and consolidation need to take place for further gains, they also tell me as long as it’s not too deep or prolonged this is a dip we should be looking to buy on. Me I’m no longer sure the chart can predict everything, sure some guys trade the chart exclusively but panic and the small size of the metals market could lead to a nasty surprise. I’m holding my HBP gold bull ETF and may even add a bit (a very small bit) gold correct below $900, as for the actually metal “From My Cold Dead Hands” or a 20 fold increase in price. As for silver, unless I trip over some rounds or junk silver on a good day when I have cash I can’t see me buying much this year.

For locals, Scotia Bank does have maples in stock, but I’m not sure what else. When you can find product right now there is little variety in manufacture or size, simply buy what you can find. First Majestic direct sales must be getting its act and supplies chain in order as the limits on some products have been increasing.

As I understand it, small gold is similarly scarce in the GTA.

Continued bloodshed is taking place in the markets with yet another bank, the Silver Falls Bank of Silverton, Oregon, failing last Friday and no doubt another or eight will be thrown on the bon fire tonight when the FDIC Ninjas descend.

The Big three story is getting just too stupid; there is too much supply, too much debt, and too few good products and much like the movie Highlander “There can be only one”, or at the very least one must be left to die so the others have a better chance.

Chrysler is private so let the fund that bought them bail them out, GM is hemorrhaging like an Ebola victim leaving Ford. As the only company not asking for money at this point Ford should be the victor. Their cars have got a lot better and if they started making or importing their European models for N.A. they could easily compete with the Japanese.

AIG, shudder I can’t even go there, what a mess

If that was not bad enough the IMF believes up to 16 countries face bankruptcy and has no funds to deal with the problem.

Lastly I’d like to remind you that financial troubles are not the only things that are endangering our way of life and invite you to peruse my post on the phenomena of Peak Oil Doomers


Sebastian Ernst Ronin said...

"US Mint Suspends Production of More Gold and Silver Coins"

What's your take? I tend to lean towards commenter Tom Andersen at 4:46 p.m.

Anonymous said...

I think the mint is stuck a rock and a bigger rock. They are required by statute to create enough eagles with domestic bullion to meet demand. The problem is however they do not own the means of production for gold and silver blanks having abrogated their responsibility to produce them to a private mint which for silver at least is in direct competition for blanks with the mint.(much like giving the Fed the power of money printing that constituionaly belongs to the treasury)

They must try to produce as many eagles as demand requires lest they be sued and unlike last year they now know they will be short so they are cancelling other minting programs early. The law does not specify proof/collector/circulation quality in the law requiring production "in quantities sufficient to meet public demand" so in a crunch they will produce the easiest product to produce, circulation quality coins.

We can't know if this is to limit total supply until year end numbers appear. If total mint production stays as high or higher than last year than its just a way to make production all the same lower quality to speed things up. If production drops significantly then we'll know ( but probably too late)

With this being the second year of this crap Bama should be stimulating jobs by opening a state run blank factory.

I wish the Canadian mint would do a 22k circulation coin, something that would take a little wear and tear if it had to be used after fiat collapse.

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