WARNING: Silver Prices Are Going To Explode
If you own silver read this now!
Experts have stated if you own 1,000 American Eagle silver coins 15 years from now, you will be absolutely shocked at what they will be worth!
NEWS FLASH: “Silver Now Costs More Than Gold!”
This shocking headline will soon flash across newspapers around the world!
Want to know why? … Keep reading.
· Unlike gold, silver is consumable (i.e., actually used up) in most applications.
· In 1942, the U.S. Government had over 3 billion ounces of silver, but they ran completely out several years ago.
· Over 90% of all the silver mined in the past 5,000 years has been used up, and is gone forever.
· Right now, there is more than five times as much gold in the known world supply compared to the world supply of silver.
· Current world silver demand is around 900 million ounces per year, but the average worldwide production of silver is only 480 million ounces. In other words, we are only producing just over half the silver we use every year.
· Gold has been going through roof, but silver has yet to follow. The Gold/Silver Price Ratio has skewed way out of the historical norm of 20:1.
· The world silver supply is strictly limited and the world demand is growing.
· This is the perfect time to buy silver … before the price skyrockets!
· If you want to protect your financial future, you need to buy silver now.
· The best way to buy silver is stamped silver bullion or officially minted silver coins
Yes, it’s true, silver is actually consumed … used up … gone forever … in most of its industrial applications.
World production already can’t keep up with world demand, and the need for silver is growing daily.
So what does the coming “Silver Supply Crisis” mean to you?
Let me answer this way … What happens when you have continually growing demand for anything that has a strictly limited supply? …. The price Skyrockets!
All the gold ever discovered still exists, and we are mining more every month … and the price of gold has risen from under $300 per ounce in Jan 2001 to more than $1,240/ounce in June 2010?
Silver has even more applications than gold … disappears when used for most industrial uses … and production is only half the current demand … and yet, silver prices have not kept pace with gold. Imagine what will happen when silver is no longer available to make batteries, refrigerators, air conditioners, plastics, electronics, pharmaceuticals, solar cells, etc.
Trust Me You WILL See This Headline … within the next 10 years:
NEWS FLASH: Silver Now Costs More Than Gold!!!
This means you absolutely must buy silver now to protect, and dramatically enhance, your financial future! The easiest way to buy silver is to buy silver coins or silver bullion in the form of silver bars.
Experts have stated if you own 1,000 American Eagle silver coins 15 years from now, you will be
absolutely Shocked at what they will be worth!
WARNING: Silver Prices Are Going To Explode – Here’s Why …
There are six predominant reasons why silver prices are about to explode. If you are not investing in silver now, you need to read this article and buy silver now. If you are already investing in silver, you absolutely MUST read this report immediately!
It’s no secret gold prices have taken off since the year 2000 (less than $300 per ounce) to the present price over more than $1,300 per ounce. But even though silver prices have risen well over 100% in the last year, silver prices are still way behind gold. Historically, the ratio of the price of gold to the price of silver is around 20-to-1; with gold at ~$1,300 per ounce and silver at ~$24 per ounce, the current ratio is just over 54:1 … silver is way behind.
Far more important than the historical price ratio, however, the fundamentals of supply and demand are about to push silver prices to the extreme. Don’t be surprised if you see the heading, “Skyrocketing Silver Prices Now Higher Than Gold”, splashed across newspapers around the world … in the next few years.
There are six main reasons why silver prices will soon zoom past the price of gold. Each of these reasons is explained in detail below. Read these articles and buy silver coins now … before it’s too late.
Reason #1: The “Silver Short Squeeze” Is Going To Blow Silver Prices Through The Roof
In the futures market, speculators can sell futures contract for delivery of a fixed amount of silver (i.e., 5,000 troy ounces per contract) in the future even though they don’t own any silver. In most cases (i.e., pretty much all cases except with companies that actually mine and produce silver), the contracts are bought back to cover the shorted contract before the delivery date.
For example, a speculator could “sell a December 2010 Comex Silver contract” in March for a specified price per ounce of silver even though he doesn’t have 5,000 troy ounces of silver and doesn’t expect to actually deliver any silver. The sold contract commits the speculator to actually deliver 5,000 troy ounces of silver by a certain day in December 2010.
If the speculator doesn’t buy the contract back (hopefully at a lower price than he sold it), he is legally required to deliver the silver. However, he can buy back the contract and cancel the transaction. Of course, for the speculator to buy the contract back means there has to be someone willing to sell the contract to him. Finding a seller is not normally a problem in the futures
market, because there are actually producers of silver willing and able to deliver the silver.
However, silver is an extremely useful metal used in many, many industrial applications, and unfortunately, most of those applications actually use up the silver … in other words, it no longer exists after using it. Furthermore, the world demand and usage of silver is about double the current world production rate, and the U.S. Geological Survey has stated below-ground (i.e., not mined yet) supplies of silver are less than any other metal. So, we have a high-demand metal with a strictly limited supply.
This means eventually miners will no longer be able to deliver 5,000 troy ounces of silver.
To make things even worse, for the last 20+ years, there have been an inordinate number of shorted futures contracts on silver in the New York Commodity Exchange (i.e., COMEX). In fact, there are more shorted contract positions than can be covered by the current level of silver
production. The total shorted positions to date (hundreds of millions of ounces) is much, much larger than the current deliverable inventory of silver.
To date, this has not been a problem, because world governments have covered the deliveries through existing inventories. But now those inventories are generally non-existent. We have consumed approximately 90% of the last 5,000 years of mined silver; it’s all gone (except the silver used for jewelry, ornamental stuff, and silver coins).
When the shortage of real silver becomes apparent, all these shorted contracts will have to buy back their positions. The increased demand to buy back the silver contracts will push prices up (remember higher demand with lower supplies results in higher prices). Furthermore, there are already signs of the limited supplies through delayed physical deliveries.
This increase in price forces even more people to buy back their contracts since they lose money on positions already sold when the prices rise. This phenomenon in shorted positions where people are forced to buy back their positions because the price is rising is called a “Short Squeeze”. This term applies to shorted stocks as well as shorted futures.
When this “Short Squeeze” kicks in, a panic will ensue; this effect alone could drive silver prices to triple digits per ounce (i.e., greater than $100 per ounce).
When this happens, if you own silver … real silver … your investments will skyrocket in value. If you bought silver today, when silver prices rise to only $100 per ounce, you will realize a 300% profit! Buy silver now while it’s still cheap!
Reason #2: Lease Repayments
Over the last 20+ years, many central banks leased out their silver holdings as a hedging strategy and to generate revenues. As with anything leased, the legal intention is to eventually return the leased, or borrowed, asset. However, hundreds of millions of ounces of silver were actually used up in industry presumably with no real intention of returning the leased silver. As a result, most, if not all, of the leased silver bullion can not be returned.
However, as silver becomes more scarce, and hence more valuable, some of these central banks may demand a return of their leased silver bullion. If this occurs, the increased demand for silver assets will further push silver prices upward.
Unlike the “Short Squeeze” in the futures market (described above), demand for returned leased silver bullion will require the return of actual physical silver. Thus, the impact will be even
greater pressure on prices than the upward pressure from the Short Squeeze.
Most likely, silver bullion will be too scarce and too expensive to return to the central banks, so a cash settlement will most likely be the end result. However, if even just a few (maybe even just one) central bank demands the return of the actual silver bullion, this alone could push silver prices into the realm of several hundred dollars per ounce.
If this trend begins, many of the borrowers (i.e., miners, businesses, bullion banks, etc.) may start trying to acquire silver in case their lease is called, which will drive silver prices up. Alternatively, the borrowers may be forced out of business which will have trickle effects throughout the rest of the economy.
This is a dangerous scenario if and when central banks actually try to call their leases (i.e., demand the return of silver bullion). Of course, it could be these so-called leases were really open market sales disguised as leases and may never be called … but it only takes one central bank to hold the borrowers to the actual legal terms of the agreement to start this snowball rolling.
Reason #3: It Only Takes One Major Buyer To Ignite The Explosion In Silver Prices
What do you do if you are manufacturer and you suddenly can’t get the materials you need to make your products … or the price of these materials start to rise quickly?
You look for a quick substitute and/or raise your prices …
But what if there is no viable substitute and competition will not let you raise prices and keep your customers?
You panic, and you try to increase your inventory of the materials you need.
What happens when you start to pre-purchase and build inventories of a material that is in strictly limited supply … meaning very hard to get … and is already rising in price?
The price goes up even faster!
This is the current state for silver.
Silver is one of the most useful of all precious metals with literally thousands of applications besides jewelry, ornamental items (like silverware, platters, figurines, etc.), and silver coins. And unfortunately, when silver is used for these industrial applications, it is normally used up and gone forever.
Furthermore, world production of silver is only meeting about half of the world consumption of silver with Government inventories making up the difference. But now, Government inventories around the world are completely or almost completely depleted . Also, since the U.S. Geological Survey has discovered there is very little silver left in the ground (they state it is the most rare of all precious metals still below-ground), the supply of silver bullion is “strictly limited ”.
Most companies using silver in their industry keep lean inventories using the JIT (Just In Time) manufacturing methods. In other words, they order the materials needed so they arrive “just in time” to use it in their manufacturing process. This delays the cost and payment for the materials and minimizes inventory storage and tracking costs.
So, what happens to these companies using JIT manufacturing when (1) we are only producing half the silver bullion currently in demand, (2) we have essentially zero inventories, and (3) there is a strictly limited supply of silver left in the ground … and (4) the inevitable delays in silver delivery begin?
These companies are going to throw out the JIT process … at least for silver bullion … and try to pre-purchase and increase their inventories. And as we already discussed above, when this happens, the price of silver bullion will start to rise.
The real issue here is it only takes one significant manufacturer using silver to kick off this trend, and we have seen it happen before with Palladium. The Palladium scenario was based on fear of shutting down assembly lines due to late deliveries; real supply was not the problem.
Silver bullion, however, is completely different …
There is a major supply problem brewing. If just one major manufacturer begins to hoard silver bullion, it will tighten the supply (and raise the price) for all the other manufacturers.
What types of manufacturers are we talking about here?
Just about any manufacturer that makes batteries, steel bearings, silver brazing, plastics or adhesives, polyester textiles, magnetic tapes, metallurgy, electrical conductors, electronics, pharmaceuticals, eyeglasses, solar cells, and lots more. And it only takes one … anywhere in the world!
Reason #4: Silver Bullion Is Going To Be Worth A Fortune – Buy Silver Now, But Beware of Paper Silver
Assume for the moment you are a major investor in silver … At the current spot price of silver (approximately $24 per ounce), how much would $10,000 worth of silver weigh? … Recognizing that silver is quoted in Troy ounces and there are 14.583 Troy ounces in a normal (i.e., Avoirdupois) pound, the answer is 28.572 pounds [($10,000/$24)/14.583].
So, how much would $100,000 worth of silver weigh? … That’s right 10 times as much, or 285.72 pounds. And of course, it follows that $1Million invested in silver bullion would weigh 2857.2 pounds; that’s just over 1.4 tons!
Obviously, 1.4 tons of silver (or even just 286 pounds of silver) would be a bit challenging to store at home. So, what do you do instead?
Historically, two options are available. The first option is to pay fees for secure storage of all your silver, and the second option is to buy “paper silver” instead. By far, the better, more reliable choice is to pay storage fees … as unattractive as that may seem.
The reason is in many, perhaps most, cases the real silver backing up “paper silver” does not really exist!
Paper silver includes such “investments” as pool accounts, bank silver certificates, and leveraged accounts. The problem with paper silver, assuming it is legitimate and not fraudulent, is you are betting on the future creditworthiness of the issuer of the paper.
This is kind of like having a pension with a company that goes bankrupt or re-negotiates (a.k.a., “Re-negs”) the terms after or just before you retire. If the company goes out of business (or otherwise can’t deliver the goods), you are left holding nothing but “paper” and broken promises.
According to silver expert, Theodore Butler, the current volume of paper silver is on the order of a billion ounces (currently worth about $24Billion), and this volume is completely separate from silver futures contracts and leased silver.
Since in many, if not all, cases there is little or no silver actually backing up this silver paper, the issuers are essentially holding a “short” position on silver. As silver begins to rise in price (which has already begun incidentally), the issuers may panic and try to buy silver to cover the paper; this would increase demand on the silver market and caused dramatic increases in silver prices.
If you are going to buy silver … which you absolutely should … buy real silver, not paper silver. If you buy silver bullion without taking delivery, be sure you get serial numbers of the silver bars, and be especially wary of unusually low or non-existent storage fees. If someone is storing real silver bullion, they are storing a lot of silver bullion. And as you can see by the introductory paragraphs of this article, if they are storing a lot of silver bullion, it’s not going to be cheap.
Protect your financial future, buy silver bullion or silver coins now … real silver coins and bullion.
Reason #5: Governments Around The World Have Depleted Their Silver Inventories
Over the last 5,000 years, billions of ounces of silver bullion have been mined and extracted from the ground (this is called “above-ground” silver). In fact, in 1940, the world had approximately 10 Billion ounces in total worldwide silver bullion inventories. Of that 10 billion ounces, the U.S. Government had the largest holding with 6 billion ounces.
Today, the U.S. Government has zero ounces in inventory, and most of the rest of the world governments have zero or close to zero as well. Furthermore, since silver is actually consumed in most industrial applications, the total world “above-ground” silver bullion currently in existence is estimated to be less than 1 billion ounces. That is a 90% depletion of the world supply of silver in just 60 years!
As if that weren’t bad enough, the U.S. Geological Survey (the chief geological statistician for the U.S. Government) estimates there is only 8.5 to 18 Billion ounces of silver left “below-ground” (i.e., not yet mined), and there is less below-ground silver (versus its current rate of usage) than any other precious metal.
In fact, based on the current rate of annual consumption of silver and the estimated total underground reserves, the world has only about 14 to 25 years left before all the below-ground silver is completely consumed … according to the U.S. Geological Survey.
Since the world Government inventories are essentially zero, this means we are quickly going to run out of one of the most useful metals in existence (with no readily available substitute in many applications) … perhaps in less than 14 years.
What happens when you have an enormously useful material with a high demand and a strictly limited supply?
That’s right; the price goes up!
And when the price has been held artificially low for 6 decades as a result of world governments dumping inventories into the market to keep the price low … and now with no remaining inventories to dump … the prices are not only going to go up they are going to soar extraordinarily fast!
Many experts are predicting the price of silver will actually surpass the price of gold …
and why wouldn’t it? Silver has many more uses than gold, and gold is never actually consumed or used up.
Historically, the ratio of the price of gold to the price of silver is 20-to-1 (i.e., gold costs approximately 20 times what silver costs). Due to the recent multi-fold run up in the price of gold, silver is way behind (in other words, gold costs a lot more than 20 times the cost of silver). However, when the strictly limited supply starts to impact businesses that use silver, silver will catch up and actually exceed the price of gold.
Buy silver coins or silver bullion now while it’s still artificially cheap!
Reason #6: Where Did All The Silver Go?
As presented above, over the past 60 years, the world has consumed over 90% of the silver bullion mined over the last 5,000 years. Government inventories of silver bullion are essentially zero now, the world annual production is only about half the total silver currently being used each year, and according to the U.S. eological Survey, there is a low strictly-limited supply of silver left in the ground.
The reason the world has managed to consume 90% of the silver mined in the last 5,000 years in just 60 years is because until around the 1940’s, silver was used primarily for jewelry, coins, utensils and other ornamental applications, and investments … just like gold. However, starting around 1940, many industrial applications of silver were developed … applications that actually use silver in ways where used silver is gone forever.
So, considering the high demand and applicability of silver with a strictly limited supply and artificially low prices, silver prices are on the verge of exploding on fundamentals alone.
But what happens if a major investor decides to buy a lot of silver bullion because he or she believes silver prices are going to increase?
A major purchase of silver for investment purposes will tip the scales and ignite the rise in silver prices. There is a plentiful supply of gold, stocks, real estate, and bonds; no single investor can buy enough to trigger the market (they could for a single small stock, but not the entire stock market).
However, the silver scenario is so dire, that a single major investor could in fact trigger the market collapse resulting in astronomical silver prices!
Such a major purchase for investment purposes would be sufficient to cause significant delays of deliveries to manufacturers triggering the hoarding of silver inventories and further increasing silver prices.
In the 1970’s, silver hit $50 per ounce for a few hours, and investors are still talking about it. Considering the current state of the supply and demand for silver, the coming silver bubble will dwarf $50 per ounce! … Remember $50 is only about twice today’s price of silver.
As stated by silver expert, Theodore Butler, “Nothing in the world has the potential to multiply your net worth like silver.” Buy silver now!
The Many Uses For Silver
Unlike gold which never goes away, silver is literally consumed. Most of the applications for silver literally “use it up” never to be seen again. Since the U.S. Geological Survey (USGS) provides predictions that lead to the logical conclusion that all remaining silver in the world (including what’s still in the ground) will be gone within the next 14 to 25 years, there is a strictly limited supply of silver.
In 1942, the U.S. Government had over 3 billion ounces of silver, but they ran completely out several years ago; even the national defense stockpile is gone. Over 90% of all the silver mined in the past 5,000 years has been used up, and is gone forever.
Right now, there is more than five times as much gold in the known world supply compared to the world supply of silver.
However, there are many, many more applications for silver than for gold. In other words, there is a huge, growing demand for silver. A growing demand with a strictly limited supply for anything can only mean one thing: prices are going to skyrocket.
This means you need to protect your financial future and buy silver now.
One of the best ways to buy silver is to buy silver coins (discussed below).
In the remainder of this article, I am going to list some of the more popular applications for silver … applications that literally consume silver … applications that will cause the dwindling supply crisis enfolding right now:
* Rechargeable and disposable batteries
* Electroplating on steel bearings
* Corrosion-resistant solder
* Silver brazing allows in refrigerators, air conditioners, cars, aerospace, etc.
* Production of plastics including adhesives, construction lamination resins, plywood, dinnerware, packaging materials, insulation, and more.
* Production of soft plastics used in polyester textiles
* Molded items such as insulated handles, computer key tops, and appliance components.
* Mylar tape used in audio and video recording
* Oxidizers in metallurgy
* Silver bullion and proof coins
* Silverware and jewelry
* Electrical conductors, switches, fuses, and contacts.
* Electrical appliances, timers, thermostats, and sump pumps.
* Silver relays used in appliances and home care machines (e.g., vacuum cleaners).
* Electronic circuit boards and components.
* Computer keyboards.
* RF Identifications (RFID’s) or Smart Tags
* Car windshields
* Silver plating
* Mirrors and glass coatings
* Prescription eyeglasses
* Xrays and photographic films
* Solar cells
* Bactericides and algaecides
* Water purifiers and swimming pool chemicals
* And new applications for silver are invented every year.
If you are like most people, you are shocked by reading the list above. Hopefully, you can see the severity of the impending problem, but what should you do about it.
Well, you can obviously do nothing, and just “watch the show” as it unfolds … or you can ensure your financial future and buy silver now.
Back in 2006 and 2007, oil, copper, gold, silver, and just about every other commodity such as concrete and lumber were growing like wildfire. It was blamed on speculators in the futures markets and on China and India for undergoing their present-day version of our Industrial Age. People like Stephen Leeb, author of the book, “The Oil Factor” and “The Coming Economic Collapse” were predicting oil prices of over $100 (we made that) and even $200 per barrel (we didn’t quite get there).
Then along came 2008, and the bottom dropped out. Oil fell from over $100 per barrel to under $50 per barrel. copper fell, stocks fell, real estate fell, banks fell (or maybe I should say, “failed”), and finally gas prices fell. What happened?
Of course, a worldwide recession kicked into gear. China and India temporarily stopped their massive building which dropped demand and hence prices dropped. Market speculators got side-swiped in many cases and stopped their market pressures … at least for awhile.
And gas prices fell which made it harder for everyone to keep raising their prices while blaming it on oil … although I never saw anyone lower their prices when gas went down, and I didn’t see anyone drop their “fuel surcharge” fees either.
It looked like the common working person finally got a break … except a bunch of them lost their jobs!
No income means less spending which means less economic growth which means fewer jobs … it’s a death spiral.
So, is all the hype about rising commodity prices just hype? Is the bull run over?
If you look at the price charts, you will get your answer. Commodity prices are on their way back up. Gold is up over $1,000 per ounce again; oil is around $80 per barrel again; and even silver (currently way behind gold) is up over 100% to more than $17 per ounce.
Historically commodity prices cycle over about 50 to 60 years based on statistical research (see Edward Dewey, Edwin Dakin, or Nikolai Kondratieff), and we are only about 10 years into the current bull run of the commodities cycle. That statistic alone implies prices are going to go up a lot more over the next decade.
However, there are other things to consider …
As I already mentioned, China and India are rapidly building their infrastructure which is straining supplies of most commodity resources, and considering China is the largest populated country in the world, that is a significant influence.
Then we have the current state of the world economy with deteriorating currencies around the world. This is also pushing prices up especially for gold which is treated as the only stable substance of wealth. This makes sense to a degree, because all the gold we ever pulled out of the ground is still here; gold is never used up. It is hoarded … it may change from jewelry to electrical contacts to a filling in a tooth, but it is still gold.
Silver, on the other hand, is an immensely more valuable precious metal than gold in terms of its industrial applications. Silver is used in nearly everything … from pharmaceuticals to electrical components to creating plastics and polyester textiles. But the key is most of today’s uses for silver actually use up the silver; used once and it’s gone … forever.
Is the commodities boom a scam?
I don’t think so … but all the hype you have heard about rising silver prices is not hype! The rise in silver prices is not a scam; it’s coming, and it’s going to be big!
As I already stated, silver is the most useful precious metal and it is actually consumed when it is used. It has been this way since the 1940’s. At the end of World War II, the U.S. Government had the largest inventory of silver bullion in world with about 6 billion ounces. Since the 1940’s these inventories have been used to fill the growing industrial demands, and now the U.S. Government (and most of the rest of the Government’s around the world) have zero silver inventory. It’s all gone … 5,000 years worth of mining silver is all gone!
Furthermore, the U.S. Geological Survey indicates there is less silver remaining the ground yet to be mined than all other precious metals relative to the application of the metals. There is only about 14 to 25 years worth of silver left in the ground based on “current” demand levels.
As if that weren’t bad enough, for several years, the world production of silver has only met about half the world demand for silver.
We are running out of silver fast!
Silver prices have doubled twice in the last 7 years; it double from about $4 per ounce in 2003 to about $8.50/ounce in 2006. It doubled again by 2008. Then like everything else, silver prices fell, but now in 2010, the price is back up … now over $24 per ounce. That’s 500% growth in about 7 years … and remember, silver is still way behind the growth in the price of gold!
The rise in silver prices is not a scam; this is just the beginning. Silver prices are going to snowball once the coming silver supply crisis hits. Just-In-Time (JIT) supplies to manufacturers using silver is just starting to incur small delays. When these delays get longer or actually don’t show up one time, there will be no turning back. Silver prices are going to fly.
8 Ways To Buy Silver Now
By now, you should fully understand the value and the need to buy silver to ensure your financial future. Here I will present and briefly discuss seven basic options you have when you are ready to buy silver for your portfolio.
1. Buy Silver Coins:
Through 1964, U.S. coins were 90% silver until the Government replaced silver coins with clad coins in 1965. In the 1970’s, silver coins were gathered in $1,000 face-value, 715-ounce bags which you can still buy today. You can buy silver coins in bags containing 2,000 half dollars, 4,000 silver quarters, or 10,000 silver dimes. These coins are all real coins issued prior to the year 1965.
2. Buy Silver Bars:
You can also buy silver in 100-ounce bars “struck” or poured by private mints including Johnson-Matthey, Engelhard, Handy & Harman, and Sheffield . These silver bars are 0.999 percent pure silver. They are becoming more difficult to get today, but you may still be able to get them through a silver distributor. You can also get 5-ounce and 10-ounce bars sold in 100-ounce lots.
3. Buy American Eagle Silver Coins:
One of the most popular ways to buy silver today is to buy silver eagle coins. American eagle silver coins are one-ounce silver coins newly struck by the U.S. mint. They have a face value of one dollar, but they typically sell for a bit more than the spot value of silver based on the silver content. They have the “Walking Liberty” on one side and are large, attractive coins.
4. Buy Canadian Maple Silver Leaf Coins
Like silver eagles, you can buy silver in the form of one-ounce Canadian maple silver coins. The Canadian maple silver coins are struck by the Canadian Mint. These coins have the Canadian maple leaf on one side and the Queen on the other.
5. Buy Circulated Peace Dollars:
During the period, 1921 through 1935, silver dollars known as peace dollars were minted. You can buy 770-ounce bags of peace dollar coins. They have been used by the public and are therefore referred to as “circulated ”. Bags of these coins are fairly limited in supply, so you will have to contact a silver distributor to buy silver dollars this way.
6. Buy Brilliant Kennedy Half Dollar Bags:
In 1964, the U.S. mints struck uncirculated silver half-dollars with President Kennedy on one side. You can buy them from a silver distributor in 725-ounce bags, but they are fairly rare.
7. Buy “Mint Quality” Silver Coins:
Some silver coins are minted specifically to create collector-quality. You generally buy these coins packaged individually so you can’t touch them. They are rated (and priced) by their mint quality. Today, the top quality, MS-70, typically sells for over $100 for a one-dollar silver coin. These coins are often bid up in later years based on the date and quality of the mint rating. Certainly the cost of silver will contribute to their future value, but their value is influenced much more by demand of “collectors”.
8. Buy Silver “Stocks”
Okay, this one is not really buying actual silver, but it offers some unique advantages you will not get when you buy real silver. There are at least two stocks and an exchange traded fund (ETF) that essentially track the price of silver: Silver Wheaton (Ticker: SLW) and Silvercorp Metals (SVM). The ETF is SSRI. Some of the advantages when you “buy silver” this way include you don’t take possession or have to pay for storage of the actual metal, you get pretty close to the same growth in price, you have better liquidity (i.e., you can sell it instantaneously), and you can even generate an income from your silver holdings by selling covered call options. This is a great strategy to add to your outright purchase of silver.
Which of these methods you choose when you buy silver is obviously up to you. If you go through a silver distributor, you will pay a small premium and/or sales commission to the “spot price” of silver, and you will pay the commission again when you sell. If you don’t take possession of your physical silver (i.e., options 1 through 7 above), you will also pay storage fees and insurance for someone else to store it.
My personal opinion is you should buy silver coins officially minted by a stable government (e.g., American Eagle silver coins minted by the U.S. Government or the Canadian Maple Leaf silver coins) or silver bullion officially stamped with the purity and weight of the bars or rounds.
Silver coins will be the easiest to use if there is an actual collapse in the currency since it is officially registered as money. Stamped silver bullion can also be used since the purity and weight is officially engraved and can be used in bartering.
Finally, you should also consider collecting so-called “junk silver” which is smaller official silver coins such as U.S. coins minted in 1964 and earlier. These coins are 90% pure silver (hence the name “junk” as compared to the 99.9% pure American Eagle silver coins). Including junk silver in your treasure trove can be used for smaller purchases if the dollar collapses.
You can get a free 90% pure silver “Mercury Dime” by taking advantage of the “below market price” silver purchasing opportunity … learn more by joining my newsletter (see the top right corner of this blog page).
The Exploding Popularity Of American Eagle Silver Coins
Since the year 2000, sales of American Eagle silver coins has experienced phenomenal growth even surpassing sales of American Eagle gold coins. And between 2007 and 2009, American Eagle silver coins literally doubled the high sales rates between 2000 and 2007.
This explosion in the popularity of American Eagle silver coins has been credited to a single article written in December 2007 by Izzy Friedman. Since that article was published, the U.S. Mint has been unable to cope with the demand.
Here is a brief excerpt from that article:
“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. … Silver Eagles that are sold by investors are bought by other coin investors. Therefore, the silver used in Eagle productions is taken off the market, in my opinion, forever.”
Did you catch that last sentence?
The silver in American Eagle silver coins is effectively taken off the market forever. As explained in my other articles, the demand for silver is dramatically increasing while, according the U.S. Geological Survey, the supply is strictly limited.
The fact that most American silver eagles are effectively taken out of the market, means the dwindling of the strictly limited world supply of silver is further accelerated.
Think the investors hoarding doesn’t make much difference? Consider this …
The American Eagle silver coins are the world’s leading silver bullion coin. It’s purity and weight is guaranteed by the U.S. Government, and there are more than 245 million American silver eagles existing … with 1.8 million to 3 million more American Eagle silver coins being sold each month. Furthermore, the trend is increasing with 10.4 million in 2007, 21.8 million in 2008, 30.4 million in 2009, and 25 million in 2010 as of October 2010.
When the silver supply crisis hits, the U.S. Mint will stop minting them (because of the impact on the diminishing supply of world silver), and the premium on these coins will soar as people try to grab their share of a discontinued resource.
When this crisis hits, most people will not be able to afford even one 100-ounce silver bar. Thus, the demand for one-ounce coins will increase even more. The premium on small pieces, such as the one-ounce American silver eagles, will be higher than on larger bars.
It has been said if you own 1,000 American silver eagles 15 years from now, the value of that relatively small holding will be shocking. Even those holding gold and gold coins, should convert some of their holdings into American Eagle silver coins as they will likely be worth more than gold some day.
Buying Silver Coins: 2 Perspectives On How To Buy Silver Coins
If you are looking into how to buy silver coins, I presume you already understand the serious fundamentals that will fuel the coming silver prices explosion, and you have decided buying silver coins is the best way for you to buy silver systematically over time. So, in this article I will explain how to buy silver coins from two fundamentally different perspectives.
The first perspective of buying silver coins is to buy mint-quality uncirculated coins.
“Mint quality” means the coins have been rated by how perfectly or finely they were created or minted. The highest mint quality you can buy is “MS-70” which means the coin is perfect with no wear whatsoever.
Buying silver coins from this perspective presumes these coins will be worth more to numismatics (i.e., coin collectors) as the coins age and become more rare. These coins are sold in a plastic case to protect the coin and to ensure it remains “uncirculated” (untouched by human hands).
The future value of these coins is driven by a host of factors when you sell the coins … including the coins age, fineness, the number of equivalent coins minted that year, availability, demand, and to a lesser degree … the price of silver. Mint quality coins are typically expensive (for example, a new, current-year MS70 American Eagle Silver coin typically costs over $100 in the year it is minted ) and are expected to grow in value … sometimes very quickly.
The second perspective is to buy “commodity” silver coins such as the American Eagle Silver coin.
I refer to them as “commodity” coins meaning there is a huge supply and they are not singled out by mint-quality ratings. Like mint-quality American Eagle Silver coins, these silver coins are one-ounce, 0.999 pure silver collector coins, but they cost much less and more closely track the spot price of silver. Mint quality silver coins will grow in value as other collectors seek specific coins to complete or complement their collections, but these “commodity” silver coins will risedramatically as silver prices rise.
Buying silver coins this way allows you to buy more silver coins which will be very important when the coming silver prices explosion arrives. To buy these commodity type silver coins, you can simply go to any silver coin distributor, or you can buy them over time and earn free silver coins as you go (enter your name and email in the “Free Newsletter” form in the top right corner of this page).
Buying mint-quality silver coins is an art that requires a mix of logic, research, and speculation which can be fun, educational, and exciting. Buying silver coins of the commodity genre’ is more a matter of getting as many silver coins for your money as you can, and then just wait for the coming silver prices explosion.
As with anything, there is always more to learn, and the path you take is your choice, but these are two fundamental approaches of how to buy silver coins today.
The Best Way To Buy Silver Below Market Cost
Want to discover the best way to buy silver coins below market cost … and even get a rare 90% pure silver “Mercury Dime” at the same time? Enter your name and email in the form at the top right corner of this blog page, and I will show you how. Do it now, it’s free!
Remember … you must buy silver coins now, but it’s the silver content that matters. If you want to invest in “mint quality” silver coins, go ahead. But make sure you focus most of your effort on buying regular quality silver coins … soon!
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