Supply & demand fundamentals for silver have NEVER been stronger when you add rapidly growing investment demand with the already robust industrial demand. There are a few certainties in life.....death, taxes & much higher PM prices.......due to rampant abuse of fiat by CB's. Another very good read, if you have the time. Ivana
CURRENT PRICE OF SILVER = Let's use $30 to be conservative.
1) The removal of the gigantic concentrated short position on the COMEX Silver market as reported in the CFTC Commitment of Traders and Bank Participation Reports.
In 1980 the Hunt Brothers attempted to corner the silver market with both COMEX contracts as well as holding physical silver. When the US Government made the decision to shut them down and end the supposed manipulation the Hunts held 90M ounces worth of long COMEX silver contracts. When the COMEX changed the rules to allow only selling of silver contracts the Hunts were forced to liquidate their COMEX position and the price fell from $50 to $10 in a matter of 2 months. Since the current manipulative short position held by JPM is estimated to represent 110M ounces short it is reasonable to project a slightly larger % move to correct the manipulation. Since silver dropped 1/5 when the Hunts were taken out let's assume a little more when JPM is taken out.
PRICE ANALYSIS = $30 x 6 = $180/oz
Let's now move on to the reversal of point #2 starting from a base of $180...
2) The announcement of charges filed by both the CFTC and the FBI in the pending investigations of Silver market manipulation by JP Morgan.
We have had an open investigation into silver market manipulation for close to four years now. The CFTC even stated that it was currently in the "ENFORCEMENT DIVISION" and no longer in the investigation arena. I find that very revealing as we all know that the CFTC doesn't want to upset the apple cart...but they really have no choice in the end. Silver must be allowed to return to it's Fair Market Value. Given that there was a VERY VISIBLE whistle-blower with proof of collusion and manipulation by JPM in silver there is no way the CFTC or the FBI can not announce some kind of charges in the very near future. The effect on the price of silver should be SUBSTANTIAL and without the bad guys there to cap the price again on the news..look out above! I'll put the announcement of this news as a doubling of the price of silver.
PRICE ANALYSIS = $180 x 2 = $360/oz
Now let's move on to the next active fraud...
3) The shut down of the iShares Silver ETF (SLV) and the subsequent attempt by SLV investors to transfer into physical silver in their own possession.
For anyone that believes that the iShares Silver ETF is legit I have a nice piece of swamp land in Florida I'd like to sell you! The extent of the fraud at SLV should not be underestimated as it involves the entire banking cabal that is currently being coordinated by the hedge fund BlackRock. I know this because after BlackRock bought the SLV from Barclays they kept JP Morgan on as the Custodian of the physical silver. Can you imagine the liability that was taken on by BlackRock KNOWING that JP Morgan was under investigation by the CFTC and the FBI and has multiple class action suits against them for silver market manipulation. YET THEY STILL KEEP THEM ON AS CUSTODIAN DISREGARDING ALL FIDUCIARY RESPONSIBILITY TO THE SLV SHAREHOLDERS! The mass exodus of SLV investors out of the iShares ETF and into REAL PHYSICAL SILVER will be a sight to behold. I'd say that's enough to double the price again...
PRICE ANALYSIS = $360 x 2 = $720/oz
Ok, 3 big injustices have been reversed and the price of silver has risen above $700...but how will it continue to rise?
4) The implementation of COMEX Position Limits in Silver of no more than 5,000 contracts and the enforcement of the Disruptive Trading Practices law.
The implementation of position limits is HUGE. It's doesn't stop manipulation but it REALLY handcuffs the market riggers. They currently continue to naked short to unlimited amounts...always enough to stop silver from blasting off. With ENFORCED position limits they can only play their dangerous games to a point and then they get CRUSHED. Anybody bumping up against the limits in order to slow the price of silver will be playing with FIRE! I'll settle down a bit and give that a 10% bump to the price.
PRICE ANALYSIS = $720 + 10% = $792/oz
But we're still not at "Fair Market Value" as there is another monster short bubble that needs to be unwound...
5) The winding down of the outrageous and manipulative Silver derivative positions held by both JP Morgan and HSBC as reported by the Bank for International Settlements.
As of June 2010 the JPM/HSBC derivative position in silver was around $120B. That was when silver was trading for $20/oz which means their total derivative games going on with silver was in the 6B ounce range! Considering there's less than 1B ounces of investment silver and only $16B ounces of discovered reserves in the entire WORLD this number is RIDICULOUS! The unwinding of some of this will be taken care of above in points #1 & #2 but there still remains a large portion of these derivatives to be unwound. I'll give this "great unwind" a 20% bump to the price of real physical silver.
PRICE ANALYSIS = $792 + 20% = $950/oz
Are we done with the fraud aspects yet? NOPE!
6) The mass redemption of paper Silver currently held in Pooled Silver Accounts and Silver Certificate Programs into physical silver held in the possession of the owner.
Here we have the rare case in which the Banking Cabal has ALREADY admitted to running a scam with warehousing phantom silver for investors when Morgan Stanley was busted for charging storage on metal that they didn't even have in their warehouse...and they claimed it was an "INDUSTRY STANDARD" to store phantom metal for account holders! The pooled account model is also a JOKE because they charge hardly any fees...clearly not enough to cover storage, insurance, marketing, administration, profit, etc. etc. The only way that business model works is if they DON'T actually buy any metal for the customers account but rather invest the money somewhere else believing that if customers cash in their certificate they can go into the market and source the metal at that time. "FRACTIONAL RESERVE METAL STORAGE"! This was the model set up by Jon Nadler for the Perth Mint and then for Kitco and then for The Royal Bank of Canada. It was his invention many years ago and now it's his FAULT. THAT IS WHY NADER IS SO ANTI GOLD AND SILVER!!! The mass redemption of all this silver will drive the price of REAL PHYSICAL towards the moon once word gets out....and it's getting out. I'd give that one a 50% bump.
PRICE ANALYSIS = $950 + 50% = $1,425/oz
Now here we are sitting at $1,425/oz silver with much of the fraud in silver shaken from the market so now we get to concentrate on the REAL supply/demand issues...
7) The Silver to Gold Price Ratio reflects the true physical relationship between above ground gold and above ground silver that is available for sale on a free and open market.
This is where the ENTIRE WORLD needs a big slap in the face. 100-1 silver to gold ratio just a few years ago?! If you are invested in silver in order to ride the wave back to 12-1 gold/silver YOU WILL SELL WAY TOO EARLY! Most of the monetary history of silver has seen 10 or 15 to 1 ratio but THAT WAS BEFORE SILVER WAS DEMONETIZED! 10 Billion ounces of above ground silver that was used as money up until a few short decades ago has been DESTROYED in modern electrical applications! ALL THE SILVER THAT HAD BEEN MINED OVER 1,000's OF YEARS IS NOW GONE FOREVER!!! Before this is all over silver will reverse history and trade at a 1-1+ ratio to gold. That means at $2,000 gold we will see $2,000+ per ounce price for silver. That's how much potential price energy is inherent in silver due to 100 years of price manipulation. I'll be conservative here since our price is already above the price of gold and just call it a REASON for silver to stay high. Should the price of gold take off silver will take off with it maintaining a high ratio.
PRICE ANALYSIS = $1,425 + 0% = $1,425/oz
Ok...Here's where it gets tricky...
8) The realization by industrial users of silver that the supply of physical silver is rapidly depleting and with the future of producing their products in jeopardy they begin stockpiling physical silver.
At $1,425 silver we will lose a good chunk of industrial uses due to the cost but not as much as you think. Most electronics use silver measured in grams and not ounces. Tiny amounts in cell phones, computers, RFID chips...and although a large flat screen TV may see it's price double due to $1,425 silver for those who want that big screen football game price may not be that much of an object. On the other hand, at today's price of $30 silver every manufacturer in the world should be crawling over the competition to get their hands on every ounce of physical silver they can find because for some silver is 100% necessary to create their products. No Silver...Goodbye Company! So the trade off will be interesting between those who cut back on silver use and those who scramble to get their hands on industrial silver at such cheap prices. My short term outlook on price is VERY bullish for this reason so I'd give it a +50%.
PRICE ANALYSIS = $1,425/oz + 50% = $2,138/oz
Are you getting a little shaky at these numbers...as in are you thinking "Not a chance"? It gets better!
9)The reversal of Silver's ever increasing use in industrial applications due to either high prices or the discovery of a viable substitute with similar physical properties and attributes.
This is similar to the above but with a twist. Silver is the BEST conductor of electricity and the BEST reflector of light which are two key requirements in the ever expanding solar energy field. We are in the very early stages of development of alternative power and silver is sure to be part of any future technological breakthroughs. Not only that but nothing replaces silver as a use in soldering and it is used in such tiny amounts that PRICE DOES NOT MATTER! So far nothing comes close to silver in most industrial uses so until we find something to replace it you can expect manufacturers to pay through the nose to get it. It's hard to quantify the future uses of silver but where there's necessity of invention there is a pocketbook ready to pay for it. I'll add 10% for now with an option to raise that number as the next great thing is invented.
PRICE ANALYSIS = $2,138/oz + 10% = $2,352/oz
Now here's where we get a little silly...
10) The realization by the remaining 99.9% of the investing public that does not currently own any physical that Silver is extremely undervalued and should be held by all investors interested in portfolio safety and value appreciation.
Almost NOBODY is invested in physical silver. I mean it. Ask around. Ask 1,000 people if they own any physical silver bullion and you will get a few "my mother left me her coin collection" or "I have some jewelery" and most of those people will offer to sell it to you because they have no idea that it will be very valuable...very soon. As all these reasons for investing in physical silver become reality the investing world will stand up and take notice. TRILLIONS WILL FLOW INTO THE PHYSICAL SILVER MARKETS FIRST TO TRY AND GET RICH AND THEN OUT OF FEAR OF LOSING EVERYTHING MADE OF PAPER!!! That is what lies ahead so I'm going to double our Silver Fair Market Value again!
PRICE ANALYSIS = $2,352/oz x 2 = $4,704/oz
So here we sit with many of the more "manipulative imbalances" worked through the reversal process. But there are many more reasons that we have still not reached the true Fair Market Value for silver even yet.
11) Acknowledgment by the Bullion Banks and US Government that they have been involved in the price suppression of Silver for over 50 years in order to support and extend the global confidence in un-backed fiat US Dollar.
When the first 10 reasons are actualized there will be many questions raised by the people of the world. "Why wasn't the rigging of the silver markets stopped if the government and market regulators knew all along?" Of course there is an answer and that answer is "To facilitate the the fiat monetary system." That's it. That's the reason that the CFTC, SEC, FBI etc have not stopped the scam. THE PRICE OF SILVER HAS TO BE CONTROLLED OR THE UN-BACKED FIAT MONETARY SYSTEM WOULD FAIL! This admission by "The Powers That Be" will totally destroy the current paper and electronic monetary system and there will be a necessity of instituting a new system with some kind of backing...most likely gold and silver. Given it will be a "new money" that will be issued we may revert back to $1 silver but with different purchasing power. For the sake of argument I'll keep this analysis in un-backed fiat terms as well as a potential gold/silver backed currency.
PRICE ANALYSIS = $4,704/oz x 2 = $9,408/oz
1oz SILVER/GOLD BACKED CURRENCY= $1
Now let's more towards the truth behind the supply/demand fundamentals of silver.
12) All Silver statistical reporting companies have completely revised their historical numbers to reflect the true supply/demand realities of the past and admit to the massive annual physical silver deficit going forward.
Lies, lies, lies. Over 100 years of lies about how much silver in available above ground as well as below ground. Today GFMS and the CPM Group are the liars and shills set up to obfuscate and conceal the truth about the rareness and importance of silver. They have no idea how much silver is bought and sold every year but they serve their purpose very well...to keep people in the dark. They make up numbers year after year such that it won't diverge too far from the prior year's numbers as to raise red flags. All pure lies. One day...very soon they will be taken out to the woodshed and replaced by a REAL reporting system and it will become known that the demand for silver is much, much greater and the supply of silver is much, much smaller.
PRICE ANALYSIS = $9,408/oz x 2 = $18,816/oz
1oz SILVER/GOLD BACKED CURRENCY = $2
So now we are closer to discovering the truth about the scarcity of silver let's move on to some of the realities of that scarcity.
13) The USGS alerts the world to the reality that at the REAL current Silver consumption rates there is less than 10 years of known below ground Silver reserves remaining in the world.
The USGS currently reports global silver reserves in the ground to be 510,000 tons or around 16B ounces. Industrial demand alone stands at between 600-700M ounces and is rapidly rising year after year. Of course when you add all demand together you will get somewhere between 1-2B ounces per year. As the above conspiracy issues are resolved a big bright spotlight will be shinning on the "silver as an investment" issue so expect massive demand from the investing public which only heightens the shortage. I'd give the silver in the ground about 10 years to be totally spoken for in one form or another...then what? Yes, they can and will find more but at ever escalating prices. There will be a significant PANIC to buy silver from all areas of manufacturing and investment. Powerful stuff.
PRICE ANALYSIS = $18,816/oz x 2 = $37,632/oz
1oz SILVER/GOLD BACKED CURRENCY = $4
So here we sit at $56k silver and the same purchasing power in the new 1oz silver currency sitting at $4. But we still aren't at Fair Market Value.
14) The realization by investors that significant increases in the price of Silver would not curtail industrial demand as silver is mostly used in very small amounts in each product produced.
We have already seen a 10 fold price in silver in the last 10 years and all those those doomsday Sayers who believed higher prices would destroy silver demand are surely scratching their heads. Yes, demand for silver in photography has decreased massively but it has done absolutely NOTHING to stop the rising price. Most photography silver was recycled anyways. The fact is that more and more applications for using silver are being discovered everyday and the physical properties of silver are JUST BEING RECOGNIZED by modern science and will continue to grow exponentially! Most of these application are in tiny amounts that will never get recycled. Since silver is also a monetary metal, as the price rises more and more investors want to get their hands on some. The higher the price goes the more people will get involved on an investment side increasing the demand. Word is spreading.
PRICE ANALYSIS = $37,632/oz + 50% = $56,448/oz
1oz SILVER/GOLD BACKED CURRENCY = $6
15) The mainstream media highlights that the investment drivers for Silver far out weight the investment drivers for Gold.
Those of you who are in a love driven lip-lock with gold should seriously get your head examined. Really. Other than gold's ability not to tarnish silver is a vastly better investment. Silver has ALL the monetary properties and history that gold has but many more uses currently and as yet undiscovered. Very soon it will be revealed that the world does not possess 160,000 tons of gold above ground but rather OVER 1M TONS! This gold has come from secret stashes all around the world including Yamashita's Gold, Nazi Gold, Grand Canyon Gold, Chocolate Mountain Gold and on and on. Lot's and lot's of gold out there...AND ALMOST NO SECRET SILVER STASHES! Why do I believe this? Because in the early 1990's the US dismantled the Manhattan Project's Y12 Facility, the most important nuclear processing facility on the face of the earth, just to retrieve the 500M ounces of silver used in the Calutron Magnets. If they had any other source for the 500M ounces needed to calm the physical market they would have used it first. Soon it will be common knowledge that silver is much more rare than gold and the price implications for silver in relation to gold are staggering.
PRICE ANALYSIS = $56,448/oz x 2 = $112,896/oz
1oz SILVER/GOLD BACKED CURRENCY = $12
16) The US Mint starts to produce US Silver Eagle coins "in quantities sufficient to meet demand" and no longer illegally rations their dwindling supply.
Recent word that the San Francisco Mint will start coining US Silver Eagles caught the market by surprise...but not here on the Road to Roota. I pointed out two years ago that the SF Mint was undergoing a gigantic retrofit that was supposedly a "historical preservation" but that was just a cover story. Pelosi and Feinstein gleaming at the opening ceremony was "the tell". Also the brand new CNC (computer numerical controlled) coining machines was a hint that there was nothing historic about this retrofit. Also, the recent resignation of the US Mint Director, Edmund Moy, last December was a flushing out of the Bad Guy operatives. Soon the US Mint will FINALLY live up to it's legal mandate of producing enough coins to meet demand...no matter how high the price of silver goes. (It will also add a higher premium to the price of US Silver Eagles as they will be deemed the very BEST silver coin investment)
PRICE ANALYSIS = $112,896/oz + 10% = $124,186/oz
1oz SILVER/GOLD BACKED CURRENCY = $15
17) When investors stop saying that silver is "too hard to store" and start worrying that silver is "too valuable to leave in a bank's safe deposit box".
Storing silver is FUN! At these ridiculously low prices it is also a great workout! If you are one of those people who don't buy silver because it is too difficult to store then let me ask you a question...Do you think the equivalent amount of gold would be too difficult to store? Think about it. If you had 10,000 ounces of gold you'd buy a really nice secure safe or keep it in a secure facility that you trust and take care to keep it out of the hands of the Banksters (hopefully). So why is 10,000 ounces of silver any different? If you truly know how valuable silver is in relation to gold you would go out of your way to make sure that silver is stored properly. It's a value perception problem that investors have not a storage problem. As far as a safe deposit box I can't tell you in more plain terms...they are DANGEROUS. Why would you let the very same Banksters that rig the silver markets hold your physical silver? One day people will not be concerned about the hassles of storing but rather the problem in FINDING MORE!
PRICE ANALYSIS = $124,186/oz + 10% = $136,604/oz
1oz SILVER/GOLD BACKED CURRENCY = $16.50
18) When Central Bankers around the world stop printing money every time there is a "bump in the road" on their never ending quest to foster perpetual growth and end the extraordinary transfer of wealth from "the many" to "the few".
Here's the root of the problem. The fact is not that silver is of infinite value but rather that un-backed fiat currency is totally and completely intrinsically worthless! The United States and most every country, state and local government is bankrupt with NO WAY TO PAY BACK DEBT EXCEPT BY PRINTING MORE OF IT! The monetary supply must ALWAYS expand in order to pay the interest on the debt money that is already in existence. It's a vicious circle with total and complete destruction of debt as the only conclusion. This is what lies directly ahead of us. The total and complete destruction of all paper and electronic debt money. There are many ways this can happen but the most likely way is through a derivative meltdown and banking collapse that was averted in 2008. Strike that...delayed in 2008 and will reappear this fall. The END of un-backed fiat money is upon us and physical silver and gold will become non-existent for any exchange in worthless fiat paper terms.
PRICE ANALYSIS = INFINITY IN UN-BACKED FIAT DOLLAR TERMS
1oz SILVER/GOLD BACKED CURRENCY = $50 in relation to Gold Eagles
19) The US Government and the Citizens of the United States recognize and acknowledge that Article I, Sec. 10 of the US Constitution specifies that only gold and silver coin can be legally used as money and the Coinage Act of 1792 defined the US Dollar as "three hundred and seventy-one grains and four sixteenth parts of a grain of pure, or four hundred and sixteen grains of standard silver."
Here's where is gets very interesting. The new gold/silver backed currency of the United States will surely begin with the US Silver and Gold Eagles but at what price in US Dollars will the metal be valued? Will it be another FIAT currency mandated by the Government that Silver Eagles will be valued at their face value of $1 and Gold Eagles at their face value of $50? Since there is far less silver than reflected in that ratio there would be a mad rush out of gold and into silver. It won't work. If silver and gold are to be used as money they must be allowed to float against each other relative to supply and demand. In this respect silver should fly by gold in the new backed currency.
1oz SILVER/GOLD BACKED CURRENCY = $100 in relation to $50 Gold Eagles
20) The price of silver has risen so high that it has fulfilled all my hopes and aspirations as an investor and I can now sit back and enjoy those other pleasures of life that I had put off in pursuit of FREEING THE SILVER MARKET FROM THE CLUTCHES OF MANIPULATION!
It's been a long hard fight up against a very formidable opponent. This battle has gone on for over 100 years but we will have FINALLY slain the Banksters and returned to an honest monetary system. Remember all those who have fought these battles with you but never lived to see the end result. Jefferson, Jackson, Eisenhower, Kennedy, Buffett Sr. and the list goes on and on.
WE OWE THEM ALL A DEBT OF GRATITUDE.
So that was my attempt to QUANTIFY the subsequent price action in Silver when these issues are addressed by the market. At some point we WILL return to a TRUE "FAIR MARKET VALUE" for silver and the final conclusion will be shocking to most...but not to us. Remember, it's not the numerical value attached to currency but rather the purchasing power of that money.
UNTIL THESE 20 REASONS TO SELL ARE REALIZED I WILL NOT SELL AN OUNCE OF SILVER. LET THESE NUMBERS SINK IN AND ASK YOURSELF IF YOU HAVE ENOUGH SILVER TO LIVE COMFORTABLY FOR THE REST OF YOUR LIFE...
IT WON'T TAKE MUCH!
May the Road you choose be the Right Road.