Replies to post #20428 on ***Precious Metals Investors Club***

[SilverEagle]

I know he has a very good point! And I also know, gold to silver ratio shouldn't be current 1 to 61. It's just ridiculous.

[Stinky_pinky]

Silver Mining, Sentiment and the Confidence Game
Monday June 03, 2013 15:56


In terms of silver’s investment demand, the bullish metric at Sentimenttrader.com is currently at 39 percent. This is a low point that has not been seen since the mid-1990's.

Furthermore, The Hulbert Gold Stock Newsletter Index or HGNSI recently fell to a new low of 43.8 percent, which is a record by a longshot. What that low reading indicates is that, of the stock newsletters that include coverage of mining stocks, 43.8 percent of them are now recommending short positions in gold stocks.

If these indicators are not yet signaling a bottom in precious metal prices, it really has to be close.

These lows are further exacerbated by undervalued market prices that are pushing suppliers of precious metals to sell their stocks below the current cost of production, thereby resulting in further destruction of an already devastated mining sector.

Remember, only fifteen or so primary silver mines remain after decades of artificially low prices created by what, in effect, was a massive lobby to offload cheap silver into the market and the use of paper futures contracts that can be easily manipulated by money printers to maintain low commodity prices.

The Macro Confidence Picture

Confidence dipped considerably in the wake of the MF Global disaster, Peregrine Financial bankruptcy, and the LIBOR scandal. Confidence in the Obama administration is now also challenged by recent controversies, such as the IRS’s added tax scrutiny for conservative groups and the Justice Department obtaining several months of phone records for Associated Press journalists.

Failing institutional confidence often leads to political turmoil, which in turn can spark up the hyperinflationary tinder box. Exceptionally loose monetary policy is the set up for this scenario, but a political crisis will probably trigger the loss in confidence that will set inflation alight.

Despite a notable preference among the mainstream investing public for looking the other way, rather than facing such coming financial disasters head on, confidence in financial institutions is slowly being chipped away at by the inconvenient reality of what a fractional reserve banking really means for the security of one’s wealth.

This worrying backdrop is further exacerbated by the present state of currency warfare, as countries print money to debase their paper currencies, as well as by regular scandals and what appears to be a false equity rally based on little more than thin air.

Moving Out of the Dollar into Gold and Silver

A trend has been established toward major countries like China off-loading huge dollar-denominated foreign exchange reserves. Few people know much about this because no official announcement has come out since 2009, although China has very likely accumulated a large quantity of gold.

Also, China has been a net importer of silver for a few years now, which was a major turn of events. It now seems safe to say that the BRICS are attempting to buy whatever hard assets they can with the substantial amount of intrinsically worthless U.S. Dollars they have accumulated without upsetting the commodities market and/or fomenting a political crisis. Nevertheless, recent tensions between Japan and China seem like a classic example of how this could be unavoidable.

Also, the United States have been, and will likely continue to be, very protective of their own industries. This coddling of U.S. businesses partly involves incubating and protecting them with tariffs, but this artificial life support is also being done to prevent the virtually inevitable flood of paper Dollars from returning home.

In other words, it would not be welcome for China to start purchasing large portions of major U.S. producers or even buying them outright. Of course, you can be quite sure that the Chinese are doing that just about everywhere else, including buying companies located in Australia, Africa, South America and the Middle East.

What's fascinating about this process is that the Chinese have been setting up swap or currency trade agreements whenever they go shopping for assets among the places mentioned above. This seems like the real fly in the ointment, largely because it is the U.S. Dollar’s predominant and historical reserve currency status that provides the last remaining leg of support underpinning its value.

Mining Production and Supply Factors

The great challenge facing miners involves verifying and proving enough ore through drilling that they are finally able to risk the construction, mining and stockpiling of overburden that is required before they finally turning the rocks they mined into tangible, real income and long lasting storable value.

Another persistent worry for miners operating in foreign jurisdictions, as many of them need to, is that their findings and operation may be nationalized once production starts in earnest. Also, if the foreign country fails to provide adequate police protection for safe operations, the end result may be nothing at all or just a big deficit where a profit was anticipated and money was spent.

Furthermore, inflation can be a two edged sword since mining and processing costs tend to go up faster than the end price of finished gold and silver does. Delivery delays for key construction and production supplies and equipment also start to arise when prices are moving sharply upward.

Most miners and investors would probably rather see a gradual long term price rise in the precious metals than all of these sudden up and down price swings, but those significant price swings have now become a fact of life in this business that miners simply have to deal with.

For more articles like this, and to stay updated on the most important economic, financial, political and market events related to silver and precious metals, visit http://www.silver-coin-investor.com

By Dr. Jeff Lewis,
Editor, Silver-Coin-Investor.com

Reposted by S~P

[SilverEagle]

Silver -> incredibly undervalued compared to the gold.

[Pro-Life]

Re: Silver... MUST read… lots of charts.
Silver To Hit New Highs As The Quality Of Analysis Falls To New Lows
Steve St. Angelo, SRSrocco Report | Monday, December 30th

http://www.silverseek.com/article/silver-hit-new-highs-quality-analysis-falls-new-lows-12807

The Silver-Energy Connection

As I have written and spoken many times before, gold & silver are a store of value because they are a store of ECONOMIC ENERGY. When I first came up with this theory, I used the term "Store of Energy Value." However, Mike Maloney in his excellent series, "Hidden Secrets of Money" used the term Economic Energy to describe how gold and silver store this value. I now use that term all the time.

[wer123]

Here is why I think silver is going nowhere fast.

JP Morgan Holds Highest Amount Of Physical Silver In History

Gold Silver Worlds
February 4, 2014

While everyone is focused on the massive outflows in COMEX registered gold inventories and the gold ETF, GLD, it seems that an important evolution in silver is passing unnoticed. In what follows, Ted Butler, precious metals analyst specialized in COT analysis, reveals a remarkable insight in the physical silver market.

Butler’s calculations show that JPMorgan (JPM) has piled up the largest holding of physical silver in modern world. Since the silver price peak in May 2011, the bank has accumulated between 100 and 200 million ounces of physical silver (if not more). The equivalent in metric tonnes is between 3,110 and 6,220 tonnes.

To put that number in perspective, it surpasses the amounts held by the Hunt Brothers or Warren Buffett (in his investment company Berkshire Hathaway).

On a yearly basis, some 100 million ounces of silver reach the investment market, which translates into 250 million ounces between May 2011 and December 2013. That has a value of approximately $5 billion. Given the size of the too-big-to-fail bank, that amount of silver, how large it may seem, is easily affordable:

• JP Morgan’s quarterly profit is $5 billion (approximately 200 million ounces of silver).

• In 2013, the closing of the gold short position, as well as the 20,000 contract reduction in the silver short position, netted JPM more than $3 billion.

• In COMEX silver, JPM was the largest buyer in 2013.
These facts make it reasonable for JPM to be a big buyer in physical silver.

Methodology

JP Morgan knows the financial markets better than anyone else. It is no coincidence that the bank is (ab)using that knowledge to their own benefit. Evidence of that lies in the record number of penalties for which they have been accused because of market manipulation.

Butler explains that JPM was able to accumulate so much silver without being noticed through the big silver ETF , SLV. In his weekly commentaries to his premium subscribers, he has explained on numerous occasions that the physical silver holdings in SLV have been largely intact on a net basis, but there was a large “churn” in the holdings, which allows for a large buyer to go unnoticed. For instance, 60 million oz were liquidated in the two months after the price smash in May 2011; they were right away absorbed by a big buyer. The data are available on this site http://about.ag/SLV/ .

Furthermore, the conclusion that JPM has been the big buyer in physical silver is confirmed by the following facts:

• The growth of metal in the JPM COMEX silver warehouse over the past three years was 45 million oz.

• The recent delivery stopped by the bank in December/January COMEX deliveries was 15 million oz.

JPM, being a master in manipulating financial markets, has also (ab)used their ability to set the silver price in the leveraged paper COMEX market, while simultaneously benefiting from lower prices to accumulate the physical metal. In Butler’s own words:

“Causing the price of silver to be depressed via a concentrated short position on the COMEX along with the ability to crush prices in an HFT second, to then scooping up physical metal (and covering paper shorts) at the self-created depressed prices.

What this also highlights is the madness and illegality of having the paper price on the COMEX setting the price in the physical market. If JPM hadn’t been capable of rigging silver prices lower in 2013, it would never have been able to buy back 100 million ounces of short paper contracts and buy many tens of millions of physical silver as well.”

Motive

The underlying motive for JPM to accumulate such a large amount of silver is most likely related to the fact that the bank was on the wrong side of the market when the silver price exploded.
When silver went through its historic rally in March and April 2011, the weekly COT data indicated that speculators did not rush into COMEX futures, which means that the peak in the silver price was not driven by speculation in silver futures. On the other hand, there was buying in the big silver ETFs, including record short selling in SLV.

“So, if it was not highly leveraged speculative paper buying on the COMEX that drove silver prices to the peak, it had to be buying in the physical market (including the ETFs). Therein resides my conviction that we were on the cusp of the first wholesale physical silver shortage in history in April 2011. And clearly it was the investment side of silver’s unique dual physical demand (investment/industrial) that pushed prices higher, as there was no great rush by industrial users into physical silver.

JPM was on the wrong side of the silver market : neither the total commercial net short position nor the concentrated short position of the four largest shorts (including JPM) increased in any way and, in fact, both began to decline in April. This implies that speculators, particularly the technical funds , not only didn’t add to long positions, but reduced long positions on the $15 price jump from March 1, 2011.”

What does this indicate? The explanation that makes most sense is that JPM realized that it was on the wrong side of the trade, after having discovered how tight the physical silver market was. Consequently, the bank had to crush the silver price with their HFT tricks in order to reverse the trend. By doing so, JPM could regain control over the silver market.

Meantime, JPM has built the longest position in physical silver in recorded history. It holds its grip on the silver price through its short corner in COMEX silver.

Ted Butler has written time and time again that the extent to which JPM adds new short contracts on the next silver rally will determine the strength of the rally. Simply put – if JPM doesn’t add new short positions, the manipulation is over. Someday, JPM won’t add to silver short positions and they, more than anyone else, will be best positioned to realize massive gains.

http://goldsilverworlds.com/physical-market/j...n-history/

[DTGoody]

I still believe this video will come true over the next 3-10 years, and I still believe Silver is the Opportunity of a Lifetime;

[DTGoody]

Why I think Silver is the Opportunity of a Lifetime;