Posted 30 August, 2010
Silver Stock Report
Many analysts and investors try to guess when silver prices will explode. They make these guesses based on the charts, or even by the fundamentals like I do. I pointed out the fundamental supply and demand numbers in my last article, “1% of 1%”.
The Tiny Silver Market attracts 1% of 1%, or $1 out of every $10,000 in the US Banking system, each year.
By the time 1% of paper money tries to buy silver in one year, there will be 100 times as much investor buying of silver as today, which will be about $180 billion trying to buy only 750 million ounces of annual world production, which implies a silver price of about $240/oz., or perhaps higher.
1% of 1% August 23rd, 2010 (The Silver Market is tiny, tiny, tiny!)
That article led Al Korelin and Steve Carr to call me up for a 13-minute radio interview on the Korelin Economics Report. See here:
Please listen to that radio segment; it’s very powerful information.
The silver fundamentals are so great, and the silver market is so small, that at any time, the silver price can double, up from about $18-19/oz. now, to about $40/oz.
How can silver prices double at any time?
Because there are over 1000 individual billionaires in the world, and each one of them could cause silver prices to double overnight by attempting to exchange over valued assets for undervalued silver. How can any analyst predict when any one of 1000 people may decide to act? And it is impossible, IMPOSSIBLE, to tell in advance, when a single buyer will try to buy silver in such quantities and urgency that it would move up the price by up to 100% over a few days. Unless you know such a billionaire personally, and unless he or she tells you, in advance, of his trading moves, which wealthy people don’t usually do.
For example: The current silver market is dominated by industrial demand, with very little investor demand, for a total of about $10 billion of new silver per year. Most of industrial demand is price inflexible, since the amount of silver used is a very little cost compared to the final item. We might assume that some, but not all, of current demand might wait or delay purchases due to higher prices, but also, higher silver prices might attract additional investor demand, as investors these days are more attracted to rising price trends than they are to excellent fundamental reasons to buy. Also, higher prices may cause panic stockpiling by other industrial users who might wish to lock in lower prices, or secure enough supply in a tight market. Therefore, an additional $1 billion of new buying, over the course of a year, could cause the silver price to move up by much more than 10%. But if a billion dollars tried to buy silver within a month’s time, then that impact, if looked at as if it were to be annualized, that would look like another $12 billion was trying to enter the market, and thus, the silver price might move up by more than 100% in a month!
Here’s another way to look at what $1 billion of silver buying within a month would do to silver. Currently, we have about $1.9 billion per year of investment demand buying 100 million oz. of silver, which works out to $158 million in a month. $1 billion buying silver within a month would be 6.3 times more than the current silver investment demand.
Therefore, it is impossible to know exactly when silver prices will explode. And there’s really no need, is there? All we really need to know, is that silver prices are highly explosive, which is great if you own silver!
Well, I suppose there is another way to tell if, or when, silver prices will explode. If you gave me the personal email addresses of all 1000 billionaires in the world, and if I sent them all my article from August 23rd, you could easily bet that the silver price would be likely to double within a week. But it’s not likely that I’ll get that email list.
Oddly, the silver price has gained about $1/oz. since my last article on the 23rd, which is when this latest rally began.
1% of 1% August 23rd, 2010
Bloomberg wrote: ” Silver has outperformed the yellow metal since Aug. 23, gaining 6 percent compared with gold’s 1.4 percent gain, as investors bought the white metal because of its relative cheapness to gold.”
Really wealthy people are kind of funny. For them, it’s often about status, or power, not wealth anymore. Well then, they should know that if they are in the top 1000 of wealthy families, they have an opportunity to enter the top 100, if only they buy silver. And if they are in the top 100, then they can likely enter the top 10, if only they buy silver. And if they are in the top ten, well, they might just be able to buy a few nations, if only they buy silver, before other billionaires do.
They should know that buying silver first is not like a race, it IS a race!
But there are many thousands of funds, retirement funds, each managing billions, and any one of them could decide to buy silver in an attempt to gain increased performance for their portfolios, too!.
The point is that reaching people, and teaching people the fundamentals of silver is potentially a very productive thing for silver prices.
In case this email is actually forwarded to any of the world’s billionaires, I suggest that they read my prior article specifically for them:
How to Get Into Silver, for Billionaires February 27, 2008
So, how else can you reach people? The Silver Circle Movie!
Please Support the Silver Circle Movie! They need to raise, within the next week, $4000 to cast actors.
Here’s their online pitch, it’s very funny:
Silver Circle – Animated Dystopian Film Needs Funding for Talent
I have a few ironic insights about people and wisdom.
To be wise, you have to have a very long attention span.
To market wisdom, you have to express it as if people have very short attention spans. Headlines, urls, titles, names and signs must catch a person’s attention in less than 1 second. And you have to have a 5 second pitch, a 10 second pitch, and a 20 sec., 1 min pitch, 5 min pitch, 10 min. speech, 30 min speech, 1 hour speech, etc. Even wise people will ignore many things, so you have to work hard to catch people’s attention quickly!
To want to teach wisdom, you have to be unselfish; but you have to put it forth in such a way that wisdom is attractive to people who are totally selfish. Even wise people recognize that people who act in their self interest create a rational free market economy.
To become wise, you have to constantly think, discern, and learn. But most people rarely think deeply, they mostly just remember slogans. Even college kids earn A’s merely by regurgitating the definitions of the theories of the day; no real thinking is required. Ok, then, here it is:
SILVER PRICES WILL EXPLODE!
SILVER PRICES WILL GO UP!
SILVER INVESTORS WILL MAKE FORTUNES!
SILVER IS LIKELY TO INCREASE BY A FACTOR OF 100 TIMES GREATER!
SILVER PRICES CAN GO UP BY 10,000%!
The Federal Reserve seems to understand these rules, and makes expert use of them.
The Fed is a master marketer. They own the media, or their partners do, and they give a constant bombardment of headlines favorable to the dollar and the Fed.
The Fed appeals to people’s greed, they even actively bribe judges to win court cases.
Payoffs for Judges, Prosecutors Is Legal by Statute
When judges are bribed, it becomes impossible for them to present rational arguments for their decisions. That happened to me, I saw it in action in 2003-2004. http://bibleprophesy.org/squaw.htm
The Federal Reserve markets through propaganda and slogans; no real analysis is ever presented for a strong dollar. For over ten years, the Fed and their media whores have warned of the risks of deflation–and yet, all the while, M3 has increased from $5 trillion to $15 trillion, and silver has increased from $5 to over $15/oz., which is 200% inflation over a decade, but all we hear of is the constant danger of deflation.
The Fed LIES!
Meanwhile, the banks who were bailed out last year are still keeping a huge reserve of cash on deposit with the Fed, so it’s not counted in M3 stats, that are no longer being published by the Fed, so there is a double secret plan to hide the inflation, and furthermore, the Federal Budget gap, or deficit, is $1.5 trillion, which must be printed, which is 10% annual inflation right there!
The Fed relies on the fact that people don’t actively think nor remember the Fed’s deceptive cry about deflation, nor do people remember the facts of the actual horrendous inflation over the last decade, or even in the last year.
So just remember one thing.
Silver prices can double overnight, at anytime, and it’s totally impossible to predict when it will happen. And yet, at some unexpected day out of the blue, silver prices will likely double, and nobody will understand why, except me, and you.
Because we know that the silver market is just way too small, and prices just way too low.
I strongly advise you to take possession of real gold and silver, at anywhere near today’s price, while you still can. The fundamentals indicate rising prices for decades to come.