Silver as an investment

Hommel had a pretty good 100 word summary:

http://silverstockreport.com/2008/lies.html

http://www.financialsense.com/editorials/fekete/2008/1205.html

This means the current spot price is higher than the future month's prices. This means people no longer trust future delivery, and are willing to pay more for delivery now than to use margin to make paper profits in future's arbitrage.

If this is not reversed, it means world trade could grind to a halt, because it means a dominos of disintegrating trust in the paper financial system for settling transactions and (letters of) credit.

Normally this can not be reversed, because once the trust in the paper financial unit has peaked and started to decline, the dominos of distrust spread out into the system as cascading defaults, because someone refused to trust someone which causes someone else to have to default on some transactions. The only way to reverse this would be for the future's markets to let the future's paper price rise dramatically, but this would probably also cause the same end result, because such a dramatic rise would signal to people that desperation had set in for the large shorts who are managing the futures markets (in gold & silver), and that longs better take delivery now.

This is growing indication that the controllers of the world financial system are "going for the end game" now. In that case, this is a dangeous time to be in the stock market or any paper asset, as the rules will probably entirely change soon (if they opted for backwardation, then it means they opted for "sorched earth" and killing the dollar). It looks like now may be the time to shift entirely to physical precious metals asap.

However, while the backwardation effect spreads (dominos), still there will be some (declining) percentage of the population will still speculate, and the controllers will I bet let the future's market prices rise, in order to capture that speculation (siphon off more wealth). So one could probably still count on a bounce in commodity stocks.

rpietila wrote:I believe we should discuss very carefully the issue of backwardation and how it affects us dealers.

First of all, I think Fekete is wrong in his banner thesis that backwardation causes all bids to buy paper money (with gold) disappear. He has the phrase "permanent backwardation" in it, but how exactly do you know if something is permanent?? Is the confiscation of my silver permanent for example?...

Because once the public realizes that the dollar is dead, there is no way to get them to go back to dollars. Backwardation is a monetary phenomenon-- meaning that is has to do with the pyschology of what people think about money.

However, I will grant you that the "money masters" can still pull many tricks to delay public stampedes.

rpietila wrote:...As we live in a world of deception, most mines are even now producing silver at a price that's way off even production cost let alone the value of product. In the event of backwardation (it will not be announced in any newspaper in the world) what makes the mines' situation different?...

Because the mines sell to smelters, and the "money masters" control the smelters. The mines are unable to sell direct into a free market, at least until things get so bad that people are willing to buy concentrate or dore bars (which by that time, I think the mines will be bankrupt or owned by the "money masters" any way).

rpietila wrote:...Base metals were in serious backwardation 1-2 years ago but the situation cleared itself...

But they didn't have a declining open interest, very important the difference between monetary and commodity backwardation:

http://goldwetrust.up-with.com/economics-f4/inflation-or-deflation-t9-30.htm#530

rpietila wrote:...Fekete's theory is that because there is ample supply of gold and silver relative to COMEX stocks, there should always be a contango (and opportunity to earn using his basis trading strategy)...

All the gold ever mined is still available (if price is high enough), unlike for industrial commodities you often physically can't recover it (at any price nor quickly). For example, most of the Zinc ever mined is in GI roofs, GI pipes, back in the landfills, etc..

rpietila wrote:...Backwardation is supposedly a red flag telling us that physical metal holders are not willing to risk their metal. How is it that the manipulators cannot counterfeit contango?...

Because they can't force open interest. Note, that open interest in gold and silver futures in the contract months has fallen off a cliff. Even if they did buy their own contracts (sell to themselves), I think this has to be reported in the Comex listing for large holdings (on both long and short side). So no, they can't fake it, not without the Comex committing themselves to future jail time, by lying about the reported large positions on the long side.

However, they may be able to end the backwardation by refusing to sell short, and letting the price rise. But this might also make the stampede by the general public into gold & silver even more ferocious. I think they are trapped indeed. Finally!!!

rpietila wrote:...(Fekete btw. also told us that COMEX naked shorting is legitimate commercial activity - perhaps August has finally proven him the opposite...;)...

I have now come to understand that Hommel was wrong about usury, and Fekete was correct to state that futures markets could perform a useful function (if they were not corrupt):

http://silverstockreport.com/2008/fekete.html
http://www.silverstockreport.com/2008/fekete2.html

Here is what I realized since that debate above:

http://goldwetrust.up-with.com/economics-f4/inflation-or-deflation-t9.htm#279

But Fekete was wrong in the sense that futures markets in a monetary metal are an oxymoron, and will always be corrupt because of it. Futures markets may only make sense in industrial commodities. How can one speculate on the future cost of money, when the money being used to speculate has it's basis relative to the money being speculated on! It is total nonsense, only useful for deceiving people. Fekete also made the mistake of looking at silver as a industrial metal, when the fact is silver has since beginning of man 3000 BC been primarily used for money. The industrial use of silver is a recent phenomenon. But Fekete is correct in the sense that never will man be able to use a pure physical money financial system, as there simply isn't a way to trade or do business. Imagine you had to physically hand me metal when you wanted to do business, but you are in Finland and I am in Philippines. I think his real bills is based on this.

rpietila wrote:...As long as paper money buys something, it should also buy gold. Otherwise the value of the world's gold stock is infinitely more compared to everything else, which is ridiculous. Maybe Fekete actually means free market when he tells that gold must be obtained from "black market" in such a situation. In free market there is always a price for gold, and if COMEX futures markets close, in theory it should not stop the COMEX from continuing as a cash-only exchange. Naturally the death of COMEX means defaults and maybe confiscation, and after that I wouldn't dare to bring my gold even close to their warehouse...

Yes he means the free market will overpower the futures market manipulation. All trading will be done in nearer time physical delivery.

rpietila wrote:...How does all of this affect our business?

I couldn't elaborate my thoughts much, sorry. This was more intended as a discussion booster.

Well it is not good for dealers who are not trustworthy, which means most of the large internet dealers. It means death to all the large dealers who are using hedging to sell at spot prices. It means a big boom for dealers who cater to the free market and have instant reliable delivery methodology-- i.e. http://GoldWeTrust.com

I am grinning from ear-to-ear, at least until the govt+FED decide to regulate gold & silver trading.

I would suggest you point out that eBay (at least in USA) has much higher prices than other dealers (at least in USA), because eBay forces the seller to offer and accept PayPal, which is both very risky (seller will lose any buyer dispute and not get paid, even if buyer has the metal) and adds % fees to the eBay fees. So seller has to add extra % to cover both the additional fees and also to cover the risk of occassional loss due to buyer dispute (yes buyers can receive the metal then claim it wasn't inside the box and win). That is why the eBay prices are not representative of the actual prices (at least in USA). Also with auction sites, there is an extra premium added due to the risk of the spot price changing during the auction (especially for those who are selling premium manufactured rounds, to replenish with lower premium Comex bars, and repeat).

Also I suggest that since you mention your competitive advantage to Hopea (rpietila) then you also mention that his system has lower margins than you on buyback, if Hopea will give a link to you and mention your slightly lower average prices but your higher margins on buy back. You each have a valuable system, serving slightly different needs. Hopea is better for those who want to trade, yours is better for those who want to buy and hold, or resell to other people at profit. In theory, any price advantage you have will be wiped out, because they can buy from you and sell into Hopea's system.

Btw, I understand that "hopea" means "silver" in language of Finland.

Actually I would love to see LibertySilver and Hopea work together to have the same system, then each of your be outlets of the same buyback system. Then I would like to see outlets in other major countries in Europe.

http://investmentrarities.com/12-30-08.html

I think we are going to see a tempest in end of Q1 or Q2, where the floodgates of bankruptcies, govt capital controls, and silver price allowed to run up to $30+.

Get ready, as this will be a very volatile time and you will get a brief moment to unload stocks, load up on silver, then prepare to trade some of it for gold as it peaks, because gold will win in times of flight from fascism (see the Weimer experience where silver initially tracked gold, then gold went much higher). I think there will be massive dumping of 17 Boz of silver once the silver price has risen enough. It is a balancing act as to when to trade silver for gold, or whether to do so at all. I can not advise you, but I wouldn't make is either/or, rather a mix. Certainly you want silver now at 80 ratio. Load up.

1oz rounds will be great for trading for gold, say 30 rounds for 1oz of gold. Or 8 rounds for a 1/4oz gold American Eagle.

I think the cabal will let silver price run, as bankrupticies force the populace to dump their 17Boz back to the refiners. They first wanted to kill the silver production, so that the industrial demand would get filled by the bankrupt westerners dumping their silverware and jewelry. They may only get a few 100 Moz in 2009, eventually they will need to bring the price higher and/or make the bankruptcies worse, in order to mop up the 17 Boz.

http://www.gold-eagle.com/editorials_08/bloom122908.html

...Armstrong is possibly the most knowledgeable man on the planet regarding the subject of cycles as they apply to social behaviour...

...Amongst other things, Armstrong is also anticipating a further down leg in the US equity markets which his model forecasts will commence on March 19th 2009 and will culminate on June 13th 2011...

http://www.scribd.com/doc/8813084/Martin-Armstrong-October-2008-Its-Just-Time-77p

p.7



p.28



p.32



p.33 "666" seems to be a pattern in time as well as number of the name of the AntiChrist:





p.35



p.65 Apparently Warren Buffet was either used or participated knowingly:



p.66



p.69




Too bad we didn't listen to Martin Armstrong before (or me saying to sell silver at $21 in the Hommel forum, while Hommel was saying to "BUY!"):

http://www.godlikeproductions.com/forum1/message522142/pg1

posted March 18, 2008 wrote:Martin Armstrong Turn Date in around March 21, 2008
Quote

Goverment and spending will jumpstart the economy, while inflation rages on. While banks go belly up, things like Google might increase. NEXT TURN IS April, 2009, that is the final downer to doom.

http://www.contrahour.com/contrahour/2006/06/martin_armstron.html

posted Feb 27, 2008 wrote:The next date in the model (+1.075 yrs.) is 2008.225 which is 3/22/08 (there are 29 days in February next year). However, the date correlation is most accurate at the "major" tops and bottoms.

Here is Martin Armstrong's book:

http://web.archive.org/web/20000817012023/http://www.princetoneconomics.com/Research/GBM/GBM-MAST.HTM#1

Read from pg 21 forward (especially page 32/570) as to the actual cause of the Great Depression, and the parallels to today (European flight into US bonds drove interest rates down causing a bubble in USA):

http://web.archive.org/web/20000826230639/www.princetoneconomics.com/Research/GBM/V2C17.PDF

And again I repeat what I have been writing lately, which is that there is no longer any "United States" place of refuge for capital to find safe haven. And I do not see any govt stepping up to offer refuge, because they are all corrupted. China can not allow the free movement of capital. Maybe Brazil? Australia with a massive import of Asian labor?

SRSrocco, I want to express my opinion on your latest post in Hommel forum, that I think you are getting ahead of time. Even Fekete says it could take some time to play out. We will have bounce to March, before resuming the decline. This bounce could be very significant in oversold stocks, as world will perceive that Obama has started to fix everything. This will eventually cause the bond bubble to peak, as people move back into stocks, which will be catalyst for going lower on Exter's pyramid and then the outcome you are predicting becomes more likely as we move towards 2011-12. Remember that confidence is more important than fundamentals in the short-term, which is what the 8.6 year Economic Confidence Cycle of the prior post is proven over and over to predict so well. Confidence ebbs like the tide, while fundamentals are the entire sea level.

See my prior post.

The policy of this forum is no religious discussion. However, I have stumbled on to some scientific coincidence that is so profound, I feel it borders on the subject of the study of cosmic cycles and via the prior post proven on economic cycles.

Bible says we will know the Antichrist "by the number of his name". Well there is a some correlation showing the number may name a cycle that (may if solar system not destroyed in 2012) repeats in time. It makes sense to me from a physical gravitational standpoint, as the Venus moves the closest to Earth of any planet. It also makes sense to me from my study of the organization of the universe as an infinite self-replicating (fractal, entropy) structure of chaos:

http://www.coolpage.com/commentary/economic/shelby/Mass-Entropy_Equivalence.html

Interestingly note the self-replicating pattern in the equation is similar to golden ratio, SUM log( p = 1/(1/n) ):

http://en.wikipedia.org/wiki/Golden_ratio#Alternate_forms



The sun's rotation about it's axis is 26 days, which is the number of the name of "Jehovah" (God) as pointed out in prior post, which also the 1/10 the birth (9 months) cycle of humans component of the Mayan calendar. The Fibonacci sequence is the birth cycle of rats (closest scaleable physiology to humans that are used for testing), which follows the golden ratio. The golden ratio happens to form the pentagram (star inside a pentagon), see Martin Armstrong's paper in prior post, which is the structure that Venus makes relative to the Earth over 6 synodic periodic orbital cycles, and although the entire 6 synodic cycles takes 6 x 1.599 Earth years, the formation of the 5 turns of the pentagram takes the roughly 8.6 years which is the proven Economic Confidence cycle of the prior post, which is each turn perhaps correponding the 5 smaller cycles within that 8.6 year Economic Confidence cycle, apparently with a turn coming up now and down again in March 2009 (see chart in Martin Armstrong's article linked in prior post):

http://www.youtube.com/watch?v=4nI3Ky8mhj8

Notice how the 8 year Presidential cycle roughly correlates which a constantly moving phase shift for the difference. I do not place much weight on the following but it is interesting other possible correlation (because I think the Earth is not in a warming period, although it will if sunspot 11 year cycles starts again) (notice 13 and 8 are the Fibonacci sequence numbers). Remember Kerry and Bush are both Skull & Bones members:

http://www.youtube.com/watch?v=dFK2-rtIdXg&feature=related

It appears the a cycle (is it the "666" cycle?) occurs every 26,000 years in the Mayan calender (13.0.0.0.0 which then resets like an odometer rolling over) which is an exact line up of Earth, Sun, and plane of the Milky Way galaxy:

http://www.youtube.com/watch?v=cGPcjMe6Qlw&feature=related

The golden ratio correlates to "666" exactly mathematically through the period of a sine wave:

http://en.wikipedia.org/wiki/Golden_ratio



Then the Bible says that after the Tribulations (the peak of the 26,000 cycle?), then Jesus returns for 1000 year reign over prosperity. Well 26 x 1000 years is the 26,000 year cycle. 26 is the name of the number of God, and also the axis rotational period of the sun-- giver of life in our solar system, and also the 1/10 of the 9 month birth cycle in humans, and also 2x the 13 number, which is the 6th number in the Fibonicci sequence, the birth cycle of rats.

Also the inner angle of the sides of a pentagram is 36 degrees, which forms the golden ratio, and 666 is the sum of the first 36 numbers. I think this is why the 5 pointed star is so important in the occult.

Apparently the the cabal know is they know the secret of cycles. They know their destiny is tied to the cycles, and thus they may know that their time in this cycle is nearly finished. This would be an interpretation of great hope for mankind, if true. Interestingly, the prime number 7, which is the stated period of the Tribulations, is what one might expect is the phase of the Presidential cycle was at the point before the 26,000 cycle of being shifted 1+ years from the Venus synodic pentagram period. 666 is the sum of the squares of the first 7 prime numbers! Wow so much self-correlating order! Can it all be a coincidence? I don't think so. The odds are very slim. One possible interpreation is that "faith in God" is what the cabal lacks, thus they will make the mistake of preparing for a "end time" event in 2012, whereas the Bible says it is only a cycle before Jesus returns anew. So thus faith in simple life could be how we survive the cabal's paranoia? Hmmm, interesting ramifications...

Of Revelations says that we will throw our gold into the streets, that it will be too dangerous to hold. It is hard for me to visualize that becoming so complete by 2012. Thus I doubt the above intepretation. Nevertheless it is interesting and all cycles appear to be pointing to major change by 2012. During complete shifts in Economic Confidence paradigms, I would say gold is the best asset to hold. However, there is a perfect storm brewing for silver that seems to be different than other cycles in recorded human history. It could be that silver reaches it's apex well after 2012, as the 8.6 Economic Confidence Cycle will turn upwards after 2011, we may go through a severe Phase transistion first in which it would be better to hold gold. I thinking to trade out of 50% of my silver to gold if silver makes a nice ratio peak against gold this year, better than 40 (currently at 80, James Turk is expecting silver to move to $30 - $40 in 2009, with Gold at $1500 - $1850). I think 1oz rounds will be best for making this trade. I think we will get a bounce in confidence due to Obama inauguration and programs, before we descend into the 2012 phase shift of epic proportions. The bounce may be too weak, and so that will muddle my decision process. It seems to me that silver does best at the first half of the 8.6 cycle, e.g. 2003 - 2006.5, as silver is correlated to positive Economic Confidence, so we should silver run for the sky after 2011.

Was this helpful? This is the sort of analysis you can only get from someone who is open-minded, and not a myopic zealot (I am not referring to Steve).


ADD:

I have realized of late that my Mass-Entropy theory (linked above) means that anti-gravity is the state of disorder, which would correlate very well to the levitation effects of super-cooled materials, because lower temperature is higher Entropy (more disorder, or less availability to useful work). Maglev trains use supercooled, low magnetic permeability super materials for the track magnets. It seems as though these materials are channeling the order around them to disorder more efficiently than other materials that require absolute 0. The ionization of air method of propulsion/anti-gravity is based on created a field of disorder in the surrounding air. It is really sad that NZ Andy decided to attack me along with Hommel (for no logical reason!), because I enjoyed some theoretical discussions with him. I wish someone could get to realize that it not friendship nor brotherhood, and to return the mix of idea sharing.

So what I am implying is that gravitational fields, magnetic fields, and electric fields are differentials to (or are the) ambient order, and this drives minute human behavior shifts that domino out in the Butterfly Effect. These are the current natural cycles of our current perceivable world. As we move to higher levels of perception, our cycles may be can altered to fit the natural cycles in that electro-magnetic (Mass-Entropy) sprectrum, e.g. virtual reality (something Dash was very interested in).

> Incidentally, I find the relationship between Phi and 666 pretty
> arbitrary, as it depends on the use of degrees...

Every reality is arbitrary, as reality is only perception.

Communication theory tells us that in order to have a signal, we have to define the noise. Resonance is shared reality.

This is why I have written that this period is more about lifestyle change and humility. It is why I read up on the Amish. The reality of the money is that it is inseparable from society, so I think offsetting the current ill direction of money is to alter one's lifestyle and thus perception of reality of money. It is hard to get the shared societal chain off the neck if one needs bits of paper to obtain the necessities of life every day.

People think they need 10oz, because silver is so cheap. But something big is getting ready to happen, then silver goes to $50, then they are going to be all over the 1oz rounds like flies to honey.

Glue 10 x 1oz together with a water soluble glue (or use a heat shrink wrap machine to encase in clear tight fit tube), so then they have the best of both, a compact 10oz bar (39mm x 24.8mm, 1.5" x 1") then later soak in water to separate into 1oz, when the price of silver goes ballastic soon. It is really stupid this infatuation people have with beautiful bars. If you want industrial silver, then buy 1000oz bars. If you want silver money, then buy coins. It is that simple in my mind.

Oh lookie, stackable 100oz bars, (are you drooling yet, I see Hommel is still playing on your psychology):

http://silverstockreport.com/2009/academy.html (is stackable going to matter to desperate people coming! No! Silver is silver)

I urge you to look at the breakout silver has had on the silver-to-gold ratio chart:

http://www.kitco.com/ind/Radomski/jan152009.html

This is a major breakout and we are going to see fireworks in 2009 probably in terms of silver moving up much faster than gold. I expect gold at $1500, and silver at 40 ratio roughly $35 - $40. I expect this sometime in 2009,. or the latest is 2010 (but I doubt it will take that long).

In other words I expect about 70 - 100% appreciation in gold as the Tbonds start to top and break, and about 3x that in silver (the next move down Exter's pyramid will come before 2011):

http://www.kitco.com/ind/Laird/jan152009.html


P.S. regarding my prior post about coming lifestyle change, I think this article is one of the best I have read ever about demographic cycles and the lifestyle changes they induce:

http://www.kitcocasey.com/articles/2491/foundations-of-crisis-1-13-09/

Thank you. Sorry no one has much 10oz right now. I don't try to buy that which everyone wants. I buy what is plentiful then wait for people to want it. I will have 10,000 oz of brand new Buffalo+Indian Head silver rounds starting next week. I am offering them at $1.50 over spot. You must be pre-wire, then lock in prcie when ever you want after your wire is received. I will give you exact # of ounces so that you don't have any funds left over.

I think we are not thinking clearly about how we will sell and dispose of your silver in future... Why pay huge premiums for bars that you eventually need to break down into small size again at huge spreads when you trade them in?? You need some rounds at home to spend. You need some rounds at home in case of defaults at vaults. If you want to store large quantities, then buy your own 1000oz bars. Maximum liquidity retail are rounds. Maximum liquidity at professional metal markets are the large bars. But it is probably better to keep the large bars stored at a vault when you can easily sell them at low spreads!