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TRUE SILVER CONCERNS

BUYING GOLD/SILVER, GOLD/SILVER COINS, SECURING GOLD & SILVER, SELLING GOLD/SILVER   No comments yet

Are you one of the many concerned about silver’s future?  Just this week I heard a talking head mention the volatility in precious metal as 2012 closes its final chapter. She confidently mentioned why investors sell silver and gold to wisely buy equities now that politicians are on the verge of solving our fiscal cliff issue. Wall Street celebrates this great news with a year-end rally almost like they realize Washington has no other choice but to feed the giant that holds the wealth of Middle America. My concern, my truest concern, goes far beyond the fiscal cliff or the triviality of our mainstream media, I’ll explain.

I would like to take a moment and do something I rarely do. I want to make a prediction, a silver prediction that is, and I’m asking each reader to, well, read closely. By the way, this prediction has everything to do with my concern of the day.

While paper silver sells down…. physical silver disappears at near record pace. Because of this I’m concerned something “big” will cause a sleeping society to awaken to our fiscal reality. This reality has the potential to dry silver inventories nearly overnight.

For those new to physical silver I want to share a fact or three.  The majority of silver on the market today is newly minted silver in the form of bullion, rounds and bars. The number of mints making silver bullion, rounds and bars are few. Most of you that own silver bought it through a third party (online bullion broker) and not from the mint itself.

Your source, the bullion broker, in all probability isn’t sitting on a huge inventory of silver in hopes you call for more. The price of silver fluctuates too much for silver sellers (brokers) to risk anything other than placing a “buy” order only after you ask for more. This means those brokering silver sales are limited to what’s produced or allocated from the few minting silver.

We will soon see days of silver rationing meaning those wanting to buy silver will be limited to a few ounces, at best, or only the highest premium and less desirable forms of physical silver.

Now here is where my concern takes over. People prudent enough to own physical silver have no intention of selling anytime soon, why should they? This December’s drop in silver means nothing to those sitting on physical silver. There is no way a person wise enough to protect with physical silver will sell it, one call to any silver broker will prove this as true.

The new-age bubble investor will run to silver not driven by wisdom but emotion. This is why so many scurried to buy silver not long ago when it hit nearly $50 per physical ounce.  The combination of short inventories and the unwillingness of those holding silver to sell will create a shadow market in PM making the true value of physical silver hard to pinpoint. This value will be far beyond silver’s daily paper fluctuations we watch today.

This writer believes we have reached such a point but the monetary spread between physical and paper hides behind a splinter of availability (silver inventory), an inventory on the verge of disappearing.

 

 WHAT ABOUT YOU?

My intention is to shout silver’s praises from the highest mountaintop so that as many folks as possible replace at least 10% of their net worth with precious metal. For those asking, 10% is a minimum and something closer to 20 – 25% is best (my opinion based on what I feel silver and gold’s actual physical values are today).  Remember, I gain nothing financially if you buy a boatload of silver since I sell neither metal.

But the problem, or concern, is that the physical silver window is closing just as those who trust a fiat currency need PM (precious metal) most. To put it simply, there is not enough AFFORDABLE silver or gold to go around. This is why both metals will go higher as more individuals realize we bought into a temporary currency system that still stands only because of the ability to print more.

Today’s silver buyers are a crafty bunch. They silently buy boxes of silver with little mention to anyone outside the few trusted, very wise. Is this why the silver cookie jar suddenly nears empty? Not exactly, physical silver has a bigger problem than its sneaky buyers.

Mining silver is challenging in today’s world. A global market may thirst for silver but politics and environmental issues dictate how fast silver leaves the ground. This conflict worsens as demand and prices grow, how could it not?

While preparing this post I typed “conflict in silver mining” and then watched nearly 3,000,000 results pop up on my screen. South America’s mining industry rages with conflict as inventories cry for more.

This only proves the option to own silver is not infinite.

I urge you to keep the above facts in mind each time a drop in paper silver prices rattle your PM faith. The fiscal issues our Congress address today are long-term problems that will take many attempts to fix. This makes protective assets, like silver, a long-term protective measure that each person who wishes to sustain wealth must own. Why not add a few hundred ounces to your stash while the opportunity to buy cheap silver still exists?

COMMENTS & QUESTIONS:

QUESTION:  You mentioned storing PMs in two or three locations as part of a proactive storage plan. One you recommended to another reader involves international storage which requires funds wired from a banking account. To my knowledge, the only way to someday retrieve this wealth is to have the funds (from PM sold) sent back to the same bank account. Here is the problem as I see it. What if the bank is no longer in business? What if the IRS decides my bank account is in their control regardless if I’m delinquent or not? Not sure I like the method for retrieval with international metal storage. Your thoughts?

TPS Reply:  Awesome question so thanks for sending it over. “Yes”, I recommend that each person who owns physical PM to use an aggressive proactive plan for storage. This could include international storage but two words popped into my head as I read your email, DUE DILIGENCE. I commend your efforts to look at international storage through realistic eyes because the risks you describe are very real, but.

I won’t speak for companies like BullionVault or GoldMoney, but my understanding is most depositors can retrieve real metal as well as cash back into a registered bank account. This means they will send real PM back to those who request it (for a fee). Does this take 100% of the risk out of international PM storage, of course not? I know of no way to store PM that is completely risk free.

My advice is for each person considering international storage to take the time to ask “what ifs” before taking the plunge. I personally feel it is well worth the risk depending on where you live. Thanks for the questions.

QUESTION:  You mentioned something about insurance for those who store PM at home?

TPS Reply:  Yep, insuring PM stored in your home is a great option…. and one recommended. The last I checked the fee for storing $100,000 in bullion was around $500 per year, well worth the effort and cost in my opinion. I’ll send the info over.

QUESTION:  Found your site on the internet looking for silver and gold information. I have so many questions I don’t know where to start and can’t afford the one-on-one consulting service you offer. In a nutshell, can you explain the steps to protect with physical silver?

TPS Reply: Would love to….. and thanks for spending time with TPS.  You have taken the first step to financial freedom, so congrats. Research is the key to understanding the power of silver/gold and how they protect in times of huge currency creation. First, continue to educate yourself why silver and gold are so relevant today.  Next, buy PMs as close to spot (paper) price as possible. I own bullion, rounds and bars…for what’s worth. Next, formulate a comfortable plan for storage that includes several options just in case one option fails. Next, forget the metal exists and live your life in the confidence that only comes from an independent nature that leads you to own a real asset like silver or gold.

 

DC Carlton is the founder of The Prospector Site and author of Why Silver and Gold Will Go Higher. Feel free to register here for his free online newsletter that provides precious metal insight rarely mentioned from mainstream media sources

 

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BARGAIN BASEMENT SILVER PRICES

BUYING GOLD/SILVER, GOLD & SILVER, GOLD/SILVER COINS, SECURING GOLD & SILVER   No comments yet

I’m sorry to say we are having trouble on the maintenance side of The Prospector Site but should have everything restored shortly.  Some of you have emailed and I’m sorry for the inconvenience and interruptions of late.

Bargain basement silver is the topic. The idea for today’s post hit me when my youngest son noticed how low silver prices are now compared to when he bought physical silver last year. Actually, I think his words went something like, “Boy dad, I’m really taking a beating on the silver you had me buy last year” and then walked away leaving a pile of guilt at my office door. My rebuttal explaining the difference between paper and physical collided with a blank stare so I decided not to waste his time or mine justifying silver’s true value, or suppression.

If the truth be known, some of you are second guessing silver’s worthiness. One of my readers went so far as to email asking for the best way to sell silver bullion purchased last year. Now I’m not trying to be critical here but isn’t this like selling the ship’s life vests under cloudy skies? This leads me to explain why silver is so necessary, and cheap.

Nothing, not even gold, has the track record of physical silver. Silver is the truest source of money throughout history and more have labored in exchange of silver than any other means of monetary reward. Most of the world longs for silver but even today’s prices are far beyond the reach of our world’s poor. The best they can hope for is shelter, food and clean water; silver is far off the radar.

But you have choices, this makes you different. You have the ability to buy silver but few take advantage of the second most used commodity that is also money. You see silver as an asset in decline but fail to see silver’s long-term value in an age of currency correction and decimation.

Our technology age thirsts for silver like never before even to a point that nothing can replace silver’s conductive abilities. Silver’s uses are more relevant today than ever before but somehow we overlook how the technology we depend on depends on silver.

These facts are especially concerning when we combine them with silver’s extremely short supply. Mining experts warn users that output will not keep up with silver’s industrial demand, not to mention monetary demand, as new technology depends more on silver with each new innovation.

Considering all the facts above, silver prices are less today than this time last year. Does it seem realistic that a commodity more relevant, more in demand, and less available is also retreating in price? No, of course not, the only reason you can still buy such affordable physical silver is because paper and physical silver are valued nearly the same.

Suppression and manipulation allows those prudent to own cheap silver in the summer of 2012.

The world fails to see paper silver as a promise in an age soon to question all wealth. This awakening will draw more to real assets certainly to include physical silver. What happens next is nothing short of amazing for the few holding physical silver as we prepare to see growing premiums divide paper from physical.

As you read this today physical silver adds a premium of around 10% and readily available. This means physical metal will cost a buyer 10% more than a paper silver promise.  As previously mentioned, the great monetary awakening will create more physical buyers, fewer trusting in paper, causing this “premium” or spread to grow as silver surfaces as a trustworthy source of money.

I realize new readers question such statements as the one above but for some reason refuse to question worldwide economies 100% dependent on debt. This misunderstanding exists only because of a false belief in never-ending debt stemming from a fiat based global economy. Name one city, state,or country not dependent on debt just to sustain an unsustainable lifestyle.

CUTTING LOSSES

In Why Silver & Gold Will Go Higher, we spent a chapter explaining the importance of wealth relocation. Don’t tell other readers but I wanted to name the chapter “Cutting Losses” since this best describes our future fire sale economy. A world at loss sells debt based assets cheap in order to raise capital to own real assets like silver and gold.

It is human nature to only bag sand when the water rises around us, never before. The rising tide of debt now teases toes and few realize the damaging affects when credit washes away. A reversal of credit is the straw to break the camel’s back and when it does assets like silver are exposed as necessary and real. Folks will sell what ever they can for what ever they can to buy silver, regardless the premium or price.

QUESTIONS & COMMENTS:

Question: Thanks for the great information about investing in precious metals. Silver is the only metal we can afford at this point and my question is what is the best silver for someone new? My plan is to buy $300 worth of silver each month to replace a car payment my wife and I recently unloaded.

ANSWER: Ah, another one sees the light, congratulations. Before I answer let me offer some free words of advice. Regardless the silver you decide to buy, find a safe place to store and then forget about it. Too many new PM (precious metal) buyers fret over a price decline not realizing the long-term potential of both silver and gold.

I love the fact you unloaded a car payment in order to buy a monthly allotment of silver, very wise. One asset is depreciating and the new asset is the truest source of real money. My advice is to buy the lowest premium silver when first starting. I like bags of “junk” silver which is nothing more than 90% pure pre 1965 coins in multiple denominations.

Not only is junk silver wise to own but could work great for a future barter economy too. Stick with your plan and feel free to contact me down the road with further questions. Thanks for reading TPS.

 Question:  I have a question about storing PM at home. I have a good safe and it’s bolted to my home’s foundation in a discrete location that no one outside my family knows about. My home also has a wireless security system but my concern is no one showing up when needed. I hear story after story of 911 calls unanswered and this leads me to believe maybe storing some PM at my bank could be best but want to get your opinion first? Thank you.

Answer: Thanks for the great question, it sound like your home storage method is text book to me. Other readers also describe 911′s failure to respond (or answer) and this greatly concerns me as well. Home safes are meant to buy time and not 100% safe from penetration, all safe manufactures will agree. This means your metal is as safe as your surroundings and this includes the response time of your local police department.

Should you diversify some PM to a bank box? Maybe, but please keep this in mind before doing so. Bank boxes are on bank property which means all things stored are subject to some kind of seizure under certain situations. Storing PM at your local bank could be safe today but not so safe tomorrow. Have you considered insuring the PM stored at home and in a locked safe? Premiums are reasonable so email me if you’re interested in companies who specialize in insuring private stashes of silver and gold. Thanks for the question.

 

 

 

 

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RETIREMENT MYTH

BUYING GOLD/SILVER, GOLD & SILVER, GOLD AND MONEY, SELLING GOLD/SILVER   No comments yet

Do you recall the good old days when a guy could find a job, work it for say thirty/forty years and then enjoy another twenty or so years living leisurely off a full pension, including health care coverage? Boy, what a difference a few years make since the best most folks can hope for now is a job working until their dying breath. Realism is liberating, this is why each reader must accept that all benefits, over a paycheck, are soon to become obsolete. This fact is yet another reason to divert today’s retirement funds into real money like silver and gold.


Let’s break this down in real fashion and then tie PM (precious metal) into this illusion of retirement. Somewhere down the line we convinced ourselves retirement wealth will take care of us during our golden years. The truth is many public pensions (private too) are severely underfunded and will not be around when age takes away the option to work. This news is hard for many to believe and possibly why so few have control of their wealth.

Right now the world is divided on how to fix monetary problems. One side looks for a government sponsored return to “normal” (even if it means mortgaging our children’s future) and the other side prepares for a correction your grandchild’s grandchildren will read about. My question is why are the two sides so far apart when the facts are as obvious as the nose on our faces?

Let’s look at where we are now to see where we’re headed. Those working want whatever is necessary to make good on past pension promises. Those looking for work want whatever is necessary to find a job.

How can we honestly expect a leisurely retirement when somewhere between 20% and 40% of the world is desperately looking for a job?

Part of my job includes consulting with small business owners and individuals to find a way to protect wealth in an age of denial and confusion. The first few minutes of each consultation includes erasing a lifelong belief in the USD (traditional investing)…… and then explaining the power of silver and gold. Most who call realize something is wrong in our monetary world but have yet to calculate exactly how this impacts them.

Why are we so confused and divided you ask? Maybe Yahoo’s home page can help answer this question better than I (As I write this Yahoo breaks new ground by sharing “Woman’s biggest Bikini-buying mistakes”), unbelievable!

Loads of misinformation keeps us from facing a harsh reality that no longer includes luxuries like retirement. The few willing to accept this as fact, and act accordingly, will greatly benefit from cheap silver and gold. Remember, no one new to PM cares what metals HAVE DONE, only what they will do.

Do we agree the job market from here forward is about to become more competitive? If so, then doesn’t it make sense new hires will take what they can get even to the point of forfeiting everything over a livable wage? Private employers always take a savings when possible, this I can guarantee you. Anyway, how much leverage will an applicant have when hundreds of others are competing for the same job? Someone will work for less and fewer benefits.

Volatility will sweep away retirement benefits for most, if not all, and the ones holding physical PM will find themselves very thankful they did so. My point today, don’t bank on a promised pension or retirement.

QUESTIONS & COMMENTS:

Question: I don’t get it…

If gold tends to rise due to monetary easing (stimulus) why did the extending of the operation twist, that is another form of stimulus ( http://in.reuters.com/article/2012/06/20/usa-fed-operation-twist-idINDEE85J0CP20120620 )

caused investors to devalue PM’s?

Why did i read today that operation twist if good for the stock market but bad for gold? Where is the sense in this if a QE3 would be good for both?

And while we are on it, what do you think of this guy forecasting that the value for gold will test $1373 an ounce by the end of this coming July ?

Share your thoughts about this.
Thanks

TPS Answer:  Love to and thanks for the questions. To begin with, the USD is benefiting from a panic sell-off in Europe as more lose faith in the euro’s future (what’s good for the dollar can mean short-term volatility for PM). Combine this with investors selling everything not nailed down to cover losses and it’s easy to see why gold and silver are off the radar (nearly all commodities are down). A run to dollars has a short shelf life and it won’t be long before the same concerns in Europe arrive here in America.

Will temporary faith in the USD take gold below $1400? Who knows, but who cares since nothing in the making will fix decades of continuous borrowing ultimately destroying the dollar as we know it. Gold will rise if for no other reason than keep par with massive currency printing.  My advice is to stick to the plan, still.

Question: This could sound crazy but my plan is to sell a few gold ounces then stock up on ammo and food storage. Talk of bank runs and bank holidays lead me to believe grocery shelves could empty overnight. Sound crazy?

TPS Answer: Crazy you ask? NO it doesn’t sound crazy, sounds wise to me. If your only option is to sell a few gold ounces then do it. All readers should have a supply of life’s necessities on hand regardless since no one knows what the future has to offer (remember Katrina?).

I’m all about self-reliance especially in this age and recommend each reader do the same. All the gold in the world does little good if you can’t protect it. I encourage you to put PMs on hold until 100% comfortable with everything your family needs in case of emergency. Great question and thanks for reading TPS.


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WHAT WILL HAPPEN TO THE SILVER MARKET?

BUYING GOLD/SILVER, GOLD & SILVER, GOLD/SILVER COINS   No comments yet

When I was around four years old my father and grandfather invested a full day in me and fishing. I can’t recall how many fish we coached to shore but I vividly recall asking far more questions than any father with a much-needed day off should endure.  Finally my father resorted to a generic reply of, “because that is simply the way it works” to each unanswerable question that only a four-year old mind can create.  Unfortunately, explaining the purpose of PM is far too important for a generic reply. Many of you are sending questions to The Prospector Site and we appreciate each question and comment, thank you. The value within each question goes beyond an answer so let me explain.  Gold and silver dialogue, or questions, create further discussion and interest in the one nontraditional asset each person should now own.  Not every question is answerable but each question is worthy of a reply. Today I want to share a couple of what I call common questions from a reader willing to invest time and money to preserve financial wealth via silver and gold, congrats.

By the way, don’t forget to sign up for The Prospector Site online newsletter emailed straight to you once a week. It’s free and available by registering here.



QUESTION:

Hello, I am an European reader and I am very fond of your site ( found about it while reading dailyreckoning.com ). I have read your website from the beginning, started last month and only now got to March. It has been very enlightening but I never said anything up until now. I wanted to read the whole site so that I could have a grasp on what the global scene was month after month, since March last year, basically reading the gold/silver economy trend, trough your posts. I have now stepped up and registered at Bullionvault.com buying small amounts of silver.

I would like to ask you 2 questions:

1. What will happen to the silver market if the copper is “the” next silver, will silver drop in prices?

2. Why if there is a gold dip, there is a silver dip at approximately the same proportion?

Thank you very much
Regards from Europe

PROSPECTOR REPLY:  Always great to hear from our European readers so thanks for the comment and questions.  I’m not sure if you know or not but you guys are in the news a bit lately?  You mentioned something that really grabbed my attention with an interest in the global scene as part of your decision-making process to buy silver.  I’m flattered our site is part of this decision so thank you for using us as a PM resource.  Starting with small amounts of silver is exactly how I advise clients to begin a soft entry into PM (precious metals). Silver is relatively cheap to own and easier to buy allowing newbies time to develop confidence in PM without spending boatloads of money in the process.  I do recommend owning both metals ONLY AS YOU FEEL COMFORTABLE in doing so.

Now, to question #1. I see no long-term drop for silver considering all worldwide currencies committing to printing themselves out of economic trouble.  Injecting fiat currency into world markets will drive up value and demand for real money, like silver, and copper rising is no more a factor than two ships rising from the tide, simultaneously.  My opinion is most metals in limited supply will find monetary attraction but nothing like silver or gold. Copper and nickel could easily be included in future monetary attraction but they will not suppress or replace silver, not in my opinion.

I see slim odds of silver doing anything but putting smiles on silver holding faces; this comes from a guy not selling silver or gold. Please stay in contact by letting other readers know how Bullionvault.com is working out (I’m assuming you’re using their vault in Zürich?).  Some PM advisers are hesitant to recommend passive storage but each person must judge risk accordingly depending on local volatility and government overreach. Diversifying storage is as important as diversifying wealth in general (hope this makes sense).

Now, to question #2. You are correct by noticing both silver and gold follow lockstep to monetary demand, kind of. Silver has one over gold and this one thing is a very big thing.  Silver is now the second most used commodity, we can thank modern-age technology for this.  Silver is a great conductor and technology now contributes to silver’s demand.  This means silver has monetary value (money) and industrial value simultaneously.  This is why PM experts feel silver undervalued and will close the silver to gold ratio very soon.  Paper silver suppression obviously is a major factor in today’s cheap silver prices (I hope all are taking advantage of discounted physical silver).

Regardless if (when) silver closes the gold gap; both historically parallel each other in true relevance and value.  This is because both metals are real money and no amount of fiat printing will change monetary balance.  Both metals float along inflationary rivers willing to rise to whatever point necessary to equal true value and worth.  This is why I started trading currency for metal ten years ago to the month.  I’m guessing this is why you are too.  Thanks for the great questions and welcome to The Prospector Site.

IF OTHER READERS  HAVE A QUESTION OR COMMENT WE WOULD LOVE TO HEAR THEM.  REACH ME HERE.


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