Friday, October 8, 2010
Is The Silver Boom Over?
Is the silver boom over? Has everyone caught up and overbought the market, like the internet stock boom and the real estate home markets? In a word, no.
My proof for the above claim? Ask your neighbors (or yourself) to identify the large picture above. Give up? Don't feel bad, the vast majority of Americans have never seen one of these things much less owned one of these beautiful coins. Hint: they are one troy ounce of silver and are official US currency denominated as a $1.00 coin. Theoretically, you could spend it to buy a pack of gum at 7-11 or pay your taxes. Of course, you would have to be a complete moron to do so since each coin is currently selling for around $25.00 per, the spot price of silver on 10/08/10 plus a $2.00 per coin premium.
Answer: It's an American Silver Eagle, the most famous and widely collected silver bullion coin in the world minted by the US Mint since 1986. Millions are sold each year, but if you split all the ASE coins previously minted among all US citizens there wouldn't be more than one per person! I ask you, is that overbought? The US Mint has already made $35 billion dollars in worthless base metal quarters for their "State Quarter" program. Now, if that's not an outrageous example of overbought (and overproduced) I just don't know the meaning of the term!
The vast majority of Americans have barely begun to wake up to the value of precious metals like gold and silver again after years of mind-numbing fiat currency (paper money not backed by gold or silver, or indeed, anything...real). Even should everyone suddenly wake up and start to buy silver, the yearly supply of 650 million ounces is only enough for each American to purchase 2 ounces per year for about $45 per citizen (or the cost of a date night movie with popcorn and candy). Of course, if this country-wide buying were to occur it would leave absolutely nothing for industry which is finding more uses for silver everyday from new hybrid car batteries to antibacterial bandages.
I knew the real estate bubble was getting ready to burst when my highly fiscally conservative brother, Mike, started talking about buying houses and fixing them up as an easy route to riches a few years ago just before the bust. So far, despite cajoling him for the last 2 years, I haven't talked him into buying even one ounce of silver. To be fair, however, he's in good company still. Only a fraction of 1% of Americans own any actual physical silver or gold coins, bars, rounds etc. Not much of an "overbought bubble" to my way of thinking! Compare that tiny ownership number to the number of troubled "under water" homeowners who bought houses they couldn't really afford in the last 10 years! In fact, a recent article stated that one home is foreclosed upon every minute of every day! Now that's overbought!
In conclusion, I'm not going to worry about the precious metal bubble bursting until my stick-in-the-mud brother starts stocking up along with all his average American friends on Gold and Silver American Eagles and pre-1965 "junk" 90% silver coinage (dimes, quarters, halves, dollars)! Maybe I should start a newsletter with a subscription fee and call it "My Brother Mike End of Bubble Newsletter". I could make thousands!
Silver and gold still have a long way to go in an uncertain economy, unconscionably high multi-trillion dollar debt, inflation and coming hyperinflation, governmental idiocy, and a world that is growing increasingly sick of our wars, deficit spending, free health care giveaways etc.
Time is running out fast! Hyperinflation seems unavoidable as fiat paper money is being printed as fast as the US presses can run. To protect your wealth and your family, buy gold and silver now from these top companies, APMEX Gold and Silver and Silver American Eagles.