Saturday, February 26, 2011

Silver Trading Facts for Dummies!

To successfully trade silver and not get ripped off you need a few pieces of info you should learn and memorize.

First, 1 Troy Ounce of silver = 31.1 grams

Secondly, 1 ounce [troy] = 1.097 regular ounce. Troy ounces are just a little bigger than the regular ounce.

The main measurement for silver when quoting or being quoted is the Troy ounce. You can see that it is a little larger than the typical English/American ounce.

The next number to remember is crucial and easy:

All USA pre-1965 dimes, quarters, and halves are made from a 90% silver 10% copper alloy. $1.40 face value (FV) of US junk silver coins has ( 1.0127 troy ounce) the near equivalent of 1 ounce of pure silver (if melted down and copper separated) . The difference between the 1 troy ounce and the decimal 1.0127 is negligible. When silver is $33 per troy ounce you're looking at only a $0.42 (in funny base metal money) discrepancy. For instance, everything else being equal, you could trade (2) Franklin or (2) 1964 Kennedy halves plus 4 silver dimes and your $1.40 in junk silver could be traded for (1) American Silver Eagle ( 1 troy ounce .999 pure silver) as the amount of silver would be virtually identical.

Botton Line : Just remember $1.40 FV in junk silver coins = 1 Troy Ounce Silver Eagle.

For more crucial number crunching help and fun go to Great site with articles and a website that continually tracks the silver price and gives you updates on how much your silver coins are worth from a strictly silver content standpoint. Note: This article is not for coin collectors looking for errors or Proof and/or Uncirculated coins. All we care about in this article is silver content only! The site is hooked in with eBay, so they can tell you how much your $10 face value Franklin half roll is worth in silver, how many ounces the roll contains, and approximately how much you can expect to be paid by the winning bidder. Usually +5% to -5% of current melt price as a rule.

Fun Fact: 90% silver US coins made for circulation were made with 10% copper to form a alloy that was tougher and more wear resistant than a pure silver coin. The Silver American Eagles are beautiful coins made from .999 pure silver, and are therefore softer and more prone to wear if handled excessively. Of course, it was known upfront that although the Silver Eagles are an official US Dollar, very few mental defectives have ever tried to buy a candy bar at 7-11 with one. Why? Because typically you'd rather give a cashier a crappy piece of paper money worth inherently zero, to handing over a coin currently containing $33.39 in silver content along with a near $3.00 fee per coin tacked on as a common premium for these beauties.

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 (below):



Wednesday, February 23, 2011

My Quarter is Better Than Yours!

The quarter in this picture is no ordinary coin. It's BETTER than the quarters you have jiggling around in your pocket or in the loose change jar in your kitchen. Why? Because it's a 90% silver US quarter dollar minted in 1964, and as I type this article its selling on eBay for 25x its face value. In other words, if you want my quarter, you're going to have to fork over 25 of yours!

You might be wondering, if you haven't been paying attention lately, just when the US Government stole your real money and gave you nearly worthless funny money? Well, starting in 1965 the US(less) Govt., switched from minting real silver dimes, quarters, and halves, to producing base metal slugs made from 92% copper and 8% nickel for a PHONY silver tint. The average US citizen barely noticed and never missed a beat. After all, the Washington quarter dollar still looked the same, right?

George Washington when he was alive made numerous statements against using anything but gold and silver as money. He believed that paper money (and by extension base metal coins), were primarily a tool of banks and governments to enslave & rob their citizens for their own enrichment. People who own gold and silver need no questionable promises from governments to keep their value. After all, both gold and silver have been valued for over 5000 years of human history, and are likely to continue to maintain that hold on our species. How long do you think the plummeting US Dollar will last before it's finally consigned to the wastebasket of history?

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 (below):


Monday, February 21, 2011


Silver prices are continuing to climb, and scale new pricing heights. Today (Feb. 21, 2011), silver tasted highs over $34 USD. That's an increase from the prior close on Friday of almost 4.0%!
Still, it makes sense to buy silver. Here are six good reasons:
1. China has turned net importerChina, the biggest commodity guzzler in the world, is importing silver big time. In fact, in 2005, China exported 100 million ounces of silver (one troy ounce = 31.1 grams). In 2010, five years down the line, the country has turned a net importer, importing 122.6 million ounces, which is around 14% of the global production.
Now, we all know the impact China has on the price of a commodity it takes fancy to. India, the biggest consumer of gold and silver in the world, imported 1,200 tons of silver in 2010, up 20% from the previous year. This increase in imports has largely been attributed to increase in the price of gold, thus making gold jewelery very expensive.This has made people in these countries turn to silver jewelery. In fact, as the price of silver keeps going up, more and more people are likely to take fancy to silver jewelery.
2. Supply demand mismatchThis is a very basic point, which is behind every price rise. Silver demand is more than silver supply, and thus the prices have been on a run. The Silver Institute, which tracks silver supply, reports that from 2000 to 2009 (the latest data available), the supply of silver went up to 709.6 million ounces, up from 591 million ounces. This shows an increase of around 2% per year.
Data from the CPM group shows that mine production rose to 741.5 million ounces in 2010 (up around 4% from 2009). Silver demand in 2009 stood at around 889 million ounces and the difference between supply and demand was largely met out of scrap sales. Given this, nearly 19% of silver demand is being meant out of scrap sale. This is not sustainable.
3. No recycling of silverOne way to increase supply is to recycle silver like gold has been over the years. Silver is largely used as an industrial metal. It is a very good conductor of electricity, the best heat transfer agent and reflector of light, a very good lubricant, catalyst and alloy. But it is used in very small amounts as an industrial metal. Given this, it is not easy to recycle silver.
Also, at its current price, it is not monetarily feasible to recycle silver. Experts are of the view recycling will become monetarily feasible only once the price of silver crosses around $50 per ounce (currently it quotes at around $32-33 per ounce). Given these reasons, increasing sale of silver scrap is not very easy.
4. Not easy to ramp up productionExperts who closely track silver believe the world is running out of silver. The most vociferous of this lot, Adrian Douglas, the proprietor of Market Force Analysis and also a director of GATA (the Gold Anti-Trust Action Committee), has gone on record to say the world will run out of silver in 2020, and thus become the first element of the periodic table to become extinct.
Theodore Butler, silver analyst, Butler Research, has said in the past that silver inventories have declined from 10 billion ounces (one ounce equals 31.1 grams) in 1940 to 1 billion ounces today. In comparison, gold inventories stand at a total around 5 billion ounces. So, if we were to believe these experts, there is five times more gold on this earth than silver. But does that reflect in the price of these metals? Certainly not.
This decreasing inventory cannot be built up through increase in production. The earth’s crust has around 17 times more silver than gold. Despite this, silver production cannot be ramped up quickly. The primary reason for this is that it is rare to find a pure silver deposit. Hence, nearly two thirds of the silver that is mined comes as a by-product of mining other metals, like copper, zinc and lead. So, increased production of silver in turn depends on the price of the other metals it is co-mined with.
Also, the silver “mine-cycle” is around 10 years, i.e. the time it takes from starting to explore for silver and until the mine finally begins to produce silver. Over the years, the low price of silver has ensured that the mining companies haven’t gotten around to looking for silver.
5. New uses of silverAs mentioned earlier, silver has lots of industrial uses, given that it is the most malleable and ductile metal, after gold. Silver is currently used in electrical applications like conductors, switches, fuses etc. It is also used in photography, and silver alloys are used as cathodes in batteries. New hybrid car batteries rely on the gray metal, as does the growing solar cell industry. Interestingly, the new uses of silver keep growing.
One of the newest and most innovative uses for the "poor man's gold" is to kill germs! As a bactericide, silver is used in water purification and air handling systems. Additional new products using silver’s biocidal qualities are being developed each year; clothing, bandages, toothbrushes, door-knobs (flu-protection), keyboards, and the list goes on growing.
6. The investment argumentInvestors are gradually realizing the potential of silver. This has led to an increased demand for silver coins as well as exchange traded funds worldwide. The US Mint sold more than 6.4 million silver eagles this January —- the highest sales in a single month since the coin was introduced way back in 1986.
Eric Sprott, who runs Canada-based Sprott Hedge Fund and who recently launched a silver fund, made a very interesting point during an interview. His new fund entered the market to buy 1 million ounces of physical silver. The silver wasn’t readily available, and it took the fund nearly 10 weeks to acquire the entire stock.
Now, this was the impact of just one fund. Imagine what would happen once a few more silver funds are launched. In fact, data from the Silver Institute shows that the investment demand for silver went up by a whopping 184% to 136.9 million ounces in the year 2009 (the latest data i.e. available).

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 (below):



Monday, February 7, 2011

Spartacus: Gods of the Arena - Ancient Past vs. Present Investment Strategies?

Spartacus: Gods of the Arena is a dynamic and truly worthy prequel produced by Starz that chronicled the rise of an infamous Roman slave, Spartacus, who lead the worst slave rebellion Ancient Rome had ever seen. Though this article is somewhat of a departure from the usual financially-oriented subjects of this blog, I believe that readers of this article will find my conclusions useful and pointed nonetheless in the study of investment strategies.

To the eyes of the average American, the tale of the House of Batiatus is a fascinating, if shocking, glimpse into the life of Ancient Rome. In this series the protagonist is Quintillius Batiatus, a Lanista, or owner of a Gladiator Training School. Batiatus seeks to raise himself and his House to heights of glory never before achieved by his ancestors, or indeed by any Gladiator Trainer before him. We can't help but applaud and root for this underdog who rose from beneath his father's heavy heel and successfully defeated numerous powerful opponents in his attempt to achieve prominence far above his current station in Ancient Capua and the Roman World. We must understand, however, that his all or nothing strategy though compelling to risk-taking, egalitarian, and over-achieving Americans, is ultimately doomed to utter failure. In fact, I think our Roman friend's strategy is as instructive to us today as it would've been to the eyes of the Ancient Romans. It is a morality play that perhaps can teach us a lesson today that just might save our financial lives.

The Ancient Greco-Roman world would've enjoyed the Spartacus offerings by Starz every bit as much as we Americans and all Westerners have to date. We must not make the common mistake, though, made by some that assume the whole world thinks and views the world through the same prism as the West does. The current eternal wars in Iraq and Afghanistan are instructive to any willing to pay attention that the worldview and goals of radical Islam share little in common with those of the more liberal and secular West. No, the Ancients would have viewed Quintillius as a fatally flawed character whose over-reaching hunger for advancement above his station deserving of nothing but ignominious death and ruin. Indeed, the Ancient Greco-Romans viewed love of tradition, caution, and humility as high virtues. They would've seen the eventual rebellion of the gladiators under Spartacus as a righteous penalty inflicted by the Gods upon a House and man who himself sinned through his intemperate craving to overturn the rightful order of the Universe. In the Ancient World the Gods reined at the pinnacle, the nobility/ruling class second, merchants, farmers, soldiers, and lanistas next, followed by free workers, and lastly, enslaved men. Batiatus, by seeking to raise himself into the heady heights of the republican ruling class in Rome was clearly guilty of seeking to overturn this divine order. His precipitous downfall would've been seen as a just punishment of the Gods for his sheer temerity and lack of respect for the laws that held chaos and ruin at bay.

In short, I imagine the ancient Romans would've counseled investors to similarly stay within bounds familiar to them, and not over-reach into unfamiliar areas with an all or nothing investment strategy. While such a moderate strategy may never enable one to become the next Bill Gates, it will insure the prudent investor also never finds themselves and their "House" lying in ruins about a torched and corpse-littered landscape.

The wise ancient Roman would most certainly have understood and approved of wealth measured in gold and silver, disdaining the paper (risky banking and investment stocks)!

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.



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Tuesday, February 1, 2011

Does Investing in Pennies Make Cents?

All pennies minted in the United States prior to and during the first part of 1982 were composed of 95% copper and 5% zinc. After 1982 the composition of pennies was changed to 97.5% zinc and 2.5% copper. Pardon the bad pun, but does investing in 95% copper pennies make any (cents) sense? Copper prices have hit new highs, and the theoretical melt value of a 95% US copper penny is close to $0.03!

So the key question is buying pennies a good idea? I say absolutely no, and here's why:

  • The Melting Ban:
    On December 14, 2006, the United States Mint implemented interim rules that made it illegal to melt or export nickels and pennies. On April 17, 2007, the U.S. Mint announced a final rule to limit the exporting, melting or treatment of one-cent (penny) and five-cent (nickel) United States Coins.
What good will it do you to own ten million pennies (face value $100,000) and three times as much in copper melt value if it's ILLEGAL TO MELT THEM?
  • Bulk:
It takes 10 million pennies to get a face value investment of $100,000. Such a penny cube would be six feet high, wide, and thick & weigh 31.3 tons! That means you're going to need a couple of semis and a forklift for delivery or whenever you want to move these things.

Plainly shipping and warehousing costs would be a significant drain on any large penny investment. Companies like the Portland Mint offer storage options, but that means they retain the pennies while you just get the bills for the storage, which isn't cheap. Of course, there's always the worry of proving ownership should the Portland Mint go out of business or even change ownership.

In short, invest in gold and silver and take delivery of your metals.

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 (below):