Showing posts with label 2011 hyperinflation. Show all posts
Showing posts with label 2011 hyperinflation. Show all posts

Thursday, April 14, 2011

Silver - What Better Investment?


When thinking about an investment, the best managers look for returns that beat what they perceive to be average. In the long run, wealth is a relative measure—today, even the poorest people are wealthier than the richest people five hundred years ago, though we’d still say that today’s poor are poor.


Investments work along the same lines, with the simple concept being that an investment must have performance that is preferable to your current financial trajectory, and it must have a return that beats holding money in cash, as well as the negative returns incited by inflation.


Whether or not you are a current silver holder or not, ask yourself one simple question: what price would it take for you to sell your metals or buy government debt? At what rate would it be favorable for you to invest your money in stocks, bonds or any other investment?


Now, take that number, which is likely quite high, and compare it to past performance of all the markets out there. You can compare it to stocks, bonds, and commodities, and see simply which asset type has produced returns that you would see favorable. It would be a safe bet to see that the returns and performance that you want out of your investment portfolio haven’t been found in stocks nor bonds for the past twenty years.


Silver Bubble is Not


For the individual investor, an exercise that looks into what he or she wants in an investment isn’t a daily happening, though it is for the institutional investor. The markets measure just like wealth—you can do well, as long as the other guy doesn’t do as well as you do.


So when the hysteria of a bubble emerges, investors should ask bubble promoters where they should go from silver. Should they buy stocks, which are priced as many as twenty years into the future? Should silver investors pile into fixed-income investments and take home 4-5 percent per year?


It is here that we reach the end of such an argument. Not only are the opportunities present in stocks and bonds weak, but they’re also offering returns that aren’t consistent with their risk profiles. So why would you hold silver, if you wouldn’t own cash flowing stocks, bonds, or an assortment of mutual funds? Because silver is the new cash.


Investors who have amassed massive positions in the metals markets are telling the market that the options aren’t exciting. If you’ve only a small selection of underperforming bonds, underperforming and expensive stocks, or negative-return generating cash, is it really much surprise that you want an alternative? Traditional investments have a best possible outcome of returns equal to a few percent per year, after inflation, and cash has a best possible outcome of negative returns each year.


The bubble isn’t in silver ownership, but in low rates and indebted economic institutions. When investors hold commodities, they’re holding the new cash, and they are insulated from risk to a degree that everyone should appreciate. Silver is “in a bubble” because the remaining opportunities are stuck in a rut. At what point would silver investors swap their holdings for paper assets? You might have to bring back Volcker to make that happen.


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.

Rick
CLICK ADS BELOW FOR FREE DISCOUNT!

Buy Gold Online Today at APMEX.com

Saturday, April 9, 2011

Is Silver Getting Bubbly?


Silver's rising prices as measured in US government fiat dollars (alias paper funny money) spawns new articles on a daily basis predicting that surely now silver is in a bubble (a price that is irrationally higher than the intrinsic value of the product or investment). I suspect that as the "tears of the moon" metal approaches the 1980 high of $50 per ounce, the uninformed scare-mongering will only increase in volume. But is silver really in a bubble just because its worth as measured in rapidly devaluing 2011 US dollars is nearing the former 1980 peak?


Firstly, let's make sure we're comparing apples to apples, or at least dollars to dollars. Based on the CPI, you'd need $134.29 today in 2011 to purchase the same products you bought in 1980 for $50. So, while we can talk about the NOMINAL high of $50 for silver per ounce, the real figure we should be eyeing for bubbly signs is a lot closer to the $134 mark in inflation adjusted dollars.


Secondly, exact information as to what price point constitutes pricing above an item's "intrinsic value" is always a little sketchy, to say the very least. However, I'd like to tentatively submit the inflation-adjusted high for silver of $134 as that point, since the 1979-1980 bull market is the best and only historical comparison to today's market.


Next, I think a "real world" comparison of actual buying power of one ounce of silver for the years 1980 and 2011, may aid us in our search for buying power equivalency, and perhaps the actual 2011 point at which we may be entering bubbly territory. Therefore, I've collected the economic information below:


1980 $ Price - Price in Silver Oz. @ $50 per ounce


Avg. New Home $76,400 - 1528 oz.


Median Household Income $17,710 - 354 oz.


First Class Stamp $0.15 - 0.003 oz.


Gallon Regular Gas $1.25 - 0.025 oz.


Dozen Eggs $0.91 - 0.018 oz.


Loaf White Bread $0.50 - 0.01 oz.



Next, we'll look at the 2011 - Silver @ $41 per ounce


Avg. New Home $202,100 - 4,929 oz.

Median Household Income $52,029 - 1,269 oz.

First Class Stamp $0.44 - 0.01 oz.


Gallon Regular Gas $3.75 - 0.09 oz.


Dozen Eggs $3.00 - 0.07 oz.


Loaf White Bread $2.78 - 0.07 oz.


It's easy to see from these two pricing tables that you need a lot more silver to buy everyday items in 2011 than was required to purchase the same products at the peak of the 1980 silver bubble. For example, you could purchase an average new home in 1980 for only 1528 ounces of silver, but you'll need 4929 ounces to close on that same house today!


Finally, I'd like to see how high silver would have to rise in price before it could buy the same amount of products it did in 1980. To determine the 2011 dollar adjusted figures I'll divide the current 2011 dollar product costs by the number of silver ounces required in the 1980 peak. See below:


Avg. New Home - $132 per ounce silver


Median Household Income - $147 oz.


First Class Stamp - $147 oz.


Gallon Regular Gas - $150 oz.


Dozen Eggs - $167 oz.


Loaf White Bread - $278 oz!


The incredible numbers above show that silver will have to rise to between $132 to $167 per ounce to arrive at pricing levels in 2011 dollars that proved to be overheated or bubble-ridden in 1980! In addition, if you want to eat bread again like we did in 1980, you're going to need silver at $278 per ounce! So, our tentative figure of $134 per ounce for a silver top is pretty right on the money.

Given all the information above, I'd say we have quite aways to go with silver at about $41 an ounce before we reach any frothy action! For my part, don't even wake me until silver has exceeded $100 per ounce!

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.

Rick
CLICK ADS BELOW FOR FREE DISCOUNT!

Buy Gold Online Today at APMEX.com

Thursday, April 7, 2011

Silver is Consumed!


Industrial Demand


The first fact that jumps off the page is that the future for silver looks remarkable with industrial silver demand rising from 15,160 tons (487 million ounces) in 2010 to 20,712 tons (666 million ounces) in 2015. Much of the growth in the global total of industrial silver consumption will be driven by stronger demand for a number of established uses including the manufacture of electrical contacts and the use of silver in the photo voltaic industry. New uses center on silver's antibacterial qualities, while other new uses tend to make use of its conductive properties, including solid state lighting and Radio Frequency Identification (RFID) tags. Overall please note that silver’s importance in the technology of the day is huge. We go so far as to say that the demand from silver has transformed from a want to a need! Whether we are in a boom or bust silver’s demand will remain robust. It is now needed to make all facets of an economy run well and at all levels, even down to individual needs. This secures its future and assures us that silver prices are well supported. Here is the list of the amounts used in different applications that emphasize this point.


- Cell phones used 404.35 tonnes [13 million ounces] of silver last year.

- Computers consumed 684.29 tonnes [22 million ounces].

- Thick film PV consumed 1,461.90 tonnes [47 million ounces] in 2010.

- Automobiles which used 1,119.75 tonnes [36 million ounces] of silver.

- Electrical and electronics demand for silver reached an all-time high of 7,555.21 tonnes [242.9 million ounces].

- Solar Power in 2011 is expected to reach 2,177.29 tonnes [70 million ounces], up 40%.

- RFID tags in 2010 reached between 31 and 62 tonnes with a long way to go before reaching full market.

- Water purification used 62 tonnes [2 million ounces] set to grow to 74.65 tonnes [2.4 million ounces].

- Medical applications may grow strongly to reach 93.3 tonnes [3 million ounces] by 2015.

- The use of nano-silver in goods packaging and hygiene combined would consume 124.4 tonnes [4 million ounces] of silver over the next five years.


Silver is consumed


While photographic use of silver allows for the re-cycling of silver, reclamation of silver from most of the above uses is difficult to nigh-on-impossible. This in itself assures either a constant or rising demand for these applications. Of particular note is the growth in Asia where we are watching around half of the globe’s population developing at infrastructural level as never before. This growth will continue at double figures, per annum for at least the next decade. Gold is rarely consumed as it is deemed far too valuable. Reclamation efforts relative to the value of the gold ensures that scrap merchants will go to extraordinary lengths to recover the gold. In silver’s case these efforts would cost more than the sale of the silver so used. As the silver price rises further reclamation efforts will become profitable and more silver will be recovered, but we are still a long way off from that day.


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.

Rick
CLICK ADS BELOW FOR FREE DISCOUNT!

Buy Gold Online Today at APMEX.com


Wednesday, March 30, 2011

Why Junk Silver Ain't Junk!

Those paying attention to world events, inflation, and the destruction of the US Dollar are buying silver. However, there are many forms of silver available for buyers including bars, rounds, American Silver Eagles, foreign silver coins, and 90% US silver coins or junk silver. I believe junk silver coins (dimes, quarters, halves) minted for circulation up to and including 1964 make the best investment for the following reasons:

  • First and foremost, during intense bull markets in silver - like the one we're experiencing right now - junk silver tends to outshine (and outperform) silver bullion.

  • Junk silver is a finite commodity.

  • Junk coins are no longer being produced (the scarcity factor).

  • Junk coins are easily recognizable.

  • Junk coins are divisible, meaning you're able to use small amounts to pay for something.

  • Junk coins require no assaying.

  • Junk silver was produced by the U.S. government, meaning everyone everywhere recognizes what you've got, so you don't need to run any tests to prove its value.

  • Junk coins are utilitarian, meaning you could actually put change into a payphone (remember those?) or a vending machine to purchase a product or service.

  • Junk coins were produced by the US government itself - and remain "legal tender". Therefore it is unlikely they will be confiscated by said government.

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:

Rick

CLICK ADS BELOW FOR FREE DISCOUNT! 
GoldSilver.com - Buy Gold & Silver



Should I Pay To Store My Gold / Silver?

Many gold & silver sellers today offer buyers the option to store their precious metals for them in their secure vault for a fee. To some concerned about theft or storage, this solution could seem like a good deal. The buyer gets to own gold and silver without the worries associated with keeping these valuable metals at home. So, is it wise to give your precious metals investment to your seller for safekeeping? Heck, NO! Why? See below:

  • Conflicts of interest - The seller is running a business. Like every business profit and cash flow are primary concerns. The temptation for a vendor to "sell" you imaginary gold or silver and then charge you fees for its storage at his facility are very real. The situation practically begs for a ponzi scam set up. Even a basically honest seller with sub par business skills could find himself in a financial tight spot if a large amount of deposits are withdrawn precipitously or through plain mismanagement.

Example: Earlier this month, FBI agents seized computers, records and safe-deposit box keys from the Tigard home of Lawrence Henry Heim, president of U.S. Gold & Silver Investments Inc. in Portland. The FBI says the mail and wire fraud investigation stems from unfulfilled investor orders made as long ago as 1998 and as recently as October 2010.


Heim and his company also face three lawsuits -- one in federal and two in state courts -- seeking more than $875,000 and alleging breach of contract. One of the suits was filed on behalf of the estate of the late Portland high-tech pioneer Tom Holce.


According to the lawsuits, first reported in Willamette Week, Heim's company has not delivered on at least $875,000 of U.S. gold and silver coins. In some cases, the suits say, investors asked Heim to store coins on their behalf. In others, Heim entered into contracts with investors for which he would pay interest while holding the coins, according to the lawsuits.



  • Bankruptcy & Legal Problems - What happens if a business storing your PM's goes bankrupt, or its assets are seized for civil and criminal legal proceedings? There's just no clear answer to this vexing question.

Example: Bernard Von Nothaus, the founder of the Liberty Dollar was arrested in 2007 and over $7 million dollars worth of copper, silver, and gold bullion owned by investors storing their PM's with the company were seized by the Federal government. Von Nothaus was recently convicted of counterfeiting, and faces 15 years in jail and substantial fines. In addition, the US government is seeking court permission to permanently confiscate all the bullion seized. As it stands now, the investors in the Liberty Dollar stand to lose their entire stored bullion, or at best face long legal battles to regain ownership.


There are plenty of other reasons not to entrust your gold and silver to others, but I hope the above two "horror stories" will be sufficient to dissuade anyone from pursuing this foolish investment choice.


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. Rick


CLICK ADS BELOW FOR FREE DISCOUNT! Buy Gold Online Today at APMEX.com

Tuesday, March 29, 2011

Prices Haven't Risen for Over 70 years!

When you're riding in a car the houses and trees outside the vehicle appear to be whizzing past rapidly while you stand still. Of course, every adult knows that the apparent movement of the objects outside the car is only an optical illusion. The motor vehicle in which you're riding is moving. The scenery is actually rooted fast.

The driving analogy above is ideal for describing the inflation of prices in US fiat money (US Dollars). It is not the prices of food, fuel, etc., that are continually moving upwards, it's the value of the US paper Dollar that is plummeting downwards!


To prove my price inflation assertion, let's look at everyday prices on items from 1940 and 2010. All costs will be computed using US 90% silver coins (dimes, quarters, halves) that were minted for circulation up to and including 1964. Coins minted after that date for circulation were made from base metals and fall under the heading of fiat money (money that has no value outside of the government mandated value).


Average Cost Gallon Of Gas


1940 $0.11 cents


2010 $2.75


Present Value $0.11 cents silver money $2.97


Average Cost Loaf of Bread Food


1940 $0.10 cents


2010 $2.79


Present Value $0.10 cents silver money $2.70


Average Cost 1lb Hamburger Meat


1940 $0.20 cents


2010 $3.99


Present Value $0.20 cents silver money $5.40



You can see from the price information above that if you'd saved your 90% US silver coinage since 1940, you could still buy these everday items for the same amount based on their silver content value! In other words, the "real prices" of these items has really stayed relatively the same. The only reason that inflation has appeared to cause prices to rise is that the actual buying power of the US Federal Reserve Notes un-backed by precious metals has dropped precipitously.


There are exceptions, of course, to the above rule. Although housing prices have been battered by the recession, they're still hovering above their 1940 silver coin equivalent. The price of a new car is likewise further ahead than its equivalent in 1940 silver coins. However, I expect these exceptions to be liquidated in the future as silver continues to rise versus the empty shell that is the US Dollar of today.


So, the next time you fill up with gas, don't give the gas station attendant a hard time. Remember, it's the Federal government with its money printing presses flooding our economy with worthless greenbacks that you should direct your anger towards.


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.


Rick

CLICK ADS BELOW FOR FREE DISCOUNT! Buy Gold Online Today at APMEX.com

Tuesday, March 1, 2011

The REAL Silver High!


As the price of silver makes its way upwards by leaps and bounds you'll be seeing the phrase, `has reached a 31 year NOMINAL high', quite a bit. Most thorough articles will use the qualifying word 'nominal' to convey that the high price they're quoting is NOT INFLATION ADJUSTED. However, as an investor doing his due diligence, it's crucial to precisely comprehend what the true inflation adjusted price is for silver for any judgment to be on a truly `apples to apples' level.

It's no secret that today's inflation continues to erode the buying power of the US fiat `paper dollar'. Many fear that rampant inflation assailing our economy now may even lead to destructive hyperinflation (50% or more inflation PER MONTH). ) The period from 1980 until today unfortunately followed the same Pied Piper siren song of currency inflation. Indeed, according to the US Inflation Calculator , the real inflation percentage was 167% during the last 31 year period. As such, an inflation adjusted high for silver would not be the often quoted $50, but in actuality over $130!

It is highly likely that the price of silver will continue to steadily rise in our woefully unstable American economy, afflicted by multi-trillion dollar deficits and inflation. The increasing demand for silver by informed investors coupled with growing industrial demand and inelastic supplies, serves to highlight the open price ceiling that beckons. Understanding the TRUE previous highs for silver will assist the prudent investor in his thorough due diligence exercise.

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.

Rick

CLICK ADS BELOW FOR FREE DISCOUNT!

Buy Gold Online Today at APMEX.com

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 Coinflation.com. 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):

Rick

CLICK ADS BELOW FOR FREE DISCOUNT!
GoldSilver.com - Buy Gold & Silver

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?

Rick
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):

CLICK ADS BELOW FOR FREE DISCOUNT!
GoldSilver.com - Buy Gold & Silver

Monday, February 21, 2011

Why You Must BUY SILVER NOW!


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):

Rick

CLICK ADS BELOW FOR FREE DISCOUNT!
GoldSilver.com - Buy Gold & Silver

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):

Rick

CLICK ADS BELOW FOR FREE DISCOUNT!

GoldSilver.com - Buy Gold & Silver