Political Metals

Let the numbers do the talking…

Over an above all these, silver is being consumed as an indispensable industrial metal with rapidly increasing demand while almost every ounce of gold ever mined in history is still in a vault somewhere.

The numbers just do not add up. Left to supply and demand forces in a free market, silver should be many multiples over its current price, and possible worth even more than gold.

Reason for this heavily suppressed price is because silver has been, and still is a monetary metal, and hence the Political Metal concept comes into play - just like gold, only more extreme. If the price of silver were “allowed” to rise according to market forces, it will pull up the price of gold because they’re both monetary metals. Silver has the largest concentrated short position all “commodities” traded on the Comex. Investigate the silver manipulation story here and here.

Shortly after the March 2010 CFTC public hearing on silver position limits, the whistle blower Andrew Maguire news going viral on the web, and a slew of high profile class action suits filed against JPMorgan and HSBC for their alleged silver price suppression schemes, silver investors have been getting out of paper silver and going physical.  This is accelerating the silver shortage in the physical market and the bankers have been fighting a loosing battle, resulting in a steep price increase from July 2010 as reflected in the charts above.

We’re waiting for them to loose the war, which many expect it to be soon. In the meantime, expect extreme volatility in the silver market. You have to understand the dynamics of the volatility and learn to manage them.

Case For Silver

• Six reasons for you to purchase silver now, despite high prices - Chandni Burma, Feb 20, 2011
• The Silver Bullet And The Silver Shield - Sons of Liberty Academy, February 25th, 2011
• Market at a Glance: Follow the Money - Eric Sprott & Andrew Morris, March 2011 
• The Gold/Silver Ratio Strategy and the case for silver - Franklin Sanders, March 5, 2003
• 32 reasons to switch from Gold to Silver - Bix Weir, Aug 6, 2011
• A Nervous New World - Ted Butler, July 25, 2011 

-

Case Against Silver

As with everything else, there’re two sides to the silver coin. Here are some opinions contrary to those adopted above. Generally, these opinions view silver as any other commodity/investment to be bought low and sold high. They are not necessarily bearish on silver, but they certainly are not “Silver Bugs”.

• Facts on Silver - Bob Moriarty, Apr 25, 2011
• Has the silver market been cornered……… AGAIN? - Costata, May 7, 2011 
• Stocks of Silver around the world - A study by Charles River Associates, 1992

 -
Aug 6, 2011 London. Silver is investment of this decade. Eric Sprott, Chairman of Sprott Asset Management, and James Turk, Director of the GoldMoney Foundation, talk about how there isn’t enough silver in the silver market to back existing “paper silver” commitments.

-

May6, 2010 Singapore. Silver Bullion Is Dirt Cheap - Mike Maloney & David Morgan on Silver Investing. When asked, “Why Silver?”, David Morgan said “When every one is think the same, no one is thinking very much”.

-

Dec 20, 2010. Silver Shortage This Decade, Silver Will Be Worth More Than Gold. By Future Money Trends

-