Tuesday, November 17, 2009

Fake Gold Bars - What does it mean for Silver?

Today I came across an interesting article - apparently gold bars can be faked quite easily, apparently enough to fool the Ethiopian Central Bank. But some believe that its been going on for quite sometime:

If anyone were contemplating creating “fake” gold bars, tungsten [at roughly $10 per pound] would be the metal of choice since it has the exact same density as gold making a fake bar salted with tungsten indistinguishable from a solid gold bar by simply weighing it.

Unfortunately, there are now more sordid details to report.
When the news of tungsten “salted” gold bars in Hong Kong first surfaced, many people who I am acquainted with automatically assumed that these bars were manufactured in China – because China is generally viewed as “the knock-off capital of the world”.

Here’s what I now understand really happened:
The amount of “salted tungsten” gold bars in question was allegedly between 5,600 and 5,700 – 400 oz – good delivery bars [roughly 60 metric tonnes].
This was apparently all highly orchestrated by an extremely well financed criminal operation.

Read more here
If true, this is horrible news. While I am not a card carrying conspiracy theorist - I don't anything past corrupt governments. But as with most stuff you read in my blog - this has a silver lining. If vast amounts of gold are faked, it may put make Silver a more attractive offer and boost silver prices.

The following is a list of facts and reasons to switch all your Gold investments into Physical Silver:
1) The Gold Banking Cabal is heavily involved in the suppression of the price of Silver and would be mortally wounded when Silver breaks the bonds of manipulation. Due to the tiny size of the market and the lack of physical Silver available to the manipulators, the Silver battle is much easier to win than Gold.
2) Central banks have NO physical Silver to assist in the manipulation of the Silver market but they still have a lot of physical Gold (although much less than they claim).
3) The majority of Silver mined every year is consumed as an industrial metal in very small amounts and will never return to the market whereas the amount of above ground Gold grows year after year.
4) Silver has developed, due to its low price and superior physical properties, into a vital and necessary industrial commodity that makes it mandatory for modern life. If we woke up tomorrow and gold vanished from the face of the earth, life would continue pretty much as it was the day before. Without silver, modern life would change.
5) Due to the relative very low price of silver and very high price of gold, the man in the street, around the world, is in a position to buy silver in much greater quantities than gold.
6) In various forms there is an estimated 5B oz of above ground Gold and 5B oz of above ground Silver but Gold trades at $880/oz and Silver trades for only $17/oz. Both metal prices are obviously manipulated but Silver appears to be manipulated more. As for Silver bullion that is “in play” for the manipulators, I estimate that less than 300M oz remain (COMEX Inventories + SLV Inventories) with a current market value less than $5B.
7) Silver has been in a supply deficit for over 50 years! Governments held approximately 10B oz of silver in 1950 and have been supplying that physical stock steadily into the market. Today there is no more of that surplus silver left to sell.
8) At current Silver consumption rates there are only 18 years of known Silver reserves remaining in the world. AFTER THAT SILVER WILL BE GONE FOREVER! Think about it.
9) Demand for Silver is “inelastic” in its industrial applications because it is used in such small quantities per application. An increase in price does not translate into a decrease in consumption.
10) The COMEX Silver short position is the largest concentrated short position of any commodity, on any exchange in the history of financial markets.
11) Throughout human monetary history the Silver to Gold ratio hovered in the 10-1 range until the invention of futures and options trading in metals. Since that time the ratio has risen to where it now stands at over 50-1.
12) The US Dollar as defined in the Coinage Act of 1792 is Silver, not Gold, and contains “three hundred and seventy-one grains and four sixteenth parts of a grain of pure, or four hundred and sixteen grains of standard silver.”
13) Silver is massively under reported in the media vs. Gold. Even Jim Rogers, the commodity guru, purposefully ignores Silver entirely in his best selling book “Hot Commodities” even though Silver exceeds all other commodities using his metrics on what makes a strong commodity.
14) Very few investors have physical Silver in their possession. Reasoning: because they claim it is “too hard to store”. Does that mean when Silver trades at over $1,000 oz people will be more willing to buy and store physical Silver? It is difficult to make up a more bullish reason to take delivery and store physical Silver TODAY…when the Cabal price rigging scam finally fails you can always buy your own Fort Knox to store all that pesky Silver you bought!
15) Gold’s strong fundamentals are only exceeded by Silver’s so when the gold manipulation stops and the Gold price takes off investors will be looking for the next under-priced investment with similar characteristics.
16) 470M oz of Silver owned by the US Treasury and used in the Manhattan Project for the construction of the atom bomb have all been melted down and sold into the physical market to support the “Strong Dollar Policy” http://www.silverbearcafe.com/private/silvermystery.html
17) Silver mineral deposits, as opposed to Gold, are usually very shallow in the earth’s crust due to the nature of the geology so most of the large deposits of Silver have probably already been found and/or already mined limiting future discoveries.
18) There is a significant problem with counterfeit Gold bullion because of its high price. Silver bullion has not, to date, had as much of a counterfeiting issue because its price did not justify the effort. (although there is a problem with counterfeit Silver jewelry which may significantly suppress Silver scrap recovery in the future…oddly bullish by-product of counterfeiting Silver!)
19) The total dollar value of the Silver market is a fraction of the total dollar value of the Gold market.
20) Most flat screen televisions use Silver in their internal electronics/screens and the US transfer from analog to digital signals in February 17, 2009 should temporarily increase the demand for new TV’s when the switch is made. http://www.dtv.gov/consumercorner.html#faq3
21) Retail physical shortages of Silver are already beginning to appear around the world.
22) Hedge funds are bleeding from the credit crunch and they are looking for ways to save themselves. A single hedge fund can scoop up the remaining physical Silver and blow the price sky high.
23) In the US, Gold confiscation laws are still on the books but there are currently no silver confiscation laws.
24) In March 2008 the Gold price breached $1,000 or 120% of its historical high. Silver, on the other hand, only approached $21 or 40% of it’s historical high suggesting that Silver has a long way still to go.
25) Un-backed paper Silver programs such as silver certificates and unallocated pooled accounts are the “industry standard” these days and will be scrambling for metal when redemptions are called in by the investors.

read more here
I find this all very fascinating, hope you have silver stashed away somewhere!

Friday, October 30, 2009

Silver Price still looking sharp despite minor gains for US Dollar

Just watched news that the US Dollar is on the recovery. What does that mean for Silver prices? Here is an article about future silver prospects

Few opportunities are so striking and promising. One can purchase silver under $17 per ounce. One very well connected colleague said recently “Silver is an absolute steal at any price under $20, but the coming breakdown in the Western banks and monetary system will be centered on their gold mismanagement.” The silver price filled an early October gap evident in the faster charts. In the view shown below, the old resistance, now new support at 16.1 held firm. The price revisited the 50-day moving average. The moving averages are all on the rise. Who knows? The price must have felt the urgent need to touch the 50dMA after having spent all this time since mid-August above it. Nah! The Powerz are scared white, are soiling their stolen underwear, and are increasingly desperate. They get away with their corrupt games, using paper still to push down metal prices, as they anger the world further. They motivate the search and establishment of alternatives to the USDollar in its key role. The real motive was the huge $115 billion in USTreasury for sale at auction this week. They needed some cloud cover, and a listless US$ rally would serve the purpose. The ultimate problem they have is the grossly inadequate silver supply in physical form. They more they offer silver at a deep discount, the more they drain their physical supply for delivery, and the more they tighten the noose around their own necks.

Thursday, September 17, 2009

World Silver Production in 2009

Production of Silver in Millions of Ounces
  1. Peru 118.5
  2. Mexico 96.4
  3. China 83.5
  4. Chili 64.3
  5. Australia 57.8
  6. Poland 41.7
  7. USA 40.5
  8. Canada 25.7

How much silver has been mined?

All the silver ever mined fits in a 55 metre cube, according this interesting history of silver mining:

3000 BC: The first major silver mines were discovered in Anatolia, modern day Turkey.

1st C. AD: Roman discoveries developed Spain into a major silver producer.

Early 1500s: After Columbus’ New World expeditions, the discovery of huge, prolific silver deposits in Mexico, Peru and Bolivia changed the focus of silver mining and enriched the Spanish Empire for 300 years.

1500 – 1875: Approximately 1.5 billion ounces mined in Mexico with the majority produced during the 1700’s.

1700s: The backbone of the Spanish Empire was the one billion ounces of silver produced from Veta Madre (The Mother Vein) in Guanajuato Mexico (Endeavour Silver has mines hosted in the Veta Madre) .

1857: Silver mining became an important industry in the State of Nevada (The Silver Sate) when the fabled Comstock Lode was discovered.

1859 - 1877: Comstock yielded silver and gold with a value aproaching $400 million, the equivalent of more than $500 billion today.

1900 – 1920: 50 percent expansion in global production to about 190 million troy ounces annually spurred by discoveries in several countries including Canada, the United States and Mexico.

1921-Present: Improved techniques in ore separation allowed for concentration of silver with lead, zinc and copper. The explosion in production of these various base-metal sources has led to an increase in both silver output and silver usage.

3000BC- Present: All the silver ever mined would fit in a 55 metre cube.

Read more here:

Saturday, September 12, 2009

Canadian Commemorative Silver Video

There is no commentary to this video, but it shows commemorative coins for the 1976 Montreal Olympics that were made of Sterling Silver. Might be useful if come across the coins for sale some where. Not sure if these where official mintage or not, but they do contain a good amount of silver.

Survival Silver - US Junk Silver Video

This video gives general overview of some Junk Silver coins in the USA. Talks about about various American junk silver coins from Morgan Dollars to war nickels. Makes a good point about Eisenhower Dollars - make sure that you have the San Francisco mint mark (S). Briefly talks about the survivalist aspect of coins (maybe not relevant for NZ audience) ?

Junk Silver: The Peace Dollar Video

This is an interesting and informative history of one my favourite Junk Silver Coins, the Peace Dollar, the replacement for the Morgan Dollar. It was minted from 1921 to 1935.

Junk Silver: The Morgan Dollar Video

The Morgan Dollar is one of the most popular junk silver coins on the market. It seems more readily accessible to a fair price to New Zealand than most New Zealand silver coins. Minting from 1878-1921, they actually weren't very rated by coin enthusiast at the times. This video below is fantastic for the information - however its target mainly for the coin collector, not the 'junk silver' collector, who's primarily interested in the silver content. Lots of good information on this coin!

Thursday, September 10, 2009

China: Dumping the Dollar, Going for Gold,

Typically I talk about Junk Silver - but this is another interesting article about China and currency. Most notably the fact that they have been stung holding the US Dollar which is worth less and less each day. So what to do? Get precious metals to back their currency. Its well know that China in mining in Africa and a player in Australia as well. In a previous article talked about the history or China and silver, this is more what is happening currently:

With Chinese state institutions hawking gold and silver to the general populace as a good investment (see China pushes silver and gold investment to the masses) - the latest news on this front being that the biggest Chinese bank, the Industrial and Commercial Bank of China (ICBC), is setting up a special precious metals department to handle growing investor demand for gold and silver within the country, the corollary is that therefore the country cannot afford to let precious metals prices fall substantially and thus alienate millions of its citizens who have been taking state advice to buy them.


Chinese disenchantment with the dollar as the world's principal reserve currency has been apparent for some time and the huge trillions of dollars overhang in the country's reserves are already seen to be being reduced by whatever means possible - notably by the Chinese Sovereign Wealth fund CIC and other state bodies buying into western resources, property and other companies it sees as strategic investments (see Chinese sovereign wealth fund dumping dollars for strategic investments like gold). It is thus logical that at least much of the country's domestic gold production - and China is now the world's largest gold producer - is already finding its way into the state's coffers.

read more here from MineWeb South Africa.

Tuesday, September 8, 2009

Will silver go over $20 USD this year?

I've taken my eye of the silver price for awhile, but it nice to see it get a bit higher. A recently youtube podcast says it could go $2000, but experts think its more likely to go above $20 and follow gold. Here's a quick article I got from google news:

The silver spot price is expected to move higher following gold, but “significant and sustained momentum” is needed, says Forex analyst Anna Coulling, if the white metal is to break out above $18.50 and test last year’s high of $21 an ounce.

Many analysts believe gold may climb to $1,200 in the near future, especially if inflation becomes a reality. If gold can maintain its hold on the $1,000 level and advance further, spot silver will power through its own resistance levels.

On Ebay I've been seeing 'junk silver' peace and morgan dollars sell for about $20 and above per coin, so something is definitely cookin' with silver (about 1 month ago it was about $15ish).

Silver price manipulation video

There $30 billion of silver that is traded for only 75 million ounces of silver.

This not actually a video - its a podcast put to youtube. Anyways - it talks about the Silver Spot Price vs Physical Silver Price - and how this has been manipulated. The sound is a bit rough, but its interesting none the less. Another reason to stock to up on Junk Silver!

From Jason Hommel via here:

Read a bit more here http://silvernjin.blogspot.com/2009/09/silver-spot-price-vs-physical-silver.html:
I think silver spot (or paper) prices can be easily manipulated, and some people are trying darn hard to suppress prices. A company can short (i.e. sell) tons of silver futures (futures are just mere promises to deliver silver) to artificially suppress prices. There is, however, a tremendous upward pressure on the physical silver price. So even if spot price were to drop to below $10, it is irrelevant to physical silver price. And from my observations and personal buying experiences, I find that this is true. I used to compare physical silver prices to the spot prices, and was uneasy when physical silver prices seem to rise faster than spot prices. I thought that the sellers are taking advantage of the rise in spot prices by charging more and more premium above the spot price for the physical bullion. This is true in a way, but not entirely true now that we know spot prices and physical prices should not be compared like that
So try to get as much physical silver as you can now!

Monday, September 7, 2009

China and Silver

Does this get your attention?

… Apparently China is pushing the idea of buying gold and silver for investment purposes to the general population in the way that Western television sells soap powder. If 1.3 billion Chinese citizens start buying gold and silver, even in tiny quantities, imagine what that will do to the market!

Apparently China has a long history with Silver; Silver was the standard for chinese currency for a long time until it became the last to abandon the silver standard in1935.

From the same article:
… What appears to have happened in China is a total relaxation of strictures on holding precious metals by the individual with the government pushing gold and silver as an investment option, seemingly at every opportunity. This is a far cry from the situation only a few years ago where the distribution of gold and silver was strictly controlled. Now, the Thunder Road Report notes that every bank will sell gold and silver bullion bars in four different sizes to individuals and gold related investments are said to be soaring in popularity.

… [Leyshon Resources managing director, Paul Atherley says] … “…Also, for the first time in history, Chinese investors can even trade gold abroad (in London) with the swipe of a ‘Lucky Gold’ card. I can’t even get Bank of America to open a foreign currency account.”

China-silver, China-silver, China-silver, I realize that is only three times, repeat until you see, hear, and understand the connection. There is a connection, China is going to need, want and use silver and a lot of it. Will this change the dynamics for silver in a big way, yes in a way few see or understand presently?

Seems prophetic now, what will happen to the silver price if over 1.3 billion decide its a sound investment?

Sunday, September 6, 2009

How high will silver go?

Despite the Teddy bears - this is any interesting vidcast for Silver. It does an interesting historic comparision of days wages in Rome as 1/10 ounce of silver, which is extrapulated to about $2000 USD an ounce. I don't think it can go this high, but biven the scarcity of silver, it can go pretty high. Its currently at $16.24.

What do you think of this video? I think its a bit sensationalist, however I do think it'll go much higher than the current price.

Friday, September 4, 2009

Another Junk Silver Calculator

Silver Stackers has a more thorough Junk Silver Calculator than Coinflation, check it out when you get the chance. Check out my other post on Silver Calculators here. Click on image below:

Silver Affiliate Programs

If you are interesting in selling silver, and have a website - a silver bullion afflilate program may not be a bad idea. I am going to try a few on this website. The list I present here is an ongoing list. - if you any you can recommend please ad them below.
  • Commission Junction: This is one of the most well know Affilate Programs out there. You can join quickly. The good thing is that they have all sorts of silver affiliate programs. Even junk silver. Commissions seem decent.
  • ClixGalore: This another one - it also offers silver products.
  • ClickBank: Interface is a bit clunky, but commissions seem good. Mostly books and stuff (a few book on coin collecting seem good).
  • Amazon: They have a great interface, and its not just books. There are few coins there as well.
Just a small post for now, I'll add more programs later.

Thursday, September 3, 2009

Where to Buy Junk Silver

This is list of places to buy Junk Silver - unfortunately, the only 3 places I know that will ship Junk Silver to New Zealand, however, I'll list them out in case anyone is going overseas or can have them shipped from a friend from overseas. This is primarily targetting US Junk Silver coins - see my post on other junk silver coins.

Keep in mind, NZ Customs will scalp you for extra money if you buy large bags. Most companies have minimum $1,000 USD (1485 NZD) purchase as well, so this usually doesn't fit in well with the average Kiwi investor (I am sure its expensive for most small investors).

If you have any other companies to add, please comment below. Also if you have any experience with these companies below, add your comments. In addition, if you know if these companies ship to New Zealand, let me know!

  • Trademe.co.nz - Not your best source, you won't find many (if any) bargains here. Mostly from coin collectors who want a premium on the coins
  • Sella.co.nz - Same as Trademe above.
  • Ebay.com - This is your best source if you are New Zealander. There are many sellers who are willing to ship to New Zealand
  • Lynn Coins - The don't ship overseas, bought based on what I've read on forums they are very reputable.
  • ApMex - I don't know too much about this company, but they look like they have good selection.
  • Gainsville Coins - When I was in the US earlier this year, I've bought Junk Silver from them. They have great coins at great prices. So if you are in the US - I would buy from them. Great customer service in the USA; the caveat - if you live overseas they put placing orders in the 'too hard to do' basket. I don't think there selection of Junk Silver is as high as it used to be.
  • Tulving - They some to be quite reputable based on what I've read in forums. I've contacted Tulving via and they do not ship to New Zealand.
  • Monex.com
  • CMI Gold and Silver
  • CC Silver
  • Bullion Direct
  • Norwest Territorial Mint - This is another reputable dealer from what I've read on forums. Seem to have a good selection.
  • Silver Trading

Melting Silver, Purifying Silver, Refining Silver resources

There comes a point where you may look into refining your silver such as junk silver, sterling silver jewelry or silverware. I've found several tutorials on the net how to do this. Melting silver doesn't seem to too big of a deal. However, refining silver can be dangerous and undertaken with extreme caution.

Note: I haven't tried any of this - so I can't give any commentary. I've just listed the sources for you to follow.

Here is a list of silver melting tutorials
Here is a list of silver refining tutorials

Wednesday, September 2, 2009

When too much Silver is a bad thing...

As you can tell I quite like silver, so forgive me if I divulge a bit and show some photos here of Argyria, a disease from to much exposure or ingestion to silver. The most dramatic symptom of this disease is that the skin becomes blue or bluish-grey colored. People who ingest strong silver colloid compounds for health and workers who breath silver dust in factories have been known to get the disease. It believed that the condition is permanent.

A famous case about Argyria can be found here. Read more about Argryria at wikipedia. See more Argyria photos on Bing.com.

Tuesday, September 1, 2009

Types of Silver Alloys and Compounds

There are many types of silver out there, here is a list of some common alloys and compounds:

  • Sterling Silver: Also Stirling silver. This alloy is 92.5% Silver and usually 7.5% copper. The copper gives the silver its strength.
  • Britannia Silver: An alloy of more than 95.84% silver, and up to 4.16% copper; in use for British coins from 1697 to 1720
  • Electrum: An alloy of gold and silver, it can be natural occuring or artificially produced, occasionally called 'White Gold'.
  • Amagram: An alloy of mercury, silver and other metals used in dentistry. Click here for more.
  • Silver nitrate: Is a silver compound that is used in Photography. Demand for this compound has decreased with the advent of digital photography. Also has antibacterial properties. Read more here:
  • Fulminating silver are explosive silver-containing substances that that are easily detonated.
  • Silver Iodide: This used for seeding clouds to produce rain. Read how Russia use Silver Iodide during the Chernobyl disaster

See also wikipedias article on Silver Minerals and Silver Compounds

Thursday, August 6, 2009

Where to store Junk Silver

If you have Junk Silver/Coins/Gold Bullion, you may want to store it in safe place like a Safety Deposit Box. The New Zealand goverment doesn't have much of precedent of stealing gold like the US government has, so its a safe bet if you don't mind paying a few hundred dollars per annum for a box.

However Here are some DIY options (time to get out the number 8 wire) for storing valuables at home:

Friday, July 10, 2009

Top Collectible Large Silver Coins

Numismaster has a nice little post of the top collectible silver coins. Keep in mind, junk silver does not mean coin collecting - however, its good to know what the best coins are. The top 2, the morgan dollar and the peace dollar, are my favourites. Read the article here

Top 10 Larger Silver Coins
  1. The Morgan Silver Dollar
  2. The Peace Silver Dollar
  3. Seated Liberty Silver Dollar
  4. Spanish Colonial Silver Reales
  5. Mexican 'Caps and Rays' Silver Peso
  6. Canadian Silver Dollar
  7. US Trade Dollar
  8. British Trade Dollar
  9. British Silver Crown
  10. Maria Theresa Thaler

Friday, June 26, 2009

Silver Price Calculators

Here's a list of some useful links, I'll update them as I find more:

Thursday, June 25, 2009

Is Silver Price Manipulated?

One thing that I've read alot about online is that silver and gold prices are manipulated by the 'powers at hand'. Here is one interesting article by Theodore Butler that explains a bit of this:

I know that many readers have trouble fully grasping the manipulation issue. Admittedly, it is complex. I know that some believe that such a long-term manipulation is not possible. The CFTC has denied the silver manipulation for so long, that they have no graceful way to change their position, no matter how compelling the evidence. This manipulation is the most important market issue possible. That is evident by the attention that the regulators exhibit when dealing with it. However, it’s never about simple and direct answers, in a timely manner. It’s always a stall and never a fair and open debate. But the evidence of wrongdoing, in the form of a continued super concentration on the short side, has grown so compelling that another whitewash is likely to be as well received as the Iranian election. That’s why the silver manipulation appears to be on its last legs.

Once this manipulation ends we will be able to measure the full extent of the damage. The long-term price suppression is the prime component behind the depletion of silver over the past quarter century. The dangerous predicament that a few short sellers have placed our country and the world in is related to the minimal remaining inventories. We have no buffer to smooth out the coming shortage, except at extremely high prices. The artificial low prices caused by the short sellers are responsible for the depleted inventories. There is no water for the fire trucks to put out the fire caused by a silver shortage. The short sellers have seen to that.

Investors in silver, of course, won’t consider the wildly escalating prices as damage, nor should they. There will be great fortunes to be made in silver, but that still doesn’t excuse the dangerous predicament a few greedy short sellers and lax regulators have created. More people are becoming aware of the real story in silver and are doing what comes natural, namely, getting their share while there is still time. There are certainly no big government stocks of silver remaining in the world. We won’t wake up to any announcement that the IMF or any other official source will be selling silver, like was just announced in gold. How can they, when they don’t own any silver?

In addition to the crime of market manipulation and the pain to producers and their employees that these short sellers have caused, they are guilty of treason. That’s a very strong word, but I think it applies not only to the short sellers, but also to their protectors. That’s because they are placing our country in jeopardy in the manufacture of defense items. The US is dependent on imports for 70% of our silver consumption just like petroleum. We all know the danger in crude oil. That’s why we maintain a strategic petroleum reserve. We have no strategic silver stockpile, just empty vaults, thanks to the big short sellers. The coming world-wide silver shortage places us in jeopardy, not just for defense, but for all types of the manufactured goods produced here and the jobs that go with them. How a US regulator, the CFTC, can stall while this condition festers is beyond me.

Because of the manipulation, silver is a better long-term buy than at any time in the past 25 years. I see us reaching a more extreme shortage scenario with price peaks that are, quite frankly, so astonishing I don’t care to pinpoint them here. On the one hand we should be outraged about the continued illegality of the ongoing price scam, while on the other hand elated over the extreme price escalation that will undoubtedly occur because of it. There will be nothing moderate about the outcome.

read the entire article here

Wednesday, June 24, 2009

Inflation - Another Reason for silver

If this is true - its mighty scary. This shows how much money the US Federal reserve has printed - and what backs up the money? Certainly not gold or silver - two things you can invest to help fight off inflation. Here's a quote from the Daily Reckoning in Australia

Did you know that today’s dollar can only buy about 2% of what it could buy in 1900? Compare that to gold, which today buys 150% of what it could in 1900. So, in roughly a century, gold has catapulted to 75 times as much purchasing power as the dollar.

The government’s promise of a stable dollar reeks. Like the breathless pledge of a toothy codger to a hooker. Not sober. Not to be trusted. And it’s certainly not something you should rely on for your investment future.

The value of gold and silver does not hinge directly on a promise from a government’s central bank. It is not a promise to pay. It’s just gold and silver. The real thing. Those precious metals form a safe haven for your wealth, protecting you from the horrors of inflation and the destruction of paper currencies.

Saturday, June 20, 2009

Silver is Gold's Lapdog

There is something worth noting about the relationship between gold price and silver price - Here is an excerpt from Adam Hamilton, Zeal Intelligence LLC: http://news.silverseek.com/Zealllc/1245428853.php

Provocatively, the gold-price trends are the single most important driver of the silver price. The reason is simple. Silver investors and speculators all watch the gold price as well, it is the primary ingredient coloring their sentiment. So when gold is looking strong, they flood into silver and bid it up rapidly. And when gold weakens, many are quick to exit silver. The technical results of this behavior are striking.

A couple years ago I did a comprehensive study of the interrelationship between silver and gold since 1971. As the 7 comparative charts in that essay revealed, silver has almost always followed gold’s lead throughout our entire modern era. Where gold goes, silver follows. History is crystal clear on this. I like to joke about this nearly-ironclad relationship by calling silver “gold’s lapdog”. It irritates some folks.

This quip is certainly not intended to denigrate silver, but to illustrate a very profitable technical truth for traders. I am a long-time silver investor and speculator. I started recommending physical silver coins as investments back in late 2001 when this metal languished just above $4. Some of our best-performing long-term investments today are elite silver stocks we recommended way back in 2002. I’ve been long silver, very profitably, since before the great majority of today’s investors ever considered owning it.

And over this secular silver bull’s span, I’ve learned that gold is often the key to gaming silver’s short-term trends. To trade the white metal successfully, you have to understand the dominating role gold plays in shaping silver-trader psychology. While silver may temporarily decouple from gold in rare extreme situations, over time it will always revert back to following its far-larger and more-important cousin.

This is exactly why silver has more potential to rise this summer than in any other I’ve witnessed in this bull. During last autumn’s stock panic, silver traders panicked with the rest of the world and aggressively dumped the metal. Since silver is such a tiny and hyper-volatile market, this intense selling drove it down much faster and farther than gold was falling. The resulting unprecedented anomaly persists to this day.

This peculiar episode is easiest to understand when illustrated visually with a chart. The blue line is silver, superimposed over gold in red. Both metals are rendered on zeroed axes so there is no visual distortion. I ran the data back several years or so before the panic, so the baseline behavior of silver relative to gold can be established before the wild and crazy events of late 2008.

read more here: http://news.silverseek.com/Zealllc/1245428853.php

Tuesday, June 16, 2009

Pros and Cons of Silver Investment

I've found a great article on How to invest in silver - please go here to read. I've included the pros and cons below.

Please go here for full article:

Exchange Traded Funds

Exchange Traded Funds, or ETFs, are passive investments that track the price of silver.

There are numerous ETFs available from different providers which offer exposure to silver, including ETF Securities Silver. Others offer exposure to a wider basket of commodities which includes silver, such as the i-Shares Dow Jones AIG Commodity Swap.

They are suitable for investors who want exposure to the physical silver market, but who don’t want to own the actual metal and the insurance and storage costs that come with it. Silver is listed on major exchanges and can be traded like equities, making it fairly easy to cash in their investment.

Because the ETFs are created to reflect the price of the silver, the market price can be very volatile on any given day.

Silver Bullion bars, coins and medallions

Bars benefits from usually being the least expensive way of buying silver. They are also readily convertible into cash, and again the price is widely quoted.

Bullion needs to be stored securely, which can incur costs, and holding the commodity in this way also yields no interest.

The pros and cons of investing in silver coins and medallions are broadly the same, although they cost more than bars. Medallions are also not always easily convertible to cash depending on where they came from.

Silver mining stocks

UK-listed mining stocks which have exposure to silver include FTSE 100 companies such as BHP Billiton. Smaller players include AIM listed Patagonia Gold, which has exposure to both gold and silver.

Shares have the potential for capital appreciation, although this is also linked to the company’s structure, management and other factors. Shares can also pay a dividend.

Buying shares can cost more than purchasing physical bullion, and shares are also particularly volatile, with the value of investments at risk of declining.

Silver mutual funds

Mining funds offering exposure to a variety of listed companies include the JPMorgan Natural Resources Fund, headed by Ian Henderson, as well as the BlackRock Gold and General fund, run by Evy Hambro.

The key advantage of any fund is that it offers diversification, and therefore is less risky than buying shares in a single company. Investors also get the benefit of professional fund managers who look after their investments for them.

Funds often have a minimum investment which could be more expensive than buying physical bullion. They also have a variety of fees and charges attached, and investors are handing responsibility for their cash over to a third party.

Silver accounts or storage accounts

These offer investors high liquidity but with competitive prices.
There are also no storage costs or risks, and no sales tax, while any dollar amount can be put into the accounts, rather than a set level.

It can take several days' to get hold of the actual investment, and the silver is not in the physical possession of its owner.

Silver Accumulation plans

These plans allow you to own silver without having to actually store it yourself.

The plans have low investment levels, and offer discounted commission rates, while they are highly liquid. There is also no sales tax and no storage fees.

Again the actual commodity is not in the physical possession of its owner.

Silver futures contracts and options

Silver futures contracts entail a legally binding agreement for delivery of silver in the future at an agreed upon price.

It is a good option for investors wishing to speculate that silver will rise in price, while silver futures contracts are also liquid and can be traded widely. There is also no storage risk or cost.

Like all stock market related investments, futures are particularly risky, and investors could lose all their money.

Silver Coin Rationing in the USA?

Here's another interesting article about Silver Coins in the USA:
original (but requires subscription)
alternate source:

“The government rationed food during World War II and gasoline in the 1970s. Now, it's imposing quotas on another precious commodity: 2008 dollar coins known as silver eagles.

The coins, each containing about an ounce of silver, have become so popular among investors seeking alternatives to stocks and real estate that the U.S. Mint can't make them fast enough. In March, the mint stopped taking orders for the bullion coins. Late last month, it began limiting how many coins its 13 authorized buyers world-wide are allowed to purchase.” . . .

The rare shortage offers a glimpse into the growing love of a commodity known as "poor man's gold." With more silver mined than gold traditionally, silver has always been far cheaper than gold and today has less than 2% of gold's value.

But silver is growing in popularity, and some investors are betting that its value will surge as inventory shrinks. Big investors are loading up on silver eagles, which are the only American silver coins allowed in individual retirement plans. For small investors, they are an accessible way to get into the metal boom.

This WSJ article confirms that silver in smaller denominations is in very, and increasingly, short supply which will result in higher prices in the coming months and investors would be wise to invest in silver now prior to the coming price spike.

As knowledge of shortages in the silver coin and small bar market enters the mainstream there will be powerful and possibly unprecedented demand for silver eagles and all forms of silver in smaller denominations in the coming weeks.

The silver market remains a tiny finite market (all of the above ground refined silver in the world is only worth at today's prices roughly a miniscule $9 billion <500>) and if even a fraction of the world's increasingly skittish investment capital flows into the silver market prices will rise to multiples of the current price.

Gold Investments continue to believe that silver should surpass $25 in 2008, its non inflation adjusted high of $48.70 per ounce before 2012 and its inflation adjusted high (as many other commodities including oil already done) of some $130 per ounce in the next 5 to 8 years. These are conservative estimates.
This is with Silver Bullion coins - junk silver is still available and at reasonable prices. Will the US impose restrictions on Junk Silver? Stay tuned!

Buying Gold is different than Junk Silver

There is great article on buying gold from goldworld.com. This article has some great points about buying gold. However, while I think these rules are fantastic for gold - silver is a bit different. I've listed some of there points here that make buying silver, especially Junk Silver, different.

3.) Buying from Multiple Dealers — If you buy gold from several different dealers, you'll pay several different markups. Buying from one will limit this expense and likely lower your overall costs, due to discounts on bulk rate purchases. Research your vendors carefully; find one that suits your needs and stick with them. Do not test-drive vendors any more than is absolutely necessary.

Comment: Junk Silver can actually be bought from individual sellers cheaply - because you are not typically dealing with high premiums, and the marketplace is more diverse, especially if you buy from Ebay, you can buy from as many different dealers and get great bargains.

8.) Buying American Gold Eagles — I feel the need to point out the American Gold Eagle specifically when mentioning gold coins. Avoid this one! American Gold Eagle coins, first of all, are minted from 91.67% gold and are, therefore, vastly inferior to those minted from .9999 fine gold. But this does not stop their minters from applying high premiums. You end up spending more money on less gold. Furthermore, as US legal tender, the American Eagle actually leaves you exposed to inflation — which you're trying to avoid by buying gold in the first place. Find a better bullion coin like the Canadian Gold Maple Leaf or South African Kuggarand.
Most Junk Silver is typically 90% Silver. But the idea here is different. Yes you can buy bullion silver, its more expensive with the premiums - the bargain to be had with Junk Silver is that it can be bought below spot price most times! The mentality is different between gold and silveer. You won't find these bargains with gold - how many gold coins do you know that have been in circulation, even if they are legal tender?

This point that the article makes is especially import for junk silver investors:

7.) Buying Numismatic Coins Instead of Bullion Coins — Whether you're buying bars or coins, at the end of the day, your goal is to own gold. Numismatic coins derive their value not just from their precious metal content, but also from their rarity and collectability. Again, the demand for such things is hard to predict over time, plus gold purity in old and rare coins is often hard to confirm. To avoid the risk of buying coins at prices inflated by dealers, or coins containing significant percentages of non-precious metals such as copper, stick with standard bullion coins.
When buying junk silver - always look at the silver value, not the Numismatic value! Think of junk silver as the 'poor mans bullion' - don't fall in love with the rarity of coin, but rather look at it purely for its silver value.

Again read the full article here - its well worth it.

Friday, June 12, 2009

Is Silver Rarer than People think?

Mike Kachanovsky makes some great points why silver can sky rocket in the future. Here is an excerpt, the emphasis is mine:

In terms of the distribution of silver and gold in the earth’s crust, there’s about 15 times more silver than gold. If you look at the market price for the last 100 years, the ratio has trended a lot higher than that. You usually have about a 50-to-1 ratio of gold price to silver price. And so I think you’re going to find that there’s going to be a narrowing of that gap.

Part of the reason that silver has been at such a discount to gold is the impression that it’s plentiful, which is just not the case. In fact, we know in the United States, for example, there was a 5-billion ounce inventory of above-ground silver, and that’s been almost entirely depleted in the last 30 or 40 years. Now there’s perhaps about 300 or 400 million ounces of documented silver inventories and I do not think new mine production will be able to keep up with demand in the years ahead. There is going to be a shortage.

Most of the gold that has been mined since the beginning of history is still sitting in bullion form some place in the world. Whereas, most of the silver that has been mined has been consumed in various industrial applications and is effectively gone forever. It’s in such small quantities that it’s not easily recycled and restored back to the market.

So, I think as you see silver decline in availability, you’re going to see it close that gap in pricing compared to gold. I think gold is going to be rising rapidly, as I mentioned earlier, from monetary pressures—inflation and the economy. Silver should rise more rapidly just on the scarcity premium as less and less silver is available to meet worldwide demand.

These are the kind of things that will be driving factors to make silver outperform gold, and both are going to be excellent investments in the future. But I really believe that silver is going to be a much stronger performer.

For the entire article, its well worth a read, go here

Cleaning Junk Silver - Do or Don't?

A common question regarding junk silver is whether to clean it or not.

Those who insist on cleaning it often prefer the shiny, clean look of junk silver - it presents the silver in its best light and makes it look more presentable for resale.

Those who don't clean the silver argue that its not worth it - people buy 'junk silver' for the silver value, not the coin value. At worst, cleaning may leave abrasions on the coin. Also those who actually might pick up the coin for numismatic value often prefer the tarnished look of silver, saying worn silver coins with high polish look often look unnatural.

For me - it depends on the condition on the condition of the coin. A bit of tarnish doesn't bother me, however, i do like to make sure that date and and mint mark is legible. These two features are fairly essential to identifying a coin, so I will try to clean coins where it is difficult to see the dates and mint mark.

Here are some ways of cleaning silver that I've found on the net. I myself have used lemon juice bath, it doesn't get the coins super shiny but it takes often enough tarnish to make it the features clear.

Which Junk Silver Coins?

As a New Zealand, which junk silver coins should you invest in?

Its good question. But I think it basically comes down to 'Junk Silver'. There are great coins to invest in New Zealand - but I've find these hard to come buy and the 'premiums' quite high. These coins are probably better used for numismatical investments than junk silver.

I tried to find deals on Australia coins, Canadian coins and UK coins, but I find when you calculate the silver value, you always pay substantially more. I am always on the look out for deals in these markets but I find that the best value on the net comes from American coins.

I belive that the American coins where more numerously produced than the above countries and the marketplace in America is larger too.

I am open to suggestions to buy other junk silver coins - so if you know of source of junk silver coins that can be bought close to or at silver spot prices, let me know!

Calculate the value of junk silver coins

I've found a great aussie site recently which as some great tools to calculate the value of your junk silver coins - not just from the USA, but Australia, New Zealand and Canada: The site is Australia-Threepence.com:

Monday, June 8, 2009

Finding Junk Silver on Ebay - Tips and suggestions for New Zealanders

The best place to find junk silver, hands down, is ebay.com! Here is list of Ebay tips that you should for finding junk silver:
  • Don't just search in the Coins category, look in the collectibles and antiques. Expand beyond coins, and you can find some deals!
  • Don't forget to calculate shipping to New Zealand! USA sellers will have the best prices to New Zealand, followed by UK and Germany. Aussies and Canadians have extortionary shipping even though the currency is valued less than US or UK. I still haven't found any deals with Aussie and Canadian ebay dealers.
  • Bid your highest price first. Why? Sometimes people will tend to move off bidding the closest it gets to the silver spot price. For instance I bidding for a roll of coins worth 40 usd, I am leading the bid at $38.00, my highest price. I am not interested in winning the auction, I am interested in getting a deal! Like minded people will realise that there is little room for a deal and move on to the next cheapest auction. I've won several auctions where it seemed like bidders have 'moved on'
  • Don't get into bidding wars, unlike trademe.co.nz - there are plenty of coins to go around on Ebay.com - On trademe.co.nz you will notice that many coin sellers greatly inflate values even after shipping and exchange conversions. Ebay is the place.
  • If you have items shipped from the USA - it can take 2 weeks to a month and half to receive them. Just be aware of this - the USA postal service, which is the cheapest option, is very inconsisent with delivery times.
  • New Zealand Customs - try to keep your total purchase under $199NZD (now $130ish USD), I've need been confronted by customs taxes at this price. I've found American shippers to be very accomondating and often write the face value of the coins instead of the silver value. Remember to ask!
  • Advanced searches are your best friend - Use it to find who ships to New Zealand and find coins within your budget!
  • Be familar with the Coins. Eg, know that 1971 Eisenhower dollar only has silver if its minted in San Francisco! Do your homework and it will save you from stupid mistakes.

Saturday, June 6, 2009

Canadian Junk Silver

I am not too familar with Canadian Junk Silver, but here is a general guide of Canadian Junk silver mintage:

Coin Silver Ounces
1920-1967 Dime 0.0599
1920-1967 Quarter 0.1499
1920-1967 Half Dollar 0.2999
1935-1967 Dollar 0.5997

Multiply the oz of silver with the current spot price of silver for the value.
For a more indepth look, read about Canadian Junk Silver Coins Here

I haven't bought any Canadian coins yet, but i'll keep you posted if I do.

How much silver is left in the earth?

Here are a few charts i've uploaded to show how much of Silver is left on the earth. We have less than 30 years left of silver left in the earth at todays silver consumption rates. This image was take from http://cache.gawker.com/assets/images/gizmodo/2009/04/26051202.jpg Click to enlarge image.

original image which show more resources, click to enlarge.

Friday, June 5, 2009

US War Nickels - 35% silver coins

During the Second World War, the USA need to use its Nickel and other alloys for the war cause. So during the war, the Nickel, or the five cent piece, was made of 35% silver, 56% copper and 9% Manganese. Production for the war Nickel began in 1942 and ended in 1945.

These are some of the cheapest investments in Junk Silver. Here are some unique facts about the War Nickel:
  • War nickels have the largest Mint Mark of any coin featured on the back of the coin
  • The coins tend to be darker and 'tarnish' easier than regular nickels
  • Francis LeRoy Henning, a counterfeiter, tried to copy the 1944 War Nickel, but in doing so he forget the Mint Mark, therefore the fakes are easy to distinguish (and ironically of high value to collectors!)
  • An error in minting the 1943/2 War Nickel - is a sought after war nickel
  • There is an estimate that says 50-60% of all war nickels were lost to the smelters for their silver and copper contents. Read more about the great smelting of coins during the early 1980's here.
  • Due to the small size and silver, its considered an excellent 'survivalist' coin.

Below is the list of years and Mintage of war Nickels:
Year Mintage
1942 P 57,873,000
1942 S 32,900,000
1943 P 271,165,000
1943 D 15,294,000
1943 S 104,060,000
1943/2 P unknown
1944 P 119,150,000
1944 D 32,309,000
1944 S 21,640,000
1945 P 119,408,100
1945 D 37,158,000
1945 S 58,939,000

For New Zealanders, this coin is an excellent entry into the Silver market. You can still pick up rolls of War Nickels very cheaply - check Ebay for the best deals (be sure to check postage as well, you should be able to have shipped to New Zealand for about 4 usd ($6.35 NZD).

Personally, I like this humble little coin. Most of the ones I've collected are well circulated, but despite of the wear, I think these little coin are deals. If the price of silver really spikes, these little coins would be the one least expensive investments to buy!

Coinflation.com - the first place to stop before buying Junk Silver

This site is the first place I stop fore investing in coin.

Coinflation.com shows the 'melt value' of junk silver coins from the USA. If you want to get the pure metal value of junk silver from the USA, this should be your primary stop. It doesn't have all the junk silver coins, but you'll find the most commonly sold ones.

Though I primarily check it fore silver value you can find the value of all a coins metal content.

Find the USA junk silver coin values here. This is probably the single most useful reference for American Junk Silver there is!

Common American Junk Silver Coins

The USA, by far, seems to have the most 'Junk Silver Around'. Here are some popular coins to look out for and their silver content:
  • 1942-45 'War Nickel' - These are some of the best values you can pick up for 'Junk Silver' They contain 35% silver, so the content is lower than any other American junk silver coin, however you can buy rolls of this quite cheaply, below the melt value. I like this coin because its the cheapest entry into Junk Silver for New Zealand. Buy in Bulk!
  • 1964-1970 - Kennedy Half Dollar. These are 40% silver - but because of their larger size, they contain more silver and more expensive than above war nickels. Hard to buy in bulk, and shipping charges to New Zealand are often the price of the coins themselves.
  • 1971 - 1976 Eisenhower Dollar - San Francisco mint. The San Francisco mint produced 40% silver 1 dollar coins. Make sure the coin is stamped 'S' as other mints in the US produced the same coin during these years without silver content. These are Big Ol' American Sized coin, bulky and can be expensive to ship.
  • 1916-1964 Dimes - These dimes (from 1916 - 1945 they are known as Barber dimes, 1946-64 they are Roosevelt dimes) have 90% silver. They are small coins, like above, buy in bulk!
  • 1932-64 - Washington Quarters. We are getting into the mid-range junk. These coins are also 90% Silver. Rolls can be a bit pricy, but their still good deals to be had on the internet.
  • 1916 - 1964 Half Dollars. During this time span their where 3 different designs (Standing Liberty: 1916-47, Franklin:1948-63, and Kennedy:1964) . Expensive to buy in rolls, however you can often find sets of 3 to 5 coins that are more within range.
  • 1871 - 1935 Morgan Dollars and Peace Dollars. These are one of my favourite coins. Beware, there are alot of copies of this one around (I'll provide sites later so you can help identify 'fakes'. 90% silver. These are often sold by themself, lots are available. Often you can find good deals on these - sometimes below the silver content value. Morgans where produced 1878 - 1921; Peace Dollars (my favourite) where produced from 1922 - 1935.
This is not an exhaustive list of American Junk Silver but these are coins that are found commonly in the market place and are easily recognised.

A special note, if you are travelling to the USA - check your pocket change. Silver quarters, dimes and War nickels look identical to current currency. I've found several dimes, a few nickels and the odd silver quarter in my change.

Junk Silver in New Zealand

Hi everyone, this is my first post here - and as you can guess by the name of this blog its about Junk Silver.

First of all what is 'Junk Silver'? Junk silver are coins, usually circulated, that contain a high content of silver. These coins are commonly found and are more valued by hoarders for silver content than coin value.

In reality, 'Junk Silver', is not junk at all. It currently can still be bought below the 'melt value' of the metals it contains. Often coins can be purchased with expensive premiums that is associated with Bullion Silver (usually .9999 pure).

This blog is particularly aimed at New Zealanders - its the country where I live. I believe there is window of opportunity for Kiwis to purchase metals at good value now (as I am speaking the value of silver is hovering around 25NZD per ounce). This is of course on speculation that silver will skyrocket in the near future.

Silver, I believe, is more accessible to the average New Zealand investor than gold is. High premiums (there is 26% percent markup/premium on the local NZMints 1/4 coin) and customs charges of importing gold do not make gold a viable investment for most New Zealanders. Even for those looking for gold on popular sites such as trademe.co.nz will find that gold items (bullion or coins) often have extortionary values when compared to the market.

I don't fault sellers, much of the pricing has to do with New Zealand's isolation and small population. However, I hope to present ideas that are more within budget to small investors (which lets face it, most of us in the country are!). I aim to open, honest and fair in this blog. The fact is, I am using this blog as much as I can learn about Junk Silver and metal investment myself. So if you have insights and corrections - and by all means, differing viewpoints, please comment away!

Here are 4 reasons that make 'junk silver' a viable investment for New Zealanders:

Portability and Divisibility
Junk silver coins can be easily spent or traded in small amounts; this makes them popular for investors. These coins are still valuable even though they are fractional sizes of most bullion coins.
Low premiums/No Premiums:
Junk silver can often be bought for little or no premium over the spot price of silver
Legal tender
U.S. and Canadian junk silver remain legal tender, and maintain their face value regardless of the price of silver.
Despite a mass smelting of junk silver in the 1980s, junk silver coins are still somewhat well-known, and may be less likely to have their value disputed than silver bars or rounds. Though rare, some silver coins can still be found in general circulation

Thanks so much!

(To Google Blogger Team - This is not a spam blog!)