fiat currencies

Silver is the best investment

The National Inflation Association says Silver is the best investment.

In our opinion, investing into silver is the only sure way to tremendously increase your purchasing power over the next ten years.

Throughout world history, only ten times more silver has been mined than gold. If you go back about 1,000 years ago between the years 1000 and 1250, gold was worth ten times more than silver worldwide. From year 1250 to 1792, the gold to silver ratio slowly increased from 10 to 15 and the Coinage Act of 1792 officially defined a gold to silver ratio of 15. The ratio remained at 15 until forty-two years later when the ratio was increased in 1834 to 16, where it remained until silver was demonetized in 1873.

The gold to silver ratio remained between 10 and 16 for 873 years! It is only over the past 100 years that the gold to silver ratio has averaged 50. History will look back at the artificially high gold to silver ratio of the past century as an anomaly, caused by the dollar bubble and the world being deceived into believing that fiat currencies are real money, when in fact they’re all an illusion. Next decade, the fiat currency experiment will end badly in a currency crisis. The wealthiest people will be those who bought silver today and were smart enough to research and pick the best silver mining stocks.

While the vast majority of the gold ever produced remains sitting in vaults, 95% of the silver produced has been consumed by industry for thousands of applications in such tiny amounts that most of it will never be recycled and seen on the market again. Nobody knows the exact above ground supply of silver today, but most likely it is somewhere in the neighborhood of 1 billion ounces. That’s a total worldwide market value of only $17.4 billion, when the world has over $7 trillion in foreign currency reserves, mostly in fiat currencies that they will need to diversify out of due to rampant inflation.

Besides the fact that the world has been ignoring the monetary value of silver, silver prices are artificially low due to a large concentrated naked short position. It’s not a coincidence that the day silver reached its multi-decade high of over $21 per ounce in March of 2008, was the same day Bear Stearns failed. Bear Stearns was a holder of a massive short position in silver. In our opinion, this was likely a naked short position because there is nobody in the world who owns such a large amount of silver for Bear Stearns to have borrowed.

The reason why we believe the Federal Reserve was so eager to orchestrate a bailout of Bear Stearns, is because Bear Stearns was on the verge of being forced to cover their silver short position. Because the silver market is so small and tightly held, if Bear Stearns was forced to cover their short position, silver prices could’ve potentially rose to $50 per ounce or higher overnight. The world would’ve seen how economically unstable our country is and confidence in the U.S. dollar would’ve rapidly deteriorated. JP Morgan still holds the silver short position they inherited from Bear Stearns. The concentrated naked short position in silver today is the largest short position in the history of all commodities, as a percentage of its market size. Eventually, JP Morgan will have to cover this short position or it could jeopardize their existence.

The best evidence that the short position in silver is naked and not backed by real silver, is the differential between what silver trades for on the Comex and what real people are willing to pay for physical silver on eBay. Every hour on eBay, there are dozens of one ounce silver coins selling for approximately $25. That’s about a 43% premium over the current spot price of silver. With so much demand for physical silver, we doubt the silver shorts in the paper market will be able to manipulate prices downward for much longer. A major short squeeze could be right around the corner and silver could take off in a way that shocks even those who are most bullish.

Another good reason to own physical gold and silver

Peter Schiff puts forward a good reason to own physical gold and silver as the dollar is collapsing.

The US dollar is in terminal decline; America is tragically bankrupt, unable to pay its lenders without printing the dollars to do so, and embroiled in an economic depression. It is only a matter of time until the dollar faces a crisis of confidence. The difference between this collapse and the bursting of any other bubble is that the dollar is the backbone of the global economy. Its disappearance will leave a vacuum to be filled.

There are three main contenders for the role: the euro, the yen or the yuan. But each of these currencies suffers from a critical flaw that makes it unsuitable as a reserve currency. When it comes to fiat alternatives, the world would be going from the frying pan into the fire.

More on Another good reason to own physical gold and silver

Crash JP Morgan, Buy Physical Silver

Over the past 11 years, the Gata (Gold Anti-Trust Action) committee has worked to reveal the silver/gold price suppression scheme; thanks to whistleblower Andrew Maguire in London, an investigation has been opened. As part of the ongoing exposé, it has now become clear that JP Morgan is sitting on what is estimated to be 3.3bn ounce “short” position in silver (which they have sold short, meaning they don’t own it to begin with) in an attempt to keep the price artificially low in order to keep the relative appeal of the dollar and other fiat currencies high. The potential liability for JP Morgan has been an open secret for a few years.

Why it did not work in 1980.
In 1980, the Hunt brothers bought silver contracts on leverage. They also borrowed money against the value of their real silver. When silver values were manipulated lower, the Hunts were bankrupted, and they lost their silver hoard back to the manipulators. Also, interest rates on paper money were high enough to trick people into going back into paper. If people continue to try to buy paper silver, or buy silver with borrowed money, or let their silver be stored with the bankers and brokers, it will not work. People must be responsible enough to take possession of their silver, and they must choose to avoid borrowing money.

More effective than urging all people to buy 1 oz. of silver, would be to urge only a few people to buy all the silver that they can afford.

How many people? Perhaps it will only take reaching 1% of people in the USA with this message, or even less!

As it is, about 100 million oz. of silver per year are being purchased for investment. With silver prices at $26/oz., that’s barely $2.6 billion invested into silver per year. Even the purchase of silver by any one of several thousand billionaires could be enough to reach a major tipping point. Silver demand by investors is increasing naturally anyway, as the effects of the bail outs are obvious. Buying silver for protection is the less obvious choice, but more and more are seeing the need to buy silver.

Right now, silver eagle sales for the month of November hit an all-time record high and the availability of silver on a wholesale level is drying up. The most important indicator is the price itself – holding just under a 30-year high. With each uptick JP Morgan gets closer to going bust or requiring a bailout.

Crash JP Morgan, Buy Physical Silver

Here’s how the campaign works: wealth tied to a fiat currency is easily overwhelmed by wealth tied to silver and gold. And the world is waking up to the fact that they have the ability, without government assistance or other interference, to create a new precious metals-based backed currency system by simply converting their fiat paper into real money.

This campaign has 100% chance of working; it falls into the category of a self-fulfilling prophecy. As more individuals buy silver and gold, all attempts to replenish the system with more paper money will only cause the purchasing power of the silver and gold to increase – thus prompting more people to buy more. Any attempts to bail out JP Morgan would have the same effect. If the US Fed was to flood the system with bailout money for JP Morgan to cover their silver short position (as they did after the collapse of Long-Term Capital Management), more inflation will ensue and the price of silver and gold will rise more, triggering more purchases. A virtuous circle is born.