Even though gold recently sank to two-year lows in April, astute investors know there is only so long America’s massive debt, high deficits, systemic unemployment, and printing of money can continue to be ignored. Gold has outperformed most traditional investments since 2001, as the world’s appetite for the safe haven of precious metals continues to grow in these tumultuous global times. However, gold’s little brother silver, continues to be a vital precious metal and is thought by many analysts to have a far greater upside. Legendary investors such as Jim Rogers continue to push silver over gold. Prominent investor Eric Sprott has even gone so far as to build a mutual fund around silver exclusively.

There are three main reasons most in the precious metals community feel that silver will one day correct its lower valuation and spring to new highs. First, one must take a close look at the 16:1 rule. Silver’s ratio to gold is currently 60:1, far off the average of 16:1 it has exhibited throughout history. If gold were to settle at $1365 per ounce, silver should logically trade around $85 per ounce. For this to occur, one would expect gold to experience a dramatic correction, silver to rise while gold suffers a more moderate setback, or silver to finally get its respect and catapult to all time highs.

Silver also serves as a much more functional metal than gold, as it is widely used in photography, jewelry, electronics, batteries, and a host of other practical and consumer applications. The worldwide demand for silver stems from these needs, as approximately 10% of silver demand only comes from coins. During economic downturns, silver traditionally suffers far less than other precious metals, as the need for these basic uses continues whether or not economies are expanding or contracting.

Finally, when looking at silver demand over the last few decades, we see that while only 30 million ounces per year of silver coins were in demand in 1990, that number skyrocketed to 88 million in 2011. As countries such as China and India continue their aggressive growth, it is reasonable to assume the demand on silver will certainly grow along with it. Additionally, because the markets have ignored the historical 16:1 ratio mentioned earlier, investors flock to silver as a cheaper way to own precious metals and protect themselves in the event of another global economic meltdown. In early 2013, the U.S. Mint ceased selling 2013 Silver Eagles, leading many to speculate there was a shortage of silver as the 2012 Silver Eagles recently sold out. Could it be that the world’s demand on silver is outpacing supply? Precious metals experts have discussed the potential for silver to end up in manufacturing settings (not in coins), creating a scenario where silver might potentially rocket in price, as industrial needs supersede investor needs.

Either way it goes, good economy or bad, the demand on silver will continue to be strong. If the global economy goes into a tailspin, investors will look to silver and gold for safety. If it continues to pull out of its multi-year downturn, then manufacturing and industrial needs will be the catalyst. Whichever scenario takes place, investors can be assured that silver will most certainly climb higher.

This is the time that you add to your physical holdings of gold and Silver. Watch this Powerful Interview with Ron Paul on Gold: “I’m Buying”

Powerful interview with Andrew Maguire in which he discusses Precious Metals, Manipulation and Failure to Deliver. This interview stresses the importance of buying and holding physical precious metals. StraightSilver.com has a large inventory of physical silver and will deliver to your door.

The coordinated attack by the banking cartel on the price of silver in the futures market has exacerbated the silver shortage at the retail level, causing new signs of the shortage to manifest. This downward manipulation of the price of silver has occurred despite massive money-printing by the Federal Reserve and recent economic indicators showing its failure to bring about an economic recovery.

The Incompetence of the Federal Reserve

Following the collapse of the real estate bubble in 2008, the Federal Reserve, led by Ben Bernanke, initiated massive money-printing to buy toxic assets from the insolvent too-big-to-fail banks and artificially lower interest rates. The Fed believed that lowering interest rates would stimulate the economy, and miraculously bring about job creation and economic growth. Though expanding the monetary base from under $1 trillion to $3 trillion brought some collateral damage by means of inflation, particularly in rising food and fuel prices, the Fed believed that such an outcome would be preferable to a deflationary depression by allowing the economy to correct itself from excessive malinvestment. Notably, the housing bubble that burst and almost consumed the entire financial system with it was enabled by artificially low interest rates encouraged by the Federal Reserve, beginning with Alan Greenspan and continuing since.

Recently, the nonfarm payrolls report from the Bureau of Labor Statistics revealed that labor participation, which is the number of people employed or actively seeking employment, is the lowest it has been since 1979. The median household income of Americans is at the level it was in 1995, and almost 50 million Americans use food stamp debit cards, a digital version of soup kitchens. What all of these facts point to is that the American middle class, which defined America following World War II, is rapidly shrinking and the gulf between the rich and poor is widening.

The Motives for Attacking Silver

With this backdrop of incompetence by the financial engineers at the helm of the economy and a rapidly shrinking middle class, there is panic at the thought that the American people will lose confidence in the dollar and begin using alternative money that maintains its value. Though inflation has been eating away at the value of the dollar since the creation of the Fed in 1913, precious metals, such as gold and silver, have maintained their value by rising in price relative to the dollar. The rise in price of gold and silver, both of which have been regarded historically as monetary metals, has been a source of embarrassment and concern to Fed officials, who know that their power rests solely on public confidence in the dollar, which cannot be seen to have a suitable alternative. In particular, silver, historically having been used even more than gold by the common people as a form of money due to its lower relative value, has been viewed as a threat to the dollar, and, therefore, the power and livelihood of the banking cartel that controls the Fed.

The Paper Manipulation and Evolving Silver Shortage

As a result of the significant general rise in the price of silver in recent years, serving as a reminder of the dollar’s debasement, its price has been actively suppressed by the banking cartel to deter the common people from viewing it as a viable alternative to the dollar. This has been done by massive naked shorting by large financial firms, such as JP Morgan Chase, which has been revealed to have the largest short position on silver of all financial firms. On especially active days in the COMEX futures market, up to two and a half times the annual global silver production is traded in the paper silver market, indicating that manipulation is taking place that is distorting the true value of silver based on actual physical supply and demand.

The paper manipulation of the price of silver has caused the amount of silver available for sale to plummet, creating increasingly obvious shortages in the physical market. This shortage has been especially evident with delays in the delivery of large orders of silver from suppliers; the inability of national mints, including the United States Mint, to obtain an adequate amount of silver to satisfy demand for their products; the increasing divergence between the price of paper and physical silver; as well as the rising premiums of junk silver, which is normally sold for about the spot price of silver.

The Divergence of Paper and Physical Silver

Because the price of silver is artificially suppressed while the demand for silver remains strong, many vendors are now offering to buy silver for an amount greater than the paper price. Currently, due to the worsening silver shortage, the premium for junk silver is approximately 10 percent of the spot price of the metal. If the price of silver continues to be manipulated downward to boost the appearance of the dollar, the divergence between the paper price and the price to acquire the physical metal will be so great as to force the paper market to adjust its price substantially upwards to appear credible. If the physical metal dries up almost completely among suppliers and the paper market continues to be manipulated downward, those holding futures contracts increasingly will demand delivery of the metal due to concerns about its actual supply as well as the potential for arbitrage. A rising number of futures contract holders demanding physical delivery of the metal will cause a massive default in the futures market, due to the inability of the sellers to provide the metal, which ultimately would drive up the price of silver to much higher levels, perhaps multiples higher than its price today.

While investors of silver may be dispirited by the paper manipulation of the silver price, they must realize that the more the price of silver is artificially suppressed, the higher it will go in price once the suppression ends. Despite the apparent confidence of the Fed and government officials in their continuous mismanagement of the economy, the rising shortage of silver increasingly will become so obvious as to cause their efforts at suppression to backfire, since no action of theirs, other than relinquishing to the free market, will cause silver supplies to magically reappear.

Park Avenue Numismatics, a leading Rare Coin and Precious Metals dealer, announced today that it has purchased StraightSilver.com. The precious metals website focuses on the sale of silver bullion and related items, including American Silver Eagles, Canadian Maples, Silver Philharmonics, certified silver bullion, silver rounds, silver bars as well as a variety of mint products.

MIAMI BEACH, Apr 10, 2013 (GLOBE NEWSWIRE via COMTEX) — via PRWEB – Park Avenue Numismatics, a leading Rare Coin and Precious Metals dealer, announced today that it has purchased StraightSilver.com (http://www.straightsilver.com). The precious metals website focuses on the sale of silver bullion and related items, including American Silver Eagles, Canadian Maples, Silver Philharmonics, certified silver bullion, silver rounds, bars as well as a variety of mint products. “We have been bullish on silver in the last few years. Many investors have been waiting for the right time to make an investment in Silver, now could be the one of the best times in recent years. In times of economic uncertainty, investors tend to purchase silver as a store of value and hedge against the uncertainty in the markets. Now may be a good time to act so we feel there is a synergy with our existing business model. This was a natural progression in serving our customer base,” according to Bob Green, President & C.E.O. of Park Avenue Numismatics.

“We’re constantly striving to offer the best products at the best prices to our customers, and StraightSilver.com has a user friendly portal that allows silver bullion consumers to point, click, and purchase a wide variety of silver bullion products. We liked the technology, and with more than 10,000 active repeat buyers the decision to acquire this business was an easy one,” said Bob Green. “In order to help serve our customers, who are already adding silver to their holdings as well as rare coins, certified modern bullion and other precious metals, they need easy access and live streaming prices. StraightSilver.com provides that service.”

Notable features of the StraightSilver.com website include:

– Access from any Internet-Capable Cellular Phone: The StraightSilver.com site was designed to give consumers a good experience. Smartphone users also have the ability to easily access spot pricing, product pricing and information, pictures, and current news, articles and blogs. In addition, users have instant access to their existing account or can open a new account.

– Access to Inventory with real time sync: StraightSilver.com stands out from the rapidly increasing number of precious metals websites because it delivers a far better customer experience. StraightSilver.com includes easy-to-use inventory functionality. For ease of navigation, this feature allows customers to find products by browsing multiple categories. The site will sync and update the inventory, prices, etc. every 30 seconds.

– Real Time Purchasing: The site is designed to give consumers the ability to confidently purchase at a click of a button. StraightSilver.com uses security SSL to encrypt credit card information for privacy, and accepts PayPal payments as well.

– Live Spot Pricing: Bullion investors closely watch spot prices, and StraightSilver.com is committed to helping investors make smart purchases. The newly updated website features a live feed that provides viewers with up to the minute precious metals quotes instantly.

– Click-to-Connect & Click to email: When the time and price is right to make a purchase, StraightSilver.com site makes it easy to order. With the click of one button, customers can chat live with Account Executives, who are ready to assist with the order or send an email for more information.

About Park Avenue: Established in 1988, Park Avenue Numismatics has bought, sold and handled over $750,000,000 in PCGS and NGC certified rare coins and precious metals. Currently they offer a $30 million inventory via internet website http://www.parkavenumis.com or mobile site m.parkavenumis.com. The firm specializes in the sales and marketing of PCGS and NGC certified rare coins and precious metals, and works directly with collectors and investors worldwide. Park Avenue has handled some of the finest known examples in all areas of Numismatics, now with offices in Miami Beach, FL, Charlotte, NC, Houston, TX and New York. Office hours are 9am-6pm Monday-Friday. Contact them toll free at 800-992-9881.

This article was originally distributed on PRWeb. For the original version including any supplementary images or video, visit http://www.prweb.com/releases/2013/4/prweb10605829.htm

While silver has been steadily going up in price over the years, many project that it’s due for a substantial move at some point in the future. What if that day is a lot sooner than you originally thought? The U.S. Mint recently ran out of silver and sold out of their popular Eagle coins in a matter of a few days. What does it mean if the most powerful government in the world is having trouble getting its hands on the precious metal? Most likely, the patience of silver investors is about to pay off.

Keeping Up With Demand

If you only trade exchange-traded funds or “paper silver,” you’d think that everything was business as usual on the silver market. No one’s talking about a silver shortage and investment banks are buying and shorting silver contracts like nobody’s business. You probably won’t find a single news report on the mainstream media about silver, and definitely not anything about there being a shortage. However, if you like to buy the physical asset, you’re most likely running into something else all together. It’s getting harder and harder to find silver bullion in any form.

In reality, there’s a lot more demand for silver than what the available mines can produce. Yes, there is more silver still being mined every day. But there are also more people and businesses looking to buy it than ever before. Think about all of the technology products like smartphones, tablets, laptops, and televisions that are being produced in the market today. Most of these items require at least a little silver in them. Car manufacturers use silver in various components in their vehicles as well. Military contractors, medical equipment manufacturers and many other businesses need silver in large quantities. Then by the time you factor in all the people who are trying to buy up silver bullion as an investment, you’ve got a massive amount of demand out there.

Buy When It’s Available

So what do these big companies do when it comes to getting the silver they need for production? They buy it when it’s available. They don’t wait around and wonder about whether they should buy at today’s spot price. They place huge orders and spend millions of dollars at a time on the metal. Many of them store it on pallets in huge, secure facilities. For example, there are storage facilities in Switzerland that are packed full of silver for some of the top companies in the world.

So what does this mean for you? If you like the idea of making money on precious metals, buy silver whenever you can. As an individual investor, it might be hard for you to get the silver that you want. Most of the time, you’re going to pay a pretty hefty premium for silver when you buy it in small quantities. If you can find someone selling near spot price, buy as much as you can. Don’t worry about whether the price is going to go down in the short term. It’s only going up in the long-term.

What’s Coming?

No one knows exactly when silver production is going to start drying up. While they’ll likely still be mining silver for several years into the future, the demand for it might get so high that individual investors can’t afford to buy it, or won’t be able to find anyone to sell it to them. It’s very likely that there will be a major shortage of silver at some point in 2013. If you want to get in on the silver bandwagon, you need to get started as soon as possible.

Since the news isn’t talking about it, the prices of the precious metal have remained pretty steady over the last few years. Once you hear about a silver shortage on the news, it’s probably going to be too late to get in at a reasonable price. By that point, the price of silver will skyrocket and you’ll wonder why you didn’t buy more of it when you could afford to do so. It’s now or never in the silver market.

Protect Yourself With Precious Metals – StraightSilver.com Offers The Very Best Deals on Silver! For more information or to speak with an Account Executive call us at 800-673-7872 or Visit Our Bullion Store

On March 16th, President Nicos Anastasiades of Cyprus announced a “one-time” tax on all savings accounts in the nation. The proposed tax rate was 9.9% on all accounts worth over €100,00 and 6.7% on all other accounts. Predictably, public outrage ensued, leading to runs on banks and ATMs, and the shutdown of all banks until at least next week.

This is after President Anastasiades explicitly promised the people of Cyprus that their bank accounts were safe. It is a measure that has been described by Forbes’ Eamonn Fingleton as “the most inexplicably irresponsible decision in banking supervision in the history of the advanced world since the 1930s.” Saxon Bank CEO Lars Seier Christensen describes the proposal as a “shocking… breach of fundamental property rights dictated to a small country by foreign powers…” Christensen reasoned that, “if you can do this once, you can do it again. If you can confiscate 10 percent of a bank customer’s money, you can confiscate 25, 50 or even 100 percent.”

Fortunately for the people of Cyprus, their parliament rejected the proposal, likening it to “[taking] a 10,000 metre jump without a parachute.” However, Cyprus’ IMF bailout is in shambles, and the fate of the nation’s economy remains to be seen. The Cyprotic government is hoping for a bailout from Russia, since many Russians have business interests on the island, but so far the Kremlin has expressed no interest in such a bailout.

So what is to become of Cyprus? The tax was proposed as an ultimatum – either Cyprus could accept and have their bailout, or they would be removed from the EU. President Anastasiades claimed that without the bailout, the nation’s two major banks would fail, leading to rampant asset liquidation that would culminate in the bankruptcy of many if not all Cyprus’ businesses.

The banksters know this. They are very aware that either Cyprus can accept the deal or face total economic collapse. If the Cypriot government reneges, the banksters get to rob the populace and has free reign to impose similar measures elsewhere. If the government keeps its decision and the economy crumbles, Cyprus will be held up as an example to any other European country offered such a deal. It is even quite possible it could happen in America, where the national deficit, wealth gap and inter-class resentment continue to worsen, billed as a tax on the “rich.” Of course, if the proposed estate tax on assets worth over $250,000 is any indicator, it will hardly be just the rich who are targeted.

How would you feel if one day the banksters forced you – at gunpoint – to give up 6-10% of your life savings? It could easily happen very soon once Cyprus’ economy tanks. This possibility further erodes the already waning trust in the baking system, as people around the world, and in Europe especially, will begin liquidating bank assets if they have not already done so.

Once enough people withdraw their money, the banksters may attempt to stem the tide by imposing more bank shutdowns. When that isn’t enough, governments around the world may impose a total ban on cash-money. If this sounds far-fetched, consider that in 1933, when the harsh economic climate caused people to hoard gold, President Franklin Delano Roosevelt signed executive order 6102, criminalizing private gold ownership. Furthermore, consider that European countries such as Spain and Italy already have bans in place on cash transactions over €2500 and €1000, respectively. Even in the United States, second-hand cash transactions are banned in the state of Louisiana. There are also countries such as Sweden where up to 97% of all business transactions take place electronically.

The banksters are coming after our money, and they won’t stop just because one small, Mediterranean island tried to resist. At this point, the IMF has thrown its hands up, offering Cyprus a €10 billion bailout if the Cypriot government can come up with €7 billion on its own. The government is mulling the imposition of capital controls once banks reopen, in order to prevent more bank runs from occurring, hinting at the possibility that the government may still implement the tax. Either way, the wheels are already in motion, and unless Russia steps in at the last minute there will be no going back.

Protect Yourself With Precious Metals – StraightSilver.com Offers The Very Best Visit Our Bullion Store

Reasons Why Silver Is The Better Option For Investment

Gold and silver are just some of the few precious metals with real intrinsic value and with the difficulty associated with extracting it out of the ground, its scarcity makes it more expensive but still a worthwhile investment. For the past few years, we have seen gold and silver in tremendous upward spikes because of China and India selling their bonds and US Dollars, and exchanging it for the said metals. So if you want to earn by investing your money, consider entering the commodities market and buy and sell silver to earn unimaginable profits.

A misconception that should be corrected

One of the most common misconceptions today is that the best metal to invest on is gold. But the hard truth is, silver is one of the best investments that you could make nowadays because of its industrial value and its everyday use in monetary transactions.

Silver has always been used in different industries and wasn’t always been considered as a precious metal. Industrial metals like copper and steel are used in huge amounts and are usually recycled, while silver is used industrially in minute quantities and rarely recycled. And while we’re advancing in research and technology, there will be more uses for silver and this will lead to higher appreciation and value for the metal. Although recycling silver would be worthless and a waste of time today, there will come a time when the metal will be appreciated in the market for its real worth and its prices will reach a point where recycling silver will be worthwhile.

Where silver is usually used

Silver is used in thousands of applications, mostly as industrial metal. The metal possesses unique and useful properties, making it a priceless value to different industries. The price is usually inelastic, meaning it won’t change much regardless of the change in the supply and demand. Unlike other commodities that have other substitutes or alternatives, silver is irreplaceable in most of its applications.

This fact would only mean that big industrial companies will buy silver as it becomes more difficult to acquire, so they could save on cost should the time come when the metal reaches higher prices. When this happens, major industry players will control the silver price in the free market.

Whether it’s the medical industry where silver is used because of its antibacterial properties or by semiconductor companies where the metal is used for its conducting properties, it won’t be a surprise when the time comes where silver becomes expensive because of its high demand. Before this would happen, take advantage of the fact that silver can be easily acquired today and invest on it for the future.

Increasing demand

There is an increasing demand for the actual metal in the past few years and whether we like it or not, the demand for silver will inevitably continue to increase.

Let us take China for example. They used to export more than 100 million ounces of silver every year but the demand has significantly shifted when they started importing. When the time comes when major buyers involve themselves in the market, it wouldn’t be a surprise if we see a surge in silver’s prices.

If you’re still debating whether or not to invest in silver, you should keep in mind that waiting for the ‘right’ time would only lead you to higher prices and loss in investment. If you do have the money now, one of the best things that you could do with it is invest and earn profits while the market is still in good conditions so that in no time, you’ll be living your dreams of becoming a  millionaire.

To learn more about investing in Silver contact us today at 1-800-673-7872

Analyzing the Bull Case for Silver

Investing in the precious metal market can be addictive, especially once you’ve experienced reaping profits out of it. In fact, Paul Mylchreest, a marketing analyst, described silver as being one of the best assets in the world. But is this enough assurance for most of us to start piling into silver?

Why Silver is irresistible

Silver, like gold, is a monetary metal that attracts investors especially in times of currency debasement and monetary intervention. What makes Silver more irresistible is its numerous uses, making it ideal not only for jewelry making, but industrial purposes as well. It possesses good thermal and electrical conductivity, reflects light well, and can also endure high ranges of temperature. Such characteristics make it useful in different products ranging from computer microchips, batteries, and even as catalysts in plastic manufacturing. Not only does the metal make a good jewelry piece, but its anti-bacterial properties also make silver useful in the world of medicine.

Back in 2010, Silver Institute estimated around 487.4 million ounces of the metal used in the industry alone, while 101.3 million ounces were used in making coins and medals and around 167 million ounces to make beautiful pieces of jewelry. However, it differs much from gold because unlike the latter which usually gets hoarded, silver is mostly used in the industry.

When it comes to investment, the continuous rise of metals in the market only means that more silver should be mined. The moment that today’s mining industry can’t supply the demand, prices will definitely be higher.

Investing in Silver

If you want to earn money with silver, there are countless of ways to do so. You can start by purchasing the actual metal, although it can be subjected to VAT, making it more expensive than its actual worth. In fact, antique tea sets are usually sold at prices that are way below the real value of their silver weight.

A shortage in the silver metal exists and since the mining sector focuses on extracting copper and gold from the Earth, there will come a time where the demand for the metal won’t meet the supply needed for different market segments. When this happens, there would come a time when silver will definitely be more expensive than gold, making your money double in no time. That is, if you do decide to invest in precious metals.

Earning money with Silver

There are more than ten reasons why investing your money in silver, and the precious metal industry for that matter, is worth every single cent. Back in 2011, silver price came to almost $50.00US an ounce and since then, the metal has been experiencing consolidation pattern. Based from price analyses, investing in silver seems to be promising and profitable.

One of the first things that you need to keep in mind is that silver and gold are metals that are a hedge against economic inflation. When dollars go down, silver price automatically goes up. Looking at it in another way, when more dollars are in circulation, its individual value decreases, making the silver price to go up and be more attractive to invest in.  In short, the best time take advantage of investing in the precious metal market is during inflation, when there is a favorable effect on commodity prices.

Earning money shouldn’t be difficult especially if you know how to play your cards right. When given the opportunity, don’t waste your time going one step forward and taking two steps back because of your fear of losing your investment. As long as you have the right knowledge and faith that everything’s going to work out, your investment will rewarded.

A special end of the year silver update with ‘Silver Shield’ Chris Duane

Did bankers use the MF Global bankruptcy to suppress gold and silver prices and create the panicked appearance of collapsing precious metals to give themselves additional precious time to delay the crash of the Euro and the US Dollar? As crazy as this sounds, a closer investigation of some key data seems to imply this possibility. Though bankers claim that they created futures markets to provide a mechanism for commodity producers to hedge against volatile market prices, I have never bought the kool-aid the bankers were selling in this explanation for the rationale behind their creation of futures markets. Given that today, futures and spot prices for gold and silver in the short-term are entirely set by banker manipulation of the supply and demand for paper derivatives that often have no backing of any physical metal, I believe that bankers created futures markets for the explicit intent of allowing themselves to manipulate the prices of commodities and to enrich themselves, and themselves only, through the process of alternately and artificially inflating and deflating prices as would not be allowed in any type of free market. In other words, bankers invented futures markets to allow themselves to siphon off and steal money from other parties that wanted to invest in commodities with a mechanism, risk-free to them, that required deception and zero honest work and zero integrity.

The futures markets in commodities is such a deceptive market that it is hard to know even where to begin to unravel its many mechanisms of deceit in all their glory. Futures contracts traded on the world’s largest commodity markets such as the COMEX in New York and the LBM in London allow bankers to commit reverse alchemy, turning real physical gold and real physical silver into nothing but false paper contracts and air. Secondly, through futures contracts traded in New York and London, bankers routinely defy the economic principles of supply and demand, and set short-term prices for gold and silver that literally have zero to do with the supply and demand dynamics of the physical gold and physical silver market. In the world of physics, such an illogical, comparable feat of deception would be the indefinite suspension of the law of gravity. Bankers invented paper derivative gold and silver markets to allow themselves to literally defy and suspend every single sound economic principle that exists.

This is important to understand because not only does understanding this concept make the bulk of what you learn in business school a lie and entirely useless, but also because bullion banks such as Deutsche Bank, Citibank, JP Morgan, Goldman Sachs et al that serve as the puppet conduits for more powerful families that control Central Banks, routinely used to lease physical gold into the open market as their primary mechanism to suppress the price of gold and silver. However, as their mechanism of fractional reserve banking began to threaten the viability and utility of the most widely used fiat currencies in the world, the USD and the Euro, bankers understood that they needed to utilize and/or create another mechanism to suppress gold and silver prices that could replace selling physical PMs into the open market as they no longer wished to give up a solid asset with no third party counter-risk for what they knew they were turning into essentially worthless pieces of paper. Thus bankers increasingly turned to the paper futures markets to manipulate and control the price of gold and silver and also served up additional bogus derivative products to the public like the GLD and SLV ETFs. Bankers knew that there was no way they could possibly control the price of gold and silver if the supply and demand determinants of physical gold and physical silver had anything to do with the price, so they conspired to fool the world into believing that the fake paper price they set was set by the supply and demand of the physical markets.

Collapsing OI of Gold/Silver Futures Markets Directly Related to MF Global Collapse?

And here’s where MF Global enters the banking cartel gold and silver price suppression scheme. Today, short-term futures and spot prices of gold and silver have almost nothing to do with the physical supply and demand dynamics of gold and silver, as odd as that may sound. Bankers created the futures markets and paper derivatives in gold and silver to kill free markets and for the express purpose of suppressing gold and silver prices. Today we literally have no idea what the free market price of gold and silver should be or could be, besides the fact that both would be multiples higher than their current price, because of the fake paper market in gold and silver that the bankers created.

As well, bankers ensured that they armed a legion of worker bees in commercial investment firms all over the world that would represent these paper derivatives backed by very little physical gold and silver to their clients as the equivalent of investing in 99.999% pure physical gold and silver. In doing so, the worker bees thereby lured people all over the world into what will turn out to be the fatal mistake of not buying millions of troy ounces of physical gold and silver and instead buying their offering of fool’s gold and fool’s silver. When we receive a massive default of gold and silver futures contracts that stand for delivery on the COMEX or LBM, or if the SLV and GLD default, then, and only then, will the public start to see true price discovery of physical gold and physical silver in action. However, for clients of MF Global, unfortunately, they have already experienced the mistake of buying fool’s gold and fool’s silver from the bankers and have received air in exchange for gold and silver futures contracts they purchased that stood for delivery.

Bankers invented fake paper gold and silver contracts, because they knew that if they could not fulfill contractual obligations to deliver physical gold and physical silver because the contracts were a binding lie to begin with), that they could always renege on these contractual obligations and give the people the nothingness they truly owned in return. And thus, we have the story of MF Global.

Ratings agencies downgraded MF Global on Oct 25 and MF Global declared bankruptcy on Oct 31. If one scours the data that the Chicago Mercantile Exchange (CME) releases via its aggregated Commitment of Trader (COT) reports during this time period, one may not notice any data that immediately stands. However, investigation of the disaggregated reports reveals far more interesting patterns that almost undoubtedly can be traced back to the collapse of MF Global. In a period just preceding the MF Global collapse, from late August to mid October, the open interest (OI) in longs in gold and silver futures within the Managed Money category collapsed by 33.75% in gold (202,430 to 136,103) and 44.74% in silver (29,849 to 16,494). During this exact same time period, shorts in the gold and silver futures in the Managed Money category increased by 19.3% and 83.82% respectively (see the chart below). Within the Managed Money category, between Sept 13th and 27th, in just a two-week period, the drop in OI in the longs in gold and silver futures was even more pronounced, with a 25.41% plunge and 34.3% plunge in silver. I imagine if someone could trace the connection of this plunge in OI in the Managed Money category in the gold and silver futures markets, one would discover that a good deal of the plunge was somehow directly tied to the impending MF Global bankruptcy and its freezing and/or liquidation of gold and silver futures accounts in its possession.

After Phase I of the collapse in OI in the gold and silver futures markets, Phase II followed. When the story about MF Global’s legalized client theft hit the presses, an enormous public distrust of the entire futures markets started to build. If clients lost millions of dollars in gold and silver futures accounts due to forced liquidation or freezing of contracts that they were holding for delivery, anyone that had considered using the futures markets to take delivery of real gold and real silver following the MF Global debacle obviously reconsidered their options. Thus, due to the massive fraud of the futures markets that was revealed by the MF Global collapse, another huge drop in the OI of gold and silver longs in the Managed Money category occurred during Phase II (as labeled in the above chart) that respectively amounted to an additional respective 11.79% and 7.48% plunge. In essence, it appears that the MF Global collapse served up the exact same price suppression effect as a CME issued initial or maintenance margin hike in gold and silver futures, which forces a tidal wave of unwanted and involuntary liquidation of gold and silver longs that consequently violate technical support lines and trigger technical sells.

Of course, we also have to factor in the temporary OI-increasing effect of the risk-on CME event when they lowered initial margins to a 1:1 ratio with maintenance margins at the onset of November. Still, given the figures presented in the chart above, it seems that bankers used the MF Global collapse to force liquidation of gold and silver longs in the futures market quite rapidly and drastically. Why is this important? This is important because typically strong hands ride out any temporary banker manipulations of gold and silver prices downward. In this case, strong hands, if they existed at MF Global, were not given this opportunity and were forced to liquidate or had their accounts frozen whether or not they desired such an outcome. Furthermore, if primarily strong hands were forced out of the futures market, this would leave the majority of volume in the gold and silver futures markets primarily in the hands of the criminal banking cartel. We’ve seen repeatedly, this past year in the US S&P 500 index, when low trading volume primarily controlled by the banking cartel has translated into curious and inexplicable market bounces of 2% in a single day. In other words, low trading volume allows bankers excessive and easy manipulation over markets. If this was indeed the scenario bankers deliberately created with the MF Global collapse, then the MF Global collapse and simultaneous collapse of open interest in gold and silvers futures certainly would have paved the way for the banking cartel to easily manipulate gold and silver prices.

There was also further circumstantial evidence that bankers used the MF Global collapse to collapse gold and silver futures markets at the end of 2011. For example, in an article posted on the SilverDoctors blog by Jim Willie in which he gathered data regarding the amount of physical gold and silver ounces represented by the longs at MF Global that were standing for delivery in the futures markets before these contracts imploded, he stated: “JP Morgan increased the amount of registered silver and gold by precisely the amount that was suppose to be delivered [by MF Global]…JP Morgan effectively averted both a Comex default and a European Sovereign Debt implosion.”

Silver Lining in the MF Global Debacle?

Can there be a silver lining in the MF Global debacle? I believe that in the long-term, this extremely unethical, negative event could transform into a positive game-changer in the way people buy large amounts of gold and silver. Obviously, the futures market is not a safe market for anyone seeking to take delivery of millions of dollars of physical gold and silver as many MF Global clients learned. The GLD and SLV ETFs, of course, are no safer than any gold or silver futures contract for the same reasons. So in the future, and I mean the immediate future starting now, I believe that large buyers of physical gold and silver will now opt to bypass the bullion bank’s middle men in the futures market and go directly to the gold and silver mining companies to buy large quantities of bullion. This should eventually help usher in the death of futures markets as a mechanism for buying physical gold and physical silver and be a step towards establishing a free market for gold and silver prices for the first time in our lives. Mark Cutifani, CEO of AngloGold Ashanti, recently echoed the same: “Major [asset management fund] buyers are finding it is hard to get physical gold. People are coming directly to us [for large gold purchases,] people who want tonnes of physical gold, people with serious financial muscle, because they are finding it is very difficult to secure the volume of gold they want. That is something we have noticed over the last 18 months, and it has been increasing in the last six months. People are finding it’s hard to get physical gold.”

People that want to own physical gold and physical silver never should have been buying the GLD, SLV, or gold and silver futures. Now, in light of the MF Global debacle, scores of people will stay away from these fraudulent vehicles for good.

About the author: JS Kim is the Chief Investment Strategist and founder of SmartKnowledgeU,

Written By: Jim Willie

Divergence between paper gold and physical gold price is happening, the process begun. Actual physical shortages have kept the price up. The naked shorting of futures has kept the paper price down. The fraud cases and lawsuits, with no hint of prosecution, provide the levered force to create much wider divergence, as traders and entire firms depart the tainted crime scene that is the COMEX.

Trust has vanished along with private accounts. At the center of the backdrop for the divergence, apart from the criminal events, is the economic deterioration and asset market downdraft. It leads to margin calls, loan payment obligations, fading investor confidence, negative sentiment, and a desire to avoid loss. Hence the huge liquidity concerns, selling of good assets that command a strong price, and central bank encouragement of gold sales even with lease.

These forces conspire to push down the gold futures price from the discovery process, called the paper gold price. These forces, although real, are exaggerated by the Syndicate to explain all. On the other side is the desperation among central bankers to cover debt securities up for sale or rollover funding. They resort to utter hyper inflation by monetizing the many types of government bonds. They are obligated to aid their banker cohorts, and thus purchase truckloads of badly impaired sovereign bonds and other collateralized bonds. Over time these sovereign bonds have proved toxic. The compelling need to stimulate economies, to redeem toxic bonds, and to recapitalize and nationalize the big banks adds to the monetary inflation outcome. Therefore, two sides are in opposition in a battle to the death of one or the other. No middle ground can be achieved, not any longer. It is the quintessential battle between monetary hyper inflation and restoring bank system integrity to avert collapse. The insolvency has recently met illiquidity. The battle features strong forces on each side. The divergence between physical and paper gold price is widening.

The incurable speculator junkies committed to the addictive leveraged game rigged by the Forces of Evil seem stuck at the casino tables, where fingers are lost, finally entire hands and arms. If their practice was to purchase physical, they could benefit from the paper price swoon, and join the Forces of Good team, rather than fighting the evil side on their dominated turf. To be sure, many aware analysts in the news maintain a small gold position in COMEX that is rolled over constantly. Many have physical positions but keep with the paper trades as a hobby, better described as an addition to the juice. Leverage cuts both ways. Their continued activity has left them exposed to theft, while knowing the criminality was widespread within the arena. So many players and firms are departing the arena altogether like Ann Barnhardt of BCM Capital. The divergence between physical and paper gold price is widening.

The desperation of the bad team is growing. The gold cartel has benefited significantly from the fresh Libyan gold supply (144 metric tons) and Greek gold supply (111 metric tons), not to mention the ample Dollar Swap Facility. It is the bankers New Gold, as reported by intrepid Jeff Neilson. In a fresh sign of bankster desperation, the lease rates for gold have been pushed down to net negative levels. The fresh supply from the two broken nations has greatly aided the COMEX, providing new cannon fodder. Perhaps more wars to liberate the oppressed can be conjured up, to release more tyrant wealth. It is not a coincidence that negative gold lease rates came when Libyan gold was made available (heisted) and when Italian sovereign bonds went into critical DEFCON mode. The gold supply helped to aid the lack of bond demand. The gold lease story is analyzed more fully in the December Hat Trick Letter.
Inelasticity Blemish

A preface is warranted. The paper Gold market is very different in its internal dynamics from the physical. The paper Gold market shows signs of inelasticity that borders on comical. Witness the low demand in 2001 and 2002 when Gold had a paper price tag at $300 or less per ounce. Witness nowadays the amplified selling when the paper price declines. The leverage from the corrupted paper mechanisms forces margin pressures and sales. The leveraged game goes opposite to the real world of price mechanisms. On the upside, global demand rises with a rising physical price, called the gold fever. The inelasticity on the supply side is prevalent in the paper market, while the inelasticity on the demand side is prevalent on the physical market. To confuse the mix, mining firms realize some inelasticity as price falls, they are stuck with a liquidity crunch on their forward sales ruin. A huge amount of money is required to cover their losses, urged on by Wall Street advisors. Their mining operations suffer from lack of funds, and projects are curtailed. The paradoxical differences in dynamics help to push the gap between the paper and physical Gold price. The incompatible forces work to rip apart the COMEX. The divergence between physical and paper gold price is widening.
Illicit Usage of Client Funds as Collateral

The hypothecation battle will bring sufficient publicity to help the divergence along. As more assets are seen as committed, involved, and tainted in the process of grabbing, snatching, and securing collateral, even by illegal means, the physical assets will be removed from the system. Parties will remove accounts and metal from the COMEX in response from basic self-preservation. On the investment and speculation side, harm has been rendered to managed risk. The client funds have begun to flee. The protection and security of money in private accounts has been under siege in recent weeks since the MF Global crime scene was established and the yellow tape cordon has been put in place. Investors are pulling money out of hedge funds at a rapid rate. The COMEX will be increasingly isolated. Clients funds were redeemed to the tune of $9 billion in October, almost four times as much as they pulled in September, according to Barclay Hedge and TrimTabs Investment Research. Investors in October yanked more from hedge funds, setting a single month high over the last two years.

The redemptions are the largest for the hedge fund industry since July 2009, when $17.8 billion was returned. The Barclay Hedge office put lipstick on the corrupt pig by commenting on how investors have lost patience with lackluster investor returns. To be sure, the average hedge fund is down by about 4% this year. The global hedge fund industry size has been reduced to $1.66 trillion, still sizeable. It is always interesting, if not amusing, to read the spin from the isolated corners. Hedge funds are seeing capital depart for the simple reason of moving away from crime centers. In the process the COMEX is being isolated. With increased isolation comes the easily recognized fraud. Look for some major stories soon about the raids to the GLD and SLV inventories by their custodians engaged in naked shorting. The Exchange Traded Fund fraud story is analyzed more fully in the December Hat Trick Letter. The divergence between physical and paper gold price is widening.
Dynamics of Paper Versus Physical Basis

Grand divergence dynamics are becoming clear. Ann Barnhardt explained in detail how the COMEX will go away. It will not default, but rather fall into irrelevance. He laid it out in credible detailed form with numerous factors coming to play. The COMEX might still suffer the shame and spotlight of criminal prosecution. It will more certainly suffer from being ignored and shunned. The physical basis market will not respond to the declines in the paper futures market. The current dominant market will go away due to lost integrity and eroded trust. The consequences and implications of the recent major scandal and coverup are enormous, staggering, and sweeping. The changes from the MF Global failure and theft of private segregated accounts will come in time, perhaps accelerated by another similar event to slam the message home. The Syndicate has turned desperate, resorting to theft in the open daylight, which has resulted in direct consequences. Hundreds of COMEX clients waited in line for delivery of gold, and had their wallets stolen by JPMorgan. Their Gold & Silver set for delivery found its way into JPMorgan accounts at the COMEX. The details of the missing silver then reappearing silver is discussed in the December Hat Trick Letter. The slow mentally overlook this fact. The alert who point to fraud consider it a smoking gun. On its face, evidence mounts that JPMorgan simply converted 614k ounces of MF Global client silver into JPM licensed vaults. Big hats off to the Silver Doctors for excellent financial fraud forensic analysis. Do not expect prosecution over the crime, for MF Global, for JPMorgan, or for the accomplices in London, not even Jon Corzine. The Fascist Business Model in the Untied States does not permit prosecution. The bigger the crime, the more likely the perpetrator is in control of the government high offices, the financial ministry, the printing press, or the regulators.

Ann Barnhardt explained how the COMEX will fade away into oblivion. Its final chapter will be marred by a grand price divergence, where the futures market price declines from shunned avoidance, while the cash physical market price holds steady then rises. Many including the Jackass had thought that a slew of delivery demands would force a drain in their gold & silver inventory, eventually leading to a slew of lawsuits, together to shut them down as a corrupt enterprise arena. The MF Global theft reveals the alternative route that seems more clear. The gold cartel led by JPMorgan and secretly by the USFed will not go quietly. They have resorted to theft of private accounts on the open stage. The money is not missing. That is the lie. It is held in JPMorgan accounts in London, where fraud laws are more relaxed. We have seen this Madoff movie before, but it will be shown on the silver screen again. The divergence between physical and paper gold price is widening.

Financial Sense Newshour: Ann Barnhardt: The Entire Futures/Options Market Has Been Destroyed by the MF Global Collapse

The backlash has begun and will gain strength. Barnhardt offered many cogent arguments with detail on how the COMEX will be ignored from distrust and suspicion of further thefts, as clients remove funds and close accounts. Here are her main points. They apply to Gold & Silver. She has the Barnhardt weblog.

Arbitrage is set to kick in. Players will buy at the cheaper corrupt paper market in COMEX and sell in the higher honest physical market, wherever brokers can match to make deals. (It is the same phenomenon that ripped the Euro sovereign bond market apart, as the German Govt Bond yields remained much lower than the Spanish and Greek.) They will take advantage of a strong basis, buy at the discount offered by COMEX, and sell into the cash spot physical market.
A linchpin holds the market together. Keeping the futures markets tied to the underlying cash physical market is the fact that the futures contracts permit taking delivery. That delivery mechanism just broke as linchpin in full view. The futures market has lost viability and trustworthiness because of the MFG collapse and theft.
The entire delivery mechanism has been corrupted and undermined. Taking delivery has meant a holding of physical metal bars is stored in a certified vault with your name attached. No longer are such holdings considered safe. Thefts occurred, and lawsuits have occurred to decided upon ownership of bars in dispute.
The de-coupling process comes when arbitrageurs finally lose all confidence in market interaction dynamics, as the cash market will lose connection on price from the futures market. Players will not be willing to take the risk of having their money, positions, and physical metals stolen or confiscated.
As players flee the futures market, the paper futures prices will decline. The cash physical market will hold steady. The divergence will come and be noticed, then be widely publicized. The players will realize that the physical market is the only remaining game to be played with honest rules in effect. The cash dealers will ignore the futures prices, no longer a valid price discovery, seeing that market demand for their physical inventory is robust, and maintain their prices steady. Later, they will even raise the physical prices. Then later still, the parabolic spike comes for physical Gold & Silver.

The Great Shun By Miners

Asset management funds are appealing to mining firms for direct metal supply. They are bypassing the COMEX in a new trend. It is a natural development, as miners seek a fair price and the funds seek a reliable supply. The COMEX is cut out of the process. The Sprott Funds have revealed how they sourced their precious metal from mining firms last year. The official exchanges are being cut off, a form of isolation as a result. The divergence between physical and paper gold price is widening.

See the Ashanti story as typical. The COMEX is seeing reduced supply lines, reduced operations, more criminal implications, horrible publicity, and fewer clients. Criminal fraud does that, as lawsuits will follow like cold rain. The trend shapes up well for higher gold & silver prices. Mark Cutifani is CEO of AngloGold Ashanti, a $16 billion mining firm. He said, “Major [asset management fund] buyers are finding it is hard to get physical gold. People are coming directly to us [for large gold purchases,] people who want tonnes of physical gold, people with serious financial muscle, because they are finding it is very difficult to secure the volume of gold they want. That is something we have noticed over the last 18 months, and it has been increasing in the last six months. People are finding its hard to get physical gold.” The clear message is that the COMEX has no spare available metal at all.Cutifani has good insights into the commodities and precious metals markets, and describes a fascination new trend regarding the global picture. He pointed out that major gold buyers are emerging from the Middle East and Asia. See the Bull Market Thinking article.
New Markets Flowering

New gold centers are forming, where the safety is most assured. Hong kong and Dubai have emerged as reliable honest brokers, and will continue to provide valid safe haven. Switzerland, London, and other locations are fading fast. They are the corrupt centers where fascism has become prevalent, laced through the financial system.Takahiro Morita, the Japan director of the World Gold Council, reported that Japan’s gold exports in the 10 months ended October totaled 95.6 metric tonnes, their highest level since 2008, when it registered at 95.5 metric tonnes. People who bought gold and jewelry in the 1980 and 1990 decades are selling back what they purchased, according to precious metals traders. Japan has turned into a big exporter. Contrast to the official side. Central bank purchases have risen by 114% over the previous quarter. Purchases by central banks could hit 450 metric tonnes this year, concludes the investment research at the council. The volume represents the highest level of central bank buying since at least 1970, perhaps the greatest in recent history. A veteran gold trader with actual experience in these locations pitched in to explain. He said, “These are not sales in Japan. They are exports, an important distinction. Many investors are busily relocating their precious metal bullion to Hong Kong and Dubai UAE. Look for Dubai to be the HK of the Middle East. The Chinese have made that decision, and it is being implemented with lightning speed.” Most of the relocation from Japan shows up as exports, which require payments.

October imports into China from Hong Kong rose 50% over September, and up 40-fold from last year. The more attractive fair price paid in Shanghai reached $50 above the corrupt controlled London price. The arbitrage has been very active. Chinese gold imports from Hong Kong hit a record. The Financial Times reported Chinese gold imports from Hong Kong hit a record high in October and astoundingly, they accounted for more than one quarter of the entire global demand. Data showed that China imported 85.7 tonnes of gold from Hong Kong in October, up 50% from the previous month and up more than 40 times from October of last year. It marks the fourth consecutive month that China’s gold flows from Hong Kong have hit new highs. The article noted that the price arbitrage between London and Shanghai was favorable for Chinese imports during late September and early October, giving astute clever traders an edge. Gold on the Shanghai Exchange traded up to $50 per ounce above the main global market based in London, a record price difference. Purchases from China have fallen since October, as the recent strength in the USDollar has made gold more expensive. Also, considerable new strain has been felt inside China in recent weeks. Conclude that price arbitrage has begun to show itself across international boundaries. The divergence between physical and paper gold price is widening.
One Gold Event, The Big Squeeze

No gold chart will be shown in this article, out of disrespect deserved for the COMEX criminal activity. A story was recounted in recent days from my best source of solid reliable gold information. The aware gold community has overlooked a phenomenon that might be more profound in action here and now. A major squeeze is on that capitalizes on the artificially low COMEX price and the higher honest physical price. The Barnhardt effect can be seen, or at least recounted. A gold trader informed that some multi-$billion purchase Gold orders have been in the process of filling at or near the $1600 price per ounce. The price must remain near $1600 to complete the orders and permit them to clear. Call it Agent2000 who seeks the massive amount of Gold, one of the Good Guyz. The name fits since their goal is to force the Gold price back over $2000/oz after the sale transaction clears. Since so large, the orders take time to fill completely. The low-ball buy orders have been filling for over two weeks. At the same time, the Agent2000 buyer has enlisted the aid of numerous assistants to push down the paper Gold price by putting extreme pressure on some bad players, some nasty types from the usual list of suspects in the Western banking sector. These bankers are being squeezed out of their gold, as they contend with deep insolvency, reserves requirements, falling sovereign bond values, depositors exiting, and more. They are players in what has been widely called the Gold Cartel. The Jackass term has been applied in a wider sense, as they have been part of the Syndicate that reaches into the Wall Street banks, the defense contractors, news media, and big pharma.

The other side of Agent2000 is where additional intrigue lies. He (they) have buyers lined up on the physical side some deals ready to close at $1900 per ounce. Later the price will push over the $2000 mark. The buyers are ready. One must infer that the buyers have a great deal of money ready to devote to the battle. Maybe some is piled up to escape the clutches of the cartel, removed from the system. Maybe some is piled up at a major new slush fund to do battle with the cartel at their own game. Maybe some is piled up and kept out of sight from greedy hands in government officials, like off-shore in the Caribbean or sequestered in the Persian Gulf. This story might be perplexing to many in the gold community since the Good Guyz are pushing down the Gold price in order to facilitate a gigantic order that will work toward crushing the cartel by draining their gold. Their gold cannot be drained without the completion of a great many orders. It is only natural to attempt to achieve the lowest possible price. If the gold cartel insists on pushing the price down, then they open the door for major volume sales at the artificially low and very much bargain price. It is happening, but the gold community does not enjoy the symptoms of the process.

So a huge huge huge buyer of gold is busy, and a multi-$billion order is working through. The buyer demands a $1600 price, while on the other side of the table Agent2000 has a sale lined up for the same metal at a $1900 price on physical. The trade will take gold bullion from the Bad Boyz hands and put it into the Good Guyz hands. In the process, the COMEX supply lines will be drained more. This is consistent with mining firms removing supply lines to the COMEX. The Agent2000 buyer is pushing price down, squeezing some evil parties hard, crushing testicalia along the way. He (they) describe to the distressed seller at $1600 that pressures will continue until the deal is closed. The seller is in tremendous pain with open distress showing. So many assume the Bad Powerz are pushing down the Gold price. Not so!! This event and transaction displays how some pain comes in many isolated cases of Good Guyz pushing the Gold price down to empty the Bad Powerz vaults. My source would not reveal the identity of Agent2000 or the location of the squeeze. It seemed like London. The money is not exclusively coming from China. Word has it that Russia is also applying the pressure, with some Chinese teamwork. The Competing Currency War has a new major flank. The divergence between physical and paper gold price is widening.
London Trader Discusses The Great Raid

Several months ago, the anonymous London trader offered some ripe information about the Chinese accumulating gold bullion from the major metals exchanges. He is back to offer an update. He made some extremely important comments, dense in the message. He said the following on King World News. He begins with a controversial claim that adds credence to what has been reported for a long time, the fraud of the major Exchange Traded Funds. These corrupted funds will be gutted before the clients are informed of owning no metal, and forced redemptions in cash. The COMEX isolation is occurring in full glory, a process well on course.

‘The Chinese have continued to take delivery of both physical gold and silver directly from the ETF’s GLD and SLV. They are also going directly to producers. Entities are bypassing the COMEX altogether and going straight to gold mining companies. Every single month producers have a certain amount of gold and silver they sell. Normally they sell it to the bullion banks and the bullion banks, of course, leverage this gold and sell up to 100 times that in paper markets to control prices. The bullion banks hold that little bit of physical gold and claim they are backed up on their position to the CFTC. I have all my large buyers now going to producers and saying to them, ‘Look, don’t sell it to the bullion banks, we will buy it from you.’ So we are buying directly from the producers and this includes some sovereign entities which are doing the same thing. We are struggling to get the physical out of these producers because they have so many people banging on their door, saying, ‘Sell it to us Direct.’ What these buyers are doing is essentially taking gold out of the system, which means the bullion banks cannot leverage that gold anymore. So this is a huge, dynamic shift that was not there before. These buyers are now cutting off future gold supply from the bullion banks.

This is a huge tectonic shift in price dynamics going forward because it is taking price discovery away from the bullion banks. These large Chinese buyers and sovereign entities which are doing this are going to have a massive impact on the market. Interestingly, so many people are bearish on gold right now and looking for a collapse in the price of gold. They do not understand what is happening in the physical market. The bullish fundamentals just described to you have enormous implications. We are making a historic bottom right now. The paper gold, or virtual gold market, has diverged so far from the physical market that it is no longer a credible marketplace. That is the key thing that came out of a very important meeting I was in yesterday where we had some serious players. The people I was meeting with are all on the buy side and have been since the lows last week. There are massive physical orders, sitting, waiting for any more discounts, and yet everyone else seems to be short. So you have huge fuel for a rally here. You have to keep in mind this recent plunge was orchestrated with borrowed gold and that borrowed gold is now gone. That is why gold cannot go much lower. Any dips in price will be aggressively purchased. Right now we are witnessing a historic bottom.” The divergence between physical and paper gold price is widening!

Do you suppose cows have any idea what’s coming as they’re marched down the chute? Or do they stare with bovine indifference at the tail and hind quarters in front of them, until they’re suddenly – and very briefly – startled by the man with the nail gun?

Perhaps Americans will – likewise too late – ask themselves What Happened in the very near future. Perhaps just after the midnight knock comes and they are taken away into the night.

It is not an exaggeration.

America is now on the cusp of becoming a state that does exactly such things; things exactly like the things done by 20th century horror shows such as NS Germany or Stalin’s USSR. Literally. Not “this is where it might lead” or “the tendency is similar.” Exactly, literally, the same thing. The only difference is that it awaits being done on a mass scale. But the power to do it openly – brazenly – has been asserted.

And is about to be sanctified by law.

The National Defense Authorization Act will make it official. It will confer upon the executive branch and the military (increasingly, the same things) the permanent authority to snatch and grab any person, U.S. citizens included, whom it decrees to be a “terrorist” – as defined or not by the executive or the military – and imprison them, indefinitely, without formal charge, presentation of evidence or judicial proceeding of any kind. These “detainees” will have neither civilian rights in the civil court system, nor – crucially – even the minimal rights to due process and decent treatment conferred upon prisoners of war. (And we are allegedly “at war,” are we not?)

The language of the bill specifically includes American citizens “caught” within the borders of the United States – aka, the “battlefield.” It is claimed by sponsors that only those awful them – you know, theenemies of freedom The Chimp and his successors like to reference as they systematically gut our freedoms – need worry. But read the actual document, and be afraid. The wording is such that any shyster lawyer for the government will be able to draw up a memorandum at some point in the near future equating, say, criticism of the federal government’s policies in the Middle East with “substantially supporting” the enemies of the United States. As defined by the United States.

That is, as defined by the government.

At its whim. At the personal discretion of whomever happens to be the Maximum Leader, or even one of the ML’s duly appointed minions.

As the always excellent Matt Taibbi of Rolling Stone recently observed, what happens when some nutjob who attended a few Tea Party meetings tries to bomb a federal building? Will the Tea Party itself – and anyone who “substantially supports” it be thus transformed into an “enemy combatant”? How about the OWS protestors? How about this web site – and this author – which have on several occasions called bullshit on the federal government’s usurpations and follies? How hard will it be, really, to describe such actions – such thoughtsexpressed in an article or an interview – as “substantially supporting” whatever the government decides amounts to “terrorism” or the threat thereof against itself?

Surely, the door is now wide open for such an interpretation by some John Woo or Dick Cheney waiting in the wings. Prospective jefe Newtie is practically turgid at the prospect of getting his hands on such power. And there is no longer (or soon won’t be) any legal means available to contest a one-way trip to Treblinka in Topeka – or wherever it is they will send you.

Taibbi writes:

“The really galling thing is that this act specifically envisions American citizens falling under the authority of the bill. One of its supporters, the dependably-unlikeable Lindsey Graham of South Carolina, bragged that the law ‘basically says … for the first time that the homeland is part of the battlefield’ and that people can be jailed without trial, be they ‘American citizen or not.’ New Hampshire Republican Kelly Ayotte reiterated that ‘America is part of the battlefield.’ ”

Graham further stated:

“It is not unfair to make an American citizen account for the fact that they decided to help Al Qaeda to kill us all and hold them as long as it takes to find intelligence about what may be coming next. And when they say, ‘I want my lawyer,’ you tell them, ‘Shut up. You don’t get a lawyer.’ ”

The key thing being, it is entirely up to the government to decide what constitutes “helping” al Qaeda. It can be nothing more than a vague assertion. Indeed, no evidence of any kind whatsoever is necessary to “hold them as ling as it takes” in order to “find intelligence” (not defined, either) by any means it wishes to employ.

As Taibbi notes:

“If these laws are passed, we would be forced to rely upon the discretion of a demonstrably corrupt and consistently idiotic government to not use these awful powers to strike back at legitimate domestic unrest.”

The Fuhrer (oops, President Obama) is about to sign this latter-day Enabling act and when he does, it will mark the moment that America’s coffin is nailed shut. The corpse has been on view since 9/11. But there was always some hope that, perhaps, it might be jolted back into life. Now we know the awful truth. Death is permanent.

And it’s coming for us.

Electronics, solar power, health care and nano-particles, along with more traditional uses, will keep silver a good investment despite latest setback.

Silver rallied to $48.70 an ounce in April, and after giving back 40 percent of its value by September, started to recover before its latest setback.  Silver has grown as an investment vehicle in the last decade and has a number of things going for it on the industrial side, says Dillon Gage Metals of Dallas.
“Silver is much more than jewelry and sterling tableware,” says Terry Hanlon, President of Dillon Gage. “It’s not just for wedding presents and birthday gifts but has widespread uses throughout the economy.”

Strong, malleable silver can be made into various forms, wires and threads. It’s a good electrical and thermal conductor for all types of circuits and connections. Silver conducts rather than absorbs heat and can endure temperature swings, making it an excellent soldering agent for joints that undergo expansion or contraction in heat and cold. It’s also a reflector and has anti-bacterial properties.

World industrial demand for silver could reach a record 665.9 million ounces in 2015 versus 487.4 million in 2010, according to a Gold Fields Mineral Services (GFMS) study for The Silver Institute, released in early April.

Electrical and electronics uses are major sources of demand for silver and were a record 242.9 million ounces globally last year, according to GFMS. Used in switches and contacts, silver is one of the best electrical and thermal conduits.

Cell phones consumed 13 million ounces of silver globally last year and computers used 22 million ounces, according to GFMS. Thick-film photovoltaic modules utilized 47 million ounces in 2010, while automobiles used 36 million ounces. Solar power has boosted silver demand considerably in recent years.

Silver is found in batteries in everything from cell phones, cameras, calculators and toys to pacemakers and hearing aids. Silver conductive inks are used in printed electronics, and the metal is utilized as a coating material for DVDs and other optical data storage media. It is employed as a catalyst in chemical reactions, such as formaldehyde manufacturing.

Brazing or joining of materials is enhanced by silver’s fluidity and strength. Silver brazing alloys are used in applications ranging from air conditioning and refrigeration equipment to power distribution devices in the electrical engineering and auto industries.

New uses of silver center on its conductive properties in solid state lighting and Radio Frequency Identification or RFID tags. Supercapacitors — devices that store and release energy indefinitely with no loss of performance — are a potential growth area, according to GFMS.  Supercapacitors are used in solar panels and hydrogen fuel-cell car batteries.

According to GFMS, silver’s use in medical applications could grow rapidly over the next five years. Silver is used in water purification and is found in wound treatments, dressings and creams. Catheters and medical implantation devices, including prosthetic heart valves and vascular grafts, often contain silver.

Tiny particles called nanosilver are of growing interest to industry and policy makers. Silver products and applications using nanosilver include water filters, pigments, photographics and wound treatments. Nanosilver is included in coatings, plastics, textiles and medical devices. Nano-sized particles of silver fight bacteria and mold, and are used for food storage.

“Silver is hardly just ornamental,” says Hanlon. “It has existing and growing new uses that suggest prices can strengthen over the next few years.” As demand for silver continues to expand, investors will want to consider silver as long-term investment, he says. Investment options include bars, ranging from one ounce to 1,000 ounces, along with one-ounce silver coins from U.S. and foreign government and private mints. “And like any investment, you should research who you purchase from,” Hanlon advises.
Author: Dillon Gage

Silver is an amazing metal…which is why it’s likely to soar over the coming years…

You see, silver has more than 10,000 uses. It’s one of the world’s best conductors of heat and electricity. Inventors filed more patents on silver uses than any other precious metal in the world. And when silver is used for most industrial and technological purposes, it is used up forever… It simply costs too much to try to recycle the tiny bit of silver from every cell phone or casino chip.

I’m not saying industry is going to use up all the world’s silver. That simply can’t happen. But scarcity is a real issue.

Our rapid consumption of silver leaves very little to meet any uptick in demand from investors. A spike in interest will send prices spiraling higher…

Here’s a breakdown of the silver market. The table below shows the percentage of the total amount of silver consumed by each category over the past four years…

Percentage of Silver Supply Consumed by Various Sourcs of Demand

As you can see from the table above, only 12% of the silver supplied to the market made it to bullion in 2010. That means only a little more than 100 million ounces of silver became bullion for the entire investing world.

That’s a tiny fraction to sop up all the investment interest in the world.

Of that silver, about 43 million ounces went to exchange-traded funds like the iShares Silver Trust (SLV) and the Sprott Physical Silver Trust (PSLV).

That means you could buy all the extra silver bullion for about $2 billion. We could buy all the surplus silver bullion from the last four years for about $10 billion.

That’s the same as the market value of the iShares Silver Trust today. If you wanted to build another silver fund, you couldn’t. There just isn’t enough silver bullion out there to fill the order.

Even trying to amass that much physical silver would send the silver price soaring. It’s a simple market fact… When there is more demand than supply, it drives the price up.

And the economic problems confronting Europe and the United States have increased interest in precious metals… Silver gained a colossal 174% from August 2010 to April 2011.

In May 2011, however, the price collapsed 31% in just four weeks. The bull market simply ran up too far, too fast… and the decline wiped out many highly leveraged silver traders.

The big money is tiptoeing back into silver.

Last month, commodity trading advisors, pool operators, and hedge funds — the “big money” — weren’t interested in silver AT ALL…

But as they move back into the market, silver prices could soar. Let me show you what I’m talking about…

Jason Goepfert created SentimenTrader, a service that tracks investor sentiment toward various asset classes. According to Jason, silver just bounced off its most pessimistic reading in four years.

The so-called “commitment of non-commercial traders” hit 10,352. That’s incredibly low. The last time sentiment numbers were that low was in August 2007. Six months later, the price of silver was 59% higher. It rose from $12 per ounce to $19 per ounce.

I went all the way back to 2002 and found that silver sentiment bottomed near 10,000 six times… On average, the price of silver rose 33% in the next six months and 54% over the next year. This chart shows the last four times it bottomed…

Here’s how the silver price performed after each of the last four times silver sentiment bottomed out…

Recent Lows in the Silver Price that Coincided With Negative Investors Sentiment

The best return came after Bottom No. 2, which coincided with the US banking/credit crisis. Silver soared an eye-popping 405%, including its parabolic rise in 2010.

As those numbers indicate, silver is one of the most volatile assets in the world. Over the last year, silver has seen massive price swings, including an 81% rally and two 30% drops. That forced many traders to liquidate their silver holdings in order to meet emergency short-term requirements. (Plus, the debacle at commodity broker MF Global has scared many folks out of the market.)

But the long-term drivers of gold and silver’s uptrends are still in place. Enormous and growing Asian economies like China and India are getting richer…and they have deep cultural affinities for precious metals. Plus, the Western world has lived way beyond its means for a long time…the debts and liabilities it has taken on can only be paid back with devalued, debased money. This is bullish for “real money” assets like gold and silver.

With sentiment so negative toward silver (and just beginning to turn back up), it’s a great time to take a position in this long-term bull market.

If gold and silver prices are nearly certain to rise over the next few years (and probably rise dramatically), the simplest way to play that trend is to buy bullion…real, hold-in-your-hand silver coins.

And I recommend everyone do just that… Buy some silver and store it away.