Rush for silver if you want to make moolah!

You know this time around white metal may prove to be a better option for you to invest than in yellow metal. There are several reasons for that. Mainly, according to Jason Homel’s Silverstockreport.com, silver has all the monetary properties of gold, and more.

It is interesting to know this. If you want know the enviable properties of silver, read on. The historic price ratio of silver to gold shows that about 10 ounces of silver would buy one ounce of gold, a 10:1 ratio. Recently, the ratio is about a 50:1 ratio (with silver at $20/oz., and gold at $1000/oz.) As the silver to gold ratio returns to historic values, from 50:1 to 10:1, you may make over 5 times more money investing in silver, than gold!

Silver prices may rise to exceed the 10:1 ratio, for the following reasons: More than all of the silver produced by the mines each year is consumed by industry, which leaves little to no room for substantial investment demand. A marginal increase in investment demand will drive prices sky high.

Most silver is produced as a by-product of mining gold, copper, zinc, or lead. Higher silver prices might not substantially increase the amount of silver mined each year. Consider, in 1980, when silver prices went up to $50/oz., less silver was mined than in 1979!

Higher silver prices may not cause much reduced demand. Why? Because most silver consumed by industry is used in tiny quantities in each application, such as in film or electrical contacts, therefore, rising silver prices will not easily slow down growing industrial demand.

Additionally, as paper money continues to falter, people will buy silver and gold without regard to price, or they will buy simply because prices are going up. Because many investors today are momentum investors, and won’t be able to ignore the gains.

Each year, silver mines produce about 650 million ounces of silver. Around 200 million ounces come from recycling and about 100 million ounces come from investor or government sales. That’s a total of about 1000 million ounces. Of that, about 42% is consumed by industrial use, about 28% consumed by jewellery, about 20% consumed by photography and around 5% consumed in coins and medallions. That’s 95% of total available silver each year.

This implies either a “surplus”, or “investment demand”, of about 5% total. At $20/oz., that’s only $1 billion per year of net investment demand.

Since the 1950s, silver use and consumption, has made silver more rare than gold, in above ground, refined and deliverable forms. Estimates suggest there are 200-300 million ounces of refined, above ground silver available to the market at the present time. There are about 125 million ounces of silver at the NYMEX, the big commodity exchange in New York. The ETF SLV has about 180 million ounces.

Each silver contract at the NYMEX is a promise. There are too many contracts, too many promises to deliver silver that may not exist. Each contract is for 5000 ounces. There are often over 200,000 contracts for 5000 ounces, that’s a total of 1000 million ounces of silver promised to be delivered.

With recent market trends of defaults and bankruptcies, these contracts are at risk of default. Yet, the exchange has only about a third of that in real silver. How can they promise to deliver more silver than exists?

If they fail to deliver silver, then confidence in the world’s entire financial system may collapse. Industrial users of silver may have to shut down their factories. To prevent this, users will bid silver prices much higher.

Due to the risk of default in silver Futures contracts, Jason Homel suggests that you avoid buying Futures contracts, avoid options, and avoid storing your silver with anyone else. Take delivery of your silver, and put your silver in your own safe.

Despite silver's intrinsic properties as money, silver began to lose its status as money starting in the late 1800s, as nations stopped using silver, and started using only gold as money. Over 100 years of this “demonetization” has caused a serious drop in silver’s value, and this trend is about to be reversed as investors re-learn that silver is a great store of value because of its intrinsic properties.

As paper money continues to waver, the neglect of silver’s use as money will end. Once again, silver will be valued based on other measures of value, such as a day’s wage, or a ratio to gold. If silver exceeds its historic value, then perhaps a silver dime, a silver quarter, or a silver dollar will be worth far more than a day’s wage, as it once was.

Will you be hurt if silver and gold prices rise? Not if you own some. Remember, honest weights and measures in commerce produce prosperity. But you must act to benefit from this information.

Don’t wait for silver to rise before buying it. Silver prices could rise by over $20/day to exceed $100/ounce at any time if large funds or billionaires buy with desperation.
(Courtesy: Jason Homel’s Silverstockreport.com)

http://www.EarnSilverToday.com

U.S. Begins Rationing Popular 'Silver Eagles"

By Ianthe Jeanne Dugan

The Wall Street Journal

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 worldwide are allowed to purchase.

"This came out of nowhere," says Mark Oliari, owner of Coins 'N Things Inc. in Bridgewater, Mass., one of the biggest buyers of silver eagles. With customers demanding twice as many as they did last year, Mr. Oliari would like to buy 500,000 a week. But the mint will sell him only around 100,000.

The coins have a face value of $1. But the mint sells them for the going price of silver, plus a small premium, to a handful of wholesalers, brokerage companies, precious-metals firms, coin dealers, and banks. The dealers mark the coins up a bit more and sell them to the public.

For Coins 'N Things alone, the shortage is costing hundreds of thousands of dollars in lost sales of silver eagles. The firm sells about $1 billion worth of precious metal every year, including silver, gold, and platinum coins. Mr. Oliari, a 50-year-old numismatist who has been in the business since 1973, sniffs: "You can't print what I want to say about the mint."

The mint, a bureau of the U.S. Treasury, has offered little explanation beyond a memo last month to its dealers. "The unprecedented demand for American Eagle Silver Bullion Coins necessitates our allocating these coins on a weekly basis until we are able to meet demand," the mint wrote. A spokesman declined to elaborate.

... 'Poor Man's Gold'

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.

"Unlike gold, these coins can be bought by regular citizens," says J.R. Roland, a Brownsville, Tenn., judge who recently began buying the coins -- and trading them on eBay. "In these economic hard times, silver coins are a great way to invest."

In March, sales of silver eagles surged more than ninefold from the previous month, to 1.85 million. This year, the mint has sold 6.8 million, representing more than twice last year's pace. Still, numismatists are clamoring for millions more as the price of silver soars. It has more than doubled in the past three years.

Linda Wood, a 57-year-old Pittsburgh accountant, scours eBay, coin shops, and flea markets in search of silver eagles. One by one, she has accumulated about 300 in the past few months and stores them in a bank safe-deposit box.

Traditional coin collectors may be impressed with the government's written descr i ption of silver eagles as "one of the most beautiful coins ever minted." But Ms. Wood isn't in it for aesthetics. She became a silver bug after she and her husband saw the value of their individual retirement accounts decline by $2,500 -- a "significant" chunk. "I just need bullion," she says. "I wouldn't care if the coins were ugly."

Amid the mint caps, shady silver-eagle hawkers are thriving. Mr. Roland says that he had to wait a month after ordering some on eBay recently, because the sellers didn't even have the goods. "I can't wait long, because you never know what's going to happen with the price," he says.

In Manitowoc, Wis., Dan Zirk, owner of Manitowoc Card & Coin, has sold twice as many silver eagles as he did last year. So he has stashed away his remaining handful of 2008 coins, betting the price will rise. He says customers, meanwhile, are asking for earlier years and other forms of silver.

...Lady Liberty

The government began producing silver eagles in 1986, basing its design on Adolph Weinman's 1916 "Walking Liberty" half dollar. The front features a flag-draped Lady Liberty striding toward the sunrise, carrying branches of laurel and oak symbolizing civil and military glory. On the reverse, a design by John Mercanti features an eagle with a shield, olive branch, and talon and arrows.

The coins are made at an armored facility in West Point, N.Y., alongside the military academy. Dealers say they heard the mint had run out of planchets -- round metal disks ready to be struck into coins. The disks are used for various coins, and the companies producing the blanks also are busy, limiting the mint's ability to increase production. The mint won't comment on the planchets.

... Coins Divvied Up

Each Monday morning now, the mint divides its silver coins into two pools. It divvies up the first equally among authorized purchasers. The second is allocated proportionately, based on the buyer's past purchases. The mint limited purchases once before -- in the late 1990s, when investors loaded up on silver, wrongly anticipating that a failure by the world's computers to adjust to the new millennium would cripple the economy.

Jim Hausman, head of the Gold Center in Springfield, Ill., one of eight companies in the U.S. authorized to buy silver eagles, estimates that the rationing will cut his expected annual sales of four million silver eagles in half.
And the result, he says, is almost un-American.

Increasingly, investors are taking a shine to alternatives. The Royal Canadian Mint saw its sales of silver Canadian maple-leaf bullion coins rise 40% last year, to 3.5 million, according to a spokesman.

Some investors expect the craze to end badly. They draw comparisons to what happened to silver in the 1970s. A rich Texas family poured billions of dollars into silver, and prices surged above $50 an ounce in 1980, only to plunge again after government intervention.

"It's akin to what happened when the Hunt brothers tried to corner the silver market," says Wendell Curry, who owns McAllen Gold & Silver Exchange in McAllen, Texas. "The silver hawks are now trying to corner silver American eagles. And it's making it harder for mom and pop to buy these for their grandchildren."

http://www.EarnSilverToday.com

Pure Silver Coins: An Investor’s Delight ?

Be it a declining dollar, fears of inflation, collector’s ambition, or pure curiosity, pure silver coins offer an opportunity. To the investor it’s alternative to paper investments, and to the collector it’s ascetic and rare qualities. Either collector or investor pure silver coins are a selection for both. And, these coins are readily available from dealers, on the Internet, and at-or-in auctions.

As a pure silver coin, the coin needs to have 90-99% of silver. Indeed, many countries, such as U.S.A., United Kingdom, Mexico, China, and Australia produce an ounce of pure silver.

Examples of these silver coins are U.S. silver eagles, to the Canadian silver maple leaf, Chinese Panda, British sovereign and the variety issued by the Australian Mints.

More for the collector, but even coins featuring famous people are available from the late Princess Diana, Marylyn Monroe; even John Wane has a silver coin minted after him.

A quick search on the net will net you hundreds of varying types and styles and mintages but all with the same theme of purse silver but in different sizes from one troy ounce up to one-kilo coins.

If you do decide to seek out and buy pure silver coin sets, then be sure to buy from a reputable dealer–or the mint directly, if possible. Ensure the quality of the coin is near proof, proof or brilliant un-circulated. Also ensuring the coin is sealed in the original container and has a certificate to go with it will help maintain the value of the coin.

Indeed, it can be heaps of fun collecting a pure silver coin or set of coins or profitable for investors. Regardless of investor or collector these pure silver coins will shine into the future.


http://www.EarnSilverToday.com