Silver in Backwardation
It seems things only get better for Silver Investors. The Physical demand from China and the rest of Asia created by their rush to own real assets has created backwardation in the Silver markets. This is something normally only reserved for oil markets. Backwardation occurs when the Physical price for delivery today is higher than the Physical price for future delivery. Normally there are interest rates associated with holding a long position. These interest rates are still there. However, the demand for Physical Silver supercedes these premiums.
The premiums for Jan 2012 call options on the SLV ETF are at 10%. The premium on natural gas 2012 call options which is in plentlful supply is 0.
I am buying Silver. I have been buying Silver for over a year. I encourage you to buy Silver whatever way you can. If you think there will be more mobile phones. If you think there will be more solar panels, electronics, computers, cameras. If you think the Fed will continue to print money. If you think the banks will continue to gamble. Not one banker has gone to jail as a result of their gambling. In the US or Europe not a single one. There is no incentive to change. The western banks are still gambling with their clients money until someone is charged this will continue.
One man went to Jail in the US. Bernie Madoff. The only thing that Bernie Madoff did differently to the bankers is he stole money from the rich.
It is said that only 1% of people will ever own Silver or Gold.
Most will continue to be sucked into the Fiat money system that is designed to devalue your money day by day. At the current rate of money expansion you would need a minimum of 10% return on deposit to meet inflation.
I cannot fault the banks they are smart they have designed a system in conjunction with their politicians to steal as much money as they can and the general public buy into it.
The blessing that the poor people in India have is that they cannot open a bank account therefore all they can do is buy gold and silver with their money. The greatest transfer of wealth in history is well underway.
Watch the future as more and more wealth transfers to Asia.
"Gold is the money of kings; Silver is the money of Gentlemen; barter is the money of peasants; but debt is the money of slaves."
- Norm Franz
The general public will continue to take on more debt and the wise and the rich will continue to own real assets.
Everyone I know in India, Thailand, China & Singapore owns Gold or Silver. Even my clients in the US and Germany all are buying Gold & Silver.
Ways to Invest In Silver
You can buy Physical Metals. Call us
Open an online brokerage account.
Market Spreads are running a free introduction to spread betting for subscribers to this newsletter this Thursday from 7-9pm at their offices on Sir John Rogersons Quay. Map
John McGlade will teach you the secret to spread betting.
An interesting view on the Middle East from Jim Sinclair :
"The developments in the Middle East are not a spontaneous outbreak of democracy. They are carefully planned, organized and misunderstood developments focused on crippling those that oppose Iran.
The mercenaries that found their way to Libya should raise an eyebrow in the Situation Room. It is planned to initiate a spontaneous breakdown of Western civilization and financial viability based on the concept of peak oil. This concept alone guarantees a much longer gold bull market than almost anyone believes.
There is no 1980 pratfall out there. Gold will stabilize in about 4 years at a very high price. This is a concept that has totally escaped the gold miners that went functionally broke on hedges by selling every ounce they mined, as fast as they mined it. That was madness, almost as crazy as their short of gold was.
It is hard for a mad short taking it as a personal matter to reverse, and then go long, but fortunes are made that way in a bull market based on fundamentals. It takes emotional control and freedom from ego which is a rare combination.
You might consider it."
News:
Saudi Arabia drafts another 10,000 troops ahead of protests
Desperate to avoid mass uprisings against the House of Saud, security forces have deployed in huge numbers across the region.
King Abdullah is also reported to have told neighbouring Bahrain that if they do not put down their own ongoing Shia revolt, his own forces will.
In response to the massive mobilisation, protesters are planning to place women on the front ranks to discourage Saudi forces from firing on them.
In Yemen, President Ali Abdullah Saleh set off a deadly battle for survival last night as he rejected an opposition peace proposal and ordered troops to fire on demonstrators, killing four. Efforts to suppress demonstrations by the key ally in the "war on terror" could jeopardise rising volumes of Western aid flooding into the country, diplomats warned.
President Saleh rejected an opposition proposal that would have brought demonstrations to a standstill in return for a promise to step down by the end of the year. Yemeni troops used rockets and machineguns to attack demonstrators in the north of the country, killing four and injuring nine.
Inflation, Oil, Gold, Ignorance, and The Media
We hear many so-called pundits say that rising oil prices will dramatically damage growth in the emerging world. However, we see the contrary as more likely to occur: rising oil prices will unleash more inflation in the emerging world, which may actually accelerate economic activity. We already are seeing substantial inflation in the emerging world. It will be exacerbated by oil price increases.
Assuming that oil does not go crazy and rocket up past $150 per barrel in 2011, we maintain that higher oil prices don't have to derail economic growth in the emerging world. Many emerging countries export more oil than they import, and others often produce exportable commodities which tend to rise in price along with oil, such as foodstuffs, base metals and precious metals. - Monty Guild.
Agriculture
Many of the agricultural commodities have returned huge gains in the past 12 months. There are some commodities that are still to move. The way the commodity markets work is like a domino effect. Rises in grain prices will cause follow on increases in other commodities. Grain is used to feed cattle. Corn is used to feed pigs. As feed costs go up so do the costs of the cattle and pigs.
As a result I am very bullish on certain select commodities outside of the traditional grains such as corn and soybeans.
Pensions
While I prefer the high yielding investments such as Gold & Silver and agriculture. I realize that many people want the security of Government backed funds. Therefore we have selected a number of funds that we see outperforming the market in the coming years.
Contact us for more information.
Free Seminar:
Market Spreads are running a free introduction to spread betting for subscribers to this newsletter this Thursday from 7-9pm at their offices on Sir John Rogersons Quay.
MarketSpreads Ltd, 77 Sir John Rogerson's Quay, Dublin 2
Email me if you need more info.
Marc Faber sent me this I thought I would pass it on.
At the end of the tax year, the IRS office sent an inspector to audit the books of a local hospital. While the IRS agent was checking the books he turned to the CFO of the hospital and said, "I notice you buy a lot of bandages. What do you do with the end of the roll when there's too little left to be of any use?"
"Good question," noted the CFO. "We save them up and send them back to the bandage company and every now and then they send us a free box of bandages."
"Oh," replied the auditor, somewhat disappointed that his unusual question had a practical answer. But on he went, in his obnoxious way. "What about all these plaster purchases? What do you do with what's left over after setting a cast on a patient?"
"Ah, yes," replied the CFO, realizing that the inspector was trying to trap him with an unanswerable question. "We save it and send it back to the manufacturer, and every now and then they send us a free package of plaster."
"I see," replied the auditor, thinking hard about how he could fluster the know-it-all CFO. "Well," he went on, "What do you do with all the leftover foreskins from the circumcisions you perform?"
"Here, too, we do not waste," answered the CFO. "What we do is save all the little foreskins and send them to the IRS Office, and about once a year they send us a complete dick."
Happy investing,
Robert McManus
The Abundance Engineer
Email: rob@theabundanceengineer.com
Web: www.theabundanceengineer.com
