Buy Silver Bullion Coins

By Matt Badiali, editor, S&A Resource Report 
Saturday, December 3, 2011

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… 

Silver Supply Consumed By Sector 
 
Industry              2007           2008           2009         2010 

Photography        53%            54%            45%          49%
Jewelry                13%            11%             9%            7%
Silverware            6%               6%              7%            5%
Coins/Medals       4%               7%              9%           10%
Surplus/Investing 10%            11%            21%          12%
Total                   100%           100%         100%         100%

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.

As I showed you on Wednesday, this has temporarily dampened sentiment toward silver. The "big money" – commodity trading advisors, pool operators, and hedge funds – isn't interested in silver at all…

The current bottom in sentiment is a great signal for us to add silver
positions. The big money will eventually return to silver… The economic forces (namely Western debt) driving people away from paper money and toward precious metals aren't going away any time soon.

As those big traders come back into the market, they have the capital to tie up all the excess silver production in the world. Remember… you could buy all the extra silver production over the last four years for less than $10 billion. Those traders could invest far more money than that.

When they do, the silver market will tighten up, and the price will roar
upward. That's what we see EVERY TIME sentiment bottoms. When those big traders stop being bearish, they put enough money into silver to move its price. Sometimes it's 28%… Sometimes it's 405%… But it always goes up. (You can find the full story on that here.)

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.

Good investing,

Matt Badiali

P.S. If you've already built your bullion position… there's another way to
ride this trend to much larger gains than bullion is likely to offer. I just
completed a full report on the opportunity. I wouldn't be surprised to see every dollar you invest in this opportunity turn into $10 or more. Get the details here.
 
 
Further Reading:

 With investor sentiment momentarily 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. Read more here: How the "Big Money" Could Push Silver 54% Higher in 2012.

"I don't expect to make 800% returns," Brett Eversole writes. "But we could easily double our money through shares of this silver company over the next few years… even if the price of silver goes nowhere."

A big attendance at this year's New York Hard Assets event has the chance to listen to a number of eminent specialist commentators, with gold and silver dominating.

Lawrence Williams
May 10, 2011
www.mineweb.com

NEW YORK
Speaking to a packed audience (standing room only) at The New York Hard Assets Conference yesterday, Eric Sprott reiterated his well-known views on gold and silver the former he called the investment of the decade and the latter the investment of the next decade. Sprott was among the Keynote speakers at this year's event which attracted potential investors looking to learn more about investment in commodities and mining companies (mostly junior miners), with the featured speakers being big attractions for the audience.

Like most of the other keynotes, the Sprott's comments covered what virtually all the precious metals bulls see as the key drivers of the markets, namely the U.S deficit, excess printing of money by most major economies, the political unrest in the Middle East, North Africa and elsewhere, the depreciation of the dollar, accelerating global inflation, fear of debt defaults, the growth of wealth and investment in gold and silver in Asia etc. Indeed fellow keynote speaker Jeff Nichols came up with 11 such factors driving up prices. All the main speakers viewed the recent heavy downturns in commodities prices as being a blip in an ongoing upwards path.

While most of the speakers point to the money supply situation in the West as being the root cause of likely future inflation in both Western and Eastern economies, Martin Murenbeeld, one of today's keynote speakers, told Mineweb that China too has been stimulating - perhaps overstimulating - its economy in a similar way and blaming current Chinese inflation on the U.S. Fed is rubbish.

Coming back to Eric Sprott - he raised the specter of market manipulation so beloved of many of the precious metals bulls, pointing to silver falling $6 in 13 minutes on Monday in an extremely thin market when some key market players like China and the UK had public holidays. Coupled with the raising of margin requirements on COMEX, he saw this as a major effort by some of those with huge silver short positions to mitigate some of their losses. "If this doesn't show market manipulation I don't know what does" said Sprott.

Jay Taylor, speaking earlier in the day also raised the specter of the U.S. economy and its lack of growth, even though some official statistics may suggest it is beginning improve. "Think about what's really going on" he opined, "Not what the establishment wants you to think is going on!" Taylor puts total debt at $57 trillion if you take into account not only Federal debt, but state and municipal debt, credit cards etc. He reckons U.S. government policy is failing as in the 1930s when there were years of depression, high unemployment etc. He too pointed to the real price of gold rising in what has been the bull market of a lifetime.

Overall the Hard Assets conference organizers have done a pretty good job in pulling in a number of very well-known names in the precious metals and economic sectors to boost the audiences in the hope that many will stay in the auditorium area and listen to the junior miners and explorers presenting their projects - a number of whom have some very interesting stories to tell anyway. The difficulty for the investor, as always, is picking the wheat from the chaff. In a precious metals bull market junior companies can provide huge returns when they are successful - but then most aren't! Caveat emptor.