I took one look at my portfolio today and I saw a field of red. I watch 30 stocks and they were all down, half of them by over 10%. So I turned off my computer and went out and spent the day with my very good friend Karen and we had a great time enjoying a perfect Edmonton afternoon.
Part of the deal in investing in PM stocks is the volatility. Today was one of those days and we shall no doubt see more on the road ahead. Some no doubt that will make today look like a little blip.
My point today is to remind all that the reason we are in this, is a belief in higher silver prices. We should see a lot of bumps along the path but the destination should always be kept first and foremost and that destination is silver valued in reality rather then in some manipulated distortion. Hang tight, stand firm and keep your eyes on the prize.

So far in a couple weeks of trading the silver ETF has already purchased 44 million ounces of silver, quickly on the way to the proposed 130 million ounces.
The question at present is whether or not that silver is already in physical form or if it is a paper contract waiting for delivery.
We have seen gold continue it’s march upward this last week and silver stalled out. Should be interesting if this silver is being delivered at the end of May. I think we are seeing at present the dealers making a last ditch effort to not lose their shirts. The great news for silver bugs is that the more the price is held back, the higher it will explode.
The ETF, the short position, the worldwide demand, the new uses, and last but not least the return of silver as a good investment, add up to an explosion that could rock the financial world. We have recently been seeing silver move up and down over $1 a day, something unheard of till recently. $10 a day swings is just around the corner and $100 an ounce silver could be this year.
It’s a great market no one really has an idea. Hang in there. The fun is just beginning.

The question on a lot of investors minds is where to put their hard earned money, on silver, gold or oil.
The historic ratio has stood at 16 ounces of silver to 1 ounce of gold.
Today that ratio is at 48-1.
In 1980 it took 1.5 barrels of oil to buy an ounce of silver.
Today it takes 5.3 ounces of silver to buy a barrel of oil.
Silver has been completely erased as a form of money by governments and banks.
Gold is still looked upon as a form of money but not as a favorable one amongst governments and central banks.
Silver has become an industrial commodity. It stands in the ranks of base metals. This perception is held by many. This perception of silver was born within the last century and it didn’t happen by accident. In 1947 an organization formed called the SUA (Silver User’s Association). No other commodity has garnered the respect to have its own User’s Association. The SUA formed from major U.S companies whose desire was to keep the silver price low in order to keep the cost of their production down. Today the SUA uses 80% of the silver produced in the U.S. With the help of government and central banks silver was completely demonetized and became what the SUA wanted, a cheap metal.
The one problem that arose from this, is that to keep the price of silver low, government inventories had to continuously sell into the market to meet demand. Now these government stockpiles are near their end.
The SUA petitioned the SEC to stop the silver ETF from trading. Why?
Because the SUA has successfully turned silver into an industrial commodity and the last thing they want to see is silver begin to gain it’s rightful place again. As a form of money. The silver ETF makes it easy for anyone to invest and with a 100% gain on the year, silver is starting to be an attractive place to invest paper dollars into.
Silver is undervalued compared to gold and oil. Silver should be trading around $40 to be historically in line with gold and oil and this doesn’t even take into account silver’s present day scarcity.
Silver was brought down sharp and hard 10 days ago but already it has almost recovered it’s losses. Look for $20 silver just around the corner.

In my humble opinion I think we have finally seen the end of cheap silver. Fasten your seat belts the train is leaving the station. The ETF has been okayed and that is big news. Everyone can invest in silver now and with the market being as tight as it is look for silver to reach dizzying heights.

How high will silver go?

No one really knows. I’ve heard $25. I’ve heard $50. I’ve Heard $100. I’ve heard $500. I’ve heard numbers which I’m afraid to mention.

Silver IS more rare then gold. Silver in today’s society IS more precious then gold. These are just the facts.

2,000 years ago an ounce of silver would buy you 8 sheep or 1 human slave and back then they weren’t using silver in their cellphones. Modern science is uncovering the basic fact that silver is the “Best Germ Fighter We Have”. We possess a metal that not only has the best electrical and thermal conductivity. It kills bacteria dead. It has the best mirror-like finish. It doesn’t corrode. It’s uses are endless. The more society advances through time the more silver plays a prominent role.

Silver is finite. World inventories have been depleted. Primary mines have been used up.

Silver is awakening from it’s manipulated slumber. Look for silver to become the greatest investment vehicle this world has ever seen.

One day soon there will be a defaulted delivery, a short squeeze or just a huge investment demand and silver will break free.

It’s not about how big the wave is, it’s about how hard it hits the wall. The wave is getting bigger and the wall is now in plain view.

Load up your boots. Sell whatever you can. Buy silver. The beginning is here and the end of cheap silver is near.

Main Entry: money
Part of Speech: noun
Definition: currency
Synonyms: Almighty Dollar, banknote, bankroll, beans, bill, boodle, bread, bucks, cabbage, capital, cash, check, chicamin, chips, coin, coinage, dinero, dough, ducats, filthy lucre, finances, fund, funds, gold, gravy, green, green stuff, greenback, hard cash, jack, kitty, legal tender, long green, loot, lucre, mazuma, moolah, pay, payment, pesos, property, resources, riches, roll, salary, scratch, silver, skin, specie, sugar, treasure, wad, wage, wampum, wealth, wherewithal
Source: Thesaurus.com
mon·ey

noun (plural mon·eys or mon·ies)
Definition:

1. medium of exchange: a medium of exchange issued by a government or other public authority in the form of coins of gold, silver, or other metal, or paper bills, used as the measure of the value of goods and services

From the U.S. Constitution:
Section 10. No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility.

Silver has been a form of money for thousands of years and I own coins that prove it.
A while ago I bought silver maple leafs when silver was $6 and today I would most certainly rather have those then the paper I paid for it with.

WEEKLY COMMENTARY
April 25, 2006
A Long Time Coming

By Theodore Butler

It has been almost eight months since I’ve been able to write about a dealer short-covering clean out in silver. It seemed like it took forever. No matter how long it has taken, the good news to the blasting to the downside we have just witnessed is that the dealers (including Mr. Big) have used the sell-off as an opportunity to buy back a large number of their shorts. Actually, it’s a little more involved than that; the dealers created the sell-off by collusively pulling their bids on the decline. (If you’re not clear on that, please read some of my previous articles.)

Now the question becomes, is it done? Have we reached a low risk buy point? I think so, but with the tremendous volatility I can’t say it’s only dimes to the downside, the way I could at 4 or 5 or 6 dollar mark (although it may be). But I can say that there are many, many dollars to the upside, courtesy of a host of reasons not contemplated a few years ago, including the growing potential awareness of the real silver story and the prospective ETF.

I also get the feeling, whether we have seen the bottom of this silver sell-off or not, that the dealers will be very reluctant to sell the next rally, when it comes, which I think is soon. This should free the price dramatically. I say this because I think the dealers have been taught a lesson they will not soon forget. Most of you know that the lessons you have learned in life the hard way, through adversity, are those that are most obeyed. The dealers, likewise, have suffered heavy losses as a result of the 8 month silver rally and are, in fact, covering at substantial loss for the very first time in decades. I think they are more concerned with closing out their shorts and eliminating continued exposure to the upside, than they are with the losses they have booked. I think they will be reluctant to put their heads back into the lion’s mouth by going short again…

I started buying bullion a couple years ago. I first bought Canadian Silver Maple Leafs for about 30% over spot. Then I started buying junk silver coins for about 10% over spot. Then one day I bought a set of sterling cutlery on ebay for $250 and when it arrived I weighed it up and realized I had bought silver for about 30% of the spot price. I then bought another set and the same thing happened, I was getting silver for a fraction of what it was worth. I began buying all the cheap sterling I could find on ebay and a couple years ago it was like an endless yard sale of great bargains. One of the first things I discovered was that I was always bidding against the same people. There was about 10 of us in North America buying all the undervalued sterling out there.

Those days have ended but they taught me a couple things:

The first one was that silver could be purchased for less then the value it was worth. PURE INSANITY!!!! I would buy something from someone who had to take photos, spend the time to list the item, pay auction fees and then pay paypal fees for the payment I made. I would receive item take it to one of two guys who gave 90% for melt value and would walk away with a very nice profit. The funny part is the original seller could have went to the melter and made a whole bunch more money for a whole lot less work. In reality I would hand someone a $5 bill they would hand me back a $20 and we would both be happy with the purchase???? I have bought silver on ebay for $0.50 an ounce.

What this has taught me is that society has devalued silver so much that it can be purchased for less then the material it is made from. Try and think of any antique item that can be purchased for less then the value of the material it was made from. I received items that were 150 years old, beautifully handcrafted and what I paid wouldn’t even cover the value of the content. The best part is I have kept the items I like the most and sold the others off to buy mining stock. So now I have sterling cutlery, cups, pitchers, bowls etc. that I use on a daily basis and a lot of my friends have purchased the same from me and everyone comes to me later and says how much they like to eat with sterling cutlery. And with that cutlery having doubled in value over a year, it is truly putting your money where your mouth is.

So in buying bullion, shop around for the best price. Soon there might be an ETF, and also The Central Fund of Canada on the TSX holds 50% silver 50% gold bullion and the price seems to track silver closer then gold.

But I believe the biggest money can be made from the miners.
Buy silver in whatever form you can find.
Silver is real money.
The U.S. constitution states all money must be backed by gold or silver. That rule held true for many a year until recently they decided to back their currency with nothing but the paper it was printed on.
One day that paper might be worth the paper it was printed on and my silver fork might be worth the silver it was made from.
I’ll take the fork any day.

Thursday we saw a huge correction to the price of silver in one day. I had a couple calls from people about whether to sell or not. I started buying silver in early 2004 at around $6, it had a run up over $8 and I thought it would go the moon from there. Within a couple of days it was at $5.50 and I was floored. Silver shouldn’t do that I stated. Well welcome to the volatile metal.

The price of silver is controlled by two major forces: the comex dealers who love the short side and then the fund buyers who like the long side. These two forces seem to control the usual day to day silver price. The dealers sell silver down get the funds to panic sell and a huge correction happens.

The one problem with all this is that the dealers have somehow built up a short position of 700 million ounces and with high prices have a lot of money on the table to lose.

What I believe is starting to happen is that some of the more recent buying activity is coming from serious money that is long on silver. We have a new wave of investors coming into the market that are beginning to understand the silver story and truly believe that what we are looking at could be the investment opportunity of a lifetime. As I have previously stated we as a society have come to believe silver should trade around these levels and $100/ounce silver sounds insane at this point in time. Mark my words, when silver hits $100/ounce it will still be a great buy and $13/ounce silver will seem but a dream.

Two Texas Billionaires known as the Hunt Brothers tried to corner the silver market in 1980 and went bankrupt through margin call rule changes. The one interesting fact of this story that remains today is the one silver property that they bought. They purchased a property in the Northwest Territories and began to build a mine there. They spent $100 million and never mined an ounce of silver. When they went bankrupt they walked away from this property. Today it is owned by Canadian Zinc and has a reserve of 70 million ounces silver and billions of pounds of lead but most importantly Zinc in very high grades. A lot is still unexplored. In 1920 someone was walking through the valley and saw the mountain shining and thought it was gold but it turned out to be silver. The thing I like is that the Hunt Brothers bought one piece of property and this was it.

The one catch is that it is a very environmentally sensitive area and there is a lot of uproar over a mine opening, but at present they are acquiring permits and with such a rich resource and a conservative government at the helm we have a good chance of seeing the light turn green.

P.S. The Hunt brothers felt this would be the best silver mine in the world.

Great Panther Resources GPR.V
Apogee APE.V
Canadian Zinc CZN.V
Alexco Resources AXR.T
Excellon Resources EXN.V
Oremex ORM.V
Portal Resources PDO.V

I own all of these companies, all of them have a high risk/reward ratio so please do your own due diligence. My present belief is that we are in the beginning stage of a major bull market in commodities especially gold and silver. From my other writings you will see I highly favour silver over gold. With a continuing rise in prices we should begin to see more and more money move into this sector. The great thing is that there are a limited number of primary silver companies out there and if this sector started to become a market favourite due to escalating silver prices there just isn’t that much room for a lot of money to flow into. So in a raging bull market probably any stock will do but a couple could truly become market darlings and my #1 pick is Great Panther #2 Canadian Zinc #3 Apogee Minerals. Hope this helps.