How’s Your Silver Doing?

Just to keep you fresh… the reasons we buy silver, each one respectively comes along with numerous explanations and pages of verification. The following (in blue) are exerts from an interview with Ted Butler.

“Silver is greatly undervalued compared to its supply and demand fundamentals.”

This is related to two phenomenon, the first being a depletion on above ground unowned reserves and the second a rapidly increasing investor interest.

“It’s undervalued on a relative basis compared to everything else, including gold.”

Think Dow/Silver ratio, Gold/Silver ratio, historical Dollar/Silver ratios in relation to market influences and silver’s rise relative to other currencies.

“There’s a smaller amount available for investment than at any time in hundreds of years.”

This is natural of a bottom of a commodities boom when commodities become scarce but more so in relation to silver of which has seen a multi-decade increase in supply. That supply is since dwindling.

“It’s under-owned, under-appreciated, misunderstood and overlooked by the investment world.”

Translate this in direct inverse correlation to the stock boom of the late 90’s when equities were, generally, over-owned (leveraged), over-appreciated (in regard to expectation) and ‘looked’ (with a surge of hundreds of analysts for each major company on the exchanges).

“It’s about as far away from being in a bubble as it can be, yet is a prime candidate for becoming a future bubble.

In line with the above silver in particular, and gold and commodities in general, share non on these in similarity.

“It has been pre-sold (shorted) to an extent never witnessed in any other item, which guarantees it must be purchased or delivered against at some point.”

He refers to the $3 billion Short-position on the COMEX of silver equivalent that has already been sold and must eventually be bought back, at a higher or lower price, important to the short-term trader but ultimately positive for the investor.

“Institutions can easily own it for the first time.”

This is similar to the surge in technology that took place in the early 80’s with the integration of computers into the private sector. The same it did for equities, it will do for hard assets. Silver has to benefit.

“It is vital for modern life.”

Silver as an element has many useful factors other than cold storage (including medications, conductors, anti-bacterial prodigies) making it an industrially consumed good as well as an investment metal.

“It can’t go bankrupt or become worthless and can soar in price by many times its current price.”

While commodities pay no interest or dividend, their advantage lies in their intrinsic worth that stands for an ultimate store of value.

“It is easy to buy.”

Think SLV (iShares Silver Trust), mining websites that will ship the world over and internet sites like eBay that bring buyers and sellers as close as ever.

“All these statements can be verified easily and I can’t think of one valid reason why it shouldn’t be bought.”

Enough said. Go do your research.



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