Silver Price ~ Betting on the Apocalypse

Mr. Ehrlich’s view of looming scarcity was hardly radical in the years after the 1970s oil shocks. Many investors in the late 1970s shared his faith that rising metal prices reflected finite supply and impending shortages. The Hunt brothers, for example, famously gambled billions of their oil fortune on the rising price of silver, and then lost their shirts in 1980 when prices faltered and they failed to corner the market.

During the 1980s, macroeconomic factors, including falling oil prices and economic slowdowns, far outweighed new pressures from population growth and drove down the prices of many metals. Everyday market forces — technological change, price-driven competition and new sources of supply — also helped reduce prices. The international tin cartel collapsed under pressure from new Brazilian mines. Aluminum, plastic, fiber-optic cables and satellites began to replace copper, even as copper production soared in response to 1970s highs; by 1985, the copper industry struggled to create demand.

This dynamic relationship between scarcity and abundance matters for public policy. Exaggerated fears of resource scarcity can lead to stifling price controls, panicked efforts to limit production or consumption, and public investment strategies predicated on high prices that turn out to be ephemeral.

The same thing is true in business. Solyndra, the now-bankrupt solar-panel company, failed in part because its model depended on the price of polysilicon, used by its competitors, remaining high. When prices instead collapsed, so did its competitive strategy and the company.

 http://www.nytimes.com/2013/09/08/opinion/sunday/betting-on-the-apocalypse.html?_r=0

MAKE SURE YOU GET PHYSICAL SILVER IN YOUR OWN POSSESSION. Don't Buy SLV, or Futures or Pooled Accounts or any other BS paper silver product .Remember anything on paper is worth the paper it is written on. Go Long Stay long the bull market have even started yet

The Hunt Brothers

The above ground supply of silver was extremely plentiful during The Hunt Brothers  Cornering of the Market in the late 70's - Since then, the above ground supply have been declining at a VERY RAPID pace, Silver Mining has had a yearly Deficit to Supply ratio for the last 12 years -while the Industrial uses for Silver have increased ten fold! (and im not even considering Increased investor demand). The Hunt Brothers DID HAVE the market cornered. They controlled 77% of the known silver. Unfortunately, the Hunts used leverage (margin). And the CFTC/Comex then ---changed the rules--- to (1) limit position sizes, and (2) raised margin requirements. The Criminal Officials were absolutely beaten at their own game, so they changed the rules... and fucked the Hunts.remember, Silver is not currently Recycled....SUPPLY=DEMAND=PRIC­E? BUY SILVER NOW!!!

And Keep in mind: The world's RICHEST man CARLOS SLIM is in the process of buying one of the World's LARGEST SILVER MINES "Fresnillo". now that should help you sleep a little easier at night



MAKE SURE YOU GET PHYSICAL SILVER IN YOUR OWN POSSESSION. Don't Buy SLV, or Futures or Pooled Accounts or any other BS paper silver product .Remember anything on paper is worth the paper it is written on. Go Long Stay long the bull market have even started yet

Is This 1980 all over again for Silver ?

Some people may think : this is just like 1980 all over again and that silver price will now collapse just as it did in 1980. In 1980 silver prices rose to a height of $48.70/oz from their normal price of $5/oz.Silver prices increased ten times their previous levels.There was a was high fuel costs and terrible inflation. People wanted to change their paper money into hard assets like silver. This started driving prices up and up. At the same time the Hunt brothers, oil tycoons from Texas, bought two hundred million ounces of silver options and futures. This caused terrible shortages and drove prices sky high.The brothers were estimated to hold one third of the entire world supply of silver.But on January 7, 1980, came the response of The COMEX the exchange rules regarding leverage were changed , The COMEX adopted "Silver Rule 7" placing heavy restrictions on the purchase of commodities on margin . As a consequence The price of Silver dropped 50% in just four days , The Hunt brothers who had borrowed heavily to finance their purchases, lost one Billion dollars (but their fortune survived) , Does not this look so similar to what happened last week with the CME  raising the margin requirements 5 times in nine days ? ,  the truth is that the amount of money the FED have printed up since 1980 is ten times higher, so if we adjust for inflation, the peak price from 1980 should be more like $500/oz. in today's dollars and not just $49 . What this tells us is that silver is still very very undervalued and as Mike Maloney told Max Keiser in an interview this morning "silver has yet to exceed its 1980 High we came within a breath of it but it hasn't exceeded its 1980 high , can you name one thing on this planet that is still selling at a discount to its 1980 price !?"


Related ETFs : Ishares Silver ETF (SLV), SPDR GOld ETF (GLD) , Powershares DB SPDR Gold ETF (GLD), Newmont Mining (NEM), Barrick Gold (ABX), GoldCorp (GG)

The Hunt brothers, marked the history of the silver market

During the seventies in the U.S. the economy was characterized by a rising rate of inflation. The Hunt family, one of the richest families in Texas, decided to protect itself from the perspective of the dollar devaluation. Since U.S. laws prohibited the possession of gold, the brothers William Herbert and Nelson Bunker Hunt put all their bets of the silver and started accumulating all the silver that they can put their hands on. Back then In 1973 the silver price was $ 1.5 an ounce.
In 1979, the hoarding of metal accelerated thanks to interest from wealthy Arab traders. The prices began to rise, reaching $ 5. Thanks to the leveraging of significant quantities of futures contracts, the ascent became, in early 1980, unstoppable. The group headed by the Texans brothers now controlled 200 million ounces, an amount equal to about half of silver available in the world spot market.The prices soared to $ 52 an ounce. The huge bull run seemed successful.
But The Hunt brothers did not taken into account the reaction of the U.S. government which intervened dramatically raising margins on futures contracts on the 'COMEX' known as Commodity Exchange, Inc., a division of the NYMEX located in New York where contracts on aluminum, copper, silver and gold are treated. Thereby creating forced selling by fragile speculators who were in the bullish buying game through leverage. The same Hunt were overwhelmed.

In The COMEX traders still remember with concern the tragic day of 27 March 1980 which saw the incredible drop in the price of silver from 21.60 to $ 10.80. A drop of 50% in a few hours.



Related ETFs : Ishares Silver ETF (SLV), SPDR GOld ETF (GLD) , Powershares DB SPDR Gold ETF (GLD), Newmont Mining (NEM), Barrick Gold (ABX), GoldCorp (GG)

Silver is a GREAT BUY even at $50.

David Morgan on The Financial Sense Newshour 22 Apr 2011 :
Silver guru David Morgan explains what's may be driving the gold and silver market rally , the COMEX and the FED could conspire again in order to bring the silver price down ,Dave Morgan heavily promotes hold physical first and then to speculate in mining stock . Remember the hunt bros. 30 years ago they bought silver for $50 ,They will never see there money again. If silver rises too fast, their iron fisted rule will be over because gold will explode and the dollar will implode. So, they have absolutely every motivation and resource to artificially suppress the price of silver, yet it went up 70%+ last year. Confirmation of shortages, complete inversion (backwardation) of the futures market-Clearly, something is going on in the silver market.

Related ETFs : Ishares Silver ETF (SLV), SPDR GOld ETF (GLD) , Powershares DB SPDR Gold ETF (GLD), Newmont Mining (NEM), Barrick Gold (ABX), GoldCorp (GG)