Off-topic: a small investment worth considering in these crazy times
You may not have known, but I used to be a professional investor.
Years ago, I decided to no longer use my life energy to have money make money.
That "life pivot" was the inception of The Grow Network.
I discovered that real wealth is not so much about money, but is based in health, family, community, meaningful work, and living a life of purpose.
I find that stopping the destruction of the Earth via homegrown food is way more fulfilling than doing high dollar deals.
But I haven't completely lost interest in financial markets.
There is one trade in particular that I have been watching for almost two decades. The time for that investment to ripen is very near.
I thought I would share it with you.
I do have to let you know that this is not investment advice, I am not an advisor, broker, or dealer. You need to decide for yourself if this makes sense for you.
For our International members, please pardon my American references. The inforamtion is still very applicable to you.
Here is the short version of the current situation and why we are on the precipice of a major change in the silver market.
There are approximately 6 billion ounces of gold that have been mined since the dawn of history; most of that is still above ground and available as bullion, coins, jewelry, etc.
And although it is estimated that there was close to 50 billion ounces of silver mined over the smae period. currently there are only about 2 to 5 billion ounces of silver in above ground inventory.
Why is there so little silver available?
Both gold and silver have historically been used primarily as a store of value. And all of the gold and silver ever mines was available as coins, bullion, jewelry, or other items. Both were precious and carefully tended by whomever owned it. But somewhere in the 1950’s or so silver started being used in many industrial and technological applications. Photography up until recently used a lot of silver. Ad silver has a lot of other desirable propoerties: is it highly conductive, reflective, extremely malliable, and anti-microbial. It has many applications in high tech and medical devices.
So over the decades, tiny bits of silver have been used up and essentailly distributed into landfills everywhere.
Here is an excellent article on the quantity of silver and gold https://www.jmbullion.com/investing-guide/james/silver-supply/
How could silver be so cheap if it's so rare, and why is now the time for it to increase?
The silver market has been manipulated for decades by a group of large banks and insurance companies led by JP Morgan. They did it by using naked shorts to keep the price low. Essentially they rode the price up, sold, shorted it to lower the price down, then bought again. Over and over.
No, the SEC has done nothing in spite of the numerous complaints and petetions filed by citizens over the years (including me).
Surprise, surprise, the SEC is just as corrupt as almost every other department of the US Gov’t.
Have you ever heard of a commodity that stays at a low price for decades in spite of decreasing supplies and increasing demand?
Theodore Butler has led the charge fighting against the manipulation and here is his website https://www.butlerresearch.com/
For the first time in decades JP Morgan, the biggest manipulator, has reversed it’s short position and is now the biggest long in silver. In addition JP Morgan has amassed the world’s largest holding in physical silver. Which means they are set to gain massively with a price increase.
Here is a reference to the JP Morgan new position in silver.
What price could siver go up to?
The current ratio of the price of gold to silver is approximately 100 to 1 (spot price of gold is $1600 and the spot price of silver is $16), but clearly silver is just as rare and more valuable. So silver should be priced at least as high as gold - currently around $1600 per ounce.
There are many reasons why gold (and silver) is likely to go much higher.
There is a very high probability of inflation and hyper-inflation just around the corner.
Yikes! we just created and blew $2 trillion dollars in a month! And there are more stimulus packages in the works.
Precious metals are a strong store of value in uncertain times. in 1923 the people in Weimer Germany who had gold or silver were very grateful.
Even with gold going up, the price of silver will likely go much higher than gold. Markets don’t respond rationally. When silver makes a huge jump, it will be such a surprise, and traders are likely to push it way beyond a rational price.
So I am guestimating silver being at a minimum of $1600 per ounce, or way, way,way more.
How soon could this happen?
I'm not sure.
With the COVID 19 experience, everything in our world is changing.
Almost any scenario is on the table
My best guess? It could be within weeks or it could be within a year.
Timing anything like this is tough.
I bet some insiders at JP Morgan know...
But holding what has been valued as money for more than 5,000 years of human history in a time like this is a wise positon regardless.
What is the best way to buy silver?
I highly recommend holding physical silver and keeping it in a nearby, safe location. Not necessairly in your home unless you have a strong vault.
“Junk silver” is the most practical and accessable form of physical silver for smaller investors.
Junk silver are dimes, quarters, half dollars, and dollars minted by the US Govt prior to 1964. These coins are 90% silver.
Dimes are especially good as they are smaller and more easily tradable.
Junk silver coins are clearly recognizable by every American.
And because they’ve been so cheap they have not been worth counterfeiting.
You can pick up coins at pawn shops, guns shops, gun shows, and coin dealers. You can also buy online at eBay. There are a bevy of online dealers. I’ve used JM Bullion and they still have inventory as I write this. They delivered to me as promised. www.jmbullion.com
EFT’s and shares in silver mines could be a good play if you are stuck in some 401k situation. Personally I avoid the stock market. But if that is your game, go for it.
There are some silver backed crypto currencies such as the digital Liberty Dollar. I don’t hold any Libery Dollar crypto, but I’ve followed those guys for years and I do trust them. I used to buy Libery Dollars back when they were physical coins.
Also UpHold (a digital currency exchange) has a digital ‘card’ that is backed by silver.
The main problem with all these are you really can’t be sure if they have the actual silver. And what will happen when the price skyrockets?
You can also buy futures contracts or options on futures contracts. These are fairly sophiscated trades and come with time limits.
There is also a risk that the COMEX will suspend trading in the precious metals markets if the prices get out of control. There are only a few large traders that are the counter party to most of those contracts and many will likely fail under the pressure of increasing prices. I don’t know what the procedure is when a large counter party to your contract goes bankrupt, but I’m guessing you won’t get your funds.
Way out of the money options on futures are fairly cheap and might be worth the speculation if you know how to do those kinds of trades and can afford to take the potential loss. The leverage makes it very appealing.
That's the opportunity as I see it.
I feel somewhat torn writing this as when the prices do go up, the pressure on mining will increase and that is a very destructive force on our planet.
My hope that these resources in the hands of this community can do some good.
I know you have a big heart. And you woud use these funds in a good way.
Again, I'm not an investment advior or any sort of licensed professional. I have no affiliations with any of the links mentioned here. Do your own homework.
This is just what I see as a high probability event and I am offering it to the TGN community.
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