Monday, December 19, 2011

Just what is going on?

lets look at what is going on in REAL SILVER, not paper silver.   This is the Silver Bullion Trust, mate to CEF, certified bullion storage in Canada.  Looks a bit diff than the Comex charts of the "Paper Silver", so to get an idea of what silver should be selling at, simply X 1.5 and  you get a rough number.  So now theoretically you could buy silver, physical silver at about 29+ per oz, USD.      Now lets look at the available means of getting and holding Silver in a readily negotiable form, say 1 oz Govt Issues Coins, specifically American Silver Eagles, and Canadian Silver Maples.  For about a 13-17% premium over the calculated price say, either SBT X 1.5 or attempting to use the Comex price.  Perhaps I am looking at U$D 33.75 @coin ( 1 oz), which is not unreasonable.   So now, if we see the "worst case scenario" of about U$D 24 per Oz, or a Coin price of  about U$D 28-29 so if you buy all the way down, you "could" be down $4 per coin, but have the PHYSICAL, so for me that is an acceptable potential (not realized)(temporary) asset pricing.

Considering that there is an on-going degradation of COMEX delivery, and increasing musical chairs as to how the main bullion banks are shuffling to meet delivery, this is a reasonable cost of insuring yourself, and having a seat in the speculative pit when the next Silver crazy train pulls out.  I think the perceived risk of all the "Induced Volatility" is in-fact, not real risk, its probably as irrelevant as the variations in consuming rye bread part of the time and whole wheat bread at other times.   We have a current monetary system of Fiat/Legal Tender Paper money, and a fledgling circulating Monetary Metals system alongside each other, and in fact one is a very good transactional medium while the other is an excellent medium at retaining value.  If  you look at some countries such as Vietnam and India, you see the same thing in operation.  I like to buy things, but I don't like my money to lose its purchasing value over time, so I use both systems.  Might we all ?