Silver Prices Explosion: Reason #4 To Buy Silver Now

ALT: Buy Silver 
Silver value today is not consistent with its underlying fundamentals of supply and demand. The high demand and strictly limited remaining supply of silver both above-ground and below-ground are going to ignite a silver prices explosion in the near future. This article explains one of the six primary reasons silver prices are about to undergo a tremendous increase.

Assume for the moment you are a major investor in silver … At the current spot price of silver (approximately $19 per ounce), how much would $10,000 worth of silver weigh? … Recognizing that silver is quoted in Troy ounces and there are 14.583 Troy ounces in a normal (i.e., Avoirdupois) pound, the answer is 36.09 pounds [($10,000/$19)/14.583].

So, how much would $100,000 worth of silver weigh? … That’s right 100 times as much, or 360.9 pounds. And of course, it follows that $1Million invested in silver bullion would weigh 3,609 pounds; that’s just over 1.75 tons!

Obviously, 1.75 tons of silver (or even just 361 pounds of silver) would be a bit tough to store in a safe at home. So, what do you do instead?

Historically, two options are available. The first is to pay fees for secure storage of all your silver, and the second option is to buy “paper silver” instead. By far, the better, more reliable choice is to pay storage fees as unattractive as that may seem.

The reason is in many, perhaps most, cases the real silver backing up “paper silver” does not really exist!

Paper silver includes such “investments” as pool accounts, bank silver certificates, and leveraged accounts. The problem with paper silver, assuming it is legitimate and not fraudulent, is you are betting on the future creditworthiness of the issuer of the paper.

This is kind of like having a pension with a company that goes bankrupt or re-negotiates (a.k.a., “Re-negs”) the terms after or just before you retire. If the company goes out of business (or otherwise can’t deliver the goods), you are left holding nothing but paper and broken promises.

According to silver expert, Theodore Butler, the current volume of paper silver is on the order of a billion ounces (currently worth about $19Billion), and this volume is completely separate from silver futures contracts and leased silver.

Since in many, if not all, cases there is little or no silver actually backing up this silver paper, the issuers are essentially holding a “short” position on silver. As silver begins to rise in price (which has already begun incidentally), the issuers may panic and try to buy silver to cover the paper; this would increase demand on the silver market and caused dramatic increases in silver prices.

If you are going to buy silver, which you absolutely should, buy real silver not paper silver. If you buy silver bullion without taking delivery, be sure you get serial numbers of silver bars, and be especially wary of unusually low or non-existent storage fees. If someone is storing real silver bullion, they are storing a lot of silver bullion. And as you can see by the introductory paragraphs of this article, if they are storing a lot of silver bullion, it’s not going to be cheap.

Protect your financial future, buy silver bullion now … real silver bullion.


BIO BOX:
Written by Dr. Bryan Stoker
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