Three weeks ago, just a few days after I was quoted, Canadian Silver Maples dipped briefly at apmex.com to $13.41. Today I see Maples at apmex are $16.79, a +25% gain in 3 weeks. Closing at 9,258 today, the Dow has fallen -19% in 3 weeks, -28% since May, and -35% in past year. Silver Maples are roughly flat in price since May and up about +20% in past year.
The rise in Maples, and similar rises for American Silver Eagles, Austrian Philharmonics, 90% silver coins, and other silver coins, has been due to a divergence between the price of physical coin silver and the Comex "spot" price. I documented that 90% silver (in past months) has risen from spot-$0.50 (I was buying) to now spot+$4 for roughly +35% price gain, if you can even find any for sale. I have observed similar price rises at all major dealers. I have on numerous occasions tried to warn paper silver "owners" (e.g. SLV, CEF, Perth Mint, bank silver certificates), they may never again get full physical price, if the price of physical coin silver continues to run away from spot price as I and others predicted. Today, 1000oz bars are still available near spot, but there is a theory based on some official data and anecdotal evidence that the supply of these bars is limited and will dry up soon in a Comex and/or general paper silver default.
Canadian Gold Maples at apmex (and similarly for Gold Eagles and at other dealers) have risen +16% in past 3 weeks, roughly flat since May, and up +23% in past year. With the spot gold-to-silver price ratio currently at 76, the Gold Maple to Silver Maple price ratio is 56, flat since May and past year, and improving from 61 in past 3 weeks. I did predict this in my March, 2007 article "Silver Will Outperform Gold When Fiat Dies". I have also documented with official data that silver bullion is more rare than gold bullion.
From the examples above, I hope you can see why I see the need for a new market price tracking mechanism, which I have begun working on, so we can document the true prices of gold and silver bullion, to produce charts that agree with reality. What use is charting, if we are using "spot" data which does not reflect reality?
Some argue that the Dow will bounce back. We may get dead-cat rallies on the way down, but the Dow Theory has confirmed a shift to long-term (secular) bear market. The central banks appear to be hyperinflating (e.g. Fed Total Money), so all things might rise or fall less than they would in dollar value, but everything else will just get that much more expensive in dollars, with the net effect being the same implosion of real value (purchasing power) for everything except the anti-fiats (gold and especially silver).
Disclaimer: The above are my personal opinions. I seek safe harbor. I am not a professional advisor. I am not responsible for anything anyone does after reading this. Seek your own counsel on all matters.
Shelby Moore [Send him email] has been a commercial software developer since late 1980s (including was one of first 3 programmers of what is now Corel Painter), and occasionally writes economic commentary that has been published by SilverStockReport, FinancialSense.com and Gold-Eagle.com. He recently completed Miningpedia.com and his current development project is GoldWeTrust.com, also known as SilverWeTrust.com.