Hi-Yo Silver!

February 15, 2003

Ah the Lone Ranger! "Return with us now, to those thrilling days of yesteryear. From out of the west, come the thundering hoof beats of the great horse Silver, the Lone Ranger rides again!" Being of advanced age, I grew up on the Lone Ranger. I listened intently on Monday, Wednesday and Friday at 7:30 PM to that show, and loved every minute of it. A definition of a sophisticate is one who can listen to Rossini's William Tell Overture without thinking of the Lone Ranger. I wonder why he didn't name his horse "Dollar?" After all, it's dollars that everyone mistakenly worships, and places faith in today. "HiYo Dollar," doesn't sound very impressive, does it?

And then there is Gold Medal Flour. Wonder why they didn't name it "Dollar Medal Flour?" But this is about silver. Ever wonder why the pioneers placed a silver dollar in their water barrels as they crossed the breadth of America, seeking their fortune in the American West? It was because the silver kept their water free from spoilage, and kept it drinkable. I know of several people who place a silver coin in their water dispensers, for the same reason. Ever wonder why silver is used as the world's best infection and germ killer? Colloidal silver works wonders. Would sucking on a silver round make one well? The first crude coins ever fashioned, were made of silver, not gold. A certain writer is wrong, when he says silver is an industrial metal, and not money. Silver has been money for thousands of years.

So why hasn't silver taken off like gold? I can only surmise, but I think it partially has to do with about eight traders on the COMEX, who regularly trade 350 million ounces of non-existent silver. They go long and short, and keep the price within the range with which they make profits, never letting it get out of hand, and silver seems to be stuck. It's against the COMEX rules, because in order to trade something, one must either have the money to buy it, or own it. Does anyone think that any trader has enough dollars to buy more silver than exists on earth? Why doesn't the COMEX shut down this outrage? Ask them. Previous queries have resulted in vague letters saying they are not doing anything illegal, or phrases like that, which is a crock of dill pickles.

The gold manipulators seem to have given up. I remember when they kept it below $275. Then they kept it below $300, then $325, and now it is over $350. Gold has gone up 25% in the last 6 weeks, and will go up a lot more. I think the silver creeps will have their ceiling pulled down on them, just like a fireman uses a Pike Pole to do the same thing in a fire situation. Why buy silver, when it just sits there? Because it won't always sit there, that's why. With a silver-gold ratio of close to 80 to 1, if there ever was a buying opportunity, it is now. In 1980, when gold and silver reached their peak, the ratio was 16 to 1. When will silver gallop up like the Lone Ranger's horse? I haven't the slightest idea, but I have faith it will. Silver isn't for everyone. It takes a lot of space to store it, and the returns may take a while. Or they may come tomorrow, I don't know. All I do know, is that anything is better than paper dollars in some bank or CD. Get into a different denomination, because the measuring device known as "dollar." is shrinking. Why? Because, as the newest board member of the Federal Reserve stated, "We have the power of the printing press." (He was undoubtedly chastised for that one.) Truth will out eventually, and it certainly did with that statement. I can just imagine Sir Greenspan's stomach upset, when he heard that speech.

There are many reasons why silver will indeed go up in all currencies. All currencies will go down, if for no other reason, but there are a lot more than that. The ratios are so lopsided in favor of silver, that I cannot remember them ever being so much in favor of a product. World troubles will give gold a favorable shine in the immediate future, because when trouble brews, people always think of gold. Thursday morning on Bloomberg, a big financial guru showed charts and moving averages, etc. comparing the dollar with gold, the stock market with gold, and he predicted an easy $500 gold, with possibility of $800. This is a fellow who deals with stocks, and he says the stock market is far from the bottom, and gold is far from its top. He never mentioned silver. No one does, except a few of us.

If silver is money, just like gold is money, isn't it logical to extrapolate that the two will rise together? Using that equation, it appears as if silver is the bargain now, and both are excellent ways to get out of paper monies. Just because silver has lagged behind gold, how can it stay behind? There may be a few places on earth where silver can be mined for its current spot price, but not many. The world consumes twice as much silver as it produces, and has done so for a few years. This could be likened to a rubber band being stretched. Pop goes it eventually? Pop goes it, if the COMEX gets its house in order, and ceases and desists allowing a few to trade what doesn't exist? Pop goes it, if the low resistance wire gets moving, which will consume thousands of tons of silver? Pop goes it when the military-industrial complex uses more and more of it for technical components of arms?

And then there is the fact that the Greenies have stopped most of the wood preservative treatment substances for some odd reason other. Guess what? Silver is said to be the best wood preservative treatment of all, and some states are requiring it. More silver to be used.

It's a good idea to do what most are not doing, because historically, most eventually do, only too late. The higher the stocks went, the more people rushed into it. Like Lemmings running off a cliff. I am what is known as a "contrarian." It has always worked for me. I built America's first totally non-smoking restaurant 25 years ago, and it was a howling success. I did America's first 100% non-smoking hotels 22 years ago, to an enormous success. Everyone thought I was nuts in both cases. I wasn't. It just takes a bit of savvy to look into the future to picture what will happen. It is said, and I only hear this, that Bill Gates and other nabobs are heavily investing in silver mines and physical. It is said that a certain billionaire has 30 million ounces of physical silver. I don't know, or even care for that matter, but I do think silver is currently a grand opportunity.

What's the best way to buy it? As usual, get the most silver and gold for the least fiat currencies. As far as silver is concerned, buy it at 47 cents over spot, which is easily done with ten or hundred ounce bars, or one ounce rounds. "Bags" of 90% US coins are only 43 cents over spot, but they are so heavy and impossible to store easily, that I prefer forms that are easier to store and handle. One of the greatest problems with silver is the fact of its high "spread." A "spread" is the difference between its bid (sell) price, and its "Ask" (buy) price. With silver it's usually 40 cents per ounce, and the reason isn't that it is less valuable, but because it costs so much to move it from place to place. Think about it. The heavier an item is, the more it costs to move. With a ratio of 80 to 1, an ounce of gold is worth 80 times an ounce of silver, even though they weigh the same. This means that it costs 80 times as much to ship, which makes the "spread" larger than gold.

Do NOT trade your silver in for gold, just because it seems to be going up faster. The shipping, spread, etc. makes it a poor move. Just keep it, and even buy more, as a wonderful insurance and investment for the future. It may take off tomorrow, I don't know, but if it doesn't don't worry. Protect yourself!

The average human body contains 0.2 mg of gold with the bone containing .016 ppm and the liver .0004 ppm.