first majestic silver

Twos-Day Silver Shortage Report

September 3, 2008

For the last two weeks, I've asked my readers to go to their local coin shop on Tuesday, September 2, at 2PM. In sum, for those who acted, they were alone. Most shops were out of silver, or nearly out. Dealers want you to pay up front for silver that may take 5 weeks or more for delivery.

No customers. No silver. Those who deny the silver shortage, are increasingly now recognizing the retail shortage, and say that it's record demand that's doing it. Nonsense. Investor demand for silver could not be lower. No lines. No huge demand. The U.S. Mint produced over 500 million ounces of silver in U.S. coinage in 1964. Today, they can barely produce on pace to make 20 million silver Eagles, without horrible shortages developing. That's not a "manufacturing" problem; it's a supply problem. But still, the mints can't supply the market. Why not?

The silver market is broken. COMEX broke it. The CFTC broke it. The Federal Reserve broke it. The paper dollar broke it. Hedged refineries and dealers broke it. The broken trust broke it. Lack of knowledge about usury and promises not being the same as real silver broke it.

The spot market, the over the counter market, is transforming itself into the futures market that it depended upon. If you try to buy silver at "spot", it's like buying a futures contract for delivery in 1 to 2 months all over again!

We now need a new silver market, where people cannot sell silver that they don't have. We need a new spot market to help discover the real price of silver. Although ebay right now is the best free market indication of a real price that there is, it is bad for silver because of the 10-15% fees, which restrict volumes. Surely a new market will emerge where people can only sell what they have, and can be proven to be able to be delivered, where real silver will sell at increasing premiums.

A dollar used to be defined as a certain amount of silver, about .76 of an ounce of it in a real silver dollar. In 1968, a few years after the U.S. Mint stopped making silver coinage, they continued to let people exchange silver certificates for real silver. It became very profitable for people to buy up the silver certificates and present them for delivery of silver that was being sold at below market prices. Eventually, .76 of an ounce of silver, a real silver dollar, was sold at increasing premiums to a paper dollar.

Same thing is happening now.

Real silver is selling at increasing premiums to the paper price of COMEX silver that you can't get. If you can get it, then you will be able to increasingly sell it at a premium, and make a quick profit if you can find silver priced at COMEX prices. Manipulated silver prices are a great advantage if you can buy cheap silver, and sell it at real free market prices, as some dealers have begun to do, especially with Silver Eagles.

Hommel’s full report may be read here:

Jason Hommel

Pure gold is so soft that a strong man can squeeze it and shape it.
Top 5 Best Gold IRA Companies

Gold Eagle twitter                Like Gold Eagle on Facebook