STRATEGIC INVESTING MODULE 3 | OWNING SILVER
AN OPPORTUNITY OF A LIFETIME
Rarely in a lifetime are we given the opportunity to participate in a truly significant investment bull market. We believe that we are witnessing a bull market that will not only yield enormous gains, but might in fact reward some savvy investors for many years to come.
From the early 1970s to 1980, silver soared from $1.50 to $50.00 an ounce – that is a 3,300% move. That means a $25,000 investment in silver at $1.50 an ounce soared to over $825,000 in 1980.
AN UNDERVALUED ASSET
Silver is perhaps the most undervalued asset in the world today, and the fundamentals to invest in silver coins are stronger now than at any time since 1971. An enormous supply/demand shortfall has developed in silver. However, unlike in the 1970s, there is no longer an overwhelming above-ground supply of silver available today. With a limited global silver supply, the quantity will for all practical purposes, evaporate over the next few years.
THE LARGEST SHORT POSITION IN HISTORY
The silver price, like the gold price, has been artificially suppressed by central banks, governments, wealthy speculators and even the mines themselves. Through a complex series of leases, silver sales and derivatives, a two billion ounce global short position in silver has been created. This is by far the largest silver short position in history!
As these different entities begin to dissolve what little above-ground silver actually exists for current consumption and delivery, a huge short squeeze is likely to develop. This short squeeze will propel the price of silver to historic levels.
Over the past 16 years, I have recommended that customers maintain a portion of their assets in silver coins. The objective was to have some silver coins that would serve as both a portfolio hedge and as a “survival” position in the event of a crisis. I am now advising clients to also purchase silver for its profit potential.
WAYS TO OWN SILVER
U.S. CIRCULATED 90% SILVER COINS
Traded in bags of $1,000 face value and containing approximately 715 ounces of silver, 90% bags currently represent the least expensive method for purchasing silver per ounce.
U.S. CIRCULATED SILVER DOLLARS
Circulated silver dollar bags contain 1,000 circulated U.S. peace silver dollars, over 75 years old, in very good condition. A full bag consists of 770 ounces of silver. Circulated silver dollars offer the investor greater anonymity because they are dealer non-reportable. They are also considered a collectible, so they offer the investor a double play on both the silver content and the higher premium of the coins.
INVESTMENT SILVER DOLLARS (PEACE AND MORGAN DOLLARS)
For investors that are interested in a decidedly up-scale silver collectible that has significant investment potential, the certified MS63 to MS65 U.S. silver dollars are just the item. They have traded at 5 to 10 times silver’s price!
1 OZ. AMERICAN SILVER EAGLES
Silver eagles are dated from their early inception in 1986 through current mintage in 2017. They are minted at West Point, New York and are .999 fine silver. Silver eagles normally sell for modest premiums above their melt value.
1 OZ. CANADIAN SILVER MAPLE LEAF
Silver maple leaf coins, sold in a 1 oz. size, are made of fine 99.99% pure silver. The Silver maple leaf is one of the most widely traded silver bullion coins in the market today. If you are considering purchasing a bullion coin minted currently by a government, this would be an excellent choice.
Johnson-Matthey and Engelhard are two of the world’s largest precious metals firms with operations around the world. When considering silver bars, investors should ask for either of these two hallmarks. Silver bars come in 10 ounce, 100 ounce, and 1000 ounce sizes. The 1000 ounce bars are non-assayed, meaning none of them are the exact size. However, you only pay for the number of ounces in that particular bar. For example, a bar weight may be 998.772 if it is a “light bar” or 1021.881 if it is a “heavy bar.” These are just examples.
SILVER BULLION ROUNDS
Silver bullion rounds are a popular, low-premium way to invest in silver. They offer the better of two worlds, as silver rounds are .999 fine silver, making them a pure silver investment, and being one ounce, silver rounds could easily be used as money in a worst-case scenario.
TYPES OF SILVER COINS
Pre-1965 90% "junk" Silver (Minted 1964 and earlier)
Canadian Maple Leaf
"Morgan" Silver Dollar (Minted 1878-1904; 1921)
COMEX Approved Bar
"Peace" Silver Dollar (Minted: 1921-1935)
FACTORS INFLUENCING THE PRICE OF SILVER
Generally, during times of economic slowdown, industrial metals (like copper, steel, iron, aluminum, etc.) will see their prices fall as aggregate manufacturing demand for these metals is not sufficient. However, even though silver is an industrial metal, as it is used in almost all electronics, it is a financial metal as well, just like gold.
WHAT DO FINANCIAL METALS RESPOND TO?
Chaos, uncertainty, turbulence, turmoil, and change.
Financial metals act as a safe haven investment. As things become more uncertain, a flight to quality occurs and investors get out of risk and into something of value.
•The world is not getting better. In fact it is getting worse.
•As central banks around the world print money without discretion to stimulate the economy, they are creating inflation!
•Europe is on the verge of complete collapse.
•The Middle East is becoming more dangerous with each passing day.
•The United States has amassed so much debt that it is impossible to pay it back.
So, as a global economic catastrophe continues to unfold, not all hope is lost.
In fact, these exact situations will cause gold and silver to skyrocket as investors re-assess their risk profile and get out of risky investments and allocate into safe assets. This is where silver acts like gold and the financial characteristics of the metal outweigh the industrial characteristics.
CALL TO ACTION
I urge you to take advantage of the opportunity of a lifetime. As we stated earlier, SILVER is possibly the most undervalued asset of this generation. As such, it needs to be a large part of your asset mix, IF protection, preservation and growth are what you are looking for.