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COUNTDOWN---TEN---NINE---EIGHT---SEVEN--- Are you
ready for blastoff? Do you have your silver shares and physical
silver with which to participate in the price supernova? The market
emergency ignites as leasing dies, At
last silver enters a free market, with free market pricing to reflect
supply and demand forces. Concerning the naked short position
in Comex silver, let no one be surprised when exchange officials attempt
to repudiate and cancel the obligations of the shorts, to excuse them
from covering; I suspect such plans have been in place for years.
Then let the lawsuits begin! If you have investments there, I
suggest you exit them and go to safety---physical and certain mining
shares. Comex silver warehouse receipts might be seized by Uncle
Sam in a national emergency scenario, concerning reestablishing a strategic
stockpile, with holders paid a capped price below free market prices.
This is speculation, but the metals markets have been the target of
much abuse, more would be no surprise. All shareholders in primary
silver mining companies are hereby encouraged to communicate to management
the absolute dictate to profit on the long side of silver. The
companies rated by Silver Investor are trustworthy to not hedge; or,
to not hedge too early in the price rise, and then, to hedge as lightly
as possible; or better still, to raise any needed development capital
by selling a minority interest in a property after the great price transition
to one of the sluggish mining giants which failed to get ready for the
silver boom. Considering who the billionaires are behind the Silver
Trio, and the fact of them being geopolitically diversified, investing
with them will give you security. I am very grateful for the existence
of the company I invested in, which I called 61 Neutron Corporation
in the Maximinus essay (silver has 61 neutrons). This time I want
to nickname it SFD Corporation---Sir Francis Drake Corporation---after
the British privateer who raided Spanish treasure ships returning to
Spain from the New World with silver and gold. Because you see,
SFD Corporation has practically stolen most of its assets in legal deals,
which represent so much pent-up value as to generate astonishing wealth
for its shareholders in times ahead. Having acquired over 200
million silver equivalent ounces since November 2001 they seem poised
to add 400 to 600 million more soon! No wonder I decided 57 months
ago to live way below my means, to chronically deprive myself of better
things and comforts so I could accumulate shares! Already having
interested two East coast billionaires in their company months ago,
they now have, indirectly, Bill Gates as an ally in South America!
And not very indirectly at that! Concentrates from the company
George Soros stands behind will get to port not too far from SFD Corporation
mines in Northern Chile. Figures are difficult to be precise,
but suggest the Silver Trio may enter the Silver Supernova with close
to 40% of the mineable silver reserves in the world! Considering
that many of their properties are primary silver deposits, and that
base metal mines (owned by other companies) yielding silver byproduct
will be idle for some time to come, it appears convincing that these
companies will absolutely dominate the silver market! Another
poem--- Silver
prices, beaten down and suppressed for years, WORLD
DEMOGRAPHICS, SILVER SUPPLY AND DEMAND As of 2002
the world has about 6,200,000,000 people. India and China represent
some 2,306,000,000 souls, or about 37.2% of the total. Demand
on silver has never been greater relative to silver available and is
increasing. From 1996 to 2000 silver demand was up about 16.5%.
In 2000 global silver demand was about .1526 ounce per capita.
Increase this demand by 16.5% and you have world silver demand at 1,102
million ounces, or about .1778 ounce per capita. This works out
to an increase in silver demand of 156 million ounces. However,
to expect this added 156 million ounce demand to take four years to
arrive would be to expect the same rate of increasing demand as happened
from 1996 through 2000. The rate of increasing demand will surge
because of several factors---superconductivity, a silver stockpile being
rebuilt for national security, investment demand increasing, and news
of silver sources running dry and others embargoing silver exports.
Additionally, many people in the world hardly consume any silver at
all, and as significant numbers of them are beginning to do so by having
improved living standards, and combined with the other factors, maintaining
the insanely low capped price becomes as hopeless a cause as pricing
diamonds like cubic zirconias! United States Geological Survey
figures show, as of 2002, about 270,000 metric tons of recoverable silver
reserves. This is roughly ten years worth of supply at current
rates, except that current rates are viewed as increasing! Hard
to believe? It was to me. See the statistics for yourself.
Since gold is not such a consumable item as silver, let the world BEWARE!!
They are going to bleed, and then hemorrhage violently to get the silver
we silver investors hold title to. Geopolitical tensions flaring
into military hostilities, and demand for silver as MONEY will infuse
silver with stunning value! Those who were conned by silver bears
will feel like they have radiation poisoning! Predicting perpetually
escalating silver prices is as sure a forecast as anything you can conceive.
The asset base of the three leading silver companies is set to expand
from acorn size to that of full blown giant redwood trees, and will
soon be worth THOUSANDS (yes, thousands) of times more than their current
market capitalization. When the day arrives that their mine resources
are depleted to 10% of their current reserves, the value of these deposits
will be greater than what the entire amount was at the beginning, because
world demand for silver is voracious and will energize the perpetual
price increases. As supplies shrink the price will escalate continually.
Even if an assumption such as only the rich and upper middle class will
consume silver, this suffices to fuel the perpetual price escalation!
These silver mining companies of which we speak are in an absolutely
enviable position to transfer a whole universe of wealth from silver
consumers to their blessed shareholders. The in place stock options
at SFD Corporation guarantee the rank and file to benefit the same way---as
silver bulls and longs. The higher silver escalates, the greater
the value of the options held by management. I believe the managements
of the Silver Trio are canny enough to have realized years ago that
when the first shock waves hit of increasing prices in a finally free
market in silver, they may find ways to drag their feet about production
decisions, in order to catch the second wave of price increases.
With the first several price spikes, considerable above ground silver
will be enticed into the marketplace. As that silver is consumed,
demand will continue rising and the value of their silver ore bodies
will escalate again in further price shock waves. India cannot
and will not come to the rescue of any users organization. Assuming
there is as much as 3 billion ounces there, look at that as less than
3 years demand, for demand is increasing. (So, adding 30% to the
recoverable silver reserves estimated by the USGS, we still have only
13 years at current consumption rates assuming India is willing to sacrifice
itself for the rest of the world; rates are increasing!) Figures
for how much silver Indians own are murky and unreliable; however, this
figure allows an average of 3 ounces per Indian. This metal took
them many generations to accumulate and they need it for infrastructure.
If anyone on the COMEX expects an Indian silver short side bailout,
they better have space aliens arrange it. Because to the Indian
people this would be less appealing than a rats rump on a banana split.
As the silver price jolts upward, Indians will become more possessive
of it. The poor mans gold, moving towards what was the price of
gold before the Silver Supernova, and Indians will clench their fists
tightly around it. I expect to hear about western industrial users
begging Indians to sell silver with most of them refusing in order to
get a higher price later. The general media have been extremely
quiet about silver since 1980, and what little has been said has been
predictably bearish considering their corporate interlocks. However,
when Silvers Mushroom Cloud appears, there will be no way to ignore
it, and knowledge of the severe silver shortage and marketplace emergency
will be all over India and they will realize the longer they hold it,
the more they can eventually sell it for. Across the Pacific,
Mexico promises to help Indians enjoy startling increases in the value
of their silver heirlooms and objects, as the movement to use circulating
silver coins as a reality based medium of exchange surges in popularity.
As the dollar becomes more of a weakling, Mexicans, Indians and all
holders of silver (and the right equities) will realize what God-given,
true wealth they actually hold, and will hang onto it the more tenaciously!
More poetry--- Silver
fundamentals made inevitable the rise so steep, PERPETUALLY
ESCALATING SILVER PRICES---OCEAN MINING! Because
of the geological phenomenon called epithermal deposition, most silver
lies close to the surface of the earth, except in Idaho, where earthquakes
inverted silver deposits downward. Elsewhere in the world, the
deeper into the earth we go, the less silver whether in primary or byproduct
mines. Many sources confirm this geological fact. This being
the case, most, perhaps nearly all, of the great silver deposits were
located long ago. SFD Corporation has a site first mined in 1772!
As land based silver deposits become exhausted, to include low-grade
deposits, which will become attractive with wave after wave of price
increases, the world must turn to seabed mining to obtain more silver.
This will be no easy task and very expensive. However, considering
the demand is certain to remain so far ahead of supply (and due to reemergence
of silver as MONEY), by the time such undersea mining becomes the main
supply of new metal, silver is likely to surpass $500 per ounce.
What appear to be wild figures now may seem tame later. We have
already recovered vast wealth by tapping the ocean floor by petroleum
platforms. Polymetallic nodules and metalliferous sediments await
eventual exploitation. Exploration will focus first on subduction
zones and tectonic plates---boundaries between huge areas of differentiated
rock masses, stretching for some 47,000 miles around the globe; and
hydrothermal vents, bringing up metallic elements from deep below the
ocean floor in massive sulphide deposits. It is at these areas
that metallic elements from the core of the earth are more concentrated---iron,
copper, zinc, gold, silver and other metals. Whether or not the
Silver Trio will eventually be involved in undersea mining is a worthy
question for their boards to consider. It is certain that the
value of undersea metallic elements is in the trillions. SFD Corporation
could consider moving into ocean mining at the right time by making
another strategic purchase, which it is likely to be aware of already,
or it could diversify. A real estate bust, which may last for
years, will follow the long-term decline of the Dow. Using staggering
profits from silver, SFD Corporation could purchase buildings at fire
sale prices, income properties, and undeveloped land at the edges of
growth---the same tactic which made the Astors one of the richest families
in history. When its land based silver mines are exhausted, it
would then be positioned to perpetually issue dividends to shareholders
from gargantuan real estate receipts! Also it could continue as
a mining company by making the strategic purchase of which I speak;
land based silver mining will be fabulously profitable in advance of
ocean mining, therefore, the capital will be there for them to dominate
ocean mining as it becomes predominant. Rene Kardol of the
University of Amsterdam has written on the subject of inhabited artificial
islands for the purpose of ocean mining, some of these proposed to be
over 60 square miles in size (100 kilometers), contain some 100,000
residents, and be anchored to the sloping sides of seamounts (undersea
volcanoes or other mountains whose summits fail to reach the ocean surface)
by means of Teflon cables. Other plans have focused on semi-stationary
cargo-type vessels. FORMULATING
THE RED TAPE OF OCEAN MINING
Not surprisingly,
governments have been active for years in connection with universities
and their corporate sponsors in developing legal frameworks by which
the seas may be exploited of mineral treasure. Before this will
really get rolling two things especially must happen---improvements
in mining technology and higher metals prices. As long as land
based mining can supply metals at lower prices, the next great phase
in world mining history will be on hold except as concerns research,
planning, and testing. Before ocean mining starts we will see
a full end to the demon of suppressed silver prices; and indeed, the
opposite of that demon---astronomically high silver prices, will show
silver bears to be shameless con men. (Then also, when certain
advisors suggest a precious metals stock, they intentionally mislead
hopeful investors---see for example Forbes, March 11, 2002, reference
to Hulbert Financial Digest survey of so-called stock guru picks, with
heavy hedger Barrick Gold among the TOP recommendations! It must
be intentional misleading---how could anyone do it out of stupidity?)
Silver
prices rising like the Alps, Andes, now the Himalayas so high, CAN THE
TIMETABLE FOR HIGH SILVER PRICES BE DELAYED?
Recent reports have come from China concerning increased exports of silver in 2002. Possibly as much as 4.5% of annual world demand may be coming out of China in one round, with perhaps two more rounds to go. If the total amounts to three times the first shipments, this might cover up to 14% of annual world demand, with shorts capping the price at under $5. We still have the deficit, our inexorable trump card! While many of us have been waiting for a silver bull market for years (my fifth year of waiting soon to start, with many readers in much longer than that), if as we suspect central bank leasing is soon to dry up as a source of supply, and silver coming out of China can be used to delay the violent upward price spikes for some months, view it as opportunity. If things work out this way, we have more time to add to our positions. The more above ground silver the shorts and their allies can wring out of many countries, the less silver to compete with what silver investors have, in mining shares and physical, when so much silver has been spirited out of countries like China that the deficit can no longer be covered. If this is the case with Chinese exports, it appears to be a signal, an emergency signal, that silver leasing is soon to end, but the price explosion may be postponed for some months to come, with Chinese dumping servicing the deficit. This would then be a situation similar to a condemned prisoner and his attorneys running out of appeals and delaying tactics. If China dumps another 1,260 tons of silver twice more this year, that amounts to about 121.5 million ounces, enough to cover the anticipated deficit. However, as long as the deficit persists, the time for rapidly escalating prices will arrive. Demand continues to increase; in 1996 it was over 800 million ounces; now at the start of the new millennium it has escalated to within striking range of the one billion ounce mark! Eventually the world must turn to longs for silver---those of us who respond to price alone, and our companies untainted by derivatives, who have the best silver deposits locked up. There are certain organizations and their corporate members who are able to command surprising influence over the export decisions of an apparently hostile nation like China, and these are linked to the great bullion banks. I almost wonder if military secrets and technology are being offered as inducement to the Chinese to release increased amounts of silver, as the most populous nation really needs their silver for infrastructure and standard of living; and military uses. There must be some under the table inducements going on, because the Chinese know that if they withhold this silver, a price explosion will occur, rendering their metal many times more valuable. Why else would they dump it at fire sale prices, but to gain other things not known to the public? Maybe Wo Fat (see 2nd essay in series by this author) did get involved after all---maybe he lurks around the Huatong Metals Wholesale Market! If China releases several thousand tons of silver on the world market at under $5 per ounce, we will have an extension of time with which to add to our positions. Recent Chinese exports, much greater than previous years, may not be what the recent silver industry delegation to China expected. This possible delay cannot be counted on, however, as silver bears are well known for making all the bearish noises they can. In the time it takes you to clap your hands, they can recite 50 lies about silver---its being abandoned by industry; tangible assets are out of favor; copper, lead and zinc companies hold billions of byproduct ounces available under $1, and short sales in New York are backed by silver fillings in cemeteries all over the world! In relation to Chinese silver exports, consider this---news of Japanese savers stampeding into gold in recent months is widely known, as is the shortfall between gold demand and production. Suppose a few hundred thousand such savers, not only in Japan, but other nations, start seriously considering the other precious metals, like silver? This is already the case with platinum, and some diversification is a plus. Such investment demand could easily overwhelm any last ditch efforts by shorts to pull Chinese strings to hold silver low until fourth quarter 2002. We still have many billionaires all over the world, and mega-millionaires---just one of these (taking cues from Warren Buffett) seeking to buy and take delivery could push the shorts to the edge of the precipice! If someone wants to send them letters asking them to get into silver at low prices, and plan to hold it for at least 3 years, that might do the trick. You need not even convince 1% of them to force a market crisis in silver! Additionally, if Congress is pressured to rebuild silver stockpiles for national defense, the crisis is forced before year end 2002. I anticipate the Silver Supernova will happen during 2002, and other better-known sources are saying the same thing. The wheels will get busted off the short sellers wagon, and silver longs will have our way---with a stunning vengeance! So be ready for those perpetually escalating silver prices!
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