Tuesday, January 31, 2012

SilverSeek.com 2012 Virtual Silver Investment Conference

Eric Sprott: Mania. Manipulation. Meltdown. [Transcript: 2012 Virtual Silver Conference]

James Turk reaffirms his $400 long-term silver target [Transcript: 2012 Virtual Silver Conference]

Julian D. W. Phillips: Why will Capital Controls Boost Silver Prices? [Transcript: 2012 Virtual Silver Conference]

David Morgan: Silver in the next Decade [Transcript: 2012 Virtual Silver Conference]

Click Here To Read The Transcript Of His Presentation

Monday, January 30, 2012

The Coming Paradigm Shift In Silver!

I found this Blog post that has several great graphs that support a coming paradigm shift in silver. The most interesting chart to me is the one that shows to total U.S. mint sales for silver and gold 1 oz. Eagle coins over the past 5 years. The next two charts that piqued my interest were the ones showing the U.S. gold and silver production vs. total 1 oz. coins sold by the U.S. mint in 2011.

I don't know anything about the author other than they go by the name of NT.

Posted By: Steve St. Angelo

Click here the read the Blog post:

Gold Sales During Week-long Lunar New Year in China Up 49.7%

By Esther Tanquintic-Misa | January 30, 2012 2:54 PM EST

The Year of the Dragon Lunar New Year holiday not only ushered a new and magnificent year for China but also gave a new record gold buying among the Chinese.

Click Here To read The Article

Wednesday, January 25, 2012

Eric Sprott: Aggressive Chinese Buying Will Spike Gold Price

From King World News:
Today billionaire Eric Sprott told King World News the Chinese cannot continue to buy gold as aggressively as they have been without there being a dramatic increase in the price. Eric Sprott, Chairman of Sprott Asset Management, had this to say about Chinese purchases of gold and the recent announcement that Iranian oil will be acquired using gold: “There are two things I think are important about that. One, it’s a statement that gold is a currency. That is by far the most important thing. I think the other thing is, if it actually transpires that way, what does it mean for the demand for gold? Because now it’s considered currency, it’s, in essence, your working capital. You have to have it. It’s like a store, you have to have money in the till.”

Eric Sprott continues:

Read More At King World News

Tuesday, January 24, 2012

'India to buy Iran oil in gold not dollars'

Oil and gold markets stunned
DEBKAfile January 23, 2012 India is the first buyer of Iranian oil to agree to pay for its purchases in gold instead of the US dollar, DEBKAfile’s intelligence and Iranian sources report exclusively. Those sources expect China to follow suit. India and China take about one million barrels per day, or 40 percent of Iran’s total exports of 2.5 million bpd. Both are superpowers in terms of gold assets. By trading in gold, New Delhi and Beijing enable Tehran to bypass the upcoming freeze on its central bank’s assets and the oil embargo which the European Union’s foreign ministers agreed to impose Monday, Jan. 23. The EU currently buys around 20 percent of Iran’s oil exports. The vast sums involved in these transactions are expected, furthermore, to boost the price of gold and depress the value of the dollar on world markets. Iran’s second largest customer after China, India purchases around $12 billion a year’s worth of Iranian crude, or about 12 percent of its consumption. Delhi is to execute its transactions, according to our sources, through two state-owned banks: the Calcutta-based UCO Bank, whose board of directors is made up of Indian government and Reserve Bank of India representatives; and Halk Bankasi (Peoples Bank), Turkey’s seventh largest bank which is owned by the government.

Tuesday, January 17, 2012

Turkey Adds 63 Tonnes of Gold Due to Acceptance of Metal as Reserve Requirement from Banks

Posted 1/17/2012 1:49 AM by Vittorio Hernandez from International Business Times in InvestingCommodities

The acceptance of gold as a reserve requirement held by Turkish banks led to a rise of holdings of the yellow metal. In November, Turkey added 63 tonnes of gold, which boosted the purchase of gold by 41.3 per cent. It was the largest increase in gold buys that month.
In October, Turkey also boosted its gold stock by 21.7 per cent. Besides Turkey, the only country that increased significantly purchase of the safe haven metal is Korea by 15 per cent, according to the World Gold Council (WGC) report released on Tuesday.
The International Monetary Fund ( IMF ) data showed that the Turkish central bank hiked its gold reserves to 5.758 million ounces in November from 4.429 million ounces in October.
Besides the two countries, Russia also continued to accumulate gold by boosting its holding of the yellow metal to 81,000 ounces. With the latest addition, the country's gold reserves had gone up 11 per cent compared to the start of 2011.
With Turkey's addition of more gold holdings, the country is the 22 nd largest holder of the precious metal in the world with a total of 179.1 tonnes of gold which comprises 10.6 per cent of the country's reserves.
The U.S. continues to be the largest holder of gold with 8,133.5 tonnes in its possession, which is 76.9 per cent of the country's reserve requirements. It is followed by Germany (3,396.3 gtonnes), the IMF (2,814.1 tonnes), Italy (2,451.8 tonnes) and France (2,435.4 tonnes), according to the latest WGC report.
The Turkish Central Bank announced on Oct 24, 2011 the new policy that allowed up to 10 per cent gold holdings of the reserve requirements for lira liabilities to strengthen the country's build-up of gold reserves and provide more flexibility in the country's banking system's liquidity management.
Based on the new policy, about $3.5 billion worth of 55 tons of gold would be maintained by the Turkish Central Bank.

Read more: http://community.nasdaq.com/News/2012-01/turkey-adds-63-tonnes-of-gold-due-to-acceptance-of-metal-as-reserve-requirement-from-banks.aspx?storyid=114553#ixzz1jlqpidxG

Monday, January 16, 2012

James Turk: 2012 to See Much Deeper Banking & Currency Collapse


from King World News:

Today James Turk informed King World News that we are now headed into a vortex, and the Lehman event was a warm-up to a much deeper, widespread crisis and collapse which lies ahead. Here is how Turk described the warning signs and what to expect: “There are all of these warning signs out there and few people are paying attention. For example, hardly anyone cares that the US has lost its AAA rating and most dismiss it as a non-event. But even a cursory look at the US government’s financial position should raise investors concerns that it will not be able to meet all of its obligations.”
James Turk continues: Read More @ KingWorldNews.com

Saturday, January 14, 2012

Foreigners Sell Record $85 Billion In Treasuries In 6 Consecutive Weeks - Time To Get Concerned?

Foreigners Sell Record $85 Billion In Treasuries In 6 Consecutive Weeks - Time To Get Concerned?

As the chart below vividly demonstrates, the traditional diagonal rise in foreign holdings of US paper has not only plateau, but it is in fact declining: a first in the history of the post-globalization world.
Well as of today's H.4.1 update, the outflow has increased by yet another $8 billion to a new all time record of $85 billion, in 6 consecutive weeks, which is also tied for the longest consecutive period of outflows from the Fed's Custody account ever. This week's sale brings the total notional of Treasuries in the Custody account to just $2.66 trillion (down from a record $2.75 trillion) and the same as April of last year.
This zerohedge.com piece from yesterday was sent to me by West Virginia reader Elliot Simon.  The graph is worth a quick look...and the link is here.

Thursday, January 5, 2012

For the first time in history, Silver Eagle & Maple Leaf sales will surpass domestic silver production in the U.S. and Canada in 2011

Silver Eagle & Maple Leaf Sales Up As Supply Slips

Commodities / Gold and Silver 2012Jan 05, 2012 - 03:25 AM
Best Financial Markets Analysis ArticleFor the first time in history, Silver Eagle & Maple Leaf sales will surpass domestic silver production in the U.S. and Canada in 2011
The demand for American Silver Eagles and Canadian Maple Leaf coins has increased tremendously over the past several years.  2011 will be the first year in which official coin sales will surpass domestic silver production in both countries.
Even though each country has seen declines in their domestic silver production over the past decade, U.S. silver production declined a whopping 30% yoy (year over year) in October.  According to the USGS in their most recent Silver Mineral Industry Survey, silver production fell to 81,400 kilograms in October— compared to 117,000 kilograms the same time last year.
As of October this year, the United States has produced 923,000 kilograms or 923 metric tonnes of silver.  This number will change as revisions are made, but currently U.S. silver production is down 15% compared to the first ten months of 2010.  At this rate, the U.S. will produce an estimated 35 million ounces of silver this year.  This is significant, as production will yield less than the approximate 40 million ounces of American Silver Eagle sales for 2011.
American Silver Eagle Sales Overtake Total U.S. Silver Production in 2011
Here we can see that U.S. silver production has declined 50% since its high of 70 million ounces in 1997.  In 1997 American Silver Eagle sales were 3.6 million, which accounted for only 5% of domestic silver production.  Contrasted to today, Silver Eagle sales are estimated to reach 40 million while domestic mine supply will decline to 35 million ounces in 2011.  Thus, American Silver Eagle sales will be 114% of the total U.S. silver supply in 2011… what a difference in 14 years.  This trend is also taking place in the country’s northern neighbor.
Canadian Maple Leaf Sales Outperform Silver Eagles in Percentage Growth
Canadian silver production has declined 57% from its recent high in 2002 at 44.1 million oz to an estimated 18.6 million oz this year.  According to the Royal Canadian Mint’s 2003 Annual Report (and including figures from previous years), there were only 576,196 Silver Maple Leaf coins sold in 2002— making up about 1.3% of the total Canadian domestic silver production.
In 2011, this figure is estimated to reach approximately 22.5 million Silver Maple Leaf (SML) sales or almost 30% higher than its previous year’s total of 17.9 million.  In comparison, 2011 American Silver Eagle sales are estimated to increase only five million sales over last year’s figures— or a 15% increase.
In the graph below we can see just how apparent this change of domestic silver supply vs. SML demand has become in the past several years:
The figure of 22.5 million SMLs for 2011 was estimated from the data obtained from the Royal Canadian Mint’s Third Quarter Report Fiscal 2011:
Sales of Silver Maple Leaf (SML) coins jumped to 6.1 million ounces during the quarter from 4.5 million ounces in the same period in 2010….During the 39 weeks to October 1, 2011, sales of SML coins increased by 56.1% to 17.8 million ounces.
If we consider that American Silver Eagle sales have declined in November, it would be appropriate to conclude that Silver Maple Leaf sales did as well.  Assuming that fourth quarter SML sales would be approximately five million (as expressed in current trends) it would give us a figure of 22.8 million oz in 2011… rounded down to 22.5 mil oz to be conservative.
If these figures are correct and the Royal Canadian Mint does sell 22.5 million Silver Maple Leaf coins in 2011, it will be at a rate of 121% of their domestic silver production.  2011 will be the first year in which both the U.S. and Canada will sell more Silver Eagles & Maples than what is available from their respective silver mining supplies.
Does the U.S. Mint Have to Use Domestic Silver Mine Supply for its Silver Eagle Production?

There has been a great deal of discussion on the internet on whether or not the U.S. Mint is by law forced to use domestic silver production for their minting of American Silver Eagles.  I have spoken with Michael White at the Office of Public Affairs at the U.S. Mint concerning this issue.  Mr. White provided me the link to Senate Bill S. 2954, passed into law in 2002, which allows the U.S. Mint to purchase silver on the open market to produce American Silver Eagles.  Wikipedia has also documented this below:
Program extension, 2002
The authorizing legislation for the American Silver Eagle bullion program stipulated that the silver used to mint the coins be acquired from the Defense National Stockpile with the intent to deplete the stockpile's silver holdings slowly over several years. By 2002, it became apparent that the stockpile would be depleted and that further legislation would be required for the program to continue. On June 6, 2002, Senator Harry Reid (D-Nevada) introduced bill S. 2594, "Support of American Eagle Silver Bullion Program Act," "to authorize the Secretary of the Treasury to purchase silver on the open market when the silver stockpile is depleted." The bill was passed by the Senate on June 21 and by the House on June 27 and signed into law (Pub.L. 107-201, 116 Stat. 736) by President Bush on July 23, 2002.
If it were true that domestic silver was required to mint these coins, the U.S. Mint would have only produced approximately 35 million oz of Silver Eagles in 2011— instead of the supposed 40 million currently estimated.  This is also true for the Royal Canadian Mint as it is now producing more Silver Maples than it can supply through Canada’s own domestic silver production. 
Even though the U.S. and Canada produce more Silver Eagles and Maples than their domestic mine supplies, neither country has regarded this as a problem because they each have enough imported silver to meet all of their industrial and investment demands.  However, this situation may change in the future as the global economy worsens and each country loses further trust in their respective fiat currencies.
The Myth Behind the So-called Silver Surplus
The investing public has been led to believe that the world is now producing a surplus of silver.  This so-called surplus was provided by information put forth by GFMS.  According to GFMS and its World Silver Surveys, there has been an annual global deficit of silver since 2003.  In 2004 the world hit its first small surplus and has continued to grow.   In 2010, the surplus was 175.4 million ounces.
To get its annual supply-deficit figure, GFMS uses a certain equation:
(Mine Production + Silver Scrap) – (Fabrication - Coin & Medal) = Surplus- Deficit
If we plug in 2010’s figures this is the result:
(735.9 + 215) = 950.9 – (878.8 - 101.3) = 775.5 = +175.4
GFMS has decided that coin and medal demand should not be included in the Fabrication total but rather as a form of bullion supply.   So the higher the coin and medal demand, the more it adds to the so-called silver surplus.  The majority of this category of “Coin & Medal” consists of official government coins that are in high demand and are not of the type that would be sold for melt and recycled back into scrap supply.  If we look at the chart below, we can see how GFMS has created this so-called silver surplus:
101.3 million of those 175.4 million oz of so-called surplus came from coin & medal demand in 2010.  I find it interesting that GFMS has decided to treat the “Coin & Medal Category” (the majority of which are coins not readily available for melt and recycle) as supply rather than demand, but allow silver scrap from recycled fabrication to be used as a form of supply. 
If we think about it for a minute, the whole idea of a surplus as expressed by GFMS is nothing more than an accounting gimmick.  In 2010, there was 215 million oz of silver scrap added to the total supply.  A large portion of this amount came from recycling silver from industrial scrap.  Every year a certain amount of silver supply goes into industrial fabrication and of that amount, a percentage gets recycled into silver scrap which becomes supply in the following years.
Ask yourself this question… what would be considered more of future supply?  Would it be comprised of official government coins that are in high demand and held for many years for their investment potential or a percentage of recycled silver from industrial fabrication?  Even if investors sell Silver Eagles or Silver Maples back to a dealer, that dealer normally resells these coins back to other investors.  These coins are the least likely to be melted and recycled.
Even if we were to go by the GFMS and their silver surplus vs. deficit figures, there is another interesting trend taking place.  As coin and investment demand has risen, so has the price of silver.  During the years attributed to a silver deficit, the price of silver remained relatively flat.  As the so-called surplus has increased, so has the price of silver.  Either way, silver investment is pushing the price of silver higher. 
There have been several analysts who have stated that future silver surpluses will keep a lid on the price of silver.  Here we can see that this is not the case at all.  On the contrary, it has been due to investment demand that both the price of silver and the so-called surplus supply have grown.
The Coming Paradigm Shift in Silver
This is the subject of my next article which will be out shortly.  The paper-backed situation in the world’s economies and financial system is grim.  Silver should be priced at a level several times higher than it presently trading.  Too many investors are becoming hypnotized by the technical analysis.  However, technical analysis is a valuable tool in a FREE MARKET.  Unfortunately, the markets and the silver charts are being manipulated while analysts who recreate these charts in their articles may not realize that they are actually helping the manipulators do their work by legitimizing its function on the internet’s financial websites. 
Even though supply and demand factors contribute to the price of silver, it will be the shift in psychology that will propel the price of silver towards the heavens.  This psychology has been slowing changing as the graphs above reveal an interesting trend taking place in the U.S. and Canada.  In 2002 both countries produced 87.5 million oz of silver and sold 11 million Silver Eagles and Maple Leaf coins.  These coins sales accounted for 12.6% of U.S. and Canadian silver production.
In 2011, just nine years later, the U.S. and Canada are estimated to mine only 53.6 million oz of silver combined, while their total Silver Eagle and Maple Leaf coin sales are to surpass approximately 62.5 million.  Thus, their coin sales are 16% greater than their total domestic silver mine supplies.
Investors in increasing numbers over the years have been buying physical silver.  While this number is growing, it is still a fraction of a fraction of the country’s population.  Even though 40 million Silver Eagles were sold in 2011, this accounts for one coin for every eight Americans. 
The Great Stampede in Silver is yet to come.
UPDATE:  Since the completion of this article, the U.S. Mint has updated its 2011 American Silver Eagle sales.  The grand total for 2011 turns out to be 39.8 million Silver Eagles sales while the month of January 2012 starts off with a whopping 3,197,000 sales on the first business day of the year.   This is speculation on my part, but instead of updating the Silver Eagle figures during the last few days of 2011(as it normally does on a more regular basis), the U.S. Mint decided to dump all the remaining sales onto January 2012.
Steve St .Angelo Independent researcher residing in southwest Utah