Silver can not go back down with the current monetary system.

How does Silver ever Fall?

By Andy Pearce

Defining Terms

Only physical silver is silver. Physical silver is not something that is not made of silver. Physical silver is easy to tell because it is made entirely of silver. Most people with an MBA will find this hard to believe. Most people without an MBA are reading this and saying: “Well, duh!”  E.T.F.’s.  Electronically Traded Futures.  That is not silver. It is electronic. It is traded, but it has no future.  A silver futures contract is a contract to buy or sell a specific weight of silver at a designated time in future, at an agreed price defined at the time the contract is entered.

Silver futures contracts were originally designed to protect large industrial users of the precious metal from adverse price swings by enabling them to obtain or supply a steady quantity of silver at established prices in order that their respective businesses will be able to make a profit.  Now they are used to fleece the small investor and drive the price of silver down by flooding the market with the promise of silver, which does not exist.

Year	Silver price (yearly avg.) US$ per ounce	Gold price (yearly avg.) US$ per ounce	Gold/silver Ratio
1840	1.29	20	15.5
1900	0.64	20	31.9
1920	0.65	20	31.6
1940	0.34	33	97.3
1960	0.91	35	38.6
1970	1.63	35	22.0
1980	16.39	612	37.4
1990	4.06	383	94.3
2000	4.95	279	56.4
2005	7.31	444	60.8
2009	14.67	972	66.3
2010	20.19	1225	60.7
2011 (28th Feb)	33.49	1411	42.1

How does the price of silver fall?

•           It does not.

•           While there can be micro changes within a certain range, we cannot again get to $5.00 silver without the economy imploding and a new currency being created. Really, I recently asked a mathematician who was skeptical of my claim to do the math and tell me how we keep the current economic model and lower the price of precious metals.  My skeptical friend became less skeptical.

Adjusting This Template

•           I still just don’t think silver investment is for me.

•           Ok. I am not responsible for you.  Read “the Five Thousand Year Leap”.  Don’t even read anything but the forward. 

•           If you require documentation just Google Silver and investing. You can find all this information for yourself.

•           From 1973 the Hunt brothers began cornering the market in silver, helping to cause a spike in 1980 of $49.45 per troy ounce and a reduction of the gold/silver ratio down to 1:17.0 (gold also peaked in 1980, at $850 per troy ounce).

•            In the last nine months of 1979, the brothers were estimated to be holding over 100 million troy ounces of silver and several large silver futures contracts. However, a combination of changed trading rules on the New York Mercantile Exchange (NYMEX) and the intervention of the Federal Reserve put an end to the game.

•           In 1997, Warren Buffett purchased 130 million troy ounces (4,000 metric tons) of silver at approximately $4.50 per troy ounce (total value $585 million). On May 6, 2006, Buffett announced to shareholders that his company no longer held any silver.

•           In April 2006, iShares launched a silver exchange-traded fund, called the iShares Silver Trust (NYSE: SLV), which as of November 2010 held 344 million troy ounces of silver as reserves.

•           In April 2007, Commitments of Traders Report revealed that four or fewer traders held 90% of all short silver futures contracts totaling 245 million troy ounces, which is equivalent to 140 days of production. According to Ted Butler, one of these banks with large silver shorts, JPMorgan Chase, is also the custodian of the SLV silver ETF. Some silver analysis have pointed to a potential conflict of interest, as close scrutiny of Comex documents reveals that ETF shares may be used to "cover" Comex physical metal deliveries. This led analysts to speculate that some stores of silver have multiple claims upon them. On 25 September 2008 the CFTC relented and probed the silver market after persistent complaints of foul play. On September 1, 2010, Bloomberg reported that JPMorgan Chase would be closing their Proprietary Trading Desk.

Final Note

If you are anything like me, most of this sounds like: “Blah blah blah blah Money, Blah blah blah Silver, blah blah blah.” I don’t sell silver. I don’t make a living from investments or commodities.  I just think that people should be allowed to make a fair informed decision about reality.  Don’t like reality… Change it! Please.  I want silver at $4.00 an ounce. Because at $4.00 an ounce we are a strong nation and free once again.