Last week I told everyone to take delivery, and I meant it. However, I forgot to mention how easy it is to get rid of those thousand ounce bars which you get when you close your futures contract, or when you have them stored in the so called “warehouses” of the COMEX. It may seem like a big problem, because that silver is sitting in a New York bank, and you are at 40th and Plum. (40 miles out of town and plum out in the country) Not so! Here’s how it can work with me anyway.
Call me, tell me where the silver is stored. Be sure your storage fees are paid, and get the receipt for the silver. Sign it over to whomever I sell it to. You will get a credit for whatever amount of ounces there are in storage, at probably a nickel or less under spot, with no charge on my part. You will then have a credit for the full value of the bar you had in storage. This credit can then be taken for purchase of hundred ounce bars, ten ounce bars, gold, eagles, or whatever metals you choose. You don’t have to lift a finger.
You will have taken that much silver out of circulation, and out of “warehouse” hands, and will therefore have hastened the day when the silver supply is completely exhausted, and the price will shoot skyward. The silver you took delivery of, but left in the hands and banks of the COMEX or other outfits, will be in your hands, not theirs.
While I do not think that confiscation will ever happen, if it did, I will guarantee you that the first silver to be confiscated, would be that silver in those storage banks on the east coast. What an easy plucking that would be, “in the name of a national emergency,” or some such nonsense.
Now about confiscation, which I refute every day it seems. I think that for the federal government to confiscate your gold or silver, would be so impossible, that it will never happen. They spend $600 for hammers, and $1,000 for toilet seats. How much do you think it would cost them to even think about tracing down you or your cousin Charlie’s silver? How would they know who has it? I’ll never tell. Even if they knew, it would be like trying to round up unregistered guns or drugs. The war on drugs is a howling success now, isn’t it? All those efforts to stop the world’s oldest profession have been hugely successful now, haven’t they? Your answer, even in the one in a million chance that it could ever happen, would be, “Me? Oh I sold that stuff years ago.” Or, “Gold? Not me, I traded it in for a 1931 Pontiac last year and it caught fire when the carburetor flooded and a spark from the distributor lit it.” My gawd people, do you realize how helpless a bureaucrat is? Do you really think they would try to snoop out all of the millions who have bits of gold and silver? Why wouldn’t they simply take the mines or stop selling Gold Eagles? Is the 4th Amendment totally gone?
As a classic example of the know how and expertise of the feds and bureaucracy in general, check out how they have found Osama bin Laden, after years of searches. And you think they’ll spend time trying to find out where your little stash is, or even care? Cut out the emotions and substitute logic, and you will realize that confiscation will not happen, and no, never did in the past.
What is better, gold or silver? Both are good. Both are historic money. Both will go up in failing dollars and other fiat currencies. I suspect that in the near term, gold will do better, because of the turmoil in the world and Dubya’s crazed desire to get us into a war. Silver consumption is about twice what is being produced, and no one knows where it is coming from. Even if the bums that unethically trade non-extant silver on the COMEX weren’t hauled in and stopped, the potential rocket rise of silver will happen, but it might not be tomorrow. If you want instant profits, go to gold. If you can take some time, and have a place to store it, silver is your baby. Either is better than pieces of paper with ink on them.
I consider the normal ratio between gold and silver to be about 35 to 1, even though in 1980 it was 16 to 1. Historically, before the “crime of ’93,” it was always pegged at 16 to 1. As I scribble this, it is 75 to 1, and is highly indicative of a time to buy silver. Hang the ratios, is what the stock brokers said about PE ratios on the NASDAQ, and they were wrong. Extremely wrong. The ratios say silver is an incredible buy, and those ratios indicate that, percentage wise, silver will go up faster than gold. It may, if the ratios mean anything.
I got an e-mail from a fellow in Canada, who says that Chinese silver has largely replaced what his company used to supply to Kodak, and I am certain this is true. Think about it though, and decide if the Chinese will continue to do this. Platinum has shot up like a 4th of July rocket, and three years ago it was half of its current price. Why? Because most platinum comes from South Africa and Russia. I hear there’s a strike in Russia, but whenever the supply slows or stops, the prices go up. Platinum therefore, has gone from $325 to $700, because its supply has been curtailed. If the Chinese are indeed sending some silver into the market, it won’t last long when they discover that if they withhold it, the price will go upward. There just isn’t any silver out there people, and the demand for it is constant. When it actually runs out, those COMEX traders will make a ton of dough if they are long at least till it is found out that they can’t deliver what they never had in the first place. That’s why you need to take delivery of whatever silver receipts and promises to deliver you have. Another E-mail from a fellow in Canada, who has a lot of silver receipts for thousand ounce bars “stored” in Scotia bank. Guess what? They will not deliver them other than for a huge cost; possibly meaning they don’t have them. Enough shallow promises. Receipts for silver that doesn’t exist, is nothing more than a rubber check in the banking field. Call their bluff and take delivery.
Meantime, though, protect yourself!