Posted: 26 Aug 2014 02:00 AM PDT

If you've been watching silver for some time, you know it's been in the doghouse.

After peaking at $49 back in April 2011 the white metal is down 60%, having languished between $19 and $22 for the past two years.

But a confluence of factors is building that make today's silver prices look downright cheap.

Here's how the bull is going to run - and how you can ride it all the way up from here...

The Pattern: Where Gold Goes, Silver Follows

To explain how the precious white metal behaves, I like to use the phrase: silver is like gold - on steroids.

What I mean by that is, when gold starts to move, whether down or up, silver tends to follow its lead. But its losses or gains usually magnify those of gold.

Gold's bull market started back in 2001 from a bottom of $256. It eventually peaked in 2011, turning in a gain of 642%.

Silver bottomed at $4.15 in 2001, than peaked in 2011 at $49, having gained 1,080%. So, from peak to trough, silver's gain was nearly twice that of gold's.

That leverage looks very exciting, but investors need to be cautious and recognize that it works both ways.

Since those highs, gold has retreated 32%, while silver's off by 60%. Again, that's a nearly 2:1 magnification that shows these metals are tied together.

These Indicators Are Undeniable: Silver Bull Market Ahead

In order to gauge how silver is priced relative to gold, one useful tool is the gold-to-silver ratio.

We calculate this indicator by simply dividing the gold price by the silver price which, right now, yields about 67. In simple terms, that means right now an ounce of gold will buy roughly 67 ounces of silver.

Historically, that ratio has been closer to about 16. On that basis, silver is still very cheap.

If we look at the gold-to-silver ratio since the current bull market began in 2001, it averaged closer to 55 before the 2008 financial crisis and stock market panic.

I believe that, as this bull market progresses, the gold/silver ratio will not only return to its pre-Panic average of 55, but will ultimately peak somewhere closer to 20.

What does that mean right now?

Well, if gold were to stay put at $1,300, and the ratio returned to 55, then silver would climb by about 20% to around $23.50/ounce.

But there are several other drivers, in addition to a reversion to the mean of the gold/silver ratio, which are likely to help drive silver a lot higher in the months and years ahead.

The price of silver may be flat on a year-to-date basis, but that's not the case for silver miners.

If we use the Global X Silver Miners ETF (NYSE Arca: SIL) as a proxy, the miners are in fact up 25% this year by comparison. That's some outperformance, and it speaks to a burgeoning interest in this sector.

We've also seen a bullish technical signal back in early July. That's when SIL completed a golden cross, with its 50-day moving average crossing up above its 200-day moving average as you can see in the chart at right.

And even though the silver price is flat on the year so far, investor interest is strong. Silver ETFs backed by physical silver added 7 million ounces in the first half of 2014.

Demand Is Up in All Corners of the Market

According to Thomson Reuters, GFMS sales of silver coins are up 4.5% globally in the first 6 months of this year. U.S. Mint sales are near record levels attained in the first half of 2013.

On the industrial side demand has also been robust, with Thomson Reuters forecasting a 23% increase for 2014.

Silver is indispensable in the chemicals sector. Ethylene oxide is critical to the production of plastics, solvents, and detergents, and silver plays a major role here.

Green energy is significant for silver demand as well. Metals Focus, another consultancy, expects the use of silver in solar panels to leap ahead 10% this year alone.

Another potential driver for higher silver prices is the price-setting mechanism itself.

Real Hope for a Cleaner Silver Price Discovery System

After more than 117 years of the silver fix, a new electronic auction-based system will now help set the silver price.

Sadly, that's come in the wake of a lawsuit against HSBC, Deutsche Bank, and the Bank of Nova Scotia for allegedly attempting to rig the price of silver. A similar problem hit the gold price fix, ending with Barclays facing a $44 million fine.

While there's some hope transparency will reign in this new price discovery mechanism, it's still early and there are only three participants, two of which were part of the old silver fix.

The London Bullion Market Association will accredit participants and own the intellectual property rights. Meanwhile, the CME Group will provide the electronic auction platform (to calculate the silver price) and Thomson Reuters will be responsible for administration and governance.

To some extent, it would seem the fox is being put back in charge of the henhouse. But it is still early days, so I'm willing to give the process some time to mature. As more participants join, especially some from outside the realm of banking, odds will improve for true price discovery.

If confidence builds, and true transparency reigns, that too should bolster the price of silver.

We don't want to be left out of the party when the inevitable bull run starts, and here's how we can profit...

Two Silver Mining Investments to Buy Now

If your portfolio doesn't already have a silver lining, it's time to have a closer look.

For direct exposure, consider the iShares Silver Trust ETF (NYSE Arca: SLV). It does a good job of tracking the price of silver, offers plenty of liquidity, and has an expense ratio of just 0.5%.

For a lot more leverage and volatility, consider the PureFunds ISE Junior Silver ETF (NYSE: SILJ). It's basically rocket fuel for the silver sector, as its holdings are essentially small cap silver producers and explorers. You may want to use a wider than normal trailing stop to account for the fund's volatility, and take some profits as they appear.

Remember, silver is cheap based on a number of indicators, and its bull market is far from over.

So the time to take a position is now, before the crowd, to benefit from this "gold on steroids."

How to Invest in Silver Today for Double-Digit Gains :: The Market ...

Posted: 27 Aug 2014 09:52 AM PDT

Commodities / Gold and Silver 2014 Aug 27, 2014 - 02:52 PM GMT

By: Money_Morning

If you've been watching silver for some time, you know it's been in the doghouse.

After peaking at $49 back in April 2011 the white metal is down 60%, having languished between $19 and $22 for the past two years.

But a confluence of factors is building that make today's silver prices look downright cheap.

Here's how the bull is going to run - and how you can ride it all the way up from here...

The Pattern: Where Gold Goes, Silver Follows

To explain how the precious white metal behaves, I like to use the phrase: silver is like gold - on steroids.

What I mean by that is, when gold starts to move, whether down or up, silver tends to follow its lead. But its losses or gains usually magnify those of gold.

Gold's bull market started back in 2001 from a bottom of $256. It eventually peaked in 2011, turning in a gain of 642%.

Silver bottomed at $4.15 in 2001, than peaked in 2011 at $49, having gained 1,080%. So, from peak to trough, silver's gain was nearly twice that of gold's.

That leverage looks very exciting, but investors need to be cautious and recognize that it works both ways.

Since those highs, gold has retreated 32%, while silver's off by 60%. Again, that's a nearly 2:1 magnification that shows these metals are tied together.

These Indicators Are Undeniable: Silver Bull Market Ahead

In order to gauge how silver is priced relative to gold, one useful tool is the gold-to-silver ratio.

Historically, that ratio has been closer to about 16. On that basis, silver is still very cheap.

If we look at the gold-to-silver ratio since the current bull market began in 2001, it averaged closer to 55 before the 2008 financial crisis and stock market panic.

I believe that, as this bull market progresses, the gold/silver ratio will not only return to its pre-Panic average of 55, but will ultimately peak somewhere closer to 20.

What does that mean right now?

Well, if gold were to stay put at $1,300, and the ratio returned to 55, then silver would climb by about 20% to around $23.50/ounce.

But there are several other drivers, in addition to a reversion to the mean of the gold/silver ratio, which are likely to help drive silver a lot higher in the months and years ahead.

The price of silver may be flat on a year-to-date basis, but that's not the case for silver miners.

If we use the Global X Silver Miners ETF (NYSE Arca: SIL) as a proxy, the miners are in fact up 25% this year by comparison. That's some outperformance, and it speaks to a burgeoning interest in this sector.

And even though the silver price is flat on the year so far, investor interest is strong. Silver ETFs backed by physical silver added 7 million ounces in the first half of 2014.

Demand Is Up in All Corners of the Market

According to Thomson Reuters, GFMS sales of silver coins are up 4.5% globally in the first 6 months of this year. U.S. Mint sales are near record levels attained in the first half of 2013.

On the industrial side demand has also been robust, with Thomson Reuters forecasting a 23% increase for 2014.

Silver is indispensable in the chemicals sector. Ethylene oxide is critical to the production of plastics, solvents, and detergents, and silver plays a major role here.

Green energy is significant for silver demand as well. Metals Focus, another consultancy, expects the use of silver in solar panels to leap ahead 10% this year alone.

Another potential driver for higher silver prices is the price-setting mechanism itself.

Real Hope for a Cleaner Silver Price Discovery System

After more than 117 years of the silver fix, a new electronic auction-based system will now help set the silver price.

Sadly, that's come in the wake of a lawsuit against HSBC, Deutsche Bank, and the Bank of Nova Scotia for allegedly attempting to rig the price of silver. A similar problem hit the gold price fix, ending with Barclays facing a $44 million fine.

While there's some hope transparency will reign in this new price discovery mechanism, it's still early and there are only three participants, two of which were part of the old silver fix.

To some extent, it would seem the fox is being put back in charge of the henhouse. But it is still early days, so I'm willing to give the process some time to mature. As more participants join, especially some from outside the realm of banking, odds will improve for true price discovery.

If confidence builds, and true transparency reigns, that too should bolster the price of silver.

We don't want to be left out of the party when the inevitable bull run starts, and here's how we can profit...

Two Silver Mining Investments to Buy Now

If your portfolio doesn't already have a silver lining, it's time to have a closer look.

For direct exposure, consider the iShares Silver Trust ETF (NYSE Arca: SLV). It does a good job of tracking the price of silver, offers plenty of liquidity, and has an expense ratio of just 0.5%.

For a lot more leverage and volatility, consider the PureFunds ISE Junior Silver ETF (NYSE: SILJ). It's basically rocket fuel for the silver sector, as its holdings are essentially small cap silver producers and explorers. You may want to use a wider than normal trailing stop to account for the fund's volatility, and take some profits as they appear.

Remember, silver is cheap based on a number of indicators, and its bull market is far from over.

So the time to take a position is now, before the crowd, to benefit from this "gold on steroids."

Source : http://moneymorning.com/2014/08/26/how-to-invest-in-silver-today-for-double-digit-gains/

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Will gold and silver really be a good investment when the SHTF ...

Posted: 27 Aug 2014 06:41 PM PDT

Graywolf
Graywolf Survival
August 27th, 2014
Reader Views: 2,550

Should you invest in silver or gold for a safety net in case the economy gets worse? I'm going to go over the pluses and minuses of each and tell you what I think.

Some of you who've now been reading Graywolf Survival for a while may remember a quick article I wrote a while back on breakable gold bars which was interesting, but not really practical for most people. I've been meaning to come back to the general idea of barter and commodities after SHTF for a while but frankly, I just got sidetracked with finding a job after returning from Afghanistan and spending some time in the Bahamas. I really should sit down someday and come up with a plan of posts to write but whatever.

I've seen a lot of stuff out there on buying silver and gold due to the economy tanking and whatnot. A lot of that stuff is pure crap just to get you to buy silver and gold from whatever link you happen to be linking on so they can get their commission. I do believe that it would benefit you to do some research and consider buying precious metals but make sure you diversify your investments into other things – like learning.

I see this all the time when someone brings up the idea of buying something like silver or gold to be used for barter if SHTF. Someone (a lot of someones, actually) always pipes up with some crap like "you can't eat silver."

Thanks Captain Obvious. You also can't eat bullets. And you can't wear food. But you know what you can buy food, bullets, and clothing with? Silver and gold. Also, you don't know what's going to happen if society collapses, so stop pretending like you do.

Prepping is all about investment – that's the whole point. You invest time, money, space, and energy into things in advance of some upcoming emergency or disaster situation. As I've mentioned in previous posts, due to opportunity cost (I haven't read the book in that link but it's hella expensive so it must have a bunch of good stuff about opportunity cost in it – $94 kindle FTW!), when you make one decision, it's at the expense of all others. The problem is that with prepping, you don't really know what you should be investing your time and money on because you don't really know what crap is gonna come. All you can do is learn what you can, make an informed decision, act, rinse, repeat.

Silver and gold trading has always been a large part of commodity trading ever since ancient man realized that ancient women would sleep with them if they brought them shiny stuff that other ancient women didn't have. From that, it became so popular that gold became the standard of bartering.

Precious metals have ALWAYS had value as an intermediate commodity in every social collapse in the history of mankind. You can't directly trade with everyone because you might have alcohol but they don't need alcohol. They might have tools to trade, but you don't need tools. By having a commonly-accepted commodity, you can trade with each other, knowing that you'll be able to still trade your goods later.

Also, if what you're trading has an expiration date (like food), you can't always wait for someone to come along with something that you need to barter with them. By using an intermediate commodity like silver or gold, you can take the trade now and use the commodity later. Otherwise you end up throwing out a bunch of good food or trading it at a severe loss.

If you think that society will completely collapse and there will forever more never be a society, they anything without intrinsic value would be useless. History has shown us for thousands of years, time and time again, that this isn't the case.

Don't just take my word for it, read The Silver Bomb: The End Of Paper Wealth Is Upon Us, which goes through the history of currency and explains why the authors believe that the world will soon return to gold and silver as money.

Is gold a better investment than silver?

Now I'm not gonna go into which will appreciate the most because that really depends on what the price is when you buy it and what the prices is when you sell it. I'm just comparing the two products here. Rich Dad's Advisors: Guide to Investing In Gold and Silver: Protect Your Financial Future , which explains how and why you should be investing in gold and silver, would be a much better place to read something like that.

The problem with gold, is that it's expensive. Real expensive, as you can see from the Breakable Gold Bars article I mentioned. That's great if you're storing it in a bank vault. Not so great if you're carrying it around for daily use. It's a bit difficult to shave off a tiny amount to buy a loaf of bread. Kinda like walking into a dollar store with $1,000 bills. Unless you're buying a large item or they're willing to make change somehow, you may have no choice but to overpay.

Silver, however is a bit easier to carry. At current prices, gold is about $1,200 per ounce and silver is $20 as of the time of this article. For all you math-deprived individuals, that means that a chunk gold to buy something will weigh about 1/60th of the same amount of silver. Sounds good on the surface but if you were looking to buy something like a chicken, assuming they're about $5 for argument's sake, you'd have to buy 280 of them for an ounce of gold or just 4 or 5 for an ounce of silver. In other words, a chicken is 1/240th of an ounce of gold and 1/4 of an ounce of silver. A pocketful of gold my ass.

Enough of that. Now my head hurts from math and I'm hungry. Time for another drink.

So why are we talking about all this anyway? If you've decided to invest in precious metals, buying silver may actually be a smarter choice than gold for practicality. If so, you can head to a local jewelry or pawn shop and get some or a website like CBMint.com or Buysilvercoins.com. If you'd like to go entirely the other direction, platinum or some other pseudo-unobtanium may be what you're looking for to hold as much value in as little space as possible but it's probably not the best choice for preppers.

Should you invest in silver or gold?

Now, the big question is: should you be buying silver or even buying gold in case SHTF? In short: yes. Kind of. Remember, investing in skills is much better in the long run. Some think that bullets, alcohol, or tobacco may be the way to go. Remember though that the reason gold and silver are ALWAYS popular when things go to crap is because pretty much EVERYONE accepts them as a form of payment because it's always been that way. You can't sell bullets to someone without a gun or alcohol to someone who doesn't drink – unless they're just using it in hopes that they'll run across someone who does.

As I keep trying to get across, you need balance in your life. If you're only worried about the end of society then gold and silver may be a good bet. The reality of the situation is that every dollar you invest in gold and silver (bullion, coins, jewels, whatever), is a dollar you can't invest in something else like land, food, water, school, etc.

What happens if TEOTWAWKI doesn't come for 32 years? Or 320? Gold and silver do fairly well in most economic conditions, especially when they're crap, but don't do as well in other times compared to other investments. For all you know, even if you're concerned about some impending end of your way of life, TEOTWAWKI could come in 32 years and you could be hit by a bus in 31. One thing I've seen though is that eventually, precious metals always go up.

If you're going to invest, you have to consider not only SHTF but all the time before that. By investing wisely, you'll have not only a better life for the next XXX years, you'll be better off if SHTF. Just don't forget that if society does collapse, all the money in your portfolios and in your digital bank accounts will instantly become worthless. Just like if Justin Bieber becomes king of the US and declares all gold worthless, whatever investment in those assets may not pan out. This goes the same for land, learning, food – whatever. An investment only pays off when you sell it. Unless it's a Harley. Then it pays off every time you ride it. Or a girl sees you ride it.

So what does all this rambling boil down to? In my limited perception of what is and what will be, my personal thoughts are that you should be investing in gold and silver, as both a SHTF solution and as investments in themselves. You should also be investing smartly in other investments such as stocks and bonds in the chance (the most likely chance) that shit isn't gonna hit the fan in the next decade or so that would collapse society to the point that we'd be back to a full barter system.

I also believe that in a TEOTWAWKI scenario, silver is probably a better choice than gold due to its utility but may or may not perform as well in the meantime.

Basically, invest with all of your future in mind – not just the end of the world. Also, diversify your positions in whatever you're investing because you don't know what's going to happen with the market. Then keep in mind the non-trade utility (such as storage, protection, etc) of whatever your investments are in several different SHTF and non-SHTF scenarios.

Before you go out and pay top dollar for gold or silver, check out places like this link for deals that occasionally come up. You can not only save money, you can get some pretty creative ways to buy it.

But what percentage of your disposable income should you be putting in gold/ siver/ land/ school/ learning/ ammo/ alcohol/ medicine/ widgets? That's a good question. You'll have to read something like The Intelligent Investor to find the answers on that one.

Just make sure you don't put all your eggs in one basket – even if they are gold.

Delivered by The Daily Sheeple

Contributed by Graywolf of Graywolf Survival.

Graywolf is a military veteran who has deployed to combat theaters in Africa, Iraq and Afghanistan. He has almost three decades of military and military contracting experience. His goal with the website Graywolf Survival is to help preppers and others prepare for SHTF or just everyday life.

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