Financial turmoil on a global scale has encouraged investment in physical stores of precious metal bullion. Silver and gold are maintaining strong positions in the portfolios of organizations and individuals wishing to protect monetary assets.
For those who want physical control over their highly liquid precious metals, bank depositories, like vaults and safe deposit boxes are no longer the answer. Recognition of silver and gold as “safe haven” assets, should international fiscal emergencies proliferate, is causing many to seek private depositories to store their bullion.
These specialized storage facilities often hold customers assets off their balance sheets, in order to maintain the exclusive claims of their owners. Twenty-four-hour security, separate insurance and immediate availability for direct shipment and transfer are convenient and protective features of these sequestered accounts. Strict adherence to operating protocols for handling investor holdings provides additional security for investors. Private vaults are typically located close to transportation hubs for greater accessibility to transport methods.
At the end of World War II, the United States had racked up a staggeringly oppressive debt burden. At the time, policies were implemented in order to propagate financial repression. A moderate inflation rate, minor economic growth and a situation that would induce banks to purchase debt were conditions required to maintain financial repression.
In the current period of financial repression, one more stipulation has been added. This is the ability of banks to hide the value of physical silver in paper instruments. Circulating currency is no longer worth the value of the silver it previously contained. This allows the major banks to hold enormous short positions in silver.
The result of this silver market manipulation is quick profits for the banks. Additionally, this makes it possible for the banks to control and purchase long positions in silver bullion without maintaining any vested commercial interest in the physical metal. The terms “hedging” and “derivatives” are names given to legitimize these suppressive practices.
With growing concerns about a global economic slowdown, particularly in the Euro-Zone, and the Federal Reserve’s recent decision not to pursue aggressive stimulus measures, you may have heard the demand for safe haven investments has fallen. While that may be true in the near term, the crisis of 2008 taught us we can never be too careful; the next crash could come at any time, from anywhere.
The leading silver producers project supply increases for the remainder of 2012. That means your opportunity to invest in silver bullion and silver rounds may never be better than it is now. Both industry and individual investors buy silver, so it will always be in demand. Add to that these turbulent economic times, and silver bullion and silver rounds remain one of your best bulwarks against the instability of stocks and high-risk mutual funds.
Don’t let short-term trends and market fluctuations jeopardize your portfolio. Keep your commitment to silver bullion strong.
The price of silver has decreased by nearly one-half since its record high of nearly $50 in early 2011. The effects of a wavering world economy are making their way down to small and medium sized silver producers. For many of these companies, compromises in capital are necessary to continue financing their operations.
Factors affecting silver mining interests are tangible and varied, but all relate to the continuing global economic crisis. European fiscal issues are helping to depress all commodities prices. As the dollar strengthens, many are investing while precious metals valuations stagnate. US Treasuries, although producing the lowest yields in history seem to be a reasonable refuge.
Future silver growth seems almost guaranteed as industrial demand continues to climb. Silver is much more easily and inexpensively recycled than gold. With European financial institutions struggling, a major source of capital for mining is diminished. Silver producers fear that production halts could occur, as plummeting silver prices make mining less profitable.
Eric Sprott is one of the most well known and highly respected investment managers in Canada. His charitable entity, The Sprott Foundation, dedicates itself to providing for Canadians who have urgent basic needs, particularly lack of food and shelter. Sprott, himself is chief executive officer of Sprott Asset Management, which operates the foundation and holds nearly all of its assets in the form of gold bullion.
Recently, Sprott has been trumpeting the advantages of owning silver bullion, as well. He even put his money where his mouth was last August, by trading two million units of his London Good Delivery Gold Bars, in order to purchase an equal value of silver bullion.
Sprott monitors precious metals prices to gain advantage by capitalizing on relevant factors, such as market conditions. His belief in the increasing rarity of silver, due to accelerated global consumption, seems to be propelling him into ever larger silver holdings.