Monday, January 31, 2011
Silver prices set to take off?
A strange start to the year and a strange end to a volatile week, so we take a whiz across the air waves in order to get a ‘feel’ of whats going on, so this will be a mixed bag of data. The first eye catcher is this:
Eric Sprott - Expect $50 Silver, Gold Possibly $2,150 by Spring.
What follows is brief summary of an interview that he gave to King World News.
Eric Sprott recently launched a silver fund and so entered the market to acquire 15 million ounces of physical silver, to his surprise it wasn’t readily available and in fact it took 10 weeks to get his order filled. Another order placed for 1 million ounces has been given a delivery period of around 2 months. The silver that he received looks to have come directly from the refiners as it is so new. This again tells us that that the supply side is indeed very tight. On the subject of China Eric drew the listeners attention to this interesting dynamic; In 2005 China exported 100 million ounces of silver, fast forward to 2010 and China imported 100 million ounces of silver, thats a 200 million ounce turnaround in an 800 million ounce market.
Other influential factors included:
One of China’s major banks has offered their customers a facility whereby they can save a portion of their savings in gold, they then had to open one million accounts which required 10 tones of gold to satisfy the demand. He then ponders the outcome if this idea were to spread throughout China and further afield, say to India. What is the effect if we get an extension to QE2 or even a QE3? The current meeting at Davos were the possibility of a 100 trillion dollar fund is being considered. The UK, where economic confidence remains rather weak. (The Bank of England supremo, Mervyn King talks of the UK being in a depression.) Over in the United States the social security department has announced a 45 billion dollar overspend for 2011.
There appears to no hiding place as the currencies via for pole position in a race to the bottom. Rallies are no longer based on an individual currencies merits, but rather just how slowly the other fiat currencies are falling apart.
In India,China, Asia and many other countries throughout the world the concept of receiving money for doing nothing is laughable. For the western world to remain remotely competitive, welfare, social security, bailouts, handouts, freebie benefits are existing on borrowed time, you have been warned. Securing your own financial independence has now reached a critical stage, think, plan and implement new ways to supplement your income.