An Exceptional Opportunity

[webmaster]

Subject:An Exceptional Opportunity
By: Ted Butler

Overview: Such opportunities do not come around very often in a person’s lifetime. I’ve personally put a lot of money into silver because I see it as the greatest profit opportunity to come along in decades. There’s no guarantees in life, and without taking some risk you can’t earn a high enough return on your money to beat inflation. It’s time to have 10% to 20% of your net worth in actual physical silver. If the greatest silver expert who ever lives (no doubt a genius on the subject) is telling you this is the moment in time we’ve been waiting for, then you should act on that advice.

Link: http://news.silverseek.com/TedButler/1223353403.php

[BULLBULL]

Heard this all before. Optimistic despite the facts. I sincerely wish I had never read Mr Butler. These rants about manipution blah blah blah just lead nowhere. They have control of the markets and will not let go. We've all lost our shirts listening to this bologna. If silver ever starts to go up in a big way they'll just cap the price. Sad lot we silver bugs.

Shirtless
BULLBULL

You're optimism about the commodities investigation is pitiful.

[Cowboy]

Ted,
I agree with so many of the fundamental arguments you make. Likewise, as I look at the market situation, and gold/silver's dual monetary nature throughout history, I find it hard to believe that with increasing unemployment, a worldwide systemic failure of the banking system (and it can be called nothing less), and the economic implications from the credit crisis, gold and silver are actually losing money (albeit with some volatile daily gains here and there). It strains all semblance of credulity at this point, as bank failures are common, and stocks march to the slaughter of an economy that cannot support increased or even status quo earnings. I ask myself where does one put their money? What else is safe in comparison to gold and silver? Surely not stocks, unless in mining companies. A bank? So you can receive less valuable FDIC insurance dollars in a few months after your bank folds? And is the mere ability to hold on to your money investment at all? If FDIC dollars are the goal, we're better off if we start stuffing our mattresses right now. Because if FDIC dollars are the best we can hope for after our bank fails, the system's broken.

So, I become more and more interested in the exact mechanism of governmental influence in the prices of gold and silver. What becomes clear to me is that the government is, somehow, curtailing the price of silver and gold. The undeniable explosion in demand for gold and silver products, without any offsetting supply explosion, demonstrates that there is a false mechanism in place keeping those prices in line. I just don't get how that is able to be done.

Flooding the market with the supply of dollars, which is what is happening (the way you unfreeze a credit crunch is to jolt it with an infusion of cash) would seem to be, by definition, inflationary. The rescission of the economy is deflationary. Yet silver and gold, whose demand is, unlike virtually every other service or product, exploding, has lost value. How is that done? There may be enough gold to sell gold in order to keep the price down, but there certainly is not enough silver. And if anyone doubts that, try to buy some. If the mint, the fed, or any other governmental entity has a stash with which they are infusing supply in order to suppress prices, please let me know because I don't see silver anywhere unless it is in at least 1,000oz bar form. So how is the price being kept so low in the face of unimaginable demand and fixed short term supply?

I know it's happening, but I strongly disagree with this apparent governmental policy of suppressing the price. People are buying gold and silver as a flight to quality...their dollars are losing value, and so are their stocks. A policy of price suppression is a policy of quality suppression. People should be allowed to invest wherever they feel quality lies. That's what the free market is...the market determines value. But that no longer appears to be true, which worries me. It worries me because I have to ask myself, if the federal government can operate in secret to suppress prices, how could that suppression be overcome? How can we see the price explosion if the government is behind the suppression? In order to overcome it, first the mechanism through which it is being carried out must be understood. You cannot hope to overcome something this complex if you do not understand the means by which the scheme is being perpetrated.

So as much as I thoroughly enjoy your articles, I was hoping you could shed some of your experience and wisdom on this subject. Perhaps my focus is misdirected. But then again, I thought you may shed some light on your thoughts regarding the federal government being the largest short position in silver, and how they have become so and remained hidden.

[Cowboy]

After reading my last post, I realized it left something to be desired in its clarity. So let me phrase it like this:

A short position in silver, as far as I understand it, does not have to be fulfilled with physical silver. A silver futures contract, for instance, would serve as payment. The promise of future delivery, but in a paper instrument traded as, and payable in, cash. Never mind the fact that there isn't enough physical silver to fullfill all those futures contracts. In other words, assume that there is not enough physical silver to fulfill all the futures contracts that are used to close out short positions. Those contracts can be paid as cash rather than silver. Therein lies the crux for me.

The federal government can print its own money. If it can short silver, and then cover that by in essence delivering cash instead of physical silver to close out a position, then that short position never needs to be closed out, nor will the government ever "get stuck" as a normal investor would. As long as they can print off more money, close out the position in cash rather than physical silver, then there is no way to break the weight that short position will have on silver. The more silver wants to go up (either demand or supply side), the more the government can simply short, create a massive position that says the price will go down, and then pay that position down in cash fresh off the presses.

This scheme would never work for a normal investor, as we cannot print money. So even the richest of the rich corporation would eventually go bankrupt in this scenario, but the federal government has no such accounting rules, and no limit to the cash it can produce. Thus there is no reason to believe that such a short position, if it were perpetrated by the government in order to suppress metals prices (to induce confidence in the dollar), could ever be reversed. Only utter and total exposure of such a scheme would ever operate to undermine its success, in my opinion. Buying physical silver will not do so.

That system depends on owners of silver who are willing to allow it to be "borrowed" and paid in cash rather than silver in hand. Who is loaning that, and at what point do they lose faith in the very cash that is being given to them in lieu of metal? How much of a banking system failure has to occur before they begin to wonder whether the dollar has any meaning? When do they demand payment in kind rather than in cash, and do they have the ability to demand the same, or are they at the mercy of the big short seller (the government), because after all, what can they do if the government simply says no, be happy with the cash we're printing rather than getting silver back? Who's goign to enforce any rules against the government not sticking to the rules everyone else has to play by when it comes to delivery on a short sale?

I realize this is pining way too philosophical, but this whole thing seems murky and misunderstood to me. I am sure something false is going on, but it all seems very abstruse right now.

[peri1224]

Current investment demand is said to be in the range of 100M ozs. per year, trend growing. Still very little considering all the investment money sloshing around the world.
I suspect that the cartel doesn't really care for silver by itself. They only "care" for it because it is their achilles heel in controlling the gold price. Achilles heel because 1. the silver market is so small, and 2. the government doesn't own much of it. That's why silver has to be so ferociously manipulated via shorts. Because a steep rise in the silver price would automatically pull gold up, too. And to prevent that is still their priority No. 1. So the manipulation continues until a better silver pricing mechanism is available. Hopefully soon.

But even then, the availability of billions of ozs. of silver (CRA Silver Report) although not in bullion form, representing 200-400 times yearly investment demand, must be a shackle on silver price moonshot theories.
Maybe this silver will not come to market at $10, but at $20 some came out. At $30 even more would come out, etc. We can only guess at the progression. Same for the question of how big the portion is that would only come out if the price is in the hundreds.
I wish Ted would address this point a little more clearly. We simply cannot go on insisting that silver is 5 times rarer than gold, when that is clearly not true and starts to sound like a mantra.
How about it Ted?

[duneyman]

Does anyone remember the article Ted wrote back in the springtime ( May I believe ) where he said we should be " all in " the silver market. From 17 way down to 11 and he never loses his optimism ! He makes a good living doing this so he will keep doing it I suppose.


Bill

[silverbuggy]

Originally Posted by duneyman

Does anyone remember the article Ted wrote back in the springtime ( May I believe ) where he said we should be " all in " the silver market. From 17 way down to 11 and he never loses his optimism ! He makes a good living doing this so he will keep doing it I suppose.


Bill

yeah i remember it and thats why i ignore his articles. it is always the same blah blah...evil comex, evil shorts, silver is a once in a lifetime chance, sell gold and buy silver instead, etc. etc.

[Constitution-Bound]

There is no doubt that Mr. Butler can be very repetitive in his articles. It seems to me that while he must sincerely believe in the idea that cheap available silver is close to running out, this sets him/us up to view his calls as "crying wolf" when years go by and nothing "earth shattering" happens to the price.

I for one am glad I starting buying silver bullion five years ago when I first started reading Mr. Butler's articles. If you own silver bullion in your own possession, then you can't have lost your shirt.

Buy it and forget it for a time. There are no guarantees that any of us will make a profit, but there are much more risky investments that we could hold and silver may just have that explosive upside we have all been reading about. I hope we are able to hold on to our silver until we can sell it for a very nice profit in whatever is the medium of exchange at that time.

[valerb@bellsouth.net]

I started buying silver back in the late 90's, actually 500 silver rounds and 30 ounces of gold. It wasn't meant as an investment, it was a just in case move to cover my ass going into Y2K. After Y2K was a non-happening event, I started reading Silver articles and turned a cover my ass investment into something for my future. I sold my gold for silver and ended up with a little over 6200 ounces after a few more purchases. My average price for that silver is just under $6 an ounce. I didn't add anymore until this year after the price fell from it's peak. So for the early believers in the Silver story, it has been a good ride, even with this major setback this summer.
I also have read Ted's weekly articles for years and still do not completely understand everything he is talking about. I assume you need in-depth knowledge of the commodities system to really appreciate what he is saying.
What I would like Ted to explain is "why" the mints are not producing silver for the public? It appears the overall silver supply is slowly being depleted and we all know that retail silver is a joke. There are literally endless amounts of 1000 oz bars that can be converted into 100oz bars and 1 ounce rounds. Why did JM stop producing 100 oz bars? Why has A-Mark stopped or drastically reduced their output. There are a number of minting operations in this country and they are not all running full steam, why? There seems to be more of a conspiracy with the mints than the silver shorts as far as I'm concerned. If North West Territorial Mint can run all out, "why" can't all the other mints as well??? I can't believe COMEX is the only thing you have an in-depth understanding of. All I read about is the shortage of silver at the retail level and we have to be getting close to the end. The silver analyst all sound like the stock market analyst trying to justify why they think things will or should go the way they want. How about some honest answers about why we have a retail shortage of silver. We all know we can buy as many 1000 oz bricks as we can afford, but that isn't what the vast majority of us want or can even afford. Isn't there a single silver analyst out there that is willing to address what someone other than COMEX is doing to the market. I'm not talking about the articles that state JM isn't making anymore 100 oz bars for now. I'm talking about "why" JM has stopped making them when there is such great demand and please don't tell me it's a silver shortage situation. That's the kind of information I'd like to read about. If I'm getting screwed, I'd like to know who else besides COMEX is standing in line behind me. COMEX may be difficult to extract silver from, but SLV has enough silver to keep our mints running full steam for a very long time.

[Kelly]

I've brought the same point up in several threads. Why isn't the US mint producing SAEs? Why aren't the dealers minting bullion? The people minting bullion can buy a 1000 ouncer any time they please. There is no shortage there on that end of the stick. So why aren't they doing it? They are going to make their profits off of minting bullion regardless of where the price is at.

The only answer I can come up with is that the same people who are manipulating COMEX futures, must be paying the bullion minters more to NOT make the bullion, than they would be getting if they were making the stuff for the investment trade.

Either that or they are buying the Big Bricks now while they are so cheap, and holding on to them until the price breaks and starts moving up again.

I am VERY suspicious of the bullion minters too.