SGM Precious Metals: The Truth About Gold & Silver and the Coming Bullion Mania!

PALM BEACH GARDENS, Fla. - Aug. 19, 2013 - PRLog -- maxkeiser.com reports: 2013 Silver Eagle sales are at record 30.3 million. Silver’s inflation adjusted high was $130/oz & we continue to see that as a realistic long term price target.

Indians purchased more gold in July than June in spite of govt efforts to curb supplies & increase tariffs. Yet the Indian govt, is doubling down in their desperate, some would say futile, attempts to curb the people of India’s preference to save in gold. Physical demand in the east is still strong ahead of the wedding season which see increased demand.

An ounce of gold bought 61.5 oz of silver in London today & the gold silver ratio has fallen from over 67 ounces at the start of August. Since 2003, we have said that the gold silver ratio would in time revert to its long term, historical average below 20/1. UBS says the gold/silver ratio should drop toward 50 in the next couple of years as silver continues to outperform gold.

The death of the silver bull market is greatly exaggerated as seen in the still very robust physical demand from investors & store of value buyers internationally. This can be seen clearly in Silver Eagle sales & silver ETF holdings.

Sales of silver coins by the U.S. Mint have set a record high in the 1st half of 2013 seeing the best start to a year ever. Year to date Silver Eagle sales are at 30.3 million, a record pace that was supported by soaring July sales. Silver Eagle sales had a record year in 2011. That year, it took until Sept 21, 2011, to reach above 30 million in sales for the year. Therefore, 2013 looks set to be a record year for Silver Eagle sales.

In April, purchases more than doubled from a year earlier after prices tumbled 16% in two days due to unusually aggressive selling of paper silver on the futures market.

Silver ETF holdings which have continued to increase in recent weeks & months even as the gold ETF holdings saw falls. Silver holdings in the IShares Silver Trust, the biggest exchange-traded fund backed by silver, were unchanged at 10,396.73 metric tons as of Aug. 12 but remain near record levels.

Falling prices & concerns about being able to take delivery of coins amid continuing concerns about the U.S. economy & currency debasement have led to the record demand.

Bull markets do not end in a period of sustained physical demand nearly two years after prices have “peaked”. This strongly suggests that silver’s bull market is far from over. Silver has gone from being massively undervalued in the early 2000’s to being fairly valued today.

Bull markets end in speculative manias with mass participation by the public & blow off tops where prices become massively overvalued like 1980. This has not happened with silver yet. Most of the public does not even know the price of an ounce of silver, let alone its value & how to own it. Silver remains gold’s very poor cousin & gets little or no media attention.

Bull markets see prices rise to above their inflation adjusted highs. Sometimes prices rise to multiples of their previous inflation adjusted high. Silver’s inflation adjusted high was $130/oz & we continue to see that as a realistic long term price target. ]

Quietly behind the scenes, the corporate media controlled by the banks & Wall Street aren’t going to tell you this, a mysteriously large custodian of GLD is “collapsing the ETF from within”, in order to suck out the physical gold collateral that backs the shares out of desperation to acquire physical gold. The inside scoop is that every ounce they are magically swiping out of the ETF is being demanded for delivery to China & they are smelting them down immediately into 1 kilo trade settlement bars which supports the rumor that there may be a new world trade settlement system backed by gold offered by China soon. Remember that the more they gut one of their critical derivative tools used to redirect monies looking to invest in precious metals the more it will go directly into the physical asset itself.

The bank coordinated takedown of the paper gold & silver prices has created a monster that will make its presence known by the end of the year. That monster is the fact that the artificially low price of silver & gold has forced almost 40% of mines to be mothballed. The miners have been forced into this dilemma due to the unprofitable dynamic of such an artificially low price for the metals in contrast to the ever increasing cost of mining the metals. Imagine what will happen to the price of metal when the consequences of these mine shutdowns begin to have an affect on the availability of an asset that is increasing in demand globally. This begins to shine some light on the fact that the Wall Street banks, who for years have been suppressing the metals through the manipulated derivative markets, currently are holding record volumes of long COMEX contracts as they appear to be positioning themselves to be the sole recipient of future deliveries of metals as they know the supply is getting ready to be choked out. This is coming conveniently ahead of the tidal wave of demand as Q/4 2013 appears poised to offer a major correction in the DOW, EU banks threatening to collapse & trigger the banking dominoes, inflation begins to rise globally & most importantly the fake debate about the fed supposedly tapering QE when sources say the FED is considering expanding the monthly banking welfare QE checks by double or more!

Consider that for over 6 DECADES September has always been the month that stocks perform their worst & investors begin to wander into alternative investments such as gold & silver for protection. Overlay that with the traditional Indian wedding season which causes gold prices to rise & the demand comes heavily into the physical markets. Using history as our guide, when gold begins to climb as the wedding season drains the supply of physical gold we typically see silver sling shot well beyond the net increase of gold by multiples. This again begins to connect the dots on why the banks have mysteriously changed a 2.5 decade trend & are heavily diving into the precious metals.

The BS stock market recovery story cant hold water much longer & the big boys & bankers are rushing into the metals markets ahead of the coming reshuffling of the global deck. All investors should begin to look for a way to hedge yourself from a stock market correction or the threat of rising inflation with hard assets as this bout of global inflation is poised to be unlike anything we have ever experienced & a correction in the DOW will have tremendous impact as the paying $2 for $1 worth of stock that has taken the DOW to record highs will have the same affect on the way down which will result in a massive evacuation of wealth from personal accounts. The time is now to embrace the bubble economy & prepare for the consequences of these failed policies as they will be profound & costly for those who ignore them.