Friday, July 22, 2011

Economic Confidence Plunges

The Gallup poll reported last week that Americans' economic confidence plunged to its lowest weekly level since March 2009. (When the stock market was at its low of 666)

And the number one financial worry for American families: Lack of money and low wages

Google Plus Growth

The following chart shows how long it took Google Plus to reach 10 million users compared to Twitter and Facebook.

I use Google for just about everything I do online (Reader, Gmail, Blogger, Youtube, iGoogle) and I look forward to using Google Plus. (I am embarrassed to say it, but I am not a Facebook or Twitter user) 

Paper Silver Vs. Physical Silver

I often discuss the difference between the "paper" silver market and the "physical" silver market.  The following goes through a real time trading event this week that provides an example of how large the paper market is compared to the physical. (If and when there is a rush for physical metal it would be an enormous game of musical chairs with very few places to sit down)

From Tuesday trading this week.....

This man had a live stream from the Commercial Mercantile Exchange (COMEX) for the minute by minute trades. Silver contracts were selling higher and at about 1:40PM they started to sell off for no reason. Then at 2:03PM there was a trade for 50,000 contracts of silver sold. (This would lead anyone to conclude that the sale was known 23 minutes before it occurred.) This is not a typo -- 50,000 contracts in one minute! Each contract is for 5,000 ounces of silver. So if we do the math 50,000 contracts by 5,000 ounces per contract equals 250,000,000 ounces of paper silver contracts. If we do some further math and we multiply 250,000,000 contracts by the proxy price of silver yesterday, which was $40.00 per ounce, then that trade was for 10 billion dollars in one minute.

I'll this one step further. According to Jason Hommel writing on behalf of the US Mint, the amount of silver produced per year in the entire world is roughly around 680 million ounces and the amount mined in the US last year was 50 million ounces. The amount that was traded on the CME on Tuesday was approximately one third of all of the silver mined in the world. It was 5 times the amount mined in America.

Source: Minyanville

Wednesday, July 20, 2011

US Debt Ceiling Vs. Gold

Chart below with the quote inside pretty much sums it up.

(Click for larger view)

Monday, July 18, 2011

$1,600 Gold - $40 Silver

New all time record for the price of gold as it crossed the $1,600 barrier this morning. 

Silver is now back above $40 while all eyes have moved back to Europe.  The bond rates for just about everyone rocketed higher this morning and their banking system continues to move toward disaster.

Italy, the titanic looking for an ice burg, crossed the 6% line for a 10 year bond, and 2 year Greek bonds after the second bail out are now trading at 36%.  (Higher rates mean lower prices)

Look for the bloodshed to continue as the billions of people around the world slowly begin realize the paper money they hold is backed by nothing.  The move toward precious metals will continue to be calm and orderly until we reach the tipping point and it becomes a mania.

With the power of the internet, curious investors can look up information about metals and discover there is less above ground silver available today than gold.

When that sinks in, you will see a mania greater than both stocks in 2000 and real estate in 2005 for the scarce physical silver that remains.