| Those Foolish 'Paper Longs' David Zurbuchen Amazingly, Silver is so cheap, that many find it much too cumbersome to invest in. It really is quite a load for someone who wishes to take ownership of a million dollars worth of physical silver bullion. At $7.80/oz (10/25/05) that would amount to over 5 tons of silver! Thus, many investors want to invest in silver, but without the hassles of transportation and storage. One way for them to accomplish this is through the purchase of Silver Bank Certificates. But there is one major problem with Silver Certificates, No Real Silver Exists to back of these paper 'con'-tracts. Reasonable estimates have determined that about 1 billion ounces of silver exist in this paper form. Only about 500 million ounces (at most) of silver is know to exist in above ground refined form. This means that Silver Contracts alone represent an estimated 2 times the amount of silver actually in existence. Obviously, these silver contracts won't be able to be redeemed for anywhere near their face value, if anything at all, when the price really explodes. Also bear in mind that one billion ounces of silver is only worth about $8 billion dollars, so the number of such certificates in existence is likely to be much higher, since over six-hundred billionaires are currently roaming the earth. With a combined net worth of several trillion dollars, you can bet at least of few of these men and women have a portion of their wealth invested in silver, following Warren Buffet's lead. Again, let me say that there is no real above ground silver to back up these contracts. Therefore, these certificates are just as bad as the fiat money they were traded for. How foolish, not only have these 'paper longs' traded one broken promise for another one which happens to be much more expensive, but they also have little hope of profiting from a dramatic rise in the price of silver. These longs will be unable to acquire the tangible wealth that they so diligently sought, because they failed to discern that their certificates were empty promises just the same. Thus, those who issue the certificates are in effect selling 'short' positions (shorting is discussed more here: Short Postions). This is in addition to the already abundant futures and leasing short positions that at COMEX which may have helped to suppress the price. If indeed there are a billion of these paper certificates in existence, then for every dollar increase in the price of silver, the issuers stand to lose one billion dollars. At present, silver is continuing its climb, and one day higher prices will force these 'short sellers' to limit their losses by buying the physical silver bullion itself, just in case their client-el start to redeem. This, in turn, will create more panic in the 'short' community, which will further simulate the precipitous rise in the price of silver. Do you understand how bullish this is? This is the Anti-bubble of all time, like a black hole reversing itself, finally able to crossover onto the other side of the event horizon. And just as the light would break forth from that pit of darkness, so also will silver, once back in the hands of ordinary men, reveal the truth behind this present system of unjust fiat money. Free oneself from these chains now! Don't wait until it's too late. Silver in Scripture Home |
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