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The Final Fight ~ Silver Shield
May 7 , 2011
Issue 92
Today's Gold/Silver Ratio: 42/1 Up

Issue 107

Gold: $1500.70/ Silver: $35.85

SGS Notes: :Yes, silver took it on the chin this week. What we have seen in the dramatic price drop for silver and gold has been a carefully orchestrated manipulation of prices by some powerful folks in high places… If you have been following the SGS newsletter for very long, you would know that we've been reporting on this faithfully from the beginning. It's been going on for several years now… and with all the exposé going on by some honest and persistent men in the industry, the fire is heating up under this issue. So this week I am devoting the newsletter to the various commentaries from these people who have reported the truth about what's happening. There's a lot to 'feast on' this week.

This is NOT a normal 'market correction' as some would have us think…Remember that investing in physical silver and gold is not the same as paper … yet the dynamics in paper have a dramatic effect on physical. (Also noteworthy this week… huge difference in Gold:Silver ratio… last week was 32:1

Bear in mind, that all of manipulation forcing prices downward have long-term effects on this market beyond the prices… it creates a disincentive for mines to produce and refine silver… a disincentive for research & development on new sources for silver. Consequently, there is a very real shortage of phyical metals in the market…

And, again, the warning is issue repeatedly: Hold on for the Long Haul. This is NOT the time to SELL… it is the time to ACQUIRE.

Silver Shield: The Final Fight

This is the final fight of physical and paper silver, so hold the line and get ready to take it to the enemy. The Elite have literally thrown everything they have at the silver markets to try to make silver investors weak in the knees and cry uncle. Like a bully trying to take your lunch money by twisting your arm.

This can only end one of two ways; you give up and the banksters laugh or you stand up and say enough! These tactics may work on some paper traders who are literally forced by margin calls. For those who have listened to me, and bought only physical, this recent manipulation is only a subsidized discount to buy more, for less.

The CME has raised the margin requirements an unprecedented 5 times in less than 2 weeks to force higher and higher costs on paper traders to force them to sell. The higher the costs and the lower the price of the underlying asset is a toxic combination in the paper market.

I saw this happen in the 2008 rout, where they took it down 60% in a matter of months. It was the worst time to be a silver holder, but I knew the real story and held on when everything in the world said get out. I held on and even added to my position to then see a return of close to 500% in the next 2 years.

Read Entire Article Here


Collusion by Fed Officials and Commodity Exchange Heads Has Its Intended Effect
Trader Dan


I find it amazing how effectively these people can coordinate their policies with the heads of the commodity exchanges and their pals at the big banks who are perennial shorts in the markets and have now managed to pluck the money out of hundreds of thousands of commodity trading accounts enriching the big banks (government sponsored hedge funds) in the process. Nothing like a freely operating financial system where the playing field is completely level and no one has an advantage over the next guy!

By their continued hiking of silver margins, the exchange effectively removed the liquidity in the silver market that the smaller specs have been providing. That left the market vulnerable to severe drops in price as these specs exited due to financial constraints which then removed a source of potential bids under the market as the CFTC commitments report has shown the small specs to be good buyers in the silver market. Even the bigger hedge funds are impacted by such a sharp hike in margins as their losses in silver then precipitate even more losses across other assorted commodity markets due to the cascading effect of mounting paper losses and margin calls and the need to raise cash.


As the silver market tanked the exchange officials could then warn about Clearinghouse integrity and have more reasons to drive margins even higher as they point to the increased volatility, volatility which I might add, they created themselves by hiking margins to such an extreme degree.
Read Full Article Here

 

Quote of the Week                               

A Few Notes...      

 

Some things we are seeing as the market demand is increasing…and things which have an impact on our customers…

  • Longer wait times for our inventory orders

  • Higher Premiums, especially for Silver Eagles

  • Product sell-out (from our suppliers)
Rest assured, however, that we are doing our utmost to get products out the door to YOU and will continue to provide you with the best service possible.

 


Honoring All Our Mothers…

 

Other Articles      

It Was All A COMEX Affair
Ed Steer

I Smell BS In The Silver Markets
Silver Shield

The End of OZ
Bix Weir

Where Did Silver Come From & Where Is It Going?


Julian Phillips

Real Reason for NATO Attack on Libya

Nixonomics at the New York Times
Gary North

Gold and Silver Storm The Fed


Darryl Robert Schoon

Gold and Silver To Explode Again


John Hathaway

Short Term Volatility but Silver will Zig Zag to $100
Paul Mladjenovic

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Audio/Video      


Interview With
Adrian Douglas
Part 1

Adrian Douglas is a Director of the Gold Anti-Trust Action Committee (GATA) and editor of the Market Force Analysis Letter
Part 2

Fractionals Are Back

 

 

We have brought back the silver fractional rounds…
½ oz, ¼ oz and now 1/10 oz
.999 Fine silver rounds are now available for purchase.

Does SGS
BUY BACK Silver?


We get inquiries about this all the time… Our answer is a qualified 'Yes'.
We are purchasing inventory replacement all the time. Consequently, timing is everything.

Customers have first priority over our vendors.
So, while we don't recommend selling at this time… we understand that circumstances sometimes dictate liquidation.

Don't hesitate to call and ask us if you need to liquidate some of your holdings.


 

Note: If you are getting duplicates of the S&GS Newsletter, please eMail us and let us know.
Contact us at info@silverandgoldshop.com
Phone: 888-203-2232 x 1
The Reason Silver Has Been Rising Faster Than Gold
April30 , 2011
Issue 92
Today's Gold/Silver Ratio: 32/1 (same)

Issue 106

Gold: $1513.50/ Silver: $46.86

SGS Notes: The crazy ride continued this week…the week began Monay with a sharp rise from $46.86 to$47.88, then Tuesday spike up into the high $49s… closely pressing the $50 threshhold…then back down by end of day to just over $45. By Wednesday night, the price was back to the mid $48 level, continuing strongly in that range until close of week Friday night. The ratio has remained constant at 32/1… but we've also seen Gold do a huge $58 spike this week. The dollar went to 73.2 in the wake of the S&P downgrading the US credit rating down to C - lower than Mexico… We've had several inquiries this week about whether silver is still a good buy at $50+… This week's newsletter will be addressing that…

Psst! Letting you in on a little 'secret'… if you watch our Facebook page for SGS, (see link at right) you will see a flurry of activity of postings on Fri/Sat … this is because we post a lot of articles and links that we come across while preparing for the Newsletter, but 'reject' for newsletter publication… lots more extra stuff there, folks!

The Reason Silver Has Been Rising Faster Than Gold
Analysis of the different advance which has occurred in the silver price vis-à-vis gold in the past few months where the former has substantially outperformed the latter.
Author: Julian Phillips, MineWeb

Silver is breaking new records at around $40 and gold is touching new highs of close to $1,460. Looking back, over the past few years we have seen gold rise from around $312 to $1,460 a rise of 4.68 times and silver from around $6 to $40 a rise of 6.67 times.

But this does not give a clear picture, so we went back over the last year and what did we see? Since early 2009, gold has moved from $900 to $1,460, a respectable 62%. Over the same period silver has moved from $10 to nearly $40 a remarkable 400%. Why the difference in relative performance?

Both metals have moved as money. Gold and silver Exchange Traded Funds have attracted massive investments in the developed world where trust in the monetary system is far higher than it is in the emerging world. But it was the underlying gold and silver that attracted investors. Waning confidence in the value of paper currencies gave way to demand for precious metals as a store of value retainers for investors.

Gold and silver have substantial differences as value retainers which help us to identify why the two metals have differed so much in performance.

Gold is and has always been the 'senior' monetary metal held by Central Banks as money until 1971 and after that as a valuable reserve asset in the vaults of central banks.
Silver was rejected as money and as a reserve asset by the mid-fifties, despite it being treated as money throughout the ages before that.

Both gold and silver have been attacked as money through 'official' sales from the seventies until last year. But gold was sold to undermine the reality that it is money. Silver was sold out from reserves almost completely by central banks discarding it as money, completely.

Apart from a brief period when Egypt was at its height and supplies of silver less than those of gold, gold has always been in far shorter supply than silver and considered far more valuable than silver.

Silver in the past few decades has been seen as a commodity, mined mainly as a by-product of base metal mining, with only 30% mined in a pure silver mine.

Most silver is consumed whereas gold is not, which will continue to be the case until less expensive substitutes are found. This will only happen at far higher prices still.

GOLD AS AN INVESTMENT

Gold has always been the precious metal of choice for wealthy individuals, institutions and central banks. It has never been abandoned as such. Even when "Official" selling was at its peak, central banks sold only what they thought was sufficient to add credibility to the paper currency they were pushing to the centre of the system, first to add credibility to the dollar then after 1999 to the euro. With those tasks completed, Central Banks are now either holders or buyers of gold.

The amount sold in most cases was around 20%, but in the case of the uninspired then-Chancellor Brown of the U.K.'s case, half of Britain's reserves were sold. The largest holders of gold sold none or only small amounts. So while it was underpriced and we believe still is, did not see its price 'crushed' completely.

The path back to investment acceptance is a slow one and a long one with most of the journey still to come. We believe that we are on the brink of major changes in price levels in 2011 and beyond.

SILVER AS AN INVESTMENT

Silver had not really been an investment metal until 2004 and not a significant one until 2009.

It was a commodity metal in so short a supply that the Hunt brothers of Texas felt they could corner the market. In 1979, they took the silver price from its high of $8 an ounce [it had doubled since it stood at $4 an ounce in the mid- 1970s' already] to $50 an ounce by the early 1980's. It then fell all the way back to $5 an ounce thereafter as the Hunt Brothers found they were unable to sell the silver until prices had fallen back to those levels where they stayed until October 2003. Until 2009, it was relegated to the sidelines as an investment metal.

It started to regain popularity as an investment metal because it began to be considered as "poor man's gold" as the gold price rose out of reach of the poorer investment classes.

For instance, in India until its middle classes began to grow substantially, 70% of all gold bought was bought by the agricultural sector, whose income was directly related to the quality of the monsoon rains. When profits were good, they found their way into property and into gold, As the price rose, the quantity of gold available to such people fell. Then $1,500 bought five ounces of gold, but with gold at $1,460, it only buys just over 1 ounce of gold.

In India, precious metals are used in commercial transactions so the divisibility of silver relative to gold was far greater and more flexible. It also remained affordable in larger quantities. After all, now one ounce of gold buys 36.5 ounces of silver. So, silver remains affordable far lower down the economic ladder than gold does. It therefore can attract a far wider market than gold does currently at retail levels. Bearing in mind that precious metals are attracting a huge and growing market in the emerging parts of the world, the demand, as a wealth protector, at the retail end of the market is expanding rapidly.

CATCH-UP

It would therefore be wrong to still categorize silver as a monetary metal. Its day will come, but not until its price is much higher and not until paper currencies have lost considerably more credibility than at present.

The most difficult part of silver's rise as a wealth protector has been from October 2004 to October 2008, from when its price moved from $5 an ounce to a peak of over $20 an ounce then to fall back to than less $10 an ounce before taking off on its current path. The fall coincided with the onset of the 'credit-crunch.

All the while, demand from the photographic sector has waned. More importantly, the uses of silver have morphed from discretionary demand to a need. Even in a downturn, the demand for silver will remain strong as its uses are considered vital now.

So as a non-monetary, more volatile precious metal, its future then was far cloudier than now. The transition from those days to 'poor man's gold was its re-birth as an investment metal. While we believe it has now returned as such to stay, it still has a lot of catching up to do. By catching up we mean that it still has to return to the concept fully, that it is a lower category investment metal respected from institutions [eventually by central banks] as well as the retail end of the market.

Gold is already at that point. This does not mean that the gold price has reached a ceiling of any kind. It does mean that the gold price will rise relative to the value of currencies from now on with its metallic qualities being far in the background. Silver is still a long way off from that point.

Julian Phillips is a long time specialist analyst for gold and silver and is the principal contributor to the Gold Forecaster - www.goldforecaster.com - and Silver Forecaster- www.silverforecaster.com - websites and newsletters

Quote of the Week                               

 

Other Articles      

US Credit Rating Lower Than Mexico
MarketWatch


Is a Silver Price Explosion Imminent?

Casey Research


Dollar Crashing

The Daily Crux


Major Bullish Development For Silver

The Daily Crux


Debunking Anti-Gold Propaganda

Lew Rockwell


Don't Fear A Pullback in Prices
Frank Holmes,SafeHaven


Your Silver Pacifier
Bix Weir


No Sign of the Top for Silver
TradePlacer


Atlas Is Shrugging
Robert Tracinski

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Peter Schiff
Commentary on CNBC

Gold at SGS      

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All gold products are available by Special Order only. Special Order transactions require payment by ACH debit or Wire Transfer.

Perth Kangaroo Bars


1 tr. Oz
. (31.1 gr)
only $48 over spot

10 gr. (.32 oz)
On Site Soon - Call for Quote
5 gr. (.16 oz)

On Site Soon - Call for Quote


Limited quantities available


A Few Notes...      

 

Some things we are seeing as the market demand is increasing…and things which have an impact on our customers…

  • Longer wait times for our inventory orders

  • Higher Premiums, especially for Silver Eagles

  • Product sell-out (from our suppliers)
Rest assured, however, that we are doing our utmost to get products out the door to YOU and will continue to provide you with the best service possible.
Note: If you are getting duplicates of the S&GS Newsletter, please eMail us and let us know.
Contact us at info@silverandgoldshop.com
Phone: 888-203-2232 x 1
The Bullion Report - Your Money is No Good Here
April 22 , 2011
Issue 92
Today's Gold/Silver Ratio: 32/1

Issue 105

Gold: $1513.50/ Silver: $46.86

SGS Notes: Whew! This week was a wild ride. (Did you notice the big drop in the ratio again?) I'm going to share a lot of info in the newsletter this week. As usual, the experts and economic advisors have been prolific in their writing the past 2 weeks. The S&P downgrading of the US credit rating was a HUGE factor in the numbers we're seeing. So read what you can now, bear with me, and stash this away for digesting the rest of the information as you are able. Let the dust settle a little this weekend and celebrate the MOST momentous occasion in history.

Your Money's No Good Here
Richard Zimmerman, Berkshire Asset Management

Fear premium seems like an understatement following the Standard and Poor's downgraded outlook for US debt. Markets reacted in kind, with and the threat of losing a AAA rating brought another round of potential haven seekers to gold and silver. What is it about the rating that is so special, and why should this change anything?

Let's get one thing clear - there were a few stories that reported the US' credit rating was lowered from neutral to negative. The Ratings Service actually lowered their outlook for US debt. The reasoning? They lack confidence that Washington will get the federal deficit under control in the next two years or so. The long term outlook suggests that there is a roughly 30 percent likelihood that the US will lose its current investment rating. That rating was actually reaffirmed in yesterday's Standard and Poor's release, but with paragraph after paragraph of concerns over the future growth and expenses for this western superpower.

The AAA rating is endangered by what the Standard and Poor's views as "very large budget deficits and rising government indebtedness and the path to addressing these is not clear to us" - exactly the kinds of things that have been moving more than a little investment in precious metals. Unlike the US dollar, I have often reiterated that gold and silver are difficult to manipulate with changes in policy. However, the key issue here is the cracks in the foundation.

Since the start of the global recession, it was not uncommon to hear that a country was in trouble on the credit front. Greece, Portugal, Spain, Ireland - there is no shortage of areas of potential weakness. The thing is - it seemed a lot less dire when it was somewhere else. The idea that the Euro zone would have a country or two with fiscal weakness is one thing, but an industrialized nation of this size? The US is practically the backbone of a global economy, and one of the largest single economies in the framework of the world.

Perhaps it is more unsettling because of the scope of foreign investment in the United States. As of February 2011, China held over $1 trillion in US treasuries. Japan had a cool $890 billion. The United Kingdom and other nations held more modest levels, around $200 billion or so, for a grand total of $4,474,300,000. (1) Of course, Japan's finance minister was quick to state that US treasuries remained attractive, despite the warning against the US. China was less magnanimous. Their foreign ministry urged policy makers in Washington to move to protect investors in their debt. Besides debt obligations, foreign governments are probably eyeing their ample US dollar reserves. While it is anyone's guess how much of China's foreign currency reserves are dollar denominated, it cannot be comfortable on any level to see the recent troubles in the US devalue the currency. Uncertainty in the future of the US and the overall perceived risk of default has as much of a chance to drive investors from the US dollar and into other assets.

The Treasury Department's projection is that the debt-ceiling is within reach, to be breached as early as May. Default could come as early as this summer.

Summary

The US is unlikely to see the kind of real growth that the situation requires to sort out its massive deficit. Right now, the economic crisis has pared growth, and playing an eternal shell game with the fiscal deficit doesn't seem close to over. The diminished outlook in a superpower like the United States is enough to rattle even the most stalwart investor's cage. That means the chance for more investor uncertainty, and that usually means fresh highs in precious metals. The threat from Standard and Poor's was a surprise to a lot of people. Everyone seems to be aware that things are not perfect, and that public finances are relatively tattered. The short term key will be how people feel this credit ruin stands up to global counterparts. If the US is viewed as the 'best of the worst' as it were, this initial gain in gold and silver will likely be met with some pressure. If all it does is create talking points ahead of re-election promises then people are less likely to assuaged, and that means a harder currency than a feeble buck.

1. http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt

Quote of the Week                               

 

Yes, we like Ayn Rand, Atlas Shrugged… which, by the way is out in theaters…We saw it last week, Part 1. Check it out here: http://www.atlasshruggedpart1.com/
Just picked up a copy of the book at Costco to re-read.

Other Articles      


Silver Set To Soar As Paper Folds
321 Gold

Impact of S&P's Announcement on Debt Ceiling Debate
Raven Clabough

45% Reduction in Physical Silver at COMEX
Zerohedge

REAL Correction in Process
Jesse's Café American

3 TONS of Silver Destroyed Last Week

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20 Reasons to SELL Your Physical Silver

 



Gold at SGS

If you haven't checked out the updated Gold pages recently, click here.


All gold products are available by Special Order only. Special Order transactions require payment by ACH debit or Wire Transfer.

Perth Kangaroo Bars


1 tr. Oz
. (31.1 gr)
only $48 over spot

10 gr. (.32 oz)
On Site Soon - Call for Quote
5 gr. (.16 oz)

On Site Soon - Call for Quote


Limited quantities available


Note: If you are getting duplicates of the S&GS Newsletter, please eMail us and let us know.
Contact us at info@silverandgoldshop.com
Phone: 888-203-2232 x 1
Silver Is Getting Too Popular, Right? by Jeff Clark
April 16 , 2011
Issue 92
Today's Gold/Silver Ratio: 34/1

Issue 104

Gold: $1487.10/ Silver: $43.12

SGS Notes: If you've been watching spot prices in Precious Metals the last 2 weeks you're probably holding on to your seat at the leaps being taken. 3 weeks ago, on 3/11 our newsletter reported the gold:silver ratio at 39:1 with gold at $1419.60 and silver at $35.90. This week the ratio has dropped to 34:1 with gold at $1487.10 and silver at $43.12. This represents a 20% increase for silver and a 4.7% increase for gold, which is in keeping with the fact that silver has outperformed gold historically, and the projections that it will continue to do so.

Jeff Christian says "Metals most likely to top out in 2nd quarter, correct into late summer before resuming another run"… We will surely see some correction in these prices on the short term, but for the long term, experts are agreeing that prices are projected to increase as currency is debased around the world and economic policies remain in place. Even at these prices, silver and gold are still a good hedge against inflation as well as having potential for solid dividends.

Silver Is Getting Too Popular, Right?
Jeff Clark, Daily Gold

04/15/11 Stowe, Vermont - It's no secret that the silver market is red hot. As I write, silver American Eagles and Canadian Maple Leafs are sold out at their respective mints. Buying in India has gone through the roof, especially noteworthy among a people with a strong historical preference for gold. Demand in China continues unabated. Silver stocks have screamed upward.

So, as an investor looking to maximize my profit, I have a natural question: is the silver trade getting too crowded, meaning we're near the top? Have the masses finally joined the party such that we should consider exiting? After all, it's not a profit until you take it, and you definitely want to sell near the top.

There are several ways to measure how crowded the silver market might be. I prefer to look strictly at the big picture and not get caught up in the weeds. This means I'm looking for signs of market exhaustion or the masses rushing in. Nothing says "peak" more than an investment everyone is buying.
So how crowded are silver investments right now? Let's first look at the ETFs.

At $35 silver, all exchange-traded funds backed by the metal amount to $20.7 billion. You can see how this compares to some popular stocks. All silver ETFs combined are less than a quarter of the market cap of McDonald's. They're about 10% of GE, a company that still hasn't recovered from the '08 meltdown. Exxon Mobil is more than 20 times bigger. And this isn't even apples-to-apples, as I'm comparing the entire silver ETF market to a few individual stocks.

This comparison is even more interesting when you consider that it's the ETFs where most of the public - especially those that are new to the market - first invest in silver. So while the metal has doubled in the past seven months, total investment in the funds is still far beneath many popular blue-chip stocks.

Okay, maybe all this money is instead going into silver mining stocks. How does the market cap of the silver industry compare to other industries?

While you fetch your magnifying glass, I'll tell you that the market cap of the silver industry is $73.1 billion. It barely registers when compared to a number of other industries I picked mostly at random. The dying newspaper industry is over 26 times bigger. Drug manufacturers are 213 times larger. Heck, even the gold market is 19 times greater. And here's the fun one: the market cap of the entire silver market, with all its record-setting prices and stock-screaming highs, represents just one-third of one percent of the oil and gas industry.

To be fair, there are a number of sectors that are smaller than silver. Radio broadcasters ($43.2B), video stores ($10.9B), and sporting goods stores ($2.5B) have puny market caps, too. But then again, who's buying DVDs or baseball mitts to protect their wealth from a coming inflation?

Silver hardly resembles the picture of an investment that is too crowded.

I'm not saying one should rush to buy silver right now. After all, it has doubled in seven months. Unless this is the beginning of the mania, prudence would certainly be called for at this juncture. The price will always ebb and flow in a bull market, and an ebb is overdue.

The question, of course, is from what price level it occurs. What if a correction doesn't ensue until, say, a month from now, and the price falls back to…where it is now? I remember some articles in January that insisted silver would fall to as low as $22, and, well, they're still waiting and have in the meantime missed out on some huge gains. For silver to fall back to $22 now would require almost a 50% drop!…Not impossible, but I wouldn't hold my breath.

Fixating on market timing takes your focus off the ultimate goal. In my opinion, instead of worrying about what will happen next week or even next month, focus on how many ounces you have, and then buy at regular intervals until you reach your desired allocation. This has the added benefit of smoothing out your cost basis. And don't forget to buy more as your assets and income increase.

This is a market where you'll want to be well ahead of the pack. Someday in the not-too-distant future, average investors will be tripping over themselves to join in. That will make the market caps of our silver investments look more like some of the others in the charts above. And that will do wonderful things to our portfolio.

See Related Article: The Tiny Silver Market - Jason Hommel
(3 parts)

Quote of the Week                               

Other Articles      


The REAL STORY of the Hunt Brothers

The Truth About Silver and Inflation
NIA

The Great Silver Mystery
Bix Weir

Silver's Performance Relative to Oil
P Radomski

All That Glitters is Silver
Brian Sylvester

Gold Price May Fall Sharply - Temporarily
Seeking Alpha

States Look to Bring gold Standard Back
ABC News

20 Reasons to SELL Your Physical Silver
Bix Weir

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Audio/Video      

 

Road To Roota Updates
on YouTube


Instead of offering you one particular video this week, we are directing you to Bix Weir's page where several are listed.

Bix says, "I'm amazed by all the information that is coming into line with the Road to Roota Theory on Youtube and other forms of the "New Media". From all corners of the world events related to the "End Days" of the fiat monetary system are taking place and the "New Media" is the place to track down the TRUTH. From the end of the Oil Standard to the Silver Moonshot to the final preparations of implementing a true gold standard in the US...it is all happening NOW!"


Gold at SGS

If you haven't checked out the updated Gold pages recently, click here.


All gold products are available by Special Order only. Special Order transactions require payment by ACH debit or Wire Transfer.


These Perth Kangaroo Bars (1 tr. Oz) are a good buy at only $48 over spot.
Limited quantities available


Note: If you are getting duplicates of the S&GS Newsletter, please eMail us and let us know.
Contact us at info@silverandgoldshop.com
Phone: 888-203-2232 x 1
The Coming Retirement Trap ~ Ron Holland
April 1 , 2011
Issue 92
Today's Gold/Silver Ratio: 37/1

Issue 102

Gold: $1429.20/ Silver: $37.91

The Coming Retirement Trap...Has Started
Ron Holland

Mandatory IRAs just proposed by Obama Administration on 1/25/10 is the 1st step in stealth nationalization & forced investment of our retirement benefits to support the treasury debt market! Read the veiled report in Business Week.

A Personal Note from the Author

Dear Concerned American:
I begin with a quote from a politician who believed in an all-powerful central government and in using that power to achieve his vision for a nation. "He who has his thumb on the purse has the power." Otto von Bismarck, a statesman who created the modern Germany and known as the iron chancellor.

But however well-intentioned he might have been, he built the regulatory groundwork and government institutions for a centralized federal state that was later taken over by an evil political leader who created a tyranny seldom seen in the world before, or after. The tyranny started in 1933, 35 years after Bismarck's death, was National Socialism and the leader was Adolf Hitler. All of this came after Germany's military defeat in World War One and a national debt crisis, followed by hyperinflation and currency collapse.

I fear that today the control, nationalization and ultimate confiscation of trillions in private US retirement plan assets is on the horizon. Rick Santelli alluded to the possible nationalization and forced investment into treasuries on CNBC as recently as January 8, 2010. There was also similar coverage on Bloomberg and Business Week.

Reports out of Washington indicate that new retirement annuities may be promoted by Obama aides. This is just the beginning! The question every successful American with substantial retirement assets must ask is "what will you do if our retirement funds are forced to become the buyer of last resort for US treasury obligations?" Unless you believe Congress and Washington bureaucrats will do a fair job of allocating and distributing your personal retirement assets between yourself and others, you must begin now to protect your assets.

As the United States moves into a new decade of military overreach abroad and national bankruptcy at home, Washington is on a desperate search for more revenue and a solution to the future financing of the trillions in national debt obligations currently held by foreign central banks and investors. Economists, politicians and smart investors know the dollar's days as the world reserve currency are numbered, as is our ability to finance the national debt.

Although the historical government solution to unsustainable government debt loads has always been the destruction of the debts by currency depreciation and eventual hyperinflation, there is always an intermediate step used to buy more time for the politicians in power. This action, usually side-stepped and downplayed by the establishment historians paid to hide the real facts of history, is wealth confiscation. Napoleon had it right when he stated, "History is a state of lies agreed upon."

The largest source of liquid private wealth remaining in the United States is the $15 trillion in private retirement funds. The ultimate ownership, control and future of these funds has already been compromised and exchanged for the favorable tax treatment of private retirement plans. Congress writes the laws, so they can tax, penalize, hold your funds hostage and, although they'd never use the word "confiscate," use your assets at their discretion.

The retirement trap I'm writing about is only a proposal at the present time and since it may well begin in the latter years of the Obama Administration, assuming the Democrats can somehow maintain their majorities in Congress, I'm calling it the "Obama Retirement Trap." But make no mistake, the government need for current revenue and their frenzied search for liquidity to monetize their debt obligations is an unspoken quest of both political parties. The establishments of both political parties will do whatever it takes to stay in power, including the raiding and pillaging of your retirement funds.

Read rest of article here:

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Other Articles      


China Calls For New Global Currency
ABC News


Spending Your Stash

Peter Schiff


The Lesson from Japon for Precious Metals Investors
Jeff Clark


Investing in Silver Instead of Toilet Paper Currencies
Mogambo Guru


Gold & Silver Fireworks About To Begin
Toby Conner


Surf Warning: Tsunami to Lift Gold
Goldseek


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Watch the Gold/Silver Ratio ~ James Turk
March 25 , 2011
Issue 92
Today's Gold/Silver Ratio: 38/1

Issue 101

Gold: $1430.90/ Silver: $37.42

SGS Notes: There's a lot that's happening this week in the silver market and in the coming 2 weeks for SGS… once again, it's been a difficult task to select only a few articles to share from the many excellent ones published this week. Those we can't fit in the newsletter are posted to our Facebook page… another good reason to 'Like' the SGS Facebook page!

We've recently re-designed the format of the SGS Newsletter and are now posting the gold/silver ration and closing spot prices. This is because as a silver or gold investor it is important to watch these two numbers. When we began SGS in 2008, the gold/silver ratio was 65:1. As of today, it has narrowed to 38:1. This week's article explains why this ratio is important.

Watch The Gold/Silver Ratio
James Turk (February 12, 2011)

In precious metal bull markets, silver outperforms. Its price climbs at a faster rate than gold's price. The reverse happens in bear markets. Silver's price drops at a faster rate than gold's price. The following chart of the gold/silver ratio illustrates this phenomenon.

At the peak of the last precious metal bull market in January 1980, it took 17.4 ounces of silver to buy one ounce of gold. Thereafter, the ratio turned and started climbing higher. By February 1991, 101.8 ounces of silver were needed to exchange for one ounce of gold. Silver was trading at only $3.50 per ounce, down 93% from its previous bull market peak.

Silver back then was "dirt cheap", but it would not get any cheaper. Silver turned the corner as value oriented buyers recognized a bargain. Since then the price of silver has been generally rising, and has been doing so faster than the spectacular rise in the price of gold. The result is a long-term downtrend in gold/silver ratio. In other words, since 1991, silver has outperformed gold.

Last week, the ratio touched 45.0 and ended Friday at 45.3. It was the lowest weekly close for the ratio since February 1998, which is a significant date. That is the month Warren Buffett announced that he had acquired 130 million ounces of silver. His footprint is visible on the above chart.

We know from his disclosures that he began buying silver around $4 in July 1997. The ratio then was in the mid-70s. But note what happened to the ratio as Buffett accumulated his hoard over the next several months, culminating with the announcement of his purchase. The gold/silver ratio fell by nearly 50%, so that only 41.3 ounces of silver were needed to buy one ounce of gold. Silver was clearly outperforming gold, just like it has been doing over the last several months - as shown in the above chart by the remarkable drop in the ratio.

The ratio has now reached an important point. It is breaking through support, which is illustrated by the lower red line on the above chart.

Several previous attempts to break through support have failed, with the result that for many years the ratio has continued marking time within a trading range bounded by the parallel red lines. That trading range now looks mature and 'ripe for picking'.

One never knows of course how the markets will unfold in the future. But I expect that the ratio will finally break through support, which is an event that I have been looking and waiting for patiently over many years.

If I am right and the ratio knifes through the low 40s and below the Buffett point, there is no clear short-term target. Given the momentum evident in the above chart and the bullish fundamental factors impacting silver at present - like its unprecedented backwardation - a drop to at least the low 30s seems highly likely, but I don't rule out the possibility of the ratio falling even lower.

My long-term target for the ratio is 17. It is approximately the average level at which the two precious metals were exchanged for hundreds of years prior to the arrival of fiat currencies in 1971. It has been my view that a 17-to-1 ratio is attainable by 2013-2015, but given what seems to be shaping up, we probably won't need to wait that long.

The unprecedented backwardation in silver has one clear signal. The potential for a massive short squeeze is building. If one occurs - as I believe is becoming increasingly likely - there is no telling how quickly a 17-to-1 ratio could be achieved.

Transitions at Silver & Gold Shop                   

Beginning this week, please join me in welcoming David & Jodie Bowen to a new role with the SGS family. David and Jodie have been in a behind-the-scenes role with our order fulfillment department for the last year; but going forward, will be taking on a more active customer-facing role in sales, service, and handling special orders.

Mary Beth, who many of you are familiar with, will be changing her role to give attention to more of the behind-the-scenes administration and development of S&GS. Mary Beth, Jodie and David will be working together to provide a smooth transition in the coming weeks ahead. We believe these changes will only bring positive improvements to your ongoing experience at SGS.

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Other Articles      


Silver Review & Outlook
Ted Butler Speech from
Silver Summit

Transition 2011 & The Tree of Liberty
Bix Weir

Sprott Says Silver Will Keep Outshining Gold
Reuters

Gold and Silver Break Records on Libya, Japan, Portugal
James West

Chinese Silver Investors Bring Suitcases of Cash and Leave in Moving Vans
Dan Collins


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Disinformation and Silver Confiscation: Opinion ~ Jeff Nielson
March 18 , 2011
Issue 92
Today's Gold/Silver Ratio: 40/1

Issue 100

Gold: $1419.70/ Silver: $35.28

SGS Notes: Be sure to read the entire article in this week's main editorial…
The title is misleading and you may be surprised at what they author is actually saying… Nevertheless, we took the 'risk' of presenting it because we want you to be well informed.

Disinformation and Silver Confiscation: Opinion
Jeff Nielson, BullionBulls , Canada

VANCOUVER (Bullion Bulls Canada) -- There have been two trends in precious metals markets in recent weeks that I find very alarming. On the one hand, we see the large "shorts" (JPMorgan and HSBC) in the bullion market ratcheting up their short positions again.

Understand that these short positions are tremendously underwater, and once the 100:1 paper-leverage of these financial terrorists is factored in, their short positions already represent large enough losses to ensure the bankruptcy of both of these vampires. Thus the fact that these "life-threatening" short positions are increasing (and being allowed to increase) tells us two things.

First, it is confirmation that the hopelessly corrupt U.S. Commodity Futures Trading Commission is simply going to defy the law, which requires these banker-slaves to institute "position limits" against the very Oligarchs they have dedicated their careers to serving. It is also apparent that JPMorgan and HSBC are now openly charging toward their own bullion-Armageddon: default events in the silver market (and possibly the gold market as well) which would lead to their financial annihilation -- in the absence of any government intervention.

Obviously the key phrase in that paragraph is "in the absence of government intervention." I will return to that point later.
The other recent trend which I find equally disturbing is the sudden explosion of rhetorical rants on the internet, which specifically revolve around the battle-cry of "taking down JPMorgan" or even the entire U.S. financial system. As a silver bull, there are many reasons for me to be dismayed by this rabid and incessant rhetoric.

For one thing, it adds nothing to the "debate" about silver manipulation, nor does it do anything to inform investors -- most especially the new investors streaming into this sector. Indeed, the emotional excesses of these writers are likely only to frighten new arrivals to this sector, who were looking for an "investment" not a "war."

In addition, this totally misrepresents how and why the original investors came to this sector: it was not to "attack" the rapacious U.S. Banker Oligarchs, it was to protect ourselves from them. Silver isn't (to use the term coined by Warren Buffett) a "financial weapon of mass destruction," like the $1.5 quadrillion paper time-bomb which these Oligarchs have created in their derivatives market. It is a "suit of armor" -- to make us invulnerable to banker blood-sucking.

Thus the rabid-ranters are in no way representative of the vast majority of silver investors. The bankers are doing a perfectly fine job of destroying themselves -- and they need no "assistance" from us to finish their greed-induced suicide. In fact, I am convinced that most of these "mouths that roar" are in fact paid tools of the bankers, performing an invaluable service for them: demonizing silver investors in the eyes of the (ignorant) general public.

Readers must realize that among any even semi-informed individuals, "precious metals manipulation" no longer represents a "question mark." It is an obvious reality, which has been documented by many (including myself). It includes not only obvious statistical evidence of manipulation, but a plethora of confessions from various "insiders" and (somewhat more recently) a bona fide "whistleblower" (Andrew Maguire ) with decades of experience in bullion-trading. However, with respect to the general public (i.e. the sheep) "manipulation" represents just another "conspiracy theory" -- which the sheep have been carefully programmed to automatically ignore.

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US Dollar Fails Annual Cycle

The Great US Collapse Nears
John Williams, ShadowStats

Gold Hoarded In Tokyo Exodus
ZeroHedge

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Jeff Nielson

The Great Silver Mystery
Bix Weir

The Silver Door Is Closing
Silver Shield

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James Turk, MineWeb

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Bob Quartermain,
Casey Research

 

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Why I'm Buying Silver at $30 ~ Jeff Clark
February 24, 2011
Issue 92
Today's Gold/Silver Ratio: 42/1

Issue 97

Gold: $1409.60 / Silver: $33.38

Why  I'm Buying Silver at $30
Jeff Clark, BIG GOLD

The silver price has bounced 27% since January 28, a huge advance for a measly 16 trading days. It's already soared past its 2010 high and was selling for less than $16 this time last year, a double in 12 months. So, is it pricy? Or should we ignore the run-up and keep buying?

I've read a few articles that say we should expect silver to drop to the $25 level, and one pinpointed $22. Others, of course, see bullish tea leaves for the near term and believe it's headed higher. Of those that assert silver will decline, most believe it will be temporary, though one writer claims the bull market in precious metals is over (I think he's a holdout from the gold-is-a-bubble camp).

These authors could be right about a near-term decline, but I'm less concerned with what the price does this month or even the next few months, and more focused on where it's likely headed over the next few years. Caution: the chart ahead may cause excitement.
While there are lots of reasons to be bullish on silver, what everyone really wants to know is how high the price can go. Here's one hint, based strictly on historical price performance.

Silver rose an incredible 3,646% from the November 1971 low of $1.32 to its January 21, 1980 high of $49.45 (London PM fix prices). Our current advance, through February 4, is 596%. At $30, silver would have to climb over five times to match the last great bull market. If it did, the price would hit $160.89 per ounce (from its bottom of $4.295 on March 30, 2001).

You'll also notice silver has a record of outperforming gold in these two bull markets. In spite of the price dropping 26.9% in 2008 (while gold gained 5%), the metal has outrun its yellow cousin by 38.6% since their respective lows in 2001.

Gold advanced 2,333% in the 1970s; it's currently up 430%. If it matched the last run, the price would hit $6,227.26 per ounce, a return of four-and-a-half times the gold you buy today.

From solely a historical price perspective, the chart certainly suggests we've got a long way to go with both metals. The question is if the fundamentals support such price advances (show me a healthy dollar and no threat of inflation, and we'll talk), but my point for the moment is that there is an established precedence for the price of these metals to climb much higher. And just as important, to keep one's eye on the big picture.

So, yes, I'm buying silver at $30, in part because I think the potential for enormous gains is high.

However, I'll add that I'm not draining my cash account to do so. I think it's important for the precious metals investor to always be in the game, but given silver's volatility and the precarious nature of most markets right now, prudence suggests we keep some powder dry as well.
Let's say one of the soothsayers noted above is correct and silver temporarily falls to $25. If you snag it at that level, your endgame return would be 543%, vs. the 436% gain from $30 (excluding premiums and storage costs). That's more than another 100% gain on your original investment.

But how does one buy silver not knowing if the price will plummet or soar? For example, silver could take off from these levels, never to see $30 again, leaving those of you waiting for a sell-off out of the market. Or it could sink to $25, making investors who went all in now regret they didn't wait for a better price. Or it could trade sideways until, say, next fall, leaving both parties uncertain and on the sidelines.

In my opinion, there's a one-word answer to the question. It solves all dilemmas - it keeps you in the market, while simultaneously letting you buy at lower prices if that occurs. It lets you build your position bigger and bigger without the worry of whether you're getting a good price.
That one-word verb is, accumulate. Or in the vernacular made popular in the '80s by the financial planning community, dollar cost average. In other words, buy a little now, buy a little next month, etc., until you have a position sufficient in size to fight off inflation and any other economic woe we're likely to encounter over the next few years.

So my advice is, buy, hold, repeat. Because if our silver market ends up looking anything like that left bar in the chart, you may regret not having bought at $30, too.

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"The expense of our civil government we have always borne, and can easily bear, because it is small. A virtuous and laborious people may be cheaply governed. Determining, as we do, to have no offices of profit, nor any sinecures or useless appointments, so common in ancient or corrupted states, we can govern ourselves a year for the sum you [Englishmen] pay in a single department, or for what one jobbing contractor, by the favor of a minister, can cheat you out of in a single article."

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Other Articles      

China Embraces The Gold Standard
The New American
 

$400 Silver, Backwardation…
James Turk

Professor Antal E. Fekete
Silver Summit 2011

Kirsty Hogg

Silver Default Looms
Jason Hommel

Silver Can Double In A Week
Bill Murphy - GATA

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Why Increased Demand for Silver Will Have a Leveraged Effect on Its Price ~ Jeff Clark, BIG GOLD
February 18, 2011
Issue 92
Today's Gold/Silver Ratio: 42.5/1

Issue 96

Gold: 1389.10 / Silver: $32.66

Why Increased Demand for Silver Will Have a Leveraged Effect on Its Price
Jeff Clark, BIG GOLD

How Much More Demand Can Silver Handle?

The numbers for silver demand are starting to make some market-watchers nervous. The U.S. Mint sold over 6.4 million silver Eagles in January, more than any other month since the coin's introduction in 1986. China's net imports of silver quadrupled in 2010, to 122.6 million ounces, roughly 13.7% of global production. Meanwhile, mine production can't meet worldwide demand; the only way demand gets fulfilled is from scrap supply.

That is some very hungry demand. Which raises the question, how long can this pace continue?

This is important for various reasons, starting with how demand contributes to price. If demand falls off, our investments could, too.

While I've discussed the concern regarding the lack of supply before, which has its own implications for the silver market, let's focus on investment demand. Frankly, is there room for it to continue to grow? After all, how long can investors continue to set records?

There are a number of ways to measure this - the amount of money available to invest, its percent of total financial assets, its contrast to demand in the last bull market, etc. - but I think the bottom line to answering the question is to compare the biggest silver investments to some popular equities. If they rival that of the stocks we always see on the news and analysts constantly talk about and every fund manager wants to own, then it might be reasonable to assume demand could be nearing its pinnacle.

So how do the world's largest silver ETF and one of the biggest silver producers compare to the more fashionable equities?

The largest silver ETF, iShares Silver Trust, has net assets of $9.6 billion (as of February 4). This pales in comparison to the more popular stocks trading in the U.S. In fact, SLV has roughly 3% the market cap of Apple. It would have to grow over 43 times to match Exxon Mobil.

Pan American Silver, the largest pure silver producer trading on a major U.S. exchange, has a market cap of $3.72 billion. This is 4.7% the size of McDonald's. The market cap would have to increase more than 53 times to match Walmart. It is over 62 times smaller than Microsoft.

This isn't to suggest SLV and PAAS will match the market cap of these other companies, but clearly the masses are still demanding much more of them than the biggest of silver's investment vehicles.

So how much more demand can silver handle? As much as it takes to make it the household name I'm convinced it will be before this is all over. When SLV is a favorite of fund managers. When Silver Wheaton is a market darling of the masses. When Pan American is Wall Street's top pick for the year.

Imagine what those bars on the right will look like when most everyone you know is talking about poor man's gold. The rise could be breathtaking.

Remember that silver rose over 3,646% from trough to peak in the last precious metals bull market; it's up about 630% in our current run. A return matching the 1970s advance would push the price to $152. This price level is further supported by the fact that this is about where it would be when inflation-adjusted for its 1980 peak.

When you look at the potential growth in market cap of the world's biggest silver investments, it becomes easy to view any downdraft in price as nothing but a buying opportunity. I know I do.

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"If workers struggle for higher wages, this is hailed as 'social gains,' if businessmen struggle for higher profits, this is damned as 'selfish greed.'"

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Silver Prices Hit 31-year High As Coin Sales Rocket
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Egypt: Placebos, Protests and Precious Metal Breakouts
SafeHaven

Silver Still Looking Good!
MarketWatch

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How To Sound/Tone
Test for Pure Silver

Other Tests for Silver

1. Weight - 1 oz of pure .999 silver should weigh 31.1 grams

2. Sound - Pure silver has a 'ring' to it when you strike it with another metal object, or drop a handful of coins together

3. Dimensions: a Silver American Eagle should be 40.6 mm in diameter and be 2.9mm thick.

4. Magnet: If there's iron in the item, a magnet will be drawn to it. A magnet will not be drawn to silver.

5. Tarnish: Pure silver will tarnish over time, especially if you handle it. Sometimes it will get 'milky' spots on it.

6. Use an acid test kit - 'Google'
'precious metals test kit' to find a vendor.

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The Rarest Earth ~ Ted Butler
February 11, 2011
Issue 92
Today's Gold/Silver Ratio: 45/1
Issue 95

The Rarest Earth
Ted Butler

Those who keep up with business news will have no doubt read about the recent developments in the category of minerals known as rare earth elements (REE's). These are minerals that are vital to modern industrial applications, ranging from lasers, batteries, alternative energy, and superconductors to all sorts of important high-tech applications. There are 17 minerals classified as REE's with exotic names like scandium, yttrium, lanthanum, cerium, and praseodymium. Don't worry, this is not a technical discussion and this will probably be the only time I write about rare earth elements.

Actually, these minerals are not all that rare, in the strictest sense of the word. Many are quite abundant in the earth's crust. What makes them rare is that they are generally not concentrated in ore bodies offering economically feasible extraction. The first rare earth mineral was discovered around 1800, in a village in Sweden named Ytterby, and several REE's are named after that village. Up until about 1950, most rare earth production came from India and Brazil. In the 50's, South Africa was a big producer, then California took the lead from 1960 through the 1980's. Then, China came to be the dominant producer by far, and currently produces 97% of world production.

Due to booming world demand, production has strained to keep pace. This was recently exacerbated by China's new export restrictions, due to falling ore reserves and environmental concerns. This sent the price of rare earth elements soaring by hundreds of percent, prompting a world-wide effort to ramp up production. However, you just don't flip a light switch and begin new mine production. It can take years to develop a mine and begin production. In the meantime, industrial consumers must compete for available supplies by bidding up the price. This is the essence of the law of supply and demand.

Since I'm not a REE expert why am I writing about them? The answer has to do with silver. Silver shares many characteristics with the rare earth elements and there is a lot to learn from them in our analysis of silver. In fact, the purpose of this article is to make the case that silver is the rarest of all the rare earth elements.

One of the common characteristics between silver and the rare earth elements is that many REE's are mined in conjunction with other minerals, the same as silver with its by-product mining profile. Mining for both tends to concentrate on the easiest to exploit properties first. Consequently, the remaining properties tend to be lower-grade and more expensive and difficult to develop. Both silver and REE's have seen the emergence of China as the chief producer of each. (In the case of silver, the production reliance includes the processing of scrap material not mined in that country.) Silver production from China is nowhere near 97% of world production, as it is in the rare earth elements, but it still is significant. Environmental issues and restrictions inhibit the production of both silver and the REE's. And with both, higher prices don't automatically guarantee immediate new production. For instance, last year on an 80% increase in silver price, the mine production of Peru (the world's largest miner) declined 7% or 12 million ounces. That's a million silver ounces less per month than from a year earlier. Recently, the price of REE's skyrocketed, due to China's sharply curtailed exports. Should any major silver producing country sharply restrict the export of silver, the price would soar.

Read The Rest of the Article ...

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"The scarce and valuable commodities such as copper, lead, zinc, uranium, gold, silver, platinum, and palladium just to name a few are limited. These are the basic building blocks for all the goods and services we desire in modern society. You can't have a car, a house,
a cell phone, a refrigerator, a simple bar of soap, etc. etc., without them.
"

-Greg McCoach    

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Why Every Hard-Working
American Should Be Loading Up On Silver

Jeff Clark, BIG GOLD

7 Reasons Why Silver Will Make You Rich
J. Edwards

Are Precious Metals Still a Good Buy?
Lakshimi Capital

1-oz Silver Coin Sales Shatter U.S. Mint Records
Mineweb

Why Governments Will Buy Silver
SilverStrategies

About Coin Cleaning

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