Group at large -

For those of you who haven't been watching, go to site www.sightings.com and check out an article by someone who's taken a real interest in this situation. He's been writing a long time and so far, his analysis has checked out remarkably accurately. The srticle has to do with the coming eruption in the silver market.

Scared the begeebers out of me, let me tell you. Not so much by what he said, but the timeframe involved. We may not have the kind of time we're all hoping for. Like the end of this year! If what he's anticipating comes to pass, Jan. 1 might be an anti-climax.

For those who don't follow the commodities market, precious metals are bought and sold short. That means that I sell a pound of gold, for example. I don't have the gold. I just sell it. Now my job is to go out and find someone who has a pound of the metal and buy cheap from him/her, and send it one to whoever I sold it too. The time lag between selling and buying varies according to quantity and finding a metal's source. The banking industry has been doing this for decades, worldwide. And gees, it's now falling apart. Gold prices have now started to rise because Europe capped sell off last week. Silver is even more volitale than gold because it backs more currency and has, until now, been more plentiful. But the majority of silver mines worldwide have ceased operation due to playout. That creates a raw supply problem. Also, the short selling practices have been much larger with silver. The "never run dry" syndrome, I guess.

The scenario currently shaping up seems to suggest a major discrepency between sell and amounts available to buy. Hence, someone is going to get caught by the shorthairs, and that someone is the banking industry (one of the largest buyers).

Got your cash stash put away? Want to gather those little sivler ingots before the financial SHTF? Now's the time. Before long you may not be able to get an ingot for less than $100 ea.

At least check out the article for info value. Personally, between property taxes this month and insurance, extra for precious metals is pretty scare in this household, but your situation may be different. I'm not advocating anything but survival over the long term here, BTW. I don't deal in metals. We can only speculate as to the importance of this commodity after Jan. 1 when the real scenario starts. Coinage and metals, however, may be the only form of exchange honored besides barter if things get really bad.

Regards, Claudette

-- Claudette Young (laclaud@cybertrails.com), October 06, 1999

Answers

Could you please provide the name of the article, the name of the author and if possible the URL (http://www. etc...). I went to sightings and there are a lot of articles....

Thom

-- Thom Gilligan (thomgill@eznet.com), October 06, 1999.

CLAUDETTE,

-- EJH (hilgendorf-e@mail.mssc.edu), October 06, 1999.

Claudette,

I've been watching and reading dor sometime the posting listed in this discussion....I'm impressed by the overall depth of knowledge and resourcefullness of those commenting. Concerning The Silver, I believe correctly that Warren Buffet in April of 98 purchased somewhere in the neighborhood of 100 million ounces. The purchase price then was $4.38 an ounce.

I cannot help but believe that the world's second richest person (monetarily) would not be privy to inside workings of what taking place in the political demonizing of precious metals. The 100 million ounces was so great they could not make good on delivery.

-- EJH (hilgendorf-e@mail.mssc.edu), October 06, 1999.

Claudette,

I've been watching and reading dor sometime the posting listed in this discussion....I'm impressed by the overall depth of knowledge and resourcefullness of those commenting. Concerning The Silver, I believe correctly that Warren Buffet in April of 98 purchased somewhere in the neighborhood of 100 million ounces. The purchase price then was $4.38 an ounce.

I cannot help but believe that the world's second richest person (monetarily) would not be privy to inside workings of what taking place in the political demonizing of precious metals. The 100 million ounces was so great they could not make good on delivery. The "Church Trust" group out of texas, Houston can transfer IRA's into gold backed IRA's if you want to preserve your savings that cannot be cashed in right now or to avoid penalties. Although that may all be a moot question soon there are alternatives that are viable after that. But be sure they have an eye for the vast reserves in retirement funds.

-- EJH (hilgendorf-e@mail.mssc.edu), October 06, 1999.

A bit more on Buffett

There was a very large deposit of silver held by one institute as collateral which had been leftover from the Hunt debacle back in the 80's.

The transaction between them and Buffett allowed a very large purchase to be made in private...if they had tried to sell all that silver it would have driven the price down dramatically.

Buffett's Fund is a major shareholder in International companies which require silver as a raw material. Major increases in the price of silver would eat up the profits of such companies and the billions of market value that Buffett would lose on the company shares could be as much as the cost of buying all the silver.

Buffett certainly bought silver because he thinks he can profit there, but he also has other motives.

One other aspect which is phenomenal. He has taken delivery of all the silver. He owns all of this silver without a penny of margin. He might sit on most of this silver for a very long time...almost like a central bank holding silver reserves...can a little guy own silver and do the same???

P.S. For anyone considering buying silver coins, remember that most people in the public do not see much difference between a quarter of the post silver era (copper clad) and a silver quarter. Today the silver is worth about 4-5 times face value.. if the market drives it up to 10 times face value you think you have doubled your money, then you take it out on the street and try to convince someone that your quarters are different and are really worth 10 times a quarter.

For the small budget householder who thinks they could afford a couple hundred dollars worth of silver...consider getting a couple hundred dollars of normal coins instead.

-- Thom Gilligan (thomgill@eznet.net), October 06, 1999.

Thom: I remember the 1979-1980 run up in gold and silver. At one point silver coins were selling at 50 times face. Earilier in the run up you could buy a gallon of gasoline for a silver dime or $1.20 paper money. I expect the same this time. Carl.

-- Carl Eschbach (eschbachcr@ar-arng.ngb.army.mil), October 07, 1999.

Claudette - once again making a request for the title of the article to help locate it on www.sightings.com

Answering Carl about buying a gallon of gasoline with a silver dime. Does this mean that one could have walked into almost any gas station and offered the attendant 10 silver mercury head dimes in lieu of $12.00 cash for a 10 gallon fill-up?? (yes, 10 gallons used to be a fill-up on those small Japanese imports which we used back then to save gas). More likely what Carl means is that back at that time, you could have dug into the bottom of your sock and underwear drawer to find that old mercury dime collection book you kept as a kid (which had 28 dimes in it) and taken it down to a coin dealer who would have been happy to give you 12 times face value in the form of cash dollars, which the gas station attendant would recognize.

One unit of silver dimes (or quarters) as traded by bullion brokers, has $1,000 face value and currently costs about $4,500. The value of such a unit is quoted in the business section of newspapers like the New York Times and there are enough places on the internet where it can also be found. Little local downtown coin dealers who would sell or buy such coins usually handle small amounts (for example $100 face value which is 1/10 of a market unit) tend to quote even values like 4 times face value or 5 times face value. For those who can afford it, I consider the purchase of 1 or 2 such units (i.e. about $10,000 today) to be a reasonable way to set aside financial assets which can be held physically in a safe place. Silver will certainly retain value throughout the crisis. It is also easy to subdivide the unit later and sell it slowly. But if the day comes when these old pre-1965 coins are recognized by most small public businesses and accepted as direct payment instead of cash (basically this means a barter economy) then y2k has certainly hit us very hard.

One small note: Bags of silver are currently trading at about a 25% premium above the melt value - that it the actual silver content. Historically, there is almost no premium...thus, if y2k is a fizzle, one stands to lose as much as 25% value even if the price of silver falls.

On the other hand, if the silver markets take off like Carl mentions, then the newspapers will certainly cover it and the general public "could" fall into a silver craze where people are willing to trade just about anything if payment is in silver.

All part of the fun, it seems.

-- Thom Gilligan (thomgill@eznet.net), October 07, 1999.

Here's the article on silver. It's originally from the Gold Eagle site:

http://www.sightings.com/politics5/silver_p.htm

See also:

http://www.gold-eagle.com/gold_digest_99/butler100499.html

-- David Palm (djpalm64@yahoo.com), October 08, 1999.

Thom Gilligan

Yes, you could take silver directly to the merchant. There were even sales ads in the newspaper denominated directly in silver coinage.

Word gets around. . .

-- Gypsy (GypsiGold@aol.com), October 09, 1999.