Why I Believe Silver Prices Will Soar

First, let's look at some important abbreviations: Gold is abbreviated as Au; Ounce is abbreviated as oz; Silver is abbreviated as Ag; Mercury is abbreviated as Hg; and Helium is He.

Next: Did you know that gold peaked on 21 January 1980 when people were willing, able and actually buying it at $850 an ounce (oz)? Put another way Au ~ US$850/oz in 1980 dollars... that's equivalent to US$2054.70 in 2003 dollars! (sorry, but my inflation calculator refuses to give me real dollar values in 2005 dollars... but someday it will... you just wait and see... but in the meantime it would be safe to say that US$850 in 1980 dollars is probably equal to about $2106.37... that's my rough estimation... just a guess...)

It's true! But...

On 15 February 2005 the spot price for an ounce of gold was about half of that historic high (~US$424 per oz). What does this mean? A guess...

Gold prices are likely to go up... and, the same is likely for silver, platinum (Pt), paladium (Pd), even copper. Why?

Currently the United States of America's (In God We Trust) dollar is tailspinning out of control.

Terrorists, barbarians, criminals, no-gooders, scum-of-the-earth, nor-do-wells, (or as the liberal press like to call them: "insurgents") are causing mayhem and would love nothing better than to destroy the U.S. economy.

At the same time China and India are increasing their momemtum in getting their economies into first class status.

These countries are intent on joining the ranks of U.S. Australia, Canada, United Kingdoms, Italy, France, Germany, Switzerland, Japan, etc... as modern economies. So, they're building... and making and working... and, as a result...

Commodity prices are going up, and worldwide demand for raw materials such as steel, copper (Cu), silver, nickel (Ni), aluminum (Al) are getting stronger than ever.

As gold prices go up you'll find Au bullion prices move up in lock-step. And...

Coins made of precious metals will appreciate also.

If part of your investment portfolio includes high grade, collectible coins (numismatics) you should notice that those little 'babies' are going to become more and more valuable.

I don't recommend investing in stocks of mining companies unless the company is run by really smart directors... The kind of smarts that I'm talking about are the type that would have the mining company purchase precious metals (like Ag) from the open market (during the short and mid-term; but not necessarily long-term) instead of wasting time digging it out of the earth. Why?

You see, Ag prices (for instance) have been artificially kept low by very powerful forces (central banks, commodity super traders, technical hedge funds, market makers...).

Those forces are losing their ability to manipulate the prices... and sometime in the not too distant future their grip will slip and the price of 'Ag' will shoot up like a 'He' balloon that was kept unnaturally tethered at the bottom of the deep end of Barbara Streisand's California swimming pool! (Can you say "The Diva's Deep End" 6 times really fast?)

First, the balloon will torpedo to the surface... it will break through the water/air interface and then bye-bye... adios... hasta la vista... au revoir... "you're out of here"...

Boeing 747 pilots coming in on their final approach to LA International will comment to the Air Traffic Controllers about a streak shooting skyward... But...

We all know that's no streak... that's no UFO...

That's our helium (He) balloon model for what's going to happen to silver (Ag) prices when the tether is released.

So, what does this have to do with smart mining executives? Everything! You see...

While it is dirt cheap to get pure, ingots of silver on the open market why go through the expense of digging the raw material out of the earth, cleaning it up, refining it and then casting it into bars when you can buy it off the open market for less?

The answer is simple... silver mining companies should be buying up purified Ag and and stock-piling it. Then, when the price goes into the hundreds or thousands per ounce (which it will)... then...

It will become very economically wise to go dig more out of the ground. But while they're digging for new stocks they can be selling from their stockpiles ounces that they bought for less than $10 per oz for 10 times or 100 times that amount. Now we're talking profits!

When gold hits $850/oz again expect silver prices to get closer and closer and eventually shoot right past... In fact, if gold is at $850/oz silver should be at least twice that amount per ounce... if, and only if, true market forces are allowed to determine the prices.

This is LeBlond, Gerard LeBlond from Sell Info Products Online dot com (SellInfoProductsOnline.com) Basic Drum Beats dot com (BasicDrumBeats.com) ; Founder & Owner of West-Gate Press (Originally of Portland, Maine but currently of Jamesville, New York).

P.S. Not only have we just concluded a lesson in 'Current Topics In Commodities Markets' but we've also had a little lesson in the Periodic Table of the Elements...

We've covered He, Ag, Cu, Au, Hg, Pt, and Pd. 7 down 111 to go!