Tuesday, December 25, 2012

Eric Sprott: Smart Investors Are Flocking to Silver

Sprott Asset Management published their monthly newsletter Market at Glance (December 2012) entitled "Why are (Smart) Investors Buying 50 Times More Physical Silver than Gold?"

Eric Sprott explains that demand for Silver relative to Gold has dramatically changed since 2008. The table below shows the US Mint gold and silver sales in ounces over the last few years:

Each year there's about 130 million Gold ounces and 1 Billion Silver ounces available per year, but due to use for industrial applications, the annual availability for investment purpose is respectively 120 million and 350 million ounces. Therefore, the ratio of physical silver availability to gold availability is roughly 3:1.

Investors are choosing to buy silver at a ratio to gold that is well above what is available. The silver price is currently mainly set in the paper market where the daily average trade on the Comex is approximately 300 million ounces. An outrageous number when you compare it to the daily mine production of about 2 million ounces, and the current price is most probably where it is because of market manipulation.

Sprott believes the current investment trend into silver is likely to continue.

The full version of the newsletters is available at http://sprottasset.com/markets-at-a-glance/why-are-%28smart%29-investors-buying-50-times-more-physical-silver-than-gold/

Saturday, December 15, 2012

GEAB 70 - 2013, The First Steps into The "World Afterwards" in Complete Chaos

Here are the highlights of GEAB 70 (December 2012) entitled "2013, The First Steps into The "World Afterwards" in Complete Chaos":

  • 2013, The First Steps into The "World Afterwards" in Complete Chaos - As the world enters into a global recession in 2013, it will become more fragmented into regional blocks. Although  the Euroland, South America and Asia should come strengthen from the crisis, the US, the United Kingdom, Israel and Japan should be greatly weakened.
  • Politics in Germany until 2017 – Weaking of main political parties, and increase in the number of small parties.
  • Yearly evaluation of LEAP anticipations – 75% success rate en 2012. By their own assessment, before new anticipations are published in GEAB 71 next month.
  • Global systemic crisis: Assessments of 40 « country-risks» - LEAP 2020 team looks into 40 countries, and how they are likely to handle the 2013 crisis.
  • Strategic and operational recommendations. Stock markets are likely to slide downwards, banks will suffer and it may be wise to spread assets among several banks,  prudence is required when investing in real estate, and keep stocking up Gold.
  • The GlobalEurometre - Results & Analyses. 66% (vs 48% in November) of respondents experienced price increases..
The full GEAB 70 report (PDF format) is available to LEAP 2020 subscribers for 200 Euros per year for 10 new issues + the 6 issues published before registration.

Saturday, December 1, 2012

Marc Faber December 2012 Market Commentary

Marc Faber has just released his December 2012 market commentary "Always try to be a little kinder than Necessary" on gloomboomdoom.com.

This month report explains that something is clearly not quite right with the economy, as the recent performance of Wal-Mart, Tiffany, Genesco, and Kohl’s show. What concerns Marc Faber greatly is that most asset markets had outsized gains since early 2009, excluding Vietnamese, Chinese, Japanese, and European equities, as well as US housing. He believes that investors’ expectations about future returns are far too optimistic, and that in a world that currently hardly grows, investors will need to reduce their future return expectations. Therefore, 2013 will most probably not be a good year for holders of assets, and he has now shifted to the preservation of the outsized gains he has achieved over the last 3 years.

Marc Faber also wishes Merry Xmas to everybody and reminds his readers to try to be as nice and kind to other people quoting Albert Schweitzer: "Constant kindness can accomplish much. As the sun makes ice melt, kindness causes misunderstanding, mistrust, and hostility to evaporate." 

The monthly market commentary including one attachment:
  • The Fed’s Last Hope by Michael A. Gayed,Chief Investment Strategist at Pension Partners, LLC.
I cannot find the attachment, but Gayed mentions it in a marketwatch.com articles, and explains bonds have now very little value, and the relative advantage of dividend yields over bonds yields, will be bullish for stocks.

If you want to access the full Monthly Market Commentary (MMC) by Marc Faber, it is available for 300 USD per year.