-- Posted 26 January, 2006 | | Source: SilverSeek.com
We are probably in a better position that even I can realize, so forgive me for my excitement and wordiness today, as I try to understand, and explain, our good fortune!
Silver, exploding to new highs: $9.50/oz. now!
Gold, exploding to new highs: $567/oz. earlier today.
Copper, exploding to new highs: $2.20/lb., showing no sign of slowing; with world stocks at 2 days inventory!
Zinc, exploding to new highs: $1.04/lb. up nearly 100% in 6 months; and ready to outperform for several years!
You see, my largest investments are silver stocks, and since silver is often found with copper and zinc, these "added bonuses" just got a lot better--so much better I can hardly keep up with it, mentally.
Why is hyperinflation hitting the zinc and copper prices so strongly? Will it continue, as many expect, and why? Why these basic industrial materials? hmmm... Copper wires carry electricity, zinc is used to rust proof steel, but it's got to be more than just the new Chinese industrial demand for steel and electricity, right?
It may just be that zinc and copper are exploding in price because they are suppressing the price of gold and silver! See the goldrush21.com DVD for proof of the gold price suppression--I will not elaborate on that point here, the DVD does a fine job.
You see, back in our industrial revolution in the 1800's to 1900's, we were living in a gold standard. Back then, silver and gold were real money, and had substantial value. The point is that back then, copper and zinc were produced abundantly and cheaply as byproducts of gold and silver mining. With high precious metal values, we had an abundance of cheap copper and zinc and lead and all sorts of other minerals that helped to fuel our industrial revolution.
Today, there is a bigger industrial revolution than we ever had. China & India! But, alas, gold and silver prices today are so low, that silver is the byproduct of copper and zinc mining! It's backwards! Today, there is no multi-year abundant supply of excess copper and excess zinc from highly profitable gold and silver mining!
Today, our government leaders seem to think that all we need is cheap oil, and they go to war over it, partly also to protect their paper dollar printing racket. But the world needs more than cheap oil and fraudulent paper money! (It could even be argued that the wars are driving up the price of oil, but I digress.) We also need cheap copper and cheap zinc, and that can only be achieved if all of society uses honest money, which will make gold mining and silver mining profitable enough to produce the zinc and copper in the abundance that we also need.
The real beauty of the gold price suppression, and excess creation of paper money that is now heading to China to help fuel their economic development, is that their schemes are failing, as copper and zinc are soaring, and are now ready to continue soaring for the next 2-3 years, or as long as China continues to industrialize.
The beauty of this is that for us silver investors, we get this surprising bonus in our exploration stocks, because silver is found with copper and zinc, giving us a bonus that I did not really predict. (See what a lousy investor I am?) Generally speaking, industry can move counter cyclical to rising gold and silver prices--But I do expect, and have predicted, that rising silver and prices will be bullish for the economy in the long run!
Rising Gold Prices Will Help The Economy - 02 December 2003
Furthermore, rising copper and zinc prices are further proof that silver and gold prices are not in a bubble, and not ready to "top" out any time soon. This is proof of hyperinflation, and that gold and silver have much much higher to go. The inflation/deflation argument is about dead, but in 2003, I was one of the few to recognize that hyperinflation had continued for 2 years at that time. Today, hyperinflation has been going on for four years now. See Inflation & Deflation During Hyperinflation - 06 November 2003
See the following articles for confirming opinions on the great outlook for copper and zinc, from highly informed executives of major mining companies who know the mining supply/demand issues in copper and zinc--because it's their industry, and business to know about all the other copper and zinc projects in the world, because it's their job to look for, and acquire them!
Copper, Zinc Rise to Records on Signs of Growing Chinese Demand --Jan. 25
Copper and zinc rose to record highs in London on speculation that sustained economic growth in China, the world's largest consumer of industrial metals, will boost demand for all commodities.
Copper used in wire and pipe has surged 56 percent in the past year, and zinc used in stainless steel is up 78 percent. . .
Prices probably will keep rising in the next two to three years because supply isn't expanding fast enough to meet demand from China, said Greig Gailey, chief executive officer of Zinifex Ltd., the world's second-largest zinc producer.
``It is difficult to see new mines coming in the next two to three years'' that are needed to meet rising demand, Gailey said in an interview from Davos, Switzerland, where he is attending the World Economic Forum. He declined to give a forecast for prices.
China's zinc consumption is expanding because of demand from steelmakers, who use the dark-gray metal to rust-proof steel. Chinese steel production rose 25 percent to a record last year, making it the world's biggest steelmaking nation.
(Increased steel demand will also be great for moly!)
Copper inventory monitored by the LME dropped 1.5 percent to 101,500 tons today, the LME said. That's equals to less than three days of global consumption.
Developing new Metals Deposits Gets Tougher --Jan. 25th
"The President of Canada's Falconbridge Mining asserted Tuesday that new metal supply will be constrained by lower grades, the scarcity of new discoveries, reduced exploration expenditures, and the scarcity of mining professionals in traditional mining nations."
"Regent suggested that the supply of new metals will be constrained due to the lack of new discoveries and long lead times to bring on new supply when and if it's discovered. For example, the rate of copper discoveries needs to increase by two thirds, but in fact, has only increased 25%."
ZINC SUPPLY SHORTFALL SET TO ELIMINATE INVENTORIES IN 2005
And I still have yet to share with you the most bullish news of all in the silver market!
I have long been telling you about the silver shortage feared by the silver users, announced ever since the SUA has asked the SEC to deny the proposed Barclay's Silver ETF, or Exchange Traded Fund, which will make it easy to buy silver in a trading account, just like a stock.
(By the way, you can also buy CEF, which has 50 oz. of silver for every 1 oz. of gold, and keeps 95% or more of assets in physical gold and silver bullion)
Well, it looks like the SEC will soon approve the silver ETF, and this news may have been responsible for silver soaring more than 25 cents/oz. today.
See the follwing news items:
Barclays' Silver ETF Takes One Giant Leap for Bull-kind --Jan 25th
Silver, platinum prices set new highs --Jan 25
Shine On – Part II: SEC Proposes Rules for Silver ETF Trading --Jan 24th
The SEC on the Silver ETF:
The SEC is asking for comments from the public about the silver ETF. If you would like the SEC to approve the silver ETF, you can tell the SEC about it here:
Click here to tell the SEC to allow free trade in silver:
-- Posted 26 January, 2006 | |
Last Three Articles by Jason Hommel, Silver Stock Report