Silver Rush

The Simple Truth About Silver
Why Silver is 'Everyman's Gold' - Free Special Report

Silver entered a new bull market over a decade ago, driving silver prices from $4.50 an ounce in 2003 to nearly $50 an ounce in 2011. Since then, silver prices have eased back below $15 an ounce, which is still over threefold growth! But not all silver performs equally and experts agree silver's real growth still lies ahead for many reasons.

Silver is sometimes referred to as "everyman's gold". With gold prices near $1,100 an ounce, buying the precious yellow metal can be a stretch for some. Today silver bars and coins are being purchased quickly, quietly and invisibly - both in the U.S. and worldwide.

In fact, the Chinese have a centuries-old affinity for silver. It began in the 1500s with the explosion of trade with Mexico via the Spanish galleons. China is still today actively encouraging its citizens to buy both silver and gold.

$806 an Ounce Silver?

Today the price of gold is more than 60 TIMES the price of silver - one of the biggest differences in 750 years.

As the chart illustrates, in 1477 silver prices peaked at $806/oz. (in 1998 dollars). Then came the New World discoveries and prices fell below $400, $300 and then $100/oz. in the 20th century. The average gold to silver ratio between 1344 and 1894 was 20-to-1.

The U.S. Coinage Act of 1792 established the official gold-to-silver price ratio at 20-to-1. But gradually as financial markets have been influenced by money printing and price manipulation, silver investing fell out of favor until the dawn of the 21st century.

Today silver is undervalued and may soon trade three times higher than at present, restoring the historical gold-to-silver ratio of 20-to-1!

5 Major Forces Driving Silver Prices Higher

1. Buying of Physical Silver is Red Hot
Despite the beating that silver took in mid-April, there's one aspect of the market most observers are ignoring: the physical silver market. In fact, savvy investors were flocking to buy physical silver. The demand for U.S. silver coins by investors has grown 300% over the last five years. (see chart below)

2. Sentiment is Too Bearish
Investor sentiment is often a great contrarian indicator because the herd usually makes the right move at the wrong time. When the speculators' net short silver positions reach a major high, it's a signal for smart money to buy at or very near a major low.

3. Silver Outpaces the Rising Cost of Living
Fifty years ago it took three silver dimes to buy a gallon of gasoline at $.30 a gallon. Five decades later the same three silver dimes will buy you TWO gallons of gas, even though the price of gas has risen over tenfold. Both silver and gold are a trustworthy store of value that protects your savings from the constant erosion of inflation.

4. Spendthrift Politicians Are Good for Silver
President Obama has been a strong driver for higher silver prices. In fact, he helped make silver the best-performing major financial asset during his first term. Another four years of Obama together with the Federal Reserve's heavy reliance on the printing press could easily provide an encore performance.

5. Silver is a Great Inter-Generational Investment
In addition to serving as an excellent long-term store of value for today's baby boomer generation, Silver Dollars or Silver American Eagles can also serve as an excellent gift item for children and grandchildren that will remind them of the real value of true and honest money.

Silver Growth Potential is Excellent!

Silver prices would need to rise above $125/oz. today just to reach the previous inflation-adjusted high of $50/oz back in 1980. So, at under $25 an ounce, silver is still a mere fraction of the $100-$150 an ounce price projected by silver industry experts. Here's why;

-Worldwide market demand for silver is growing, while supplies are disappearing.

-New high-tech uses for silver are straining already-tight supplies.

-World demand for silver now exceeds annual production, depleting stockpiles of silver.

-The U.S. government has dumped billions of ounces of silver, depressing silver prices.

-Today the U.S. government's silver hoard is gone, so they must buy at the market price.

For all these reasons the silver market certainly appears to represent a brilliant investment opportunity. Silver is also an excellent inflation hedge which will become very important as the trillions of dollars of new debt drives the cost of living higher.

Best of all silver is the most affordable precious metal asset to buy and put away month by month and year by year.

At Swiss America we teach our clients to think of their gold and silver as wealth insurance - you buy it and hope you never need it - like life, homeowners' and car insurance.

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