David Morgan

Recently it was announced on a Chinese news service that silver bullion is now being offered to the Chinese public. Please note this is a very small operation and at this point none of us knows if this will really catch on with the Chinese investing public.

Chinese Silver Currency - There are some subtleties going on in China that not too many people write about. China actually has a fairly long history with silver and I might suggest that readers check out the archive section at Silver-Investor.com and read what Charles Savoie has written on this subject. I know many of my colleagues are not as bullish on silver as I am, yet going back many years I recall reading an article in Barron's by John Doody.

The combination of liquidity circulating through the U. S. economy and a tanking dollar stokes inflation. Investors are increasingly sensing inflation as a threat and seeking a safe-haven in gold.

The U. S. government has responded to the worst financial crisis since the great depression with a massive, more than $13.5 trillion in pledged or potential outlays. Meanwhile, rising unemployment and slumping corporate profits are crimping the U. S. Treasury’s tax revenue.

The credit worthiness of the U. S. government is raising concern and its AAA credit rating is something that cannot be taken for granted. Against this backdrop, it is hardly a surprise that the appetite of foreign governments and investors for dollar-denominated investments has diminished.

Stealing From You and Me As the Public Carries On Its Belief in Fantasies

What ever would possess intelligent professionals such as those running the finances of major financial institutions to leverage their equity 88 to one in the case of Citigroup and 134 to one in the case of Bank of America? JP Morgan’s credit exposure to financial derivatives, (financial weapons of mass destruction) at last glance exceeded 400 to 1! An undergraduate student with average intelligence would clearly see that such outrageous levels of leverage would guarantee a bad ending. So what was it that compelled supposedly best of breed financial officers to act like total nincompoops? Well, if you had tomorrow’s sports pages you might be willing to bet a little more heavily on the horse races today if you believed you already knew the outcome. When you view the landscape and try to make sense of how these financial institutions could possibly have allowed themselves to get to such extreme levels of leverage, common sense leads one to believe that the only thing that could compel such reckless behavior was that the parties involved believed they already knew the outcome of such bets.

By David Morgan

How does silver perform during a deflation? A question many of our readers have asked.

Today, most investors are fairly convinced that gold does fairly well during a deflationary environment. Since gold has held better than all asset classes these past several months, many mistakenly believe that gold does best during inflations, but they are not sure about gold during deflation. The fact is, from times past, gold actually does best during deflations, rather than inflation. The seminal work on this topic was produced by Professor Roy W. Jastram of the University of California at Berkeley when he penned the book called, The Golden Constant.

By David Morgan

Many of us who write about the precious metals field have put out their 2009 forecasts and predictions for the New Year. This writer is no exception, but it seemed to me that it might be nice to look at my mission statement and determine if I could compose a simple story that might engage the reader to think about the current dire state of affairs in the economy and how an honest “money” system might help on an individual basis.

My mission statement is, “To teach and empower people to understand the benefits of an Honest Monetary System.” Although the words gold and/or silver are not even mentioned in my mission statement, they are both very important components in an honest money system—they instill trust. And the lack of trust is the core issue of today’s economic problems. Our banking institutions and well established investment firms do not trust each other, and the system is grinding down. This has even affected the “Big Three” automakers, who are experiencing problems in this economy . . . but it wasn’t always that way.

With the current downturn in the economy the Jewelery Industry continues to struggle, recent figures supplied by the assay office show that Hallmarking has dropped dramatically. In the third quarter 4.86 million articles were hallmarked, down 23% from last year.

The collapse of the US-centric global credit bubble caused what is now labeled a financial crisis in 2008. At heart, this process amounts to a necessary rebalancing of economic and financial market distortions that had built up over many years, the gargantuan US trade deficit being the most obvious and problematic manifestation of an untenable situation. Clearly, a cleansing of excesses was called for and, in the long run, rebalancing should be beneficial despite the short-term pain. Short-term pain, however, is evidently anathema to politicians and their captive central bankers. Their efforts to prevent rebalancing in the name of economic and financial market stability are laying the groundwork for a far more devastating crisis. The world would go on with a 50% drop in share prices and real estate values, some major bank failures, and 5,000 fewer hedge funds. A doubling of unemployment and several years of recession could be endured, even if the pain to those directly affected seems insurmountable.

By David Morgan

“Junk silver” and “junk bags” are terms that refer to $1000 in U.S. coinage—dimes, quarters, or half dollars minted 1964 or earlier; commonly known junk bags consist of 90% silver. Junk bags of silver dollars are sold separately and have always held a higher premium.

We are talking about coins that are only in fair condition and have no collectible value above the bullion value or the “melt value.” The word “junk” refers only to the value of the coins as bullion, and “junk” is not scrap silver.

By David Morgan

This headline should grab anyone’s attention, especially those interested in the silver market. Before going forward, let me explain that fully 70% of silver is produced as a result of mining other metals, mostly base metals. Copper mining, for example, is responsible for 28% of the silver mined in 2007. Lead/Zinc mining yielded 32% of the silver mined in 2007. Finally, gold mining brought about 10% of the silver mined, again in 2007. All data is from GFMS World Silver Survey 2008, page 31.

How Investing in Precious Metals Will Help Baby Boomers Retire Comfortably Without Fear

By David Morgan

Baby boomers, with every year that you get older, do you become more and more afraid of retiring? I don’t blame you at all. The worldwide economic slowdown epidemic that is forcing homeowners into foreclosure, halting consumer spending, driving up credit card bills and crashing stock exchanges on a global basis are seriously hurting many baby boomers’ plans for retirement.

Many boomers have become very fearful of their future because they were relying on their 401Ks and IRAs for a comfortable retirement. Now, they’re watching their profits freefalling downward. Many boomer investors are now seeing lots of red in their portfolios – so how can they retire?