China Silver Market

We have heard enough about US on QE3 (mid September), QE4 (early December) and the recent ASE coins sold out in US Mint (last week), let’s move on to look at the world 2nd largest economyChina.

China Second Largest Economy

SilverInstitute has published a report titled The Chinese Silver Market  and it is available for download here. It is a 26 pages report fulled with small text and jargon, so I will explain it in a simple to understand manner.

China’s retail investment demand for silver has great potential to grow robustly over the short to medium term, as a wider population base gains access to silver bars and coins. The demand for silver in industrial application and jewelry are main drivers for the consumption. Silver investment demand has exponentially growing since 2008 – 2011. With a rapid development in the Chinese silver market, both silver demand and supply are expected to achieve even further growth in coming years. (Click on image to view full size).

China Silver Demand Supply

Silver fabrication (industrial use) is set to rise across most sectors in the coming years, the strength of industrial demand will remain the key driver behind this growth. In the olden days, silver is a monetary metal first, then being used for other jewelries and utensils. However in the modern days with technological advances, silver is an industrial metal first, then only is a monetary metal.

The following chart will show you the difference between Fabrication Demand and Silver Supply. But what is “fabrication”? In layman terms, silver fabrication means making use of silver to produce goods. The silver is being used up and the silver is usually gone and cannot be recovered.

Supply over Fabrication

So, where did the fabrication demand use the silver for? The following diagram will answer the question. Silver is being used up in Industrial Applications, Jewelry, Silverware, Coins & Medals and lastly Photography.

Silver Fabrication

If you remember what I mentioned earlier, in modern days, silver is an industrial metal first, then only is a monetary metal. We seen the industrial usage, now let’s take a look from the investment / monetary view.

In July 2009, restrictions to own silver were lifted by the government of China. The government now allow the people to invest in silver bars. China introduced its first ever investment opportunities for silver bullion bars in 2009. The people in China are buying silver for many reasons:

  1. China’s high household savings rate. That means domestic investors (rich local investors in China) have a large amount of cash that urgently needs to be parked.
  2. Investment options are still rather limited. Immature financial markets in China. Hence they invest into something proven to have value for the past thousands of year – gold & silver.
  3. The property market has been volatile and controls have been implemented to control speculation. At the same time, the stock market has seen heavy losses. Hence, focus shifted to silver.
  4. Interest rates for savers have remained low and, in fact, are close to zero in real terms. China government encourage the people to take out money to invest rather than saving the cash in bank.

Notice investment demand for silver has increased drastically since 2008 till 2012. (Year 2012 is not ended by the time this chart is drawn, so the final number is expected to be even higher.)

China Silver Investment Demand

Investment demand for silver has posted a spectacular increase in China in recent years. From a small player just a few years ago, China has already become the world’s leading market for physical silver investment. One of the most famous physical silver coins from China is Silver Panda Coins that you can start investing as low as RM130/oz.

Jim RogersThe legendary investor, Jim Roger said:

If you were smart in 1807 you moved to London, if you were smart in 1907 you moved to New York City, and if you are smart in 2007 you move to Asia.”

If we put it into a Malaysians’ investment context, it would be equivalent to:

If you were smart in 2006 you parked your money to Bursa Malaysia, if you were smart in 2008, you park you money to property, if you are smart in 2013 you park your money to silver.

Practical Guide For Investing Silver In Malaysia is an eBook specifically for Malaysian. You will learn different strategies in silver investment that anyone can apply. You will even learn how to invest silver below market price in Malaysia! Click here to find out more.

Abu & En. Jamal – QE Four-ever

Fed Chair Ben Bernanke Holds News Conference

QE4 (Quantitative Easing 4) is officially announced by Ben Bernanke, The Chairman of Federal Reserve on 12th December 2012, which is only 3 months after QE3 is announced in September 2012. This “money printing” will be adding 1 trillion dollar (USD 1,000,000,000,000) into financial market in 2013.

Silver price fluctuate in an (almost) exact mirror the day before and after the announcement of QE4. It is obvious that the traders are systematically trading silver on paper using previous day as an opposite reference.

silver-mirror

Creating inflation is the main objective of quantitative easing. Throughout history, government that “print money” will eventually collapse their own economy. Germany (in the 1920s), Zimbabwe (in the 2000s) and Japan (2001-2006) have all done quantitative easing and the efforts are all FAILURE.

Why do they have to print money? Why create inflation? What is the real problem here?

The problem here is really simple: The economy is not growing. The people are not spending enough money to stimulate the economy. Hence, the government “print” more money for the people to spend. Federal Reserve will “print” as much money as possible until the economy recovers, which is IMPOSSIBLE.

jackie-chan-impossible

I will show you a simple explanation why this is impossible.

Abu is born in a rich family. His father En. Jamal is a decent businessman. When Abu at age 21, he got a job with salary RM2,000 a month and he applied a credit card from Maybank with credit limit of RM20,000. Being young and fantasized by the materialistic world, Abu started spending money using the credit card. He soon has reached his credit limit and he could not afford to pay back the debt. En. Jamal (being a loving father), used his personal saving to help Abu to pay off the credit card debt. Abu is happy now and very soon, he started spending on the credit card, again. But this time, he called up Maybank to ask for a larger credit limit of RM50,000 because the smaller and cheaper “toys” could no longer satisfy him. Once he hits his credit limit, the father En. Jamal has to use his personal saving to pay off his son’s debt – only this time a larger debt at RM50,000. Abu knowing his father will always pay off the debt for him, Abu this time ask for RM100,000 credit limit from Maybank. Then… well you know what happen… The credit card debt cycle will grow larger and larger until one day En. Jamal can no longer help his son.

debt

So how does the story relate to Quantitative Easing?

En. Jamal is the government and Abu is the economy. Every time Abu is in financial trouble, En. Jamal has to take out money for Abu to keep Abu going. Each time the amount will be larger and the problem happens more frequent. The money being used to “save” the situation did not really save the situation but encourage the problem to be bigger the next round. QE3 is printing $40 billion every month and QE4 is printing another $45 billion every month. Then, guess what’s next?

If you have problem understanding the story of Abu and En. Jamal. Another example would be a drug addict and his drug. When the drug addict is addicted to a drug, he will need it from time to time, with a heavier dose and more frequently. He will continue need it until he finally collapses. In this case, US economy is the drug addict and QE1, QE2, QE3, QE4 are the drugs.

The interesting part is, QE1 and QE2 have definite period of time and definite amount of money to be “printed”. When it’s over, it’s over. While for QE3 and QE4, they are open-ended. In other words, there is no end to them. Federal Reserve will print as much as they want, that’s why QE3 and QE4 are QE Four-ever.

QE4-ever

The solution is the problem. En. Jamal should have NEVER helped Abu when the 1st time he get into financial trouble. En. Jamal should have let Abu felt on the ground and learn to pay off the debt himself (learn to recover from the financial trouble himself). Similarly, Federal Reserve should have NEVER introduced QE1, QE2 and QE3 at the first place. US should have let the economy crashed in 2008 and recover on it’s own (not by artificially stimulating the economy using QE1). The financial problem will now grow bigger and bigger to a level that beyond recovery. Since US Dollar is the world reserve currency, this financial crisis will grow so big until the whole financial system collapse.

I have no power to change what Federal Reserve has done, but I have the ability to prepare myself for the coming financial crisis. J.P. Morgan (1912) said, gold and silver are money, everything else is credit. I’m preparing myself and keeping my wealth in precious metal (real money) especially silver.

Silver has huge industrial demand (while gold has little, close to none), in fact it is the second most traded commodity in the world (after oil). Silver to gold production ratio is 10 to 1, while current price ratio is 51 to 1. In other words, silver is still way undervalued. Silver price has to increase significantly to match the actual production ratio. Robert Kiyosaki said “Silver is no.1 investment today, silver is biggest thing against inflation, great investment!“.

When comes to money, talk is cheap, action is everything. I have written the eBook Practical Guide For Investing Silver In Malaysia to show Malaysians how to invest in silver. If you are serious about protect yourself against inflation, click here to find out more.

Free Silver Report, Adolf Hitler & War World 3

For this week update, I want to share the following 3 resources with you:

Item No.1: Free Report: The Outlook For Silver Industrial Demand. It is a 15 pages free report provided by Silver Institute published in November 2012.

  • You will learn the Economic Outlook
  • You will learn silver industrial demand outlook.
  • You will know the role of silver in industrial items such as cars, solar panels, computers, televisions, iPhone, iPad, etc and silver the world has been consuming
  • You will know what are the countries have been buying silver for the past 8 years.
  • and a lot more…

Click here for your free download now!

Item No. 2: Mike Maloney vs Adolf Hitler video. A funny video on the greatest wealth transfer in human history spoken by Mike Maloney has finally come true. The story started by Robert Kiyosaki lend money to Mike Maloney to cut off key silver supplies by taking over coins shops in certain areas…

As David Morgan has spoken, the real potential of silver will only come at the last 10% of the time of bull run. This videos showed Hitler was trying to manipulate the silver price through technical analysis but unfortunately silver price manipulation could no longer manage the price. In my eBook: Practical Guide For Investing Silver in Malaysia, this situation is described as “wrapping fire with paper“, the manipulation cannot go on forever and when paper can no longer wrap fire (silver price manipulation get exposed), silver price will shoot up to a new level.

Item No. 3: War World III Simulation. When Israel started attacking Gaza, the conspiracy of War World III has again came back. This video produced by FutureMoneyTrend.com simulate what the world is going to look like if War World III actually happens.

Interesting in the video is gold, silver and oil are being mentioned again and again.

If you want to invest in oil, you cannot be storing a tank of oil in your apartment, your only option is paper oil. Some investors argue they do not like paper asset during crisis, hence the option is left with gold and silver. It is an obvious indication that during the time of crisis, everyone would run to precious metals which are gold and silver to protect their wealth.

Between gold and silver – where both of them are precious metal, silver is a much greater option to put your money in for one simple reason. Gold has value mainly due to people believe gold should have value. It is only about perspective. While for silver, apart from being recognized as real money for 4000-5000 years of history, silver also has real industry demand. The silver available on ground has dropped more than 93% since 1950. While the supply for gold has increased more than 600% since 1950. Gold is mainly being hoarded (kept in somewhere, not being used) while silver is being consumed by industrial demand.

Please download this free report to understand how great the demand for silver is. When industrial-demand consumes more and more silver each year and supply is not picking up, physical silver price will explode. A very good example to illustrate is whenever 1oz of physical silver is being mined, that 1oz is being traded approximately 100 times in COMEX (paper market) before being put for physical use.

This is how little silver there is left to be owned by investors. Put at least 15% to 20% of your money into silver before the silver bull run starts. Good luck investing! Until next week.

In Practical Guide For Investing Silver In Malaysiayou will learn step by step how to invest silver in Malaysia to maximize your profit. In the eBook, you will learn the exact strategies and the safe places to buy your silver from. Click here to find out more.

Too Big Then Fail

When comes to money, anything that grow too huge, it will be gone. It will always be replaced by something smaller or something invisible.

Enron – a corporation employed 20,000 staffs and it was the world’s leading electricity, natural gas, communications and paper companies, with revenues of $101 billion in 2000.  When the mega corporation grown to this huge, disaster is awaiting. Enron declared bankruptcy on December 2, 2001. It was the largest bankruptcy in US history back then. Interestingly, Enron was not the only example of huge corporation failure. Later in year 2002, Worldcom (another even bigger corporation) filed an even bigger bankruptcy, surpassed Enron record. Then in year 2008, Lehman Brothers filed the largest ever bankruptcy in US history. Enron, Worldcom, Lehman Brothers are the typical examples of when something grown too huge, it will be gone. These huge corporation has been replaced by something smaller.

Maybank is Malaysia’s largest financial services group in Malaysia. Maybank has more branches than any other banks – in all over Malaysia. When the bank has grown this huge, it is taking a shift to go invisible, which is a very smart move. The invisible approach is known as online banking. Customers no longer have to queue at the counter to perform transaction. Right now, a Maybank online banking customer can pay bills, reload hand phone credit, transfer money, buy shares, place a fixed deposit, and a lot more just by going online. Money transactions can be done online and many prefer to do it online because it is safer, save time and more efficient. The whole monetary transaction process has gone invisible. Now, we no longer can see the money with our eyes, we need to see the money with our mind. Simple because, the money has gone invisible.

For anything huge to stay, it will have to go either invisible or replaced by something smaller.

Many things started off small, it grown into a success. When success grown too big, human are blinded by arrogance. In the examples of Enron, Worldcom and Lehman Brothers, many people blindly believed that the corporations are so huge and they should not fail. Unfortunately, the reality is they failed.

Shipping industry started small and it grown into a huge industry. When everyone was extremely confident that Titanic was an “unsinkable” ship, it sank. Titanic was weighted 46,328 tons, 268 meters long and 55 meters high, approximately the same size as London’s Tower Bridge. It has simply grown too huge. This is another example of something has grown too huge, everyone believed it would not fail, and then it failed. Titanic took 1,514 lives.

Another local example is Genneva Gold. It started off small, grown into a huge company with 60,000 customers and monthly turnover of RM2 billion. It was raided by Bank Negara Malaysia on 1st October 2012.

According to Awang Adek Hussin (Malaysia Deputy Finance Minister), Genneva Malaysia’s liabilities exceeded its assets. The reason Genneva attracted the attention of local authority in the first place simply because it has grown too huge and did not go invisible. Now, it is potentially replaced by smaller precious metal dealers in the market.

So, what’s the big deal of showing all the huge failure?

Those are the failure of the past. What we want to concern is, what is going to happen next? And how we make the most benefits from it? In order to answer that, we need to look for what is extremely huge now. The answer is: the US Economy.

Image from page 10, Practical Guide For Investing Silver In Malaysia

Obama was re-elected as the president for the next 4 years. Obama is a big government guy. He is supporter of Keynesian economics. In simpler terms, he is good in spending money and creating more money. Ever since he took over the US government in 2008, US debt level has been increasing ever since and it was increasing in the fastest rate in US history.

Last year Obama cut $38 billion dollars out of $3.5 trillion dollars in spending. This is equivalent to me cutting RM380 who happens to be spending RM35,000 while only earning RM22,000. Get the idea?

US Economy has grown too huge and it is waiting for the financial disaster. I’m personally preparing myself to take advantage of this by investing in silver. When US Economy comes down, both gold and silver are going to shine. For a number of good reasons, silver is going to beat gold in the coming years. You can find out more about the reasons here.

Lastly, I will leave you with this, when Obama took over US in 2008, silver price was less than $15. Silver price now is $32. So, how much silver price be when Obama leaves office in year 2017?

You can find out more about my work, the eBook: Practical Guide For Investing Silver In Malaysia will explain the current economy and how it affects you as Malaysian. It will show you how to take advantage of the economy mess through silver investment.

Robert Kiyosaki: Conspiracy of the Rich

In the latest update (October 4, 2012) of Robert KIyosaki’s Conspiracy of the Rich, he mentioned:

Early in 2012, the ECB, European Central Bank, announced LTRO, which stands for Long Term Refinance Operations: a.k.a. printing money. This is a violation of the Euro’s founding principles.

Last month, US Fed Chairman Bernanke announced QE3: a.k.a. printing $40 billion a month until… until what, I wonder?

The Bank of Japan followed immediately with their own “quantitative easing,” imitating the US and further weaken the purchasing power of the Yen.

What does this mean? It means the central bankers of the world are choosing to “Live today” and “Die tomorrow.” They are “Out of bullets.” They can no longer lower interest rates so they chose to print, print, and print.

Robert then continued discussing about US debt, you can check out the full article here. What I want to bring to your attention is all the major financial power in the world are printing money. When the whole world is printing money, it is close to impossible for our country Malaysia NOT to follow printing money.

Why? The answer is simple. Malaysia produces goods and exports to other countries. When the other countries are printing money, they are devaluing their currencies. Their currencies is weaker than it was. Now, they will need more amount of their currencies to buy the same amount of goods in Malaysia. In other words, Malaysia become expensive.

When this happens, all the other countries will look for cheaper alternative and no longer want to buy from Malaysia, because we are expensive. Our country financial leaders are not going to allow that to happen because when that happens, our Rakyat will have no job, economy will slow down, crime rate will increase, a whole chain effect will happen.

Therefore, our central bank BNM will manipulate our currency (Ringgit) to lose the same amount of value like all the other countries in the world. So that the export activities can continue like nothing happened. Sorry if this is a rude awaken call for you, but the Ringgit you are holding (or inside your bank account) can purchase less and less stuff everyday. Your “money” is losing value due to these money printing activities.

Lastly, Robert ended the article with the following paragraph:

If you are just starting out investing, I suggest you begin by reading a few books and buying a few silver coins. Knowledge and real money, silver and gold, are better than Obama or Romney. — Robert Kiyosaki, October 4, 2012

Practical Guide For Investing Silver In Malaysia is the No.1 eBook available in Malaysia to show you how to invest in silver. Forget about the free articles over the internet, they give you 1001 reasons to invest in silver but never show you how. Click here to learn how.

 

China Made US Dollar Going to Drain (aka Longkang)

Silver investment is all about buying silver at low price and selling silver later at high price. Since Silver price is measured in US Dollar. It is definitely worth to take a closer look into US Dollar especially what happened after QE3 is announced.

Congressman Ron Paul, a 3-time candidate for President of the United States said:

If we act now to replace the fiat system with a stable dollar backed by precious metals or commodities, the dollar can regain its status as the safest store of value among all government currencies. If not, the rest of the world will abandon the dollar as the global reserve currency.

Sept. 6 2012 is the most significant day in the history of the American dollar, since its inception. On that day, something took place that is going to affect our life, our family, our dinner table more than we can possibly imagine.

China made the official announcement on Sept. 6 2012:

Our banking system is ready, all of our communication systems are ready, all of the transfer systems are ready, and as of that day. Any nation in the world that wishes from this point on, to buy, sell, or trade crude oil, can do using the Chinese currency, not the American dollar.

China has officially abandoned US Dollar. The demand for US Dollar has significantly dropped. The value of US Dollar is significantly lowered. Unfortunately US Dollar is still the world reserve currency. The world reserve currency is going to affect all other currencies in the world including Ringgit.

When you continue keeping your wealth in Ringgit, that is exactly what government wants you to do, so that the government can print out more money. How do you think the central bank print out more paper money? The answer is by simply stealing (devaluating) the value of the Ringgit in your pocket. A fancy term is known as inflation. The reality is, prices of goods did not go up, it is the value of currency going down.

The good news is, silver price and paper currencies (such as US Dollar or Ringgit) always move the opposite direction. When the value of currencies goes down, silver price will shoot up. Silver not only a good medium to preserve your wealth, in fact silver price is going to rise significantly in the near future.

Now is the perfect time to get into silver investment especially during the trouble global financial time. Like any other investments, you must educate yourself before investing your money. The quickest way is to download eBook that guide you step by step on silver investment. Click here to download.

QE3 Is Now Official

Federal Reserve on Thursday (13/9/2012) decided to launch a new program of open-ended bond purchases. This is also known as Quantitative Easing 3 (QE3). QE3 will buy $40 billion of agency mortgage-backed securities each month, starting Friday. It’s also keeping in place Operation Twist (another stimulation package). The bottom line is the central bank will be adding $85 billion of long-term securities each month through the end of the year.

Right after the news, silver price shoot up to $34.70 (almost $2 rise):

US Dollar and silver will always work on the opposite direction. What does it means? When the value of US Dollar drops, silver price rises; when the value of US Dollar rises, silver price drops. When QE3 is launched, it is an action to devaluate US Dollar (lowering the value of the paper currencies), which means the value of US Dollar drops, so consequently silver price reacted with it and went up almost $2 within minutes.

Also take note of the open-ended bond purchases mentioned above. In layman terms, that means Fed will continue devaluating or lowering the value of US Dollar as long as they want. There is no end to it. In other words, the potential for silver price to go up is also no end. Silver price will continue to rise and rise and rise and rise…

I have said it many times and I will say it again, “this is just the beginning“. Silver price has a long way to go. This is a wonderful opportunity in our time. Most people do not know this, but you are reading this blog right now, you must take advantage of the rising silver price. Honestly, it is not too late to start now. However, before you go in to silver investment, I suggest you equip yourself with the correct knowledge to avoid getting burn.

Check out the eBook Practical Guide For Investing Silver In Malaysia. It is the most complete guide for Malaysians to kick start the silver investment. It will guide you exactly step by step how to be a successful silver investor:

Bill Murphy: JP Morgan Secret Is Out, Silver Price $100 Soon!

The prices of gold and silver are breaking out. Bill Murphy, from GATA.org, predicted all of this over a month ago, before the near 30% jump and now he says this is just the beginning. Murphy is further forecasting continued explosive moves to the upside in the metals prices. “It won’t be long in till silver is at $100,” Murphy declares. But is physical precious metals the way to go? Check this fast-moving interview to hear Bill Murphy reveal the other investment he believes will actually outperform the metals as a “10 to 20 bagger.”

Murphy states that if the JP Morgan scandal breaks as he is expecting:

There is no telling what silver could do on the upside due to a short squeeze as JPM holds naked short positions 3 times the deliverable silver available on the COMEX!

Silver market is very tight. The amount of silver available for purchase is far less than the available gold. It will take up to weeks or even months if someone is trying to buy silver in large scale. This is the very first sign of silver shortage. Right now silver price is about $33. It is not surprising to see silver to hit $50 to $60 and it won’t be long before silver price hit $100.

When talked about general economy, Bill Murphy also mentioned the average person is being squeezed. When the financial crisis hits (which many believe is going to happen within a year) standard of living is expected to drop 30% to 35%

You must know how to invest in silver to protect your financial life. If you want to invest in silver but do not know how, the best time to start is to start NOW! The “Perfect Moment” may never come. Great fortune belongs to those who are well prepared~

Is The Golden Era Of Silver About To Dawn?

by Rakesh Neelakandan

“Investment demand for precious metals will take over in any case from industrial demand. And once the gold price heads up then silver will follow. You get 50 times more silver for your money than gold. Historically it was 12 to 15 times the amount of silver for gold, so that also looks like a correction just waiting to happen.”

The time before monetary easing contributes to a period of uneasiness. Time after easing contributes to a binge.

It is because Quantitative Easings, wherever they are carried out ultimately find their way to commodities and equities. Now China, in an anticipated phase of deceleration predicted for August is expected to announce stimulus measures. US Federal Reserve minutes from the latest meeting of policy honchos is indicative of a round of QE 3 for many.

So, what is the outcome of these measures as and when they happen?

One word: inflation!

When printed money without sufficient asset backing finds its way to markets, it behaves like a tide and in a deluge kills the value of money. Hence you may have to pay that piece of burger or this piece of jewellery, a little more than what you had paid a few months ago.

The next question is how to safeguard your investments and assets from this deteriorating trend.

Investing in precious metals is the best option and investing in silver the bettter-than-best option!

“It does just have to be silver. Consider this: silver is the only major commodity not to have reached a new all-time high in this bull market; silver is still cheaper than it was 32 years ago, prices are astonishingly depressed. Then you can consider the impact of an economic slowdown on silver. Yes its industrial use will go down but so will its production because that is linked to the output of copper and zinc mines.” said Peter Cooper in an article.

[Pure-play silver mines are rare and silver is often obtained from zinc and copper mines in an also-mined fashion.]

“Investment demand for precious metals will take over in any case from industrial demand. And once the gold price heads up then silver will follow. You get 50 times more silver for your money than gold. Historically it was 12 to 15 times the amount of silver for gold, so that also looks like a correction just waiting to happen.” he added.

Nowadays there are talks of a global slowdown about to happen in lines of the 1930s depression. If that turns out to be true, those who possesses nuggets of gold and silver would rule the world.

Now, if the silver prices are being kept low as Theodore Butler has argued, and pent up demand in silver and a mismatch in paper silver and actual silver occurs, God save all those who have not invested in silver.

Practical Guide For Investing Silver In Malaysia is the only eBook you ever need for silver investment. If you think you have been learning a lot from this blog, wait until you see the eBook. The content will totally surprise you. Click below to download it now.