Interested in the speculative precious metal ideas you mentioned in your daily blog. I have to say given the Feds complete debasing of its balance sheet and the monetization of the debt we’ve seen lately I am surprised silver and gold have already headed for the stratosphere. The upside of it is that you can still by the actual metal for what seems like a cheap price.

Michael

“if anyone has other recommended trading services please share in the comments on the website”

Check out Commodity Trading Solutions ,
http://www.commodity-trading-solutions.com

The strategy is only a year old, but on his about page he has a pretty good track record going back some time.

Now what’s that “ordinarily” about? Well, things are not exactly crystal clear, in that the tax bureaucrats have some discretion(!) in how they apply the rules. But the one clear exception is if you are a “trader” rather than an investor, your investment income is taxed at ordinary rates. Or in other words, about double. Throw in inflation, and it’s clear to me that taxes and inflation (including the forex rates) are the first consideration, not one to ignore, as is almost universally done by commentators on investing, let alone brokers. Throw in the commissions, and the fact that the market administrators and governments have demonstrated a willingness to change to rules to protect favored players, and you can see why I wouldn’t touch options and futures with a ten-foot pole.

Your situation will be different. I just suggest that you look at it carefully and holistically before you invest.

Bob in NZ

Enjoyed your WOB articles but this new letter seems to be focused on the type of investment I have had some sucess with in the past. Sure do think $13 Silver in 2011 will be a winner. I also have played with writing puts and calls on various commodities over the past year, and done OK. Please share your ideas on this silver trade. Also have been putting your recommendations on wealth storage out of your home country to work, but even more earnestly now since your reminder the other day :-) As you mentioned transporting Gold and Silver coins and bars internationally via air has not been a problem for me either. Have had a few questions here and there (if they actually notice them) but like yourself never detained.

Then we can look at the inflation / deflation situation. Should deflation take stronger control, it will provide a wonderful opportunity to achieve exactly what you suggested – buy and salt it away. There is a high probability of a 33% drop – then we can reevaluate. But an owner I am and a buyer I will be.

Been selling options rather than buying and find it much less nerve wracking and much more profitable. Waiting for a pull back in gold and silver to sell puts on both this summer. Hoping that I can drum up enough cash with these positions to make some long term bets on gold/silver. Am interested in your ideas on that.

Thanks for your great work.

Regarding silver, Mexico is a great place to buy silver bullion coins. Spreads are low. There is even a significant movement in Mexico favoring the use of silver coins as money. You can buy silver anonymously for cash quite easily.

We at Q Wealth Report also have a very interesting way of buying gold bullion direct from producers in Peru, at prices that can even be below spot, because you are buying ‘outside the system.’

ETFs are certainly convenient for short term speculation but I totally share your view from yesterday that every astute investor should “Store physical and paper assets outside of your home country, and outside of the electronic banking system.” Well said. Please continue to keep up the good work by empowering individuals with information on how to achieve such diversification.

I also enjoy your newsletter and look forward to becoming an “International Man” myself. I am interested in how you are approaching the silver investment. Thanks.

I own some Jan 2010 silver calls on SLV (SLVAQ) which I bought for $1.00 per contract, considerably under water right now. I would be interested to hear if you or others think this is too short a timeframe for silver’s appreciation

I think the silver and even gold trade comes back to the old inflation/deflation debate. I have been looking at the Argentinean collapse and wondering if a similar fate is in store for the US economy. Argentina actually experienced a period of deflation before the inflation set in. It began with a post credit bubble economic collapse this immediately resulted in debt deflation and a contraction in bank credit. This contraction then spilled over into the real economy and voila, monetary deflation as demand and output fall. But the period of deflation was brief because the economics orthodoxy of our time calls for radical and immediate fiscal and monetary policy action to slow the contraction of money and credit and boost demand.

For what its worth I have been buying long dated out of the money calls on Silver Standard, SLV, Goldcorp, GDX and Yamana gold.

If you want a balance of Gold & Silver check out symbol “CEF” – not necessary but suggest you have a Canadian broker account for this one; just to be a little safer against future government appropriation should the wheels really fall off.

thanks for the newsletter. Very entertaining.
As far as the silver trade, do you actually plan to take a delivery in 2011 at $13 or still aim to trade the contracts? What do you think of the covered calls in silver? Would you rather trade a bull spread?
I also wonder if you can find a ‘low hanging fruit’ in Panama nowadays?

I’m an Agora Financial Reserve member so I receive all of their offerings and actively participate in their commodity options service. I’ve had pretty good success with it and look forward to more. I also subscribe to several of the Casey newsletters. I have had success with the International Speculator recommendations.

Regarding the price of silver that seems to concern one of your readers, $13 as “low hanging fruit” and with a prediction of as low as $8, I don’t think it matters.

The thing is to keep buying. If it goes down then you are averaging down into a better position. Moreover, silver owners should not have the view of making a fortune overnight. They won’t.

But with all the government shenanigans that are bound to fail, the holders of silver will be extremely glad they bought, even at $13.

I’m interested in hearing your silver trade, as offered above.

I agree with you concerning your comments about silver. My only concern is the timing of the move. I think/fear that we’ll be in extended period of deflation for commodities. It could go for a couple of years. We may not see a significant drop in gold and silver prices but my guess is that we won’t see a significant spike up either. I bet gold continues to trade in a +/- band of about $100 and silver about $1.50 band. We’ll see.

As for trading services, I haven’t tried any. I subscribe to several of Casey’s newletters and all of Stansberry’s newsletters. I’m considering Casey’s Club membership which would give me access to all of their services and newsletters. I’m just not sure if I can handle all the info, some of it conflicting. Cheers.

It appears that you are looking strictly at paper trades in the metals???

Please share your different trades.

I agree 100% that silver is still an outstanding buy at current levels. Maybe just as good as it was at $5.00 a few years ago. I also agree with the ratio analysis. 200yr. average is 32 -to 1.
But, I believe that “physical” metal is much safer then any paper includling
EFT’s and even mint storage programs. However for people like myself that travel the world year round, there is 1 or 2 very good storage facilities even in the U.S.
I believe a reverse trade will be available in future years. Trading out of physical silver to gold. Ok, enough of my amateur opinion.

Thank you again for the years of WOB, and looking forward to receiving your future comments!

Thanks, VB

Speaking of silver, I wanted to let you know that I have a found a “lower cost” way to purchase silver bullion in bulk.

If you buy in volume, Academy Corporation will let you buy 999.99% 10 oz or 100 oz silver bars directly from Academy at a substantial discount from the brokers and dealers.

MY cost was spot plus $0.50 premium which includes a small fabrication charge. Shiipping and insurance will be extra. In my case, the Academy refinery is in Albuquerque and I am able to drive up and pick up my silver.

The bars are beautiful CNC machined bars with the Academy logo.

Some of your subscribers my want to pool their resources with other like minded souls to buy in bulk.

Also there is no sales tax on the metal.

In the future, Academy will manufacture silver rounds and gold bars.

Do you have any thoughts on the practicality of driving silver bars across the Canadian border and depositing them in safe deposit box in Canada?

Thanks for your e-mails.

John Skees

Short History
Symbol Report Date Volume Change
HNU – T 2009-06-30 22,434,000 22,297,600
HNU – T 2009-06-15 136,400 -268,000
HNU – T 2009-05-31 404,400 277,305
HNU – T 2009-05-15 127,095 85,695
HNU – T 2009-04-30 41,400 3,963