Golden Minerals Company

A good article on recent developments involving global silver coin shortages.

Regards - VHF

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APMEX Implications

Silver Shield

April 26, 2011

Many of you have received an email from APMEX yesterday about buying gold and silver over spot price. This is the first time that I ever remember seeing a tactic like this from them. Now don’t get me wrong, I have had nothing but good things to say about APMEX, I have bought from them in the past and they are an affiliate advertiser on the blog. I have to say that I am a little taken a back from this email and is something we all should be paying close attention to.

My first conclusion that this is the inevitable outcome of the US Mint stopping production of silver American Eagles in March, despite record sales. The normal sources of supply must be drying up for APMEX to try to solicit buying back their product. This could be a sign of real stress in the real physical market of silver. After all there should be a lot of silver on the market with the smack down we saw yesterday. (Do you smell the sarcasm?)

The next thing I would think about is that customers are buying and not selling. I can tell you from all of the people I talk to on a regular basis, that people are dumping their savings accounts, 401ks, IRAs, stocks, bonds and any other paper assets and buying REAL tangible wealth. I have told you my story of a very good friend, that after 6 years of me pestering him about buying silver, finally read the Silver Bullet and the Silver Shield and said to me "I get it now." This weekend alone, my mother and father in law came to me about buying silver. They are 70+ year old retired autoworkers and they now get it. My neighbor was in a mommy support forum and they got talking about the bad economy. She googled hyperinflation and ran across my blog and was shocked that it was her next door neighbor wrote the article. My wife’s best friend who just beat cancer is “scared” about the economy and the future of her kids and want to buy silver. A guy who I twisted his arm to buy a monster box at Christmas time, gave me a “high five” in the mall over the weekend. A very good friend of mine is considering selling the home he built to buy silver. As I am writing this article I just got Skyped from an old coworker asking about silver. We are close when people around me are waking up on their own. Once you are aware, you can prepare.
Prices MUST be going up, for APMEX to invest into buying more supply over the spot price. This is probably one of the largest retailers of silver in the market and they have the pulse of market probably better than anyone. I am sure they are getting massive orders and they see the determination in their buyers to buy and buy and buy. APMEX alone could force the market higher by being the bidder of last resort on silver. This new monetary demand is insatiable and that is what all of these negative silver haters are missing trying to trade this market. People are fed up with Wall St and Washington and are using silver to stick it to the man and protect their life’s work.

The next point is that the real physical market is becoming less and less tied to the fake paper CRIMEX market. The premiums have gone from $1 to buy Silver American Eagles, to now, with this APMEX solicitation, $3 to sell. This is huge! Forget the huge appreciation in the physical metal, the premium alone is up 200%. It will get worse/better as this market progresses. I would not be surprised that the premiums move much higher than the underlying paper metal price as the silver scarcity become more obvious.

If the shortage is apparent in these individual coins, there is soon to be shortage in other silver coins. In 2008, the silver market was very tight during the big bust of ’08. Many times APMEX would show no inventory in their top 40. Or the premiums seemed as high as the metal price itself. People who are entering this market want physical and will start with American Eagles, then silver rounds and junk silver, and eventually bars. At the end of the day, they just want REAL silver and will take what they can get.

APMEX is big, but China is BIGGER. When China announced that it should cut its now $3 trillion dollar reserve by 2/3 the silver market took off. After all, what can China use most? Commodities. They will buy oil, food and metals to bolster their economy. When commodities spiked in 2008, China paid triple the going rate for potash. China could in a blink of an eye pay triple for the entire SLV, COMEX, and all of the Silver Miners and still have a couple of trillion left over. After all, wealth is not the paper, it is the REAL things you can buy with that paper.

The final thing I want to bring up is the huge amount of anti silver propaganda I am receiving right now. This disinformation campaign has to be coordinated and will be short lived. I will tear these guys apart in another article right after this one, but I feel we are real close to the end with all of these developments. The enemy always fights the hardest when you are closest to victory. It is better to be 6 years too early than one day too late.