The Best Ways to Profit from the Silver Boom

The Best Ways to
Profit from the
Coming Silver Boom

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The Case for $200 Silver:
Profiting from a Run on the
World's Most Important Metal

     Silver has been one of the best-performing assets of the last decade, soaring from lows of $5.50 an ounce in 2004 to almost $50 an ounce in early 2011. But thanks to the recent pullback in commodity prices, silver is now trading in the $30s. And looking ahead, we expect silver to rebound strongly, for reasons we reveal below.

     In fact, several signals point to far higher prices. $200 an ounce isn't out of the question, and I'll show you why.

     Let me explain why we're so bullish on silver right now...

     Silver is about 17 times more common in the earth's crust than gold... and over history, silver has been about 17 times cheaper. It makes sense. You expect to pay less for something when there's more of it.

     But here's what few people realize: there is NOT more of it. Not when you look how much silver we have on hand. 

     The world actually has five times more gold than silver in above-ground inventories.

     That's because 80%-90% of all the silver ever mined has been used up for industrial purposes. But 80%-90% of the gold has been saved.

     It's the same story below ground. Silver has the lowest in-ground reserves of any major metal.
"In constant dollars, silver's purchasing power averaged $150 per ounce (in 1998 dollars) for 600 years. Obviously silver is nowhere close to that 'value' today. This provides one unbelievable investment opportunity."

-- David Morgan, leading silver analyst

     That's because 80%-90% of all the silver ever mined has been used up for industrial purposes. But 80%-90% of the gold has been saved.

     It's the same story below ground. Silver has the lowest in-ground reserves of any major metal.

     According to data compiled by New Scientist magazine, at our current rate of use, all known silver reserves will be mined out in 27 years. And if new technologies now on the drawing board come to pass, we will run out in about 15 years.

     Scarier yet, if the rest of the world starts using silver at just half the rate we do in the U.S., it will be gone in seven years.

     As that date approaches, we believe silver's huge run up of the past few years will look like a blip on the chart.

Why We're Betting On Silver Over Gold

     Everyone knows that gold costs more than silver... but believe it or not, silver is actually more valuable.

     Just look at the facts...

     Silver fills every economic function gold does, plus a whole lot more...

     Gold is a great hedge against economic uncertainty. So is silver.

     Gold shields investors from inflation... so does silver.

     Silver offers "safe haven" status, just like gold.

     Gold serves as money around the world. Silver does too, and in even more countries than gold.

     Silver and gold have both been prized for thousands of years. They both melt at around 1,000 degrees Celsius. They even have the same atomic radius.

     But there's one big difference: if gold disappeared from the face of the earth tomorrow, most people would barely notice. But if silver vanished, our lives would be severely disrupted.

     That's because silver is needed in just about every electronic device modern society runs on -- from cell phones to TVs to computers to cameras to MP3 players to iPads.

     It's in every wall switch in your house. It's in your washing machine, dryer, refrigerator and car.

     We use silver in more of mankind's most useful devices than any other commodity besides petroleum. So when it comes to how valuable these two metals are to our society... silver beats gold hands down.

     Yet gold is 50 times more expensive than silver.

     Something doesn't add up here. We consume the overwhelming majority of the silver that we take out of the ground each year... while we pile up gold reserves... and yet gold is still selling for 50 times the price of silver -- $1,750 an ounce for gold versus just $35 for silver.
"Silver has more uses than any other metal known to man ... in areas of technology, medicine, electronic applications, clean water applications, and you can get silver on your Band-Aids now because it's an effective killer of bacteria."

-- Dennis Wheeler, CEO, Coeur d'Alene Mines Corp.

     There are two ways this will resolve itself. Gold can fall or silver can rise. My money is on silver going up. Way up.

     We got one strong clue of this in early 2011... when we saw something that hadn't happened since 1997: The spot price for silver rose higher than the price for future delivery. Usually, futures prices are higher because of storage costs and other factors.

     The rare flip-flop meant that traders were willing to pay a premium to get their hands on silver today rather than a few months from now. This hints at shortage fears and is usually a sign of even bigger gains ahead.

     The last time this happened in the silver market was in the late 1990s. That's when Warren Buffett first began accumulating a huge silver position of 130 million ounces, which made him hundreds of millions in profits a few years down the line.

     How high will silver go this time? I'll give you my forecast in a minute. Just keep in mind that 31 years ago silver spiked to about $143 in today's dollars. And every supply/demand factor I can find is exponentially more bullish now than it was back then.

     The move I see coming gives average investors the chance to make a small fortune. In fact, I think you have the opportunity to amass a $200,000 nest egg on just a modest investment now. I'll explain how in a minute.

Industry's Massive (and Growing) Silver Appetite

     The silver story isn't about earrings and teapots any more. Household demand for silver, like flatware and candlesticks, hasn't risen in 10 years. Jewelry use has barely budged.

     But thanks to our never-ending industrial appetite, silver consumption keeps climbing. About 70% of the world's annual silver output is gobbled up by industry. That percentage is rising every year... and once that silver is used, it's rarely recovered.

     Since 1999, consumption in electronics has increased 120%. And many new products contain such small amounts of silver that they're not worth recapturing. More than half of all silver in TVs and computers ends up in landfills.

     Silver was also first used to kill bacteria in 2002 and this use has already grown six-fold. Bacteria don't develop resistance to silver, as they do to antibiotics. NASA uses silver purification technology in its spacecraft. Scottish health authorities use silver-based products to control killer antibiotic-resistant infections in their hospitals.

     But the biggest new kid on the silver block is solar power. Because it is more reflective than just about any other metal, silver is a key part of solar cells. It takes a staggering amount of silver -- up to 2.5 million ounces -- to produce one gigawatt (GW) of solar power. Silver use in solar panels began in 2000, and usage is up 640% since.

     Solar generates about 40 GW of power around the world now, so it's already a big silver user. But by 2020 solar power is projected to be at 20 times today's level. The buildup has already started and 130 million ounces of silver per year could be going into solar power as soon as 2014. Considering the entire global silver mining industry produces less than one billion ounces a year, that's a huge chunk of the yearly supply.

     Silver is also a critical component in cell phones. The rising need for cell phones and computers for the 2.5 billion citizens of India and China alone virtually guarantees that demand for silver will steepen.

     China's silver imports increased fourfold last year. In 2005, the Chinese exported 100 million ounces of silver. But by 2010, they were importing 120 million ounces.

     We are already seeing shortages of physical silver bullion around the world. On his CNBC show last December Jim Cramer stated, "As someone who tried to buy U.S. coins in December, there was a real scarcity. My dealer reportedly just couldn't get any coins. Said there was a shortage. Very telling."

     The basic problem is that we use more silver than we mine.

     Every day the world takes around 1.75 million ounces of silver from the earth. But we consume over 2 million ounces.

How Much Do We Have Left?

     This part might shock you.

     According to research firm CPM, in 1900 there were 12 billion ounces of above-ground silver on the planet. By 1990, we were down to 2.2 billion ounces. Today, we're down to about a billion ounces.

     That's a drop of 92%. A vital material, prized by man since the time of the Pharaohs, is literally disappearing before our eyes... used up in industrial products. It has taken 65 years to obliterate the silver inventory that it took the world 5,000 years to accumulate.

     The U.S. government was once the largest stockpiler of silver in the world. At the end of World War II, Uncle Sam held 4 billion ounces. But it has dumped billions of ounces of silver onto the market over the years. Today, that silver hoard is gone.

"Gold will preserve your wealth. Silver will make you wealthy."

--David Morgan, editor of The Morgan Report
     The Pentagon classifies silver as a strategic metal. Many satellites, missiles, rockets and torpedoes can't function without silver. The Department of Defense once had an inventory set aside for this purpose. Now even this strategic stockpile is gone.

     Contrast the dwindling amount of silver with the healthy situation in gold. Since 1950, the amount of gold above ground has surged 600%, from 1 billion to 7 billion ounces.

     Now are you starting to see why I'm so bullish on silver? I'm not knocking gold, but my money is on silver right now. And it's not just me who feels this way...

The "Warren Buffett of Canada"
Says Silver Will Hit $125 -- for Starters

     Eric Sprott runs the biggest hedge fund in Canada. His funds have generated such spectacular returns that he's called "the Warren Buffett of Canada."

     Sprott started his first hedge fund in November 200o. Now, 11 years later, it is up 1,065%. Meanwhile, the S&P 500 gained just 6.9% over this period.

     His uncanny foresight into the markets has made Sprott a billionaire. Right now, Sprott is making an extraordinary bet on silver. He's got 25% of his flagship mutual fund -- more than $340 million -- in silver bullion. (He only has 7% in gold.)

     Why? Because he says "We'll certainly see a three-digit price" for silver. Earlier this year he said it was "a very reasonable prospect" that silver will be trading at $125 within two years.

How High Will It Go?

     It's sometimes easy to forget that silver is actually a tiny asset class.

     Investors hold 250 times as much money in gold as they do in silver.

     In other words, all the investors' silver in the world is worth just 0.4% of what their gold is worth.

     If gold investors start warming up to silver, watch out. It will be like watching Niagara Falls going through a garden hose.

     If gold owners decide to switch just 0.4% of their gold into silver, they will be bidding for 100% of the available silver. It's hard to imagine how far the bid price on silver would shoot up.

     But let's try. Just how high could it go?

     Let's look at history. The last time silver went parabolic was in 1979-80, when inflation surged to more than 10%. Silver spiked to $52.50/oz.

     Despite today's more bullish fundamentals, the metal trades for less than it did way back in 1980. And if you adjust for inflation, it's not even close. In 1980, silver hit $143 per ounce in today's dollars.

     For all the reasons I've gone into, that $143 figure could go much higher. Although it's just an estimate, looking ahead I could see silver becoming 1/15 the price of gold.

     Right now, silver is dirt cheap relative to gold. In fact, silver's price has rarely been this low compared to gold. Which is odd, considering that silver supplies keep shrinking while gold supplies keep rising.

     As I mentioned, you can buy 50 ounces of silver for one ounce of gold. That puts the gold/silver ratio at 50:1.

     In the precious metals boom of 1979-1980 this ratio bottomed at 17:1. Even though gold was soaring at the time, silver outran it.

     Eric Sprott keeps a close eye on the gold-to-silver ratio. On May 18, 2011 he said "I think it goes to 16/1. It might very well overshoot that."

     Why not? In ancient Egypt, silver cost more than gold... and there's no reason it couldn't happen again. Silver is already more valuable and scarce, as I've said. And I think the price will start catching up in 2012.

"My outlook for gold, silver and platinum has become even more bullish. Im now expecting precious metals to hit the following prices:
$3,200 gold (80% higher than now)
$125 silver (220% higher than now)
$5,800 platinum (225% higher than now)"

-- Peer Leeds in Forbes, September 21, 2011

     The shift could happen at any time.

     You see, silver isn't like most metals, which are spread around the world. Silver mines are concentrated in just six countries. Mexico, Peru, China, Australia, Chile and Bolivia accounted for 66% of mankind's silver production last year.

     If any of these countries suffers strife, floods, nationalization, revolution or war... it wouldn't take much to constrict the supply of new silver to market... and ignite a fire under its price.

     Take Bolivia, where the country's socialist president Evo Morales has already threatened to expropriate silver mines.

     Bolivia is home to the world's largest pure silver mine, operated by Idaho-based Coeur d'Alene Mines (NYSE: CDE). Nationalizing other people's businesses is nothing new for Morales. He took over privately-owned gas fields and refineries in 2006. And he seized the Vinto tin smelter from Zurich-based Glencore in 2007. If he makes a grab for Coeur d'Alene's mines, silver will likely spike in response.

     When you step back and look at the big picture, deteriorating economic conditions here at home are also bullish for silver. When people realize that Uncle Sam is broke... that Social Security, Medicare and other government transfer programs are insolvent... all precious metals will be squeezed higher.

     When it sinks in that the Fed doubled the money supply in two years... that inflation is virtually inevitable... and that rising interest rates could crush stocks... the rush into precious metals will hit full stride.

     If my analysis is correct and gold heads to $3,000 an ounce and the gold/silver ratio drops to 15:1, silver will be at $200 per ounce. If you buy 1,000 ounces of silver now on the cheap, you could be sitting on $200,000 that nobody can take from you. You won't have to worry about the Fed, our massive government deficits, or our entire dysfunctional political/economic system. In fact, that very dysfunction becomes your ally, driving your silver position even higher.

StreetAuthority Isn't Like Any of the Others

     StreetAuthority isn't like any other investment publisher... and this is a great way to prove it.

     We don't have offices on Wall Street. Our headquarters are in Austin, Texas... and our analysts work in places like Shreveport, Louisiana... Huntington, West Virginia... and Alberta, Canada.

     Operating this way makes it easier to generate investing ideas that buck conventional Wall Street thinking.

     Unlike so many Wall Street analysts, we have no business relationship or "side deals" with the companies we cover... no hidden agendas. Our entire business is built on making money for our readers -- and they only stay with us if they profit.

     Judging by our record number of subscribers, they're profiting plenty.

     After starting from nothing in 2001, we now provide independent financial research to 2.1 million investors in 175 countries.

     Our record is out there in the public eye for anyone to see. Ever since 2003, we have publicly released our 10 favorite investment ideas at the start of every year.

     An annual exercise like this is one of the toughest tests in investing. You have to place your bets and stick with them... no matter what happens to the stock or economy during the year.

     Results? Our picks have almost tripled the S&P 500.

     Between 2003 and 2010, we never had a year without a big winner. Here is a look at a pick from each year, with how much it gained during the year.

2003 Chelsea Property Group (CPG) +72.7%
2004 Mills Corp. (MLS) +50.3%
2005 Whole Foods (WFMI) +63.3%
2006 Carmax (KMX) +77.9%
2007 CME Group (CME) +35.8%
2008 Panera (PNRA) +45.8%
2009 CPFL Energia (CPL) +67.7%
2010 Silver Wheaton (SLW) +136.5%
2011 TBD +TBD%

The Two Best Ways to Profit From Silver

     Please understand that we don't sell silver, but we cover it intensely in our research... and we think there is plenty of upside left for silver investors.

    
I'll send you a free copy of my new report Our Two Favorite Ways to Profit from the Coming Silver Boom. You'll see why you should consider adding to your own silver position... and our favorite ways to invest in silver right now.

     One of the stocks you'll find in this report has a remarkable deal going on. Its silver costs are fixed at $4.09 per ounce, yet it can sell its silver at whatever the market bears... $20, $30... even $40 or more per ounce.

     Somebody else foots the bill to find and extract the silver, and then hands it to this company for next to nothing. It's the perfect business model -- allowing the company to convert 82 cents from every dollar in revenues into pure profit.

     Because the firm's expenses are basically fixed, any rise in the silver spot market drops straight to the bottom line. Even a small move in silver can lead to a big jump in profits.

     We've already bought and sold this stock once for a gain of +106.4%. Now it's back down in price again, following the recent drop in silver, and it's once again a top-rated "buy" in our portfolio.

     I can't go into details on all our favorites or I'd be here all day. Instead, why not just send for a free copy of this new report?

     All I ask is that you sample our monthly natural resources newsletter -- Scarcity & Real Wealth.

     Our monthly newsletter focuses exclusively on the rarest and most valuable assets on the planet silver, gold, oil, natural gas and other natural resources. These critical inputs are in short supply, yet worldwide demand is exploding.

     In a world of crooked politicians, paper money and ballooning government debt, Scarcity & Real Wealth brings you investments with real, tangible value. Just like silver.

     Our own subscribers are already making good money in silver...

     Jerry S. of Bend, Oregon told us "I started my stock purchases by getting 25,000 shares of Silver Wheaton at $3 a share. Now it is at $33.50." By my calculations, Jerry had a whopping unrealized gain of about $750,000 at that point.

     Vince B. of Honolulu, Hawaii, says he's "up over 500% in silver rounds & ingots."

     As you'll see when you get your first issue of Scarcity & Real Wealth, investing in the path of growing scarcity is one of the surest bets in investing. With so many forces converging to drive silver, gold, and other scarce commodities higher, this is an almost effortless way to invest.

     Right now, the world is demanding more of everything... not just the headline grabbers like oil and gold... making scarcity an odds-on bet to drive financial markets for years to come. Scarcity & Real Wealth gives you a way to hitch your wagon to this locked-in trend.

     Silver is just one way to profit from scarcity. Look at the range of other opportunities we've recently profiled in Scarcity & Real Wealth:

The 3 Best Energy Stocks to Hold Forever
The Most Promising Rare Earth Metals for Investors
The Best Commodity Play for 2012 and Beyond... and It's Not Gold or Oil
The 3 Best Stocks to Own if Oil Hits $150 Again
This Oil Company is a Prime Takeover Target
These 2 Companies Should Benefit from the Coming Natural Gas Boom
Two Water Stocks You Could Hold Forever
How to Become an Oil Baron Overnight
These 2 Stocks Could Profit from the Nation's Next Big Energy Source
This Energy Company Is Trading at Least 50% Below Its Real Value

     Every recommendation in Scarcity & Real Wealth is based on this simple premise: Every year 80 million new people are born who need to be fed, clothed, and sheltered. Meanwhile, supplies of virtually every natural resource the world needs are shrinking. Invest in the companies meeting those needs and you will have a great chance to profit if silver and other rare commodities skyrocket in price, as we predict.

     So far, the readers following my work seem to be happy with it...


 

     Laurent R. of Webster, New York says that the stocks he bought based on my analysis "have been very productive and a boon to my increasing net worth."

Free Coin for the First 5,000 New Subscribers Only

     All you have to do is accept a no-risk trial subscription to Scarcity & Real Wealth.

     As soon as we hear from you, you'll have access to all our research into natural resource investing... all our current and past issues of Scarcity & Real Wealth... and all of our special reports. And we'll also include a silver American Eagle in your welcome package.

     The Silver Eagle is the most popular silver coin issued by the U.S. Mint. Demand is so high that the Mint had to suspend sales of these coins several times already this year. So I can't guarantee that you will get one of these coins. It depends on how many people take me up on this offer before you do.

     This is the real thing, so I'm sure these coins aren't going to last long. If you wanted to buy this coin at your local coin shop, you would
almost certainly pay more than $40, after markup and taxes. If you bought it online or through mail order, you'd have to pay for shipping on top of that, too.

     Important: You need to provide us with a physical mailing address to send your coin, and someone must be there to sign for the coin upon receipt. It takes about 14-30 days to arrive from the day you place your order. Note: this coin will be shipped from First Federal Coin, a well-respected national coin dealer that our company has been working with for more than a year.

     I hate to rush anyone, but you should probably order right now if you want this coin.

     The American Eagle silver coin we'll be sending you free of charge can be hard to come by.

     The U.S. Mint sold more of these coins in 2011 than any other year in its history. In fact, the mint was forced to suspend sales several times in 2011 due to fluctuating prices and supply problems.

     We've managed to get an allotment of 5,000 coins from First Federal Coin Company. And while we were able to secure a supply for this offer, it's not open-ended. Once they're gone, we can no longer make this offer available.

     One reason American Eagles are so popular is because they are the only silver coins allowed in an IRA. They are also a great choice if you like your privacy. When you sell bullion you may be required to be report it to the IRS on form 1099B. But you never have to report the sale of Silver Eagles, no matter how many you sell.

Try Scarcity & Real Wealth
at No Cost or Obligation for 30 Days

     Now, there's no guarantee Scarcity & Real Wealth will be the right publication for you. So here's what I'd like to do.

     Try Scarcity & Real Wealth for the next 30 days risk-free for two easy payments of $39.95 each... unpack your gleaming new silver coin... look over Our Two Favorite Ways to Profit from the Coming Silver Boom, which is included for free with your subscription, and then look over the latest issue of our investment advisory.

     In the meantime, you'll have full access to the names and profiles of the best natural resource plays my staff and I have found worldwide.

     For the next 30 days, you can take the time you need to decide if our research is what you're looking for. In other words, you are only agreeing to try our work to see if you like it.

     If you don't, no problem. Simply contact our customer service team for a 100% refund. They will tell you where to return the coin and as soon as we receive it, your credit card will be credited.

     If you prefer, just keep the coin and we'll call it even. That's what I'd do because you'll actually come out slightly ahead.

     As I mentioned, the best price I could find for this coin was over $40. Pairing that with a subscription to our highly popular Scarcity & Real Wealth, regularly $99, then it's already worth more than your subscription price. If silver moves higher like I think it will, you'll want to hang on to your coin because it could be worth a lot more down the road.

     To get started, simply click on the link below, which will take you to a secure order form. Your order will be processed immediately, and you'll have access to all of my work in a matter of minutes.

All the best,


Paul Tracy
Publisher, Scarcity & Real Wealth

P.S. -- One last thing: Order today and I'll also send you an in-depth Silver Buying Guide containing dozens of tips for investing in silver, including:
 

Where to buy the cheapest silver in the world -- and it's even purer than .999
Where to buy real, hold-in-your-hand silver for just $3
A creative way to find pre-1964 U.S. coins that are 90% silver
Ask the teller for this the next time you're at the bank -- you might get silver
Four advantages junk silver gives you over bullion
The top 5 places to find junk silver
How to use mutual funds, ETFs and IRAs to invest in silver