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Chris Duane of Silver Bullet, Silver Shield is one of the true “good, smart people.”  One of the growing ARMY of silver experts, he recently created a fantastic video chronicling the history of silver premiums over the past decade…

The Tale of Three Silver Premium Spikes

“Premiums” are the difference between the “spot” price quoted in fraudulent PAPER markets like the New York COMEX – and what people actually pay for real, PHYSICAL metal.

PHYSICAL prices are ALWAYS higher than spot – for a variety of reasons.  From a practicality standpoint; the costs of refining, storage, and transportation must be passed along to customers.  However, these objective costs are supplemented by subjective “premiums”; based solely on varying demand trends.

During “normal” conditions, PHYSICAL premiums are typically 3%-5% above spot, give or take – depending on the specific product.  However, in times of tight supply – driven by either FEAR or GREED-based buying; premiums can sharply expand; as we saw in January and February after the U.S. Mint suspended Silver Eagle sales for nearly two weeks…

US Mint Out Of Silver Coins – Suspends Sales 

Subsequently, Silver Eagles spiked to between $3/oz and $5/oz above spot; yet, still the Mint SHATTERED its all-time monthly sales record.  Moreover, this occurred amidst no specific “crisis” to point to…

The most notorious premium EXPLOSION occurred in Fall 2008; when the Cartel viciously attacked PAPER prices to prevent the masses from realizing gold and silver are the only true safe havens in times of political, economic, or social crisis.  As it turns out, they actually were safe havens, as I am about to explain.

During Global Meltdown I, PAPER gold only declined 30% at its trough, and quickly recouped ALL losses – while equities continued to plummet – in early 2009.  As for PAPER silver, it was smashed from $21/oz to $8/oz.  However, the PHYSICAL price NEVER fell below $15-$16/oz; as demand skyrocketed and premiums surged to more than 100% of spot.  ALL global mints sold out for months; and just two years later, prices raced up to $50/oz – where again, mints sold out and premiums soared.

Below is a table based on Chris Duane’s video; notating each major silver premium spike of the past decade.  Notice how they occurred in both up and down markets; as unlike non-monetary assets, gold and silver have inelastic demand.  Moreover, see how the time frames between premium spikes has dramatically shrunk in recent years – to the point we’ve now had four in the last 22 months alone…

Even today – following the Cartel’s most prolonged, egregious PAPER raid I can remember; we are seeing selected premium elevations and demand delays in the ultra-thin PHYSICAL silver market.  For example, “Junk silver” – i.e., pre-1965 dimes, quarters, and half-dollars with 90% silver content” – are seeing $2+/oz premiums compared to their usual valuation closer to spot; with delivery delays in the 3-4 week range.

Finally, there’s no better way to demonstrate how tight the PHYSICAL silver market is than to view the “futures strip” – depicting futures prices for contracts in “out” months and years.  Per below, silver is now in backwardization out to May (spot price higher than futures prices); with NEARLY ZERO Contango out to the DECEMBER 2017 contract!

Silver Futures – BarCharts.com

Keep your eyes on PHYSICAL premiums versus the fraudulent PAPER prices; as they give a good indication how tight the real market is.  Just give us a call at Miles Franklin, and we’ll be happy to let you know what they are at any time.  Ultimately, PAPER markets will disappear entirely

Jim Sinclair – Paper Markets to Disappear As Gold War Rages

…and when they do, the odds are that PHYSICAL supply will be gone


Call Miles Franklin at 800-822-8080, and talk to one of our brokers.  Through industry-leading customer service and competitive pricing, we aim to EARN your business.