Silver Headin’ for $4,000/oz?

More Ted Butler insights from his latest column (excerpt follows). Ted says (and I agree) Izzy’s Dec 2007 column triggered the run on Silver Eagles.

If there is one thing upon which I have agreed with my good friend and mentor, Izzy, it is the coming shortage of silver. This has been an issue on which we have agreed for more than 20 years. But it is only recently that I have come to appreciate his true take on what shortage will mean to the price of silver.

By way of review, the silver retail investment shortage emerged some six months ago, shortly after Izzy’s article extolling the advantage of buying US Silver Eagles. There is not the slightest doubt in my mind that his article jump started the huge demand for Silver Eagles and as a result the US Mint could not keep up with demand. They still can’t.

Already, the Mint has sold more Silver Eagles in the first seven and a half months of this year than it sold in any full year in the 22 year history of the Eagle program. I believe the demand for Silver Eagles subsequently generated sales for all retail silver investment products. Those not able to buy Eagles bought other forms that were available, until demand exceeded supply for other silver products.

Now many may doubt that a retired grandfather could write a single article that could launch a shortage of retail silver for the very first time in history, but I know better. I know that is exactly what happened. And the reason I know it is because I knew that was Izzy’s intent beforehand. Everything he wrote about the benefits of owning silver was the gospel truth. But, he also intended and set out to highlight just how tight silver supply had become by forcing the Mint into a position where they could not meet demand. He knew that the Mint couldn’t hide a shortage of Silver Eagles. There’s no way that someone sets out to accomplish such a specific objective and then achieves it by accident.

The reason I am recounting Izzy’s remarkable accomplishment is to give you a sense of the true meaning of his thoughts on the coming silver shortage. Even I raise my eyes when he offers his seemingly outrageous price projections, although I know better to dismiss anything he says. But there is something unique in his experience and background that gives him a perspective unlike most.

Izzy has experienced the kind of shortages of basic goods only witnessed during war. He was present during communist take over in his native Romania. He has related to me how people would pay any price for a loaf of bread, a chicken, even a tool. You and I can’t conceive of such shortages because we have never experienced them first hand.

Perhaps you can mentally transport yourself to imagine such shortages, where price becomes secondary to availability. If so, you may get a brief glimpse of Izzy’s vision and “crazy” price targets for silver in a time of true shortage. If this persistent and growing retail shortage of silver develops into a true full-blown wholesale and industrial shortage (as I believe we may already be in), we will not be able to judge what price is truly crazy. Those most likely to gauge price correctly in a shortage may only be those who have been there and done that.

Izzy doesn’t name a price target in recent columns. He says only,”Mr. Butler has a modest view on future prices, and my opinion is more extreme. I can see very high prices. If I tell you the price you will need a seatbelt, not to fall from your chair.”

I did find this from Izzy in another column from Feb 2008:

At some point, in 15 to 20 years, silver prices will be 5 times higher than gold prices. If my calculation is correct, a dollar invested in silver will do many times better than gold. In real estate value, I think 1,000 ounces of silver will buy a 3-bedroom apartment in Manhattan in Trump Towers.I am a different thinker, and some gold investors don’t like my opinion, but that is their problem. 

In other words, Izzy’s saying silver could be at least $4,000 an ounce. At that rate a single 100 oz bar could pay off your house.

◊◊◊◊ Now: Gold @ $812.80, Silver @ $13.18, USDX @ 76.85 ◊◊◊◊


28 Responses

  1. It is acceptable time for it to form some methods for the longer term and additionally it’s time to be at liberty. I even have investigate this publish and after I might My partner and that i want to advocate a private some fascinating points or maybe suggestions. maybe you may compose next content discussing this short article. we wish to look at even a lot of aspects of the idea!

  2. of course. Silver reach 4000$but still low reach to 5200$ per ounch

    • I don’t know…
      I don’t know…
      I don’t know where I’m a gonna’ go
      When the volcano blows.

      Dedicated to those who own Silver paper ETF’s
      held in fractional reserve instead of physical Silver.
      By Jimmy Buffett.

  3. Finally I can buy that new mule I’ve been dreaming about.

  4. Gold $3,400.

  5. you guys are nuttier than squirrel terds 4000 per oz. I hope your future doesnt depend on it or your fubar. lucky if it hits 100 in your life time good luck

  6. Dear Sir or Madam:

    Thanks to your predictions and advice my wife and I now have more money than God.

    You go girl/guy!

  7. The guys from have been spot on lately and called the US elections spot on months before it happend.

    You should see what they are saying. Incredible. I do not think people have woken up yet.

  8. Good Morning,

    The temporary increase in Gold and Silver is an anomaly
    based not on increased demand for Gold, but a short drop
    in the U.S. dollar’s purchasing power, which is in turn based
    on deep Keynesian 20 year cyclical patterns.

    Evidence for decreased demand in precious metals abounds.
    In Morococha, Peru, 100 miles from Lima, one shepherd traded
    11 Llamas for an ounce of gold, and he said last month the price
    for an ounce of Gold was 12 Llamas.

    Across the globe in Bangladesh, Gold demand is down 2% this month.
    We talked to one woman from Bangladesh, C’mon Iwannabagabankster,
    who says that decreased demand there is due to devastating floods.
    But my sources at the Country Club say the data indicates otherwise.

    So anyone who is not a Chimpanzee with A.D.D. can clearly see that Gold
    is teetering on a huge bubble, with evidence for worldwide demand decreasing sharply.
    These days, Precious Metals are a barbarous relic that only Luddites and Anarchists buy.
    I predict Gold will soon fall precipitously and eventually find traction around $350. to $400. an
    ounce by Christmas.

    Those “Honest Money” simpletons who merely glimpse at charts and fall for the illusion
    of increased price and demand for Gold and Silver probably do not have access to the
    proprietary and extensive database that I have. If they did, they would surely notice that
    the short term upward blip in Gold prices are a function of recently increased interest rates
    in Japan, and a remarkable glut of Tuna bonds in Micronesia.

    Now that I have bestowed my learned opinion on you minions, I shall return to
    my lofty pedestal of hypocrisy and arrogance, where I work very hard for the company with
    by far the most colorful Gold and Silver charts, where nearly every day I have to find another
    more and more obscure reason to dis-credit the daily rise in precious metals.

    Now I must go read a 100 page report on this year’s annual Galapagos Island wheat harvest,
    which I suspect is the real reason Gold is skyrocketing. Next week I will quote more minuscule
    increases in a localized segment of England’s Real Estate market which has nothing to do
    with any Precious Metals, but does offer another indication that I am a shameless puppet.

    In closing, if there is anyone who still believes that Gold and Silver is a solid investment,
    I’d like to sell you a bridge, or maybe sell you some nice storage fees on a piece of paper?

    Jawin’ Nadless
    Senior Analyst

    • what u say doesn’t make sense… and your an Analyst..look @ 1 thing for sure right now..
      Central banks and Govs are investors in Bullion right now..For what? Think hard!!
      2nd-Short-longterm trend for the dollar is downnnnnn..THink Hard
      3rd-Currency warfare to devalue

      not too mention supply especially silver–
      BUy silver and gold or be doomed economically..
      Silver above $150 is a no brainer…My personal view is silver in the future yrs at least 400/oz..Silver will be the item” spoken of in history as the thing that went boom in the 21st century

    • Well your prediction sucked. you’ve just been owned. And you’re an Alleged Analyst?Look for another job Bud!

    • Gold is now over $1,400.00 an ounce & silver is over $30.00, your prediction is coming true….well in your mind…

    • It is now January 6 2011 and the price of gold is $1,378. It looks as if your predictions are way off. Now I do have a bridge for you if you have any gold or silver you still want to dump.

    • “I predict Gold will soon fall precipitously and eventually find traction around $350. to $400. an
      ounce by Christmas.”

      Well it’s Jan 10 and gold is still $1376 so I guess you should call yourself a Senior BS Spewer who knows F**k All.

      • Hello all!

        Kudos to you, Jawin’ Nadless! Very nice satire.

        To you all who commented thinking this was serious:

        How easily are fooled, by one who is HOPING to be caught BS’ing you.

    • Time will show you to be the fool with no sense of what is, has, really been going on with a phoney fiat money system bubbles are built on false credit. not real money. You’ll see, you will have no PM’s, and you will have your pants on your ankles..

    • It appears your forecast for December gold was only $1,000 (or 75%) off the mark. Hope you don’t plan on making a living this way.

    • LOL! It’s okay, Dave. Some of us get the joke. :)

  9. Consider the fact that JP Morgan (who has outrageous paper short positions) is also the custodian of SLV – the silver etf. This is more than a conflict of interests…. this is an explosion waiting to happen. When holders of paper wish to convert to physical silver, we will see an epic price melt up as the paper shots get squeezed.

  10. As you may know, silver is consumed. (Unlike gold, which is horded). The demand for silver is inelastic, and required for cell phones, computers, x-ray machines… the list goes on and on. Even when the price goes ballistic, the demand will not abate. There simply is no replacement for silver.

  11. this may come true in a few years the comex hitmen are out there slowly taking it apart. the game when it finishes will finish in a heartbeat. Its good to see that americans are buying the silver eagles and all silver like crazy because they do not own much gold. Silver is the money of the masses. With china telling its citizens to buy gold and silver human nature tells us to buy silver, firstly because even though its cheap there is more of it. One measly 1 ounce gold coin is worth $1000, we can buy a lot more silver ounces for a $1000. but there will be a time to switch your silver to gold (if you can find any) as silver does not hold value as well as gold in deflation which is what we will get when the inflation runs its course. I may be wrong but if silver went to $4000 switch to gold.

  12. $ 4,000 is an amazing amount is this an true anaysis that is backed by fct or just expert hypothisis.

  13. I own approximately 45 ounces of silver what woul be you recognitionfor a stop loss top out.. I am not interested in selling at this time as I believe and have for years that silver could not do anything but go up. Also is the prices quoted in this article for bullion or just eagles? Thank you

  14. Butler’s got the patience of Job, let’s hope we won’t need to half as patient.

    I think the foreigners (Arabs, Russians, Chinese) will kill the Comex. They will pick their time.

    The Fed will be bk eventually, but its owners, likely stocking their personal vaults at the expense of the taxpayer right now with gold & silver, will survive as always, but have to cut deals with the east more now.

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