“Major Explosion” in Silver Coming

Jason Hommel, editor of the Silver Stock Report and one of our heroes, has just stated, “We are closer than ever to a major explosion in the silver price.  In fact, it’s already begun in the premiums for “walking silver” as opposed to “paper silver”.  What’s “walking silver”?  The stuff you can walk out of the store with!”

Last week Jason wanted to test the market for 100 oz bars. He was able to sell 25 JM 100 oz bars for $4.01/oz OVER spot.

When I bought most of my 100 oz bars two years ago I think I paid 18 cents over spot. 100 oz bars have appreciated faster than Silver Eagles!

The “Backstory.” Consider these facts before reading further:
1) Kitco is one of the most recognized precious metals dealers in the US.
 
2) Kitco is partners with Australia’s Perth Mint, one of the world’s most respected mints.
 
3) The Perth Mint partners with AGR Matthey for 100 oz silver bars. These back Perth’s “certificate program.” (That’s where you “buy” silver from PM and the “hold” it for you, issuing you a “certificate” instead of the actual metal. Kitco does this too.)
 
4) Johnson Matthey, AGR Matthey’s parent, is the largest silver refiner & producer of 100 oz silver bars in the US.
 
5) Amark is the largest bullion trader in the US and source for Don Stott’s Colorado Gold.

Getting back to Jason’s “price explosion” comment: why does he think this? Here is my synopsis of his recent email.

1) Kitco has a silver shortage. They have just posted a special notice to silver buyers that, in effect, says “They want to defraud you by holding your money potentially forever, and if you ask for a refund, they will charge you extra.” (Jason’s words.)

Jason says, “Don’t fall for it.  Not now.”

2) Johnson Matthey, the US’s largest producers of 100 oz bars, is between 3 and 10 weeks behind in fulfilling orders. They are refusing new orders until they catch up. Now, they have just announced they are “ramping down” production of 100 ounce bars!!! And that can only mean one thing. There is a shortage of 1000 oz. COMEX bars or any other form of silver to make into 100 ounce bars.

3) Johnson Matthey has suddenly, and very quietly, shut down one of their subsidiariesAGR Matthey,” in Australia. AGR Matthey had previously borrowed $500 million of gold/silver from the Perth Mint to produce 100 oz bars. In the face of record demand for silver, with 100 oz bars commanding a hefty premium, they close their doors!? What happened to the silver they were loaned?

Jason comments, “I believe that this is the first major “hidden” default, or emerging default, that has the potential to cause the bankruptcy of the Perth Mint, and/or bankruptcy and/or silver default at the COMEX, if they are not all bankrupt already. The closing of AGR Matthey calls into question the validity of the entire Perth Mint certificate program, and Kitco.” (PM’s US partner)

4) Amark is out of all silver products, so they are essentially “out of business” with a “shut down” silver division too, until they get silver.

Jason says, “Be careful out there.  Defaults are either ongoing, or imminent.”

I say. “Don’t buy any silver that is not on hand. Do not accept promises that “it’ll ship in a few weeks” from anyone, even Don Stott. Nothing at all against Don (I just received two monster boxes of Silver Eagles from him), but, if Amark can’t deliver because JM can’t get the physical metal, he’s at their mercy. Through no fault of his own you may not get your silver.

◊◊◊◊ Now: Gold @ $804.10, Silver @ $12.27, USDX @ 78.89 ◊◊◊◊
◊◊◊◊ Now: DJIA 11,220.96

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4 Responses

  1. This is not easy work, but the rewards are significant: a stronger civil society where all mem- bers feel included, respected, and responsible for building community. ,

  2. Does it make sense, in other words, to ask what my experiences are really like, as opposed to how they appear to me? ,

  3. “Johnson Matthey, AGR Matthey’s parent, is the largest silver refiner & producer of 100 oz silver bars in the US” – incorrect, JM has a 20% interest in AGR Matthey.

    “Johnson Matthey has suddenly, and very quietly, shut down one of their subsidiaries “AGR Matthey,” in Australia” JM hasn’t shut down AGR Matthey. See http://goldchat.blogspot.com/2008/09/reply-to-reply.html for the truth.

    • “Johnson Matthey, AGR Matthey’s parent, is the largest silver refiner & producer of 100 oz silver bars in the US” – incorrect, JM has a 20% interest in AGR Matthey.

      AGR Matthey came to the birth as a partnership between AGR JV (Western Australian Mint + Australian Gold Alliance Pty Ltd) and Johnson Matthey (Aust) Ltd., so, irrespective of its share JM may be called a parent. Thus, everything is correct.

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