Why I Bought Silver...And Why I Won't SellBix Weir
I'm going to keep this short but sweet.
In January 2002 I bought my first few ounces of physical silver at less than $5 per ounce.
The reason I bought silver was that the Commercial Short position in the COMEX Commitment of Traders Report was, in my opinion, way too high considering that the US Government had just announced that they had sold their entire 3 Billion ounce silver position over the last 50 years and would now have to buy silver to support their Silver American Eagle program.
Here is the CFTC Silver Commercial Short Position that I based my analysis on: Date: January 8, 2002Silver Commercial Short Position = 55,534 Contracts or 277.6M ozPrice of Silver = $4.71 http://www.cftc.gov/MarketReports/CommitmentsofTraders/HistoricalCompressed/index.htm
Other factors I looked at were the total lack of investor interest in silver, the end of hedging for miners, the flat new mine supply projections, the new applications for industrial silver and the massive abuse of the fiat money supply.
From my work with the folks at GATA I knew that the Commercial players were manipulating the Gold and Silver markets. Common sense told me that one day the "free market" for Gold and Silver would take over and the price of silver would have to break free of the manipulators to find it's true "Fair Market Value".
My Investment Analysis:
Stick with my position in Silver UNTIL the Commercial Short Position came back down to some sense of reality and the silver price rises to reflect the buyback of these Commercial Shorts. That was almost 9 years ago.Where are we today?
Date: December 6, 2010Silver Commercial Short Position = 79,561 Contracts or 397.8M ozPrice of Silver = $30.00
Amazing! The price of Silver has risen 6x but the size of the Commercial Short Position has ALSO risen 1.5x! In fairness to the analysis, the way the CFTC measures the Commercial Short Position has changed a little over the years but this should not dissuade you from the ultimate conclusion...THE COMMERCIAL SHORTS ON THE COMEX HAVE GREATLY INCREASED THEIR SHORT POSITION OVER THE LAST 9 YEARS SUPPRESSING THE SILVER PRICE FROM GOING MUCH, MUCH HIGHER!Ask yourself this: "How high would the price of silver be if those Commercial Short Sellers had NOT added 120M ounces in new shorts?"
Would silver be $100/oz? $500/oz? $2,000/oz...take your pick. The price of silver has risen 6x even though the Commercial Short keeps rising skyward to try and stop the meteoric rise in the price of silver. CONCLUSION: THE SILVER MOON SHOT STILL LIES AHEAD OF US!So for all those "new silver investors" who are worried about buying silver at $30/oz just follow the same simple analysis as I did 9 years ago...you should be salivating at getting your hands on real physical silver BEFORE the price finds it's true "FAIR MARKET VALUE"!
Consider it an early Christmas gift!Bix WeirLearn all about silver manipulation at www.RoadtoRoota.com
Silver is king, Go Gold !
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