Silver & Oil, Shiny and Rare
Research for Online Investors

by John Dalt

6/30/09

Our two main topics today are silver and oil.  Silver is a precious metal, but much more.  It is in almost every electronic piece of equipment produced in the world.  Oil is in everything produced in the world, period.  Energy, without it, you would need a horse walking in a circle.  I have called crude oil the trade of the year.  We may be facing a soft period ahead for a week or two, who cares.  Quite watching your screen like a mother hen hatching eggs!

Silver has been jumping like a thoroughbred at the starting gate for the last two months.  Would you rather own silver and oil, or some biotech company that is one FDA letter away from oblivion?  Nobody said investing was easy.  Like I used to say in the construction business, "If you want a friend, get a dog."

George Kengott of First National Bullion sent me a note with a few important points to keep in mind (I have added a few of my own):

• Silver is a by-product of mining in many copper and other industrial ore mines.  Industrial metals are under pricing pressure, reducing the amount mined, which means less silver. 
• Silver mining has not met demand for the last 16 years. 
• Silver is an industrial metal and a precious metal. 
• Silver is consumed, almost all the gold ever mined is still in existence. 
• Silver is cheap compared to gold.  900/13=69 ratio 
• Historically this ratio should be between 16 and 30 
• Silver increased in price almost three times as fast as Gold from 4/17 thru 6/2.  Gold = 13% vs. Silver 34.8% 
• California is going bankrupt in July! 

Buy Silver to own, or the SLV etf to trade.

SwingTrader has a buy on silver that will pay us over 10% while we own it and capitalize when the price reflects the money being printed in Washington. You can make enough on this one position in the next few months to pay for the whole year’s subscription. Of course, our service is guaranteed; we will happily refund your money any time.

Exxon was the high bidder for one of Iraq’s oil fields offering to increase production tenfold to over two million barrels per day. Exxon bid a concession of $4 per barrel, Iraq offered $1.90 and gave them 45 minutes to consider modifying their bid. Exxon rejected the lower concession structure, so the Chinese were given the option of accepting $1.90 per barrel. The Chinese rejected the price also.

Iraq opened bids for eight oil fields, accepting one. A consortium of British Petroleum (BP) and China National Petroleum won the sole contract awarded. Iraq will assess the political willingness to deal with the multinational oil companies and viability of long term contracts. There is political opposition to letting the international oil companies participate in the 20-year contracts. Keep your position in USO! Oil may get cheaper for a short time, but it is still the trade of the year.

The U.S. economy shrank at an annual pace of 5.5% in the first quarter, the second worst quarter in 27 years. Britain’s economy shrank at annual rate of 9.6% for the first three months, their worst since 1948!

Subscriber R.L. sent this e-mail about an economics professor:

The professor told me he had never failed a single student, until last fall, when he failed a whole class.

A class insisted that Oh! Bama’s economic plans would work for America.
No one would be rich, but none would be poor!
In exasperation, he agreed to an experiment.
The test grades for the whole class would be averaged.
All students would get the same grade.
The first test, everyone got a B
The A students were upset; they did not get the grade they deserved.
The poor students were excited; they did not have to study and got a better grade.
The next test everyone got a D
The good students did not study as much, because they were not rewarded for their work.
The poor and average students did not study at all, because they were counting on being carried.
The third test, everyone failed with an F
Test scores progressively got worse throughout the semester.
All students failed the class, as will our experiment with Socialism under Oh! Bama.

Moral of the Story:
When there is no reward for hard work and risk, why would anyone try or want to succeed?

I wonder how many of these Oh! Bama voters like the class results any more than we like what is happening to our country?

Remember to protect yourself, as the U.S. becomes more like the country portrayed in ATLAS SHRUGGED. Are we already there? Watch this video, and let me know what you think at feedback@galtstock.com

John Boehner told reporters “people deserve to know what’s in this pile of shit.”, after he spent over an hour reading excerpts from the climate bill as it was being debated in the house on Friday.

Rarely do we get such accurate language to describe proposed legislation.

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions. It may contain errors and you should not make investment decisions based solely on what you believe you have read here. Do your own research, it is your money. If you lose it, it is your responsibility, not ours or your grandmothers! The editor may or may not have a position in any securities discussed. The editor may have held a position in a security earlier, or in the future.

MarketToday Home Page

Back to Top