The International Monetary Fund (IMF) has issued new Special Drawing Rights worth approximately $300 bn which shows that inflation is a major problem the worldover, according to National Inflation Association (NIA). Perhaps, thisis the right time to buy gold and silver. NIA said that SDR's may not become the new world reserve currency. In a set of 10 questions and answers on precious metals, inflation and crude oil, it addresses key issues of interest to US and global investors.
1) How much over spot is a good price for silver and gold?
A good price for a 1 oz silver coin like an American Eagle or Canadian Maple Leaf is 12% over spot, and a good price for a 1 oz silver bar is 6% over spot. For gold, a good price for a 1 oz gold coin like an American Eagle or Canadian Maple Leaf is 4% over spot, and a good price for a 1 oz gold bar is 2% over spot. The larger premium for silver compared to gold indicates a shortage in the physical silver market.
2) Now that GATA has blown the doors off the LBMA ponzi scheme, and we know there is only 1 oz of silver for every 100 oz represented on paper, why hasn't there been a panic to dump paper and go into physical? What will it take to trigger a short squeeze?
We don't believe there is only 1 oz of physical silver for every 100 oz represented on paper. Most likely, there is 1 to 3 times more paper silver than physical silver. This is still a major problem that will ultimately result in a major silver shortage and short squeeze, once a large number of COMEX holders begin to demand physical delivery of silver. This is a topic that we will be covering extensively in our new documentary coming out next month.
3) If the silver market is controlled by JP Morgan and others, how does the little guy stand a chance of making money?
The manipulation by JP Morgan through naked short selling is providing an opportunity for normal everyday investors to purchase silver at dirt-cheap prices. Without JP Morgan's naked short selling, it's possible silver would already be well above $30 per ounce right now.
Remember, JP Morgan is not manipulating silver up, they are manipulating it down and the manipulation can't last forever. When investors around the globe call for physical delivery of their silver, there will be a shortage of physical silver and JP Morgan will be forced to cover their naked short position, causing silver prices to explode to the upside.
NIA believes silver will eventually see the biggest short squeeze in the history of all commodities.
4) What is the best way to respond to the overused and baseless argument that we needed the stimulus package or else the U.S. economy would've crashed and we would've had another Great Depression?
The stimulus package didn't stimulate the economy but it actually stifled it because we needed to go deeper into debt and borrow the money that was used on projects that added no production to our economy. The jobs that were created were temporary but we still owe the debt. We will need to print the money to pay the debt back, which will ultimately lead to hyperinflation.
Our country does not have access to unlimited financial resources. The money that we borrowed for the stimulus package took away from the money that could've been borrowed by a small business, which could've invested the money into building a factory that would've produced goods and generated real wealth for decades to come.
Our economy needed to enter a recession in order to clean out the toxic assets and imbalances. Today, all of the toxic assets still exist on the balance sheet of the Federal Reserve and the economic imbalances that caused the last crisis have grown larger than ever before.
Instead of going through a steep recession, we will now be forced to eventually endure a hyperinflationary Great Depression. Remember, when there is a boom created by cheap credit, there must eventually be a bust. There is no way around it. All the government has done is push the real collapse down the road while making the eventual outcome a lot more devastating.
5) Why do you not like investing into Real Estate? Isn't it smart to buy Real Estate that is cash-flow positive and then use that cash-flow to purchase precious metals?
Real Estate that is cash-flow positive today, might not be so in the future. In our opinion, it will be impossible for landlords to increase their rents at the same rate as inflation. If you are a landlord, your real cash-flow will diminish over time.
During periods of high inflation, preserving ones purchasing power becomes a lot more important than generating cash-flow. We believe Real Estate will continue to decrease in real value because Real Estate is not very liquid and prices are still at artificially propped up levels. Those who own Real Estate will do poorly compared to those who own precious metals.
6) Do you believe the discovery of many large oil shale deposits in the U.S. will drive down oil prices?
There are several major shale deposits in the U.S. that contain large amounts of oil and natural gas. The cost of extracting oil from these formations is very high and we doubt it will have much of a damper on oil prices. Although it is cheaper and easier to extract natural gas from these formations, we believe the existence of these shale deposits is already factored into our current low natural gas prices. We expect to see many vehicles convert to run off of natural gas in the future, which could lessen the demand for oil, but it will take many years for these conversions to take place. We believe $100+ oil is inevitable due to increasing demand from China and India, and the Federal Reserve's monetary inflation.
7) Do you believe Special Drawing Rights (SDRs) being issued by the IMF will accelerate the U.S. into hyperinflation? Are SDRs being setup to become the new world reserve currency?
From 1970 to 1981 the IMF issued $30 billion worth of SDRs, and gold and silver prices soared to record real highs. The IMF recently issued approximately $300 billion worth of new SDRs. Certainly, this shows that inflation is a major problem around the world and now is the time to own gold and silver.
We don't believe SDRs are being setup to become a new world reserve currency. It would be much more beneficial to China for them to allow their own currency to become the reserve currency.
8) I am considering a career in the military. With the coming collapse, will the military offer me and my family any type of security or will the hyperinflation affect the military as well?
We don't think the U.S. government will be able to afford the military it has today for much longer. Our military needs to be scaled back immediately if we want to prevent hyperinflation. During hyperinflation, the army will most likely be used mainly to protect government officials. Those who are left in the military will demand to be paid in gold, until our gold reserves are completely depleted.
9) I work at Disney Orlando as a server. I make about $300 a day on average. My seniority is rather high. What will happen to my job when the economy collapses?
We can't picture Disney World in Orlando ever closing its doors and going out of business. Certainly, your wages will decline in purchasing power and workers will demand higher nominal wages. Disney will have to increase admission fees and if visitors can't afford them, Disney will layoff employees. Hopefully your level of seniority will ensure your job safety.
The good thing about Disney World is many Asian visitors and foreign tourists come each year. We might see the percentage of foreign visitors increase in the years to come and make up a larger percentage of Disney World's theme park revenues.
10) If the government imposes a value added tax, how will that affect inflation?
We believe Americans are already taxed to the hilt and any additional taxes will have the effect of reducing tax revenues. We need to move the discussion in America away from taxes and towards inflation. It is impossible to fund our current level of government spending and pay back our national debt through taxation. It will all be paid through massive monetary inflation.
Showing posts with label silver. Show all posts
Showing posts with label silver. Show all posts
Monday, 19 April 2010
Monday, 21 December 2009
Silver’s smart run to continue in 2010
Till now, market analysts have been going ga-ga over the rise and rise of gold prices but silver has been shining better than gold in 2009 and this trend is set to continue in 2010 also.
Driven by demand from auto sector for silver-zinc batteries which are used in ‘smart automobiles’ and an array of portable electronic devices, the silver’s shining story will continue in the coming year also.
Silver ready (.999 fineness) prices are hovering around Rs 27,850 per kg in the Mumbai bullion market.
Demand for silver in the coming year is expected to rebound to normal levels in 2010 as the emergence of key new markets for silver would help to boost prices further.
Also, re-stocking of inventories for more of silver’s traditional uses will be a powerful demand driver in the near-term.
Silver prices are mainly driven by the fact that traditional industrial end-users of silver, such as the global electronics industry have in recent weeks begun to replenish severely depleted inventories.
During the financial crisis, silver inventories had run down sharply and it may take approximately six-months to fully rebuild the inventories to normal levels, Singh said.
An important factor to understand in the case of silver is that demand from the industrial sector tends to be quite inelastic. This means that buyers have few options and have to pay at prevailing prices.
Driven by demand from auto sector for silver-zinc batteries which are used in ‘smart automobiles’ and an array of portable electronic devices, the silver’s shining story will continue in the coming year also.
Silver ready (.999 fineness) prices are hovering around Rs 27,850 per kg in the Mumbai bullion market.
Demand for silver in the coming year is expected to rebound to normal levels in 2010 as the emergence of key new markets for silver would help to boost prices further.
Also, re-stocking of inventories for more of silver’s traditional uses will be a powerful demand driver in the near-term.
Silver prices are mainly driven by the fact that traditional industrial end-users of silver, such as the global electronics industry have in recent weeks begun to replenish severely depleted inventories.
During the financial crisis, silver inventories had run down sharply and it may take approximately six-months to fully rebuild the inventories to normal levels, Singh said.
An important factor to understand in the case of silver is that demand from the industrial sector tends to be quite inelastic. This means that buyers have few options and have to pay at prevailing prices.
Wednesday, 7 October 2009
The health benefits of wearing silver jewelry!
Silver Jewelry is very nice-looking, but also it’s a very healthy jewelry. Do you know much about how much silver is needed to our bodies? It’s a highly important element for balancing other elements in our body. It keeps our blood vessels elastic. It is really important for bone formation and healing, skin formation and repair.
Silver Jewelry is very good to wear with autumn-colored clothes. Yellow, beige colors signs of soon to come winter, which always brings spring after it. Try also wearing silver beads with black t-shirt or any other dark top.
Since the dawn of civilization people used silver because of its unusual strengths. Wise people engraved prayers on silver stones or silver plates to deliver a strong message to other worlds. Is it believed that silver stimulates energy flow to itself, so when silver jewellry is on body – it helps to accumulate more energy. It also seemed to help with avoiding lethargic tendencies and as a result of wearing it you may feel re-vitalized and stronger. It helps you to concentrate your thoughts.
As you might have already read – silver is absorbed through skin and has pain-relief effect, that’s why silver bracelets are so popular. It’s not an urban legend – this has medical background and some proofs from Eastern countries, where people know many things from past. Knowledge slowly fades away in nowadays if it has no big commercial value, but Eastern countries cherish comprehensive historical facts. So in a talk with a lady from East – there was a confirmation that silver jewellery has strong effect on people suffering from arthritis. Silver (especially magnetic jewelry) is known to increase blood circulation and reduce pain in muscles. Many people suffering from arthritis will not leave home without a bracelet.
Besides silver bracelets you can find some silver beads, strings, and earrings. Most of them are amazingly beautiful and not expensive, since silver isn’t a precious metal. Despite it’s dollar value – it’s very precious to our health.
Wearing silver jewelery you might notice green stains on your skin under the place of contact with silver. Don’t panic. It’s all right, it will come off in a day or two – it’s just silver entering your body. It usually happens in warm days. If you want to avoid it – paint inside a bracelet with a transparent nail polish, but as you might figure out – it prevents health benefits of silver too. These stains aren’t known to do any harm for you. There are recommendations to wear silver jewelry while you are sleeping, which time for our body to rest and to restore, that way you can wash it’s traces in morning.
Silver jewelry, like many other metals is known to tarnish over time. To clean jewelery, made from silver – just put it in a small solution of lemon or limejuice with a dash of salt, it will shine as new. Alternately you can keep it in silver jewelry box, preventing from continual air exposure, which causes silver jewelry to tarnish.
If you are still not convinced that silver bracelets are a great way to help your health – well – go to the nearest pharmacy and continue to buy pilling helping pharmaceutical industry to grow and sell you even more.
After all – it’s not always about how it works – sometimes it’s about how it looks – and 925 silver jewelry is sometimes amazingly beautiful. Try to find some and you’ll be amazed too!
(Courtesy:PRLog)
Silver Jewelry is very good to wear with autumn-colored clothes. Yellow, beige colors signs of soon to come winter, which always brings spring after it. Try also wearing silver beads with black t-shirt or any other dark top.
Since the dawn of civilization people used silver because of its unusual strengths. Wise people engraved prayers on silver stones or silver plates to deliver a strong message to other worlds. Is it believed that silver stimulates energy flow to itself, so when silver jewellry is on body – it helps to accumulate more energy. It also seemed to help with avoiding lethargic tendencies and as a result of wearing it you may feel re-vitalized and stronger. It helps you to concentrate your thoughts.
As you might have already read – silver is absorbed through skin and has pain-relief effect, that’s why silver bracelets are so popular. It’s not an urban legend – this has medical background and some proofs from Eastern countries, where people know many things from past. Knowledge slowly fades away in nowadays if it has no big commercial value, but Eastern countries cherish comprehensive historical facts. So in a talk with a lady from East – there was a confirmation that silver jewellery has strong effect on people suffering from arthritis. Silver (especially magnetic jewelry) is known to increase blood circulation and reduce pain in muscles. Many people suffering from arthritis will not leave home without a bracelet.
Besides silver bracelets you can find some silver beads, strings, and earrings. Most of them are amazingly beautiful and not expensive, since silver isn’t a precious metal. Despite it’s dollar value – it’s very precious to our health.
Wearing silver jewelery you might notice green stains on your skin under the place of contact with silver. Don’t panic. It’s all right, it will come off in a day or two – it’s just silver entering your body. It usually happens in warm days. If you want to avoid it – paint inside a bracelet with a transparent nail polish, but as you might figure out – it prevents health benefits of silver too. These stains aren’t known to do any harm for you. There are recommendations to wear silver jewelry while you are sleeping, which time for our body to rest and to restore, that way you can wash it’s traces in morning.
Silver jewelry, like many other metals is known to tarnish over time. To clean jewelery, made from silver – just put it in a small solution of lemon or limejuice with a dash of salt, it will shine as new. Alternately you can keep it in silver jewelry box, preventing from continual air exposure, which causes silver jewelry to tarnish.
If you are still not convinced that silver bracelets are a great way to help your health – well – go to the nearest pharmacy and continue to buy pilling helping pharmaceutical industry to grow and sell you even more.
After all – it’s not always about how it works – sometimes it’s about how it looks – and 925 silver jewelry is sometimes amazingly beautiful. Try to find some and you’ll be amazed too!
(Courtesy:PRLog)
Monday, 6 July 2009
How India Budget affects commodities
Union Finance Minister Pranab Mukherjee has announced several commodity-friendly measures in the budget including withdrawal of Commodity Transaction Tax. (CTT) apart from the stated objective of raising agricultural growth to 4% by substantial increase in plan allocation and capital formation and increase in infrastructure investment to more than 9% of GDP.
These measures are expected to boost the agri-commodities, metals, cements and chemicals industries in the medium to long term and also add further impetus to stimulus packages already announced to boost growth.
”A very positive sign for Indian commodities market. Being in the nascent stage of development, abolition of CTT will reduce transaction costs in commodities trading, thereby the burden will come down and participation in these markets shall increase.CTT was to be introduced in the last budget and was causing concern in the growth of the Indian commodities market. This news of abolition of CTT has brought in great relief,” according to Dinesh Thakkar, CMD of Angel Broking.
Anjani Sinha, Director, MCX, said, “The Budget is visionary and good for the commodity markets, for which the government should be applauded with highest intensity. It will stimulate huge investment in the warehousing sector since the uncertainty of commodity market viability with respect to the cost of transaction (CTT) has been removed and now it will be at par with top 25 global commodities exchanges which constitute 99.99% of the world’s exchange traded commodity derivative volume. This announcement will put Indian commodity market ecosystem at par with international exchanges with respect to cost of hedging, thereby fulfilling the government’s vision of making Indian commodity derivative market competitive on a global canvass”.
National Rural Employment Guarantee Act that provided employment to 4.47 crore households in 2008-09 has got a further fillip with allocation for the scheme raised to Rs 39,100 cr, a whopping increase of 144%. To increase the productivity of assets and resources under NREGA, convergence with other schemes relating to agriculture, forests, water resources, land resources and rural roads is being initiated, Finance Minister said.
The Budget has restored an eight percent Centre Excise duty on manmade fibre and yarn making ito on par with cotton sector. The Minister has also reduced the customs duty on wool waste and cotton waste used in cheaper varieties of textile articles such as blankets and rugs to 10% from 15%.
Gold Bars, Silver
Customs duty on gold bars have been hiked to Rs 200 per 10 gm from Rs 100 while other forms of gold excluding jewellery will be levied at the rate of Rs 500 per 10 grams against existing rate of Rs 250. Silver will charged at Rs 1000 per kg as against existing Rs 500.
One mega handloom cluster each in West Bengal and Tamil Nadu and one powerloom mega cluster in Rajasthan have been announced..The minister said that the earlier tow the two mega handloom clusters at Varanasi and Sibsagar and two mega powerloom clusters at Erode and Bhiwandi are under successful implementation..These will generate job opportunities and income. The government also intends to add new mega clusters for Carpets in Srinagar (J&K) and Mirzapur (UP).
Financial inclusion
As a result of financial inclusion initiatives by scheduled commercial banks -3.3 crore no-frill accounts were opened. To develop banking network in unbanked or underbanked areas, a Sub-committee of State Level Bankers Committee will identify such areas and formulate an action plan to bring them under banking network within 3 years, the Minister said. A budget allocation of Rs.100 crore during the current year as one-time grant-in-aid has been made to ensure provision of at least one centre/Point of Sales (POS) for banking services in each of the unbanked blocks in the country.
The RBI has announced a further relaxation in its Branch Authorisation Policy. Scheduled Commercial Banks are now allowed to set up off-site ATMs without prior approval, subject to reporting.
Exports
The adjustment assistance scheme to provide enhanced Export Credit and Guarantee Corporation (ECGC) cover at 95 percent of badly hit sectors have been extended to March 2010.
The allocation for Market Development Assistance Scheme provides support to exporters in developing new markets has been raised by 148% to Rs 124 cr. The interest subvention scheme of 2 percent on pre-shipment credit for seven sectors—textiles including handlooms, handicrafts, carpets, leather, gems and jewellery, marine products and small and medium exporters has been extend till March 31, 2010.
Micro, Small and Medium Enterprises (MSMEs) have been affected by the slowdown in exports and the indirect effect of the global crisis on domestic demand. To support this them credit flow will be ensured by providing a special fund out of Rural Infrastructure Development Fund (RIDF) to Small Industries Development Bank (SIDBI), Pranab Mukherjee said. This fund of Rs.4,000 crore will incentivise Banks and State Finance Corporations (SFCs) to lend to Micro and Small Enterprises (MSEs) by refinancing 50 per cent of incremental lending to MSEs during the current financial year.
Nutrient-Based Subsidy .
To ensure balanced application of fertilizers, the Government intends to move towards a nutrient based subsidy regime instead of the current product pricing regime, Pranab Mukherjee said. It will lead to availability of innovative fertilizer products in the market at reasonable prices. This unshackling of the fertilizer manufacturing sector is expected to attract fresh investments in this sector. In due course it is also intended to move to a system of direct transfer of subsidy to the farmers.
Agriculture
The one-time bank loan waiver of nearly Rs.71,000 crore to cover an estimated 40 million farmers was one of the major highlights of the last Budget. This scheme has been extended to 31 December 2009. A task force will be set up to study the problem of indebtedness among Maharasthra farmers due to credit availed from money lenders and therefore not coming under the loan waiver scheme.
Finance Minister had made an additional Rs.1,000 crore allocation over Interim BE for the Accelerated Irrigation Benefit Programme (AIBP), marking an increase of 75 per cent over the allocation in 2008-09(BE). The allocation for the Rashtriya Krishi Vikas Yojna (RKVY) is also being stepped up by 30 per cent over Budget Estimates of 2008-09.
Agriculture has been the mainstay of our economy with 60 per cent of our population Agriculture credit flow was Rs.2,87,000 crore in 2008-09. The target for agriculture credit flow for the year 2009-10 is being set at Rs.3,25,000 crore. To achieve this, the Minister has proposed to continue the interest subvention scheme for short term crop loans to farmers for loans upto Rs.3 lakh per farmer at the interest rate of 7 per cent per annum. Thereby effective interest rate for farmers will come down to 6%. An additional budget allocation of Rs 411 crore over interim budget is being made.
Power
Allocation for Accelerated Power Development and Reform Programme (APDRP) has been increased to Rs 2,080 crore, an increase of 160% over interim budget. Minister also announced reduction of the basic customs duty on permanent magnets - a critical component for Wind Operated Electricity Generators - from 7.5 per cent to 5 per cent
Government will evolve a blue print for long distance gas highways leading to National Gas Grid facilitating transportation of gas across the country.
India Infrastructure Finance Company Limited (IIFCL) set up as a special purpose vehicle for providing long term financial assistance to infrastructure projects will be strengthened to fulfill its mandate, the Minister said.
Bio-Fuel
In order to encourage the use of this environment friendly fuel and augment its availability in the country, Government will reduce basic customs duty on bio-diesel from 7.5 per cent to 2.5 per cent - at par with petro-diesel. Biodiesel obtained from vegetable oils and used for blending with petro-diesel, is currently exempt from excise duty. From now on petro-diesel blended with bio-diesel will also be exempted from excise duty.
These measures are expected to boost the agri-commodities, metals, cements and chemicals industries in the medium to long term and also add further impetus to stimulus packages already announced to boost growth.
”A very positive sign for Indian commodities market. Being in the nascent stage of development, abolition of CTT will reduce transaction costs in commodities trading, thereby the burden will come down and participation in these markets shall increase.CTT was to be introduced in the last budget and was causing concern in the growth of the Indian commodities market. This news of abolition of CTT has brought in great relief,” according to Dinesh Thakkar, CMD of Angel Broking.
Anjani Sinha, Director, MCX, said, “The Budget is visionary and good for the commodity markets, for which the government should be applauded with highest intensity. It will stimulate huge investment in the warehousing sector since the uncertainty of commodity market viability with respect to the cost of transaction (CTT) has been removed and now it will be at par with top 25 global commodities exchanges which constitute 99.99% of the world’s exchange traded commodity derivative volume. This announcement will put Indian commodity market ecosystem at par with international exchanges with respect to cost of hedging, thereby fulfilling the government’s vision of making Indian commodity derivative market competitive on a global canvass”.
National Rural Employment Guarantee Act that provided employment to 4.47 crore households in 2008-09 has got a further fillip with allocation for the scheme raised to Rs 39,100 cr, a whopping increase of 144%. To increase the productivity of assets and resources under NREGA, convergence with other schemes relating to agriculture, forests, water resources, land resources and rural roads is being initiated, Finance Minister said.
The Budget has restored an eight percent Centre Excise duty on manmade fibre and yarn making ito on par with cotton sector. The Minister has also reduced the customs duty on wool waste and cotton waste used in cheaper varieties of textile articles such as blankets and rugs to 10% from 15%.
Gold Bars, Silver
Customs duty on gold bars have been hiked to Rs 200 per 10 gm from Rs 100 while other forms of gold excluding jewellery will be levied at the rate of Rs 500 per 10 grams against existing rate of Rs 250. Silver will charged at Rs 1000 per kg as against existing Rs 500.
One mega handloom cluster each in West Bengal and Tamil Nadu and one powerloom mega cluster in Rajasthan have been announced..The minister said that the earlier tow the two mega handloom clusters at Varanasi and Sibsagar and two mega powerloom clusters at Erode and Bhiwandi are under successful implementation..These will generate job opportunities and income. The government also intends to add new mega clusters for Carpets in Srinagar (J&K) and Mirzapur (UP).
Financial inclusion
As a result of financial inclusion initiatives by scheduled commercial banks -3.3 crore no-frill accounts were opened. To develop banking network in unbanked or underbanked areas, a Sub-committee of State Level Bankers Committee will identify such areas and formulate an action plan to bring them under banking network within 3 years, the Minister said. A budget allocation of Rs.100 crore during the current year as one-time grant-in-aid has been made to ensure provision of at least one centre/Point of Sales (POS) for banking services in each of the unbanked blocks in the country.
The RBI has announced a further relaxation in its Branch Authorisation Policy. Scheduled Commercial Banks are now allowed to set up off-site ATMs without prior approval, subject to reporting.
Exports
The adjustment assistance scheme to provide enhanced Export Credit and Guarantee Corporation (ECGC) cover at 95 percent of badly hit sectors have been extended to March 2010.
The allocation for Market Development Assistance Scheme provides support to exporters in developing new markets has been raised by 148% to Rs 124 cr. The interest subvention scheme of 2 percent on pre-shipment credit for seven sectors—textiles including handlooms, handicrafts, carpets, leather, gems and jewellery, marine products and small and medium exporters has been extend till March 31, 2010.
Micro, Small and Medium Enterprises (MSMEs) have been affected by the slowdown in exports and the indirect effect of the global crisis on domestic demand. To support this them credit flow will be ensured by providing a special fund out of Rural Infrastructure Development Fund (RIDF) to Small Industries Development Bank (SIDBI), Pranab Mukherjee said. This fund of Rs.4,000 crore will incentivise Banks and State Finance Corporations (SFCs) to lend to Micro and Small Enterprises (MSEs) by refinancing 50 per cent of incremental lending to MSEs during the current financial year.
Nutrient-Based Subsidy .
To ensure balanced application of fertilizers, the Government intends to move towards a nutrient based subsidy regime instead of the current product pricing regime, Pranab Mukherjee said. It will lead to availability of innovative fertilizer products in the market at reasonable prices. This unshackling of the fertilizer manufacturing sector is expected to attract fresh investments in this sector. In due course it is also intended to move to a system of direct transfer of subsidy to the farmers.
Agriculture
The one-time bank loan waiver of nearly Rs.71,000 crore to cover an estimated 40 million farmers was one of the major highlights of the last Budget. This scheme has been extended to 31 December 2009. A task force will be set up to study the problem of indebtedness among Maharasthra farmers due to credit availed from money lenders and therefore not coming under the loan waiver scheme.
Finance Minister had made an additional Rs.1,000 crore allocation over Interim BE for the Accelerated Irrigation Benefit Programme (AIBP), marking an increase of 75 per cent over the allocation in 2008-09(BE). The allocation for the Rashtriya Krishi Vikas Yojna (RKVY) is also being stepped up by 30 per cent over Budget Estimates of 2008-09.
Agriculture has been the mainstay of our economy with 60 per cent of our population Agriculture credit flow was Rs.2,87,000 crore in 2008-09. The target for agriculture credit flow for the year 2009-10 is being set at Rs.3,25,000 crore. To achieve this, the Minister has proposed to continue the interest subvention scheme for short term crop loans to farmers for loans upto Rs.3 lakh per farmer at the interest rate of 7 per cent per annum. Thereby effective interest rate for farmers will come down to 6%. An additional budget allocation of Rs 411 crore over interim budget is being made.
Power
Allocation for Accelerated Power Development and Reform Programme (APDRP) has been increased to Rs 2,080 crore, an increase of 160% over interim budget. Minister also announced reduction of the basic customs duty on permanent magnets - a critical component for Wind Operated Electricity Generators - from 7.5 per cent to 5 per cent
Government will evolve a blue print for long distance gas highways leading to National Gas Grid facilitating transportation of gas across the country.
India Infrastructure Finance Company Limited (IIFCL) set up as a special purpose vehicle for providing long term financial assistance to infrastructure projects will be strengthened to fulfill its mandate, the Minister said.
Bio-Fuel
In order to encourage the use of this environment friendly fuel and augment its availability in the country, Government will reduce basic customs duty on bio-diesel from 7.5 per cent to 2.5 per cent - at par with petro-diesel. Biodiesel obtained from vegetable oils and used for blending with petro-diesel, is currently exempt from excise duty. From now on petro-diesel blended with bio-diesel will also be exempted from excise duty.
Thursday, 7 May 2009
When gold/silver ratio widens, silver does worse
The tangible difference between silver stocks and the silver price, in comparison to that of gold, can be partly explained by the enormous volumes of silver produced as a by-product from zinc, lead and copper mines, which leaves primary producers less important to the rises and falls in world silver supply, says The Silver Book, a report on silver investment potential from V M Group.
Following is an extract from the The Silver Book:
Silver enjoyed a strong run in Q1 2009, hitting a six-month high of $14.39/oz (London fix) in late February from October lows of less than $9/oz. But its price still appears to be hovering in something of a no-man's-land. After all, silver had succeeded in rising above $20/oz in March 2008.
This kind of volatility has had many heads spinning. But the key to explaining it is, as ever, not in the silver market, but rather, by looking at what has been happening in gold. The movement in the price of silver reveals a much sharper degree of volatility than that of gold.
While silver is a long way from its all-time dollar nominal high set in January 1980, gold hit its nominal high in March 2008 and currently remains close to that level. But the two nevertheless enjoy a very close price relationship.
A perfect linear relationship between the two prices does not mean that when gold rises (for example) by 5% that silver also rises by 5%. In fact, the silver price tends to move in line with that of gold, but more extremely i.e. when gold goes up, silver goes up more, and when gold goes down silver goes down more.
One useful way of measuring the relationship between their respective prices is the gold/silver ratio, i.e. the number of ounces of silver that would be needed to buy an ounce of gold. This ratio tends to fall (i.e. silver gets cheaper relative to gold) when gold and silver are falling, and rises (i.e. silver gets more valuable relative to gold) when gold and silver prices are rising.
This is in some ways counter-intuitive, because if you compare the price of a product to the ratio of its price to another item, you would expect there to be a positive correlation. But in this case it is negative; so when gold is doing well, silver must be doing better. Similarly, when gold does badly, such as between July and August 2008, the gold/silver ratio widens, meaning silver is doing even worse.
One obvious explanation for this changing relationship between these two metals is that silver is not only a precious and a monetary metal (we use this term rather than precious metal to distinguish gold from platinum or palladium), but it is also an industrial metal, more like copper or nickel.
If we compare the supply-demand balances of silver and gold, we find that between 2003 and 2008 silver's industrial demand (photographic, electronics, brazing alloys, catalyst, and a myriad of other applications such as solar panels) accounted for an
average 15,486t/year, 57% of total demand. Gold on the other hand saw industrial demand of at most 700t, only about 15% of total demand.
Silver's industrial edge is demonstrated by the better performance of silver stocks over gold stocks between 2005 and 2008, while the relationship reversed after the credit market collapse in mid-September 2008.
The tangible difference between silver stocks and the silver price, in comparison to that of gold, can be partly explained by the enormous volumes of silver produced as a by-product from zinc, lead and copper mines, which leaves primary producers less important to the rises and falls in world silver supply.
Since the onslaught of the recession a small proportion of by-product gold has been removed due to base metal mine closures and cut backs, but this has not exerted any upward pressure on the gold price since supply cuts have been minimal and more than compensated by increased scrap supply.
Silver mine production has fared much worse, with aggregate silver output for our top 20 miners (primary and by-product production) slipping almost 5% to 10,979t in Q4 2008. We expect 2009 production could be down by at least 700t, as miners maintain production cuts and delay mine start-ups.
Check out silver and gold trading five years ago:
11th August 2004: The Chicago Board of Trade announced plans to trade gold and silver futures contracts exclusively on its electronic trading platform. Trading in the contract, available 21 hours a day, will compete with Comex. Trading in gold and silver at the Comex is only available online after the trading floor closes.
21st July 2004: 417 oz of gold, about a tonne of silver, and about a tonne of bronze, was used to make more than 3,000 medals for the Athens Olympics.
5th May 2004: Apex Silver reported a $4.2m net loss for the first quarter, and announced that it was seeking commercial bank financing for the huge San Cristobal project in Bolivia.
8th March 2004: First Majestic Resource Corp announced that silver production had begun from its La Parrilla Silver mine located outside of Durango in Mexico.
12th January 2004: Industrias Penoles, Mexico's largest silver producer, was seeking a $120m bank loan to finance expansion projects, including construction of a $200m copper mine and to upgrade the mill at Fresnillo, the world's largest silver mine.
Courtesy: www.virtualmetals.co.uk
Following is an extract from the The Silver Book:
Silver enjoyed a strong run in Q1 2009, hitting a six-month high of $14.39/oz (London fix) in late February from October lows of less than $9/oz. But its price still appears to be hovering in something of a no-man's-land. After all, silver had succeeded in rising above $20/oz in March 2008.
This kind of volatility has had many heads spinning. But the key to explaining it is, as ever, not in the silver market, but rather, by looking at what has been happening in gold. The movement in the price of silver reveals a much sharper degree of volatility than that of gold.
While silver is a long way from its all-time dollar nominal high set in January 1980, gold hit its nominal high in March 2008 and currently remains close to that level. But the two nevertheless enjoy a very close price relationship.
A perfect linear relationship between the two prices does not mean that when gold rises (for example) by 5% that silver also rises by 5%. In fact, the silver price tends to move in line with that of gold, but more extremely i.e. when gold goes up, silver goes up more, and when gold goes down silver goes down more.
One useful way of measuring the relationship between their respective prices is the gold/silver ratio, i.e. the number of ounces of silver that would be needed to buy an ounce of gold. This ratio tends to fall (i.e. silver gets cheaper relative to gold) when gold and silver are falling, and rises (i.e. silver gets more valuable relative to gold) when gold and silver prices are rising.
This is in some ways counter-intuitive, because if you compare the price of a product to the ratio of its price to another item, you would expect there to be a positive correlation. But in this case it is negative; so when gold is doing well, silver must be doing better. Similarly, when gold does badly, such as between July and August 2008, the gold/silver ratio widens, meaning silver is doing even worse.
One obvious explanation for this changing relationship between these two metals is that silver is not only a precious and a monetary metal (we use this term rather than precious metal to distinguish gold from platinum or palladium), but it is also an industrial metal, more like copper or nickel.
If we compare the supply-demand balances of silver and gold, we find that between 2003 and 2008 silver's industrial demand (photographic, electronics, brazing alloys, catalyst, and a myriad of other applications such as solar panels) accounted for an
average 15,486t/year, 57% of total demand. Gold on the other hand saw industrial demand of at most 700t, only about 15% of total demand.
Silver's industrial edge is demonstrated by the better performance of silver stocks over gold stocks between 2005 and 2008, while the relationship reversed after the credit market collapse in mid-September 2008.
The tangible difference between silver stocks and the silver price, in comparison to that of gold, can be partly explained by the enormous volumes of silver produced as a by-product from zinc, lead and copper mines, which leaves primary producers less important to the rises and falls in world silver supply.
Since the onslaught of the recession a small proportion of by-product gold has been removed due to base metal mine closures and cut backs, but this has not exerted any upward pressure on the gold price since supply cuts have been minimal and more than compensated by increased scrap supply.
Silver mine production has fared much worse, with aggregate silver output for our top 20 miners (primary and by-product production) slipping almost 5% to 10,979t in Q4 2008. We expect 2009 production could be down by at least 700t, as miners maintain production cuts and delay mine start-ups.
Check out silver and gold trading five years ago:
11th August 2004: The Chicago Board of Trade announced plans to trade gold and silver futures contracts exclusively on its electronic trading platform. Trading in the contract, available 21 hours a day, will compete with Comex. Trading in gold and silver at the Comex is only available online after the trading floor closes.
21st July 2004: 417 oz of gold, about a tonne of silver, and about a tonne of bronze, was used to make more than 3,000 medals for the Athens Olympics.
5th May 2004: Apex Silver reported a $4.2m net loss for the first quarter, and announced that it was seeking commercial bank financing for the huge San Cristobal project in Bolivia.
8th March 2004: First Majestic Resource Corp announced that silver production had begun from its La Parrilla Silver mine located outside of Durango in Mexico.
12th January 2004: Industrias Penoles, Mexico's largest silver producer, was seeking a $120m bank loan to finance expansion projects, including construction of a $200m copper mine and to upgrade the mill at Fresnillo, the world's largest silver mine.
Courtesy: www.virtualmetals.co.uk
Wednesday, 29 April 2009
How to make money with Silver?
By Eric Gruber
Recently, I met the owner of a well-known precious metals web site and I popped this question to him: “What do you think about investing in silver?”
His reply was both profound and accurate. “David,” he said, "The smart money is moving into gold, but the SMARTEST money is moving into silver!"
Investing in silver is a great way to make money, especially if you are looking to secure your future or your retirement. But of course, just like any type of investing, there are no guarantees. You need to know what you are doing and what the silver market is all about before you can get too involved. This is the only way to make sure that you give yourself every possible advantage to benefit from silver investing.
That’s the ONE and ONLY reason that I am here today. I want to share with you some tips that will give you direction when you start investing in silver so you can make the most money possible.
1. Take a close look at the market before you decide that silver investing is right for you. Investing is silver is different than investing in stocks and bonds.
2. Educate yourself. If you are not sure how investing in silver works, touch base with a professional who can help you with the buying and selling process.
3. Complete effective online research. Be careful of the information you find. There’s so much information online about silver investing, but a lot of it is misinformation. You want to learn from experts who are in the trenches tracking the silver market and making investments every day. For example, the information that you will find on http://www.silver-investor.com is based on my experiences and knowledge from following the silver market daily for more than thirty years.
4. Get familiar with the many different ways that you can invest in silver. You can invest in silver mining companies, silver ETFs, silver futures, silver bullion and silver coins. The sure-fire way to invest in silver without the worry is to invest in bullion or coins. This is the place to start-- real metal for your future. You don’t have to pay for a mining company’s energy costs. And you don’t have to buy 1000 to 5000 ounces in a futures contract that carries too much risk for a beginning silver investor.
5. If you are looking to invest in silver coins and silver bars then you need to know this trick -- Find sellers who are actually selling as near the spot price of silver as possible (spot plus a reasonable fee). A general rule is that the more silver you are buying the less percentage of fees you should be expected to pay. When buying coins to invest in their silver content be certain you are not buying coins for their numismatic value (the value to a collector of rare coins).
6. Before you invest in silver, make sure you calculate how much you can invest between your IRA rollover funds, cash on hand and other assets that you wish to turn into silver. Be sure to keep your emergency fund mostly in cash for unforeseen expenses. You don’t want to bite off (invest) more than you can chew (afford).
7. Stay on top of the market. There are times to buy. And, there are times to sell. Yes, at some point, it may be better to sell some or perhaps even all of your silver holdings for currency, depending on the bull market and your personal investment goals. But the only way you know when to buy or sell is if you have current silver market investing information at your fingertips.
Recently, I met the owner of a well-known precious metals web site and I popped this question to him: “What do you think about investing in silver?”
His reply was both profound and accurate. “David,” he said, "The smart money is moving into gold, but the SMARTEST money is moving into silver!"
Investing in silver is a great way to make money, especially if you are looking to secure your future or your retirement. But of course, just like any type of investing, there are no guarantees. You need to know what you are doing and what the silver market is all about before you can get too involved. This is the only way to make sure that you give yourself every possible advantage to benefit from silver investing.
That’s the ONE and ONLY reason that I am here today. I want to share with you some tips that will give you direction when you start investing in silver so you can make the most money possible.
1. Take a close look at the market before you decide that silver investing is right for you. Investing is silver is different than investing in stocks and bonds.
2. Educate yourself. If you are not sure how investing in silver works, touch base with a professional who can help you with the buying and selling process.
3. Complete effective online research. Be careful of the information you find. There’s so much information online about silver investing, but a lot of it is misinformation. You want to learn from experts who are in the trenches tracking the silver market and making investments every day. For example, the information that you will find on http://www.silver-investor.com is based on my experiences and knowledge from following the silver market daily for more than thirty years.
4. Get familiar with the many different ways that you can invest in silver. You can invest in silver mining companies, silver ETFs, silver futures, silver bullion and silver coins. The sure-fire way to invest in silver without the worry is to invest in bullion or coins. This is the place to start-- real metal for your future. You don’t have to pay for a mining company’s energy costs. And you don’t have to buy 1000 to 5000 ounces in a futures contract that carries too much risk for a beginning silver investor.
5. If you are looking to invest in silver coins and silver bars then you need to know this trick -- Find sellers who are actually selling as near the spot price of silver as possible (spot plus a reasonable fee). A general rule is that the more silver you are buying the less percentage of fees you should be expected to pay. When buying coins to invest in their silver content be certain you are not buying coins for their numismatic value (the value to a collector of rare coins).
6. Before you invest in silver, make sure you calculate how much you can invest between your IRA rollover funds, cash on hand and other assets that you wish to turn into silver. Be sure to keep your emergency fund mostly in cash for unforeseen expenses. You don’t want to bite off (invest) more than you can chew (afford).
7. Stay on top of the market. There are times to buy. And, there are times to sell. Yes, at some point, it may be better to sell some or perhaps even all of your silver holdings for currency, depending on the bull market and your personal investment goals. But the only way you know when to buy or sell is if you have current silver market investing information at your fingertips.
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