BERAL, INC.
Andrew Racz
Director of Research
300 East 54 Street, Suite 26C
New York, NY 10022
Phone: (212) 319-6949
Fax: (212) 753-1944
E-mail: mlikar@aol.com

Silver At $200

The resolute march toward $200 Silver began in August 2011 … that is the day when the U.S. Dollar lost its AAA credit rating. Gold was crowding $1,700. The likely scenario- Chancellor Merkel travels to Beijing. Germany and China call for a joint currency.

It was August 1939, that the Molotov -Ribentrop Pact was signed.

The currency war against the U.S. Dollar has began. Silver is on its way!

Silver At $200

The actual statement or we may call the actual concept that we can discuss silver at $200 doesn’t seem to be plausible in the ordinary course of precious metals history.

Most of us and certainly the generation that is currently at college consider silver as somewhat volatile commodity type of metal. We all know that silver fluctuates and it fluctuates on economics more than perhaps any other metal.

For the generation over 40, silver has not been considered a little bit glamorous but is thought to be a simple metal trading around $5 - $6. Glamour is singularly tied to the Texan born Hunt Brothers game some 30 years ago. One of the most remarkable people, a maverick was Bunker Hunt - whom I recommended for a Nobel price for Economics in 1980.

If, however, we start to study the situation in books and publications an interesting concept begins to emerge. Can silver go to $200? Silver at $200! Seriously!

  1. We have, fist of all, population growth, the very fact that in 1956 when the Hungarian Revolution liberated me, there were probably not more than 1 ½ billion people who worked. Today in 2011, the number is over 5 billion.
  2. There is quality improvement among working people and silver buyers. Apart from India and China which are big factors a large number of countries like Russia and Brazil, have joined those who have acquired silver for monetary value.
  3. The surprising thing is the vast increase of industrial applications that require silver. 34-40 years ago, we were considering industrial applications of silver in photography, a utilization which actually declined. Today the picture is different. There are a number of industrial applications consuming a growing number of silver and creating a floor for the yearly usage of the metal.
  4. Not to forget, the price increase. Only 10 years ago Warren Buffet bought silver at $6. Today silver changes hands between $35 and $40/45. The higher price is actually a trigger of a whole gamut of obligations.
  5. Silver is a very popular ETF. Dozens of ounces of silver disappear in bank vaults of the various ETFs .
  6. In general high priced silver which trades actively in New York, Chicago, Hong Kong, Singapore and Tokyo, is utilized as a store of value and has begun to be utilized as monetary value which increases among other monetary utilizations of silver. This is not a minor factor. When 7.5 billion people all over the world in various countries talk about silver and buy silver in one form or another from industrial applications to coins, ETFs and storage, their actions lead to financial transactions causing silver to be considered as a monetary asset. As a result, suddenly there could be a major jump in the price of silver.
  7. If any metal like silver is being considered as a monetary asset, the utilization and acquisition of silver jumps phenomenally. It is relatively simple to explain that if one ounce of silver is used in a camera, if one once of silver is used for Apple Computers and if silver is considered a monetary metal, the utilization rate goes up to 10,20,30 or 40. We are now entering a world where the monetary value of silver is recognized in India, China , Brazil and very soon Africa and such value from ETFs to coins to silver bonds or silver bullion is acquired by banks, individuals and perhaps governments.
  8. If it goes through this process we will realize that for the next 5 or 10 years there is path for silver to become a monetary metal and in that case the demand for its physical presence in the financial world would increase the demand 5 or even 10 fold and therefore a $200 price is practical reality.
  9. Additional factors in the growth of silver usage and the rise in price is transforming the profile of mining companies which are producers of silver. This change happened in the last two years. The cost of mining silver is still between $5 and $8 an ounce. At the same time the price of silver has increased to $40. A $30 gap – a $30 operating margin is transforming or rather creating companies with enormous cash holdings.
  10. We would like to bring up a few factors: First Majestic (AG) –projected that the company has a market value today after two years of boom, of $2.5 billion, but in 5 years the company could accumulate because of the operating margin $2 billion in cash. A rapidly growing medium size company, US Gold which is in the form of a vehicle of potential company projects by the year 2015 is forecasting production of 7.5 million ounces of silver. At the $40 price, we are talking $300 million value; at the $100 price the value is approaching $1 Billion. US Gold is by no means a large silver producer, but its performance and the storage of silver value in the corporation is meaningful.
  11. What we are stating between the year 2015 and 2020 maybe a dozen silver mining companies could have accumulated silver in cash form, close to ½ billion dollars. 10 such companies would account for a total surplus of $5 to $10 billion.
  12. 12. If a search for the concept silver at $200 – be happy to take into account the recent valuation of silver at least between $40 to $100. That enables the accumulation of silver values in mining companies of $10 billion, the $10 billion which has not been there.
  13. The silver companies joined a club of multi billion dollar cash surplus which brings them to the status level previously held exclusively by members of the Dallas Petroleum Club.
  14. This represents a changing world. We are in the year 2011, talking of countries going bankrupt. We are talking about Greece, Portugal, Spain and Italy in Europe and regretfully, we are talking about the $14.5 trillion deficit of the United States.
  15. In other words, we live in a world when countries have grossly mismanaged their economies and are now experiencing large deficits but at the same time, companies that mine silver or mine what we call by then, a monetary metal, accumulate vast values maybe in the tens of billions of dollars. In other words, the original question is silver a currency answers itself because we will see the movement of monies which includes monies from governments to a silver.
  16. What it means is that the stockholders of First Majestic, the stockholders of US Gold which started at $2 a few years ago and today are $7, are happy. We are living in a world in which those who backed silver as a currency are different from those who just blindly follow the regular routine of paper currency and paper transactions and find themselves as citizens of a deficit country as opposed to stockholders of a prime silver company such as Silver Corp. or First Majestic.
  17. The world has never seen such a transformation; the world has never seen such a major change.
  18. Mr. Paulson, the well known hedge fund manager who now has under his control some $35 billion, stated in January 2010, that he is buying gold, gold mining companies because he is betting against governments.
  19. He was right. Gold went up; gold mining stocks became profitable and governments went bankrupt.
  20. If this process is carried further and further, the result is that a different and higher value of silver is emerging and at some stage it will reach the $200 level; in that case maybe government bankruptcies will continue but the silver mining companies and new companies and marginal producers which may become major producers could have accumulated large quantities of silver and thus become very cash rich.
  21. Therefore, in our estimate the higher valuation of reserves, the high production and storage of reserves and the bankruptcies of government together create the atmosphere that silver could go to $200 and thereby change the relative values of other monetary components. I would like to reflect on the fact that the movement of silver from $6 to $200 is going to make a major change in our monetary values and currency valuations.
  22. The world has seen such a major change, always in the most unexpected moment and from unexpected sources.
  23. Professor Einstein while in Switzerland discovered the theory of relativity and changed the world.
  24. Franklin Roosevelt while solving the tragic events of the Great Depression put America back to work and created a US Army which defeated the German super power.
  25.  We live in a world where currencies come and go, where countries of great reputation and civilization go bankrupt; when individuals of no particular achievement almost control the White House and this is the world where one man discovered some 40 years that a white metal –silver is a monetary asset. This man was Bunker Hunt who conceived the concept, but the world actually punished him for his foresight. Bunker Hunt was the individual who foresaw the commodity boom, who foresaw the decline of paper currency, and selected silver to save the assets of his friends and his own family.
  26. We live in a world where there are Madoffs and Bunker Hunts – mining companies and imaginative entrepreneurs who create silver assets.We only hope that the next 10 years will see the utilization of monetary values of silver and silver would contribute to our currency system all over the world. People should benefit from strong currency even if it is not controlled by any government.

Silver may go to $200 because of the system of governments we live in is incapable to take the proper measures to solve the problems which we are facing.

The European bankers and governments have issued some $300 billion to cover Greek debt calling it refinancing and knowing perfectly well that Greece will never pay this money back.

The European governments and bankers go on the front pages and talk about refinancing other nations, postponing payments and do not even have the intelligence to admit that unless people start to work 12 hours a day, that unless nations tell their citizens that payments and entitlements are only going to destroy their currency, the value of the two metals, gold and silver, while becoming defacto currencies are not used to resolve national problems.

The most astounding example is unfortunately the United States of America. We have $14.5 trillion debt. We have a debate about limits of government borrowing in July, in the summer of 2011. Both the Republican and Democratic Parties talk about minor differences. The most startling example of shortsightedness and to some extend demagoguery is the expression of millionaires and billionaires.

My research indicates and Donald Trump mentioned that there may be 750 billionaires in the world. If 300 live in the United States and if they tax millionaires with double the rate of the average citizen, the United States couldn’t gain more than $5 to $10 billion which is a miniscule sum on an annual deficit of $1.4 trillion.

We are lying to ourselves.

If silver goes to $200 net worth the value for retired people would increase for those far sighted ones who bought silver when it was $100. 

Disclaimer

Information contained herein is based on data obtained from recognized statistical services, issuers reports or communications or other sources believed to be reliable. However, such information has not been verified by us and we do not make any representation to its accuracy or completeness. Any statement non-factual in nature constitutes only current opinions which are subject to change. BERAL INC. or their officers, directors, analysts or employees may have positions in the securities or commodities referred to herein, and may as principal or agent buy and sell such securities or commodities. An employee, analyst, officer or a director of BERAL INC. may serve as a director for companies mentioned in this report. Neither the information nor any comment expressed shall constitute an offer to sell or a solicitation of an offer to buy any securities or commodities mentioned herein. There may be instances when fundamental, technical and competitive opinions may not be in concert. This firm may from time to time perform investment banking or other services for or which investment banking or other businesses from any company mentioned in this report.

 

Archive

Bunker Hunt Article
Posted October 27, 2014

Lamb Realty.
Posted October 15, 2014

Chiquita Brands International
Posted August 20, 2014

Emerson Radio
Posted August 24, 2014

Evercore Partners Inc.
Posted August 5, 2014

Moelis & Co.
Posted July 22, 2014

Torchlight Energy Resources, Inc.
Posted May 21, 2014

Andrew Racz
Posted May 19, 2014

Royal Nickel Corporation
Posted May 02, 2014

Recorded Interview Robert Schermer, CEO
Posted March 15, 2014

Cowen Group, Inc.
Posted March 5, 2014

Pacific Booker Minerals Inc.
Posted February 4, 2014

Sandstorm Gold Ltd
Posted January 24, 2014

Global X Gold Explorer ETF
Posted January 16, 2014

Bring Back Mr. Giuliani
Posted December 24, 2013

Gold Reserve Inc.
Posted October 15, 2013

Premier Diagnostics Health Services Inc.
Posted September 25, 2013

Almaden Minerals
Posted September 3, 2013

Electric Cars In New York City
Posted August 27, 2013

The World Without Gold
Posted July 2, 2013

Remembering Mr. Churchill
Posted June 10, 2013

Financial Transactions in the Digital Age
Posted May 15, 2013

Senator Chester Crandell ( R ) Arizona
Posted May 7, 2013

Explor Resources Exs V
Posted April 14, 2013

The Gathering Storm
Posted April 9, 2013

Vietnam - West of Hong Kong
Posted March 11, 2013

Vietnam – In Peace!
Posted February 26, 2013

Wisdomtree Investments Inc
Posted January 28, 2013

Explor Resources Inc.
Posted November 28, 2012

Oremex Silver Inc.
Posted September 18, 2012

Alphamin Resources Corp.
Posted July 26, 2012

Harvest Natural Resources
Posted July 20, 2012

The Man Who Was Created by Gold
Posted July 06, 2012

Recorded Interview With Zach Erdem, President
Posted June 20, 2012

Nortec Minerals Corp.
Posted May 01, 2012

The Fundamentals of Chesapeake Gold Corporation
Posted April 16, 2012

Jourdan Resources Inc. (JOR.V)
Posted March 20, 2012

THE IMF
Posted February 27, 2012

Gold Index Bonds - To Avoid the Money Traps
Posted February 2, 2012

Monarch Casino & Resort, Inc.
Posted February 01, 2012

QMC Quantum Minerals
Posted january 19, 2012

African Metals Corp.
Posted December 21, 2011

The Crisis That Almost Wasn’t
Posted December 7, 2011

DNI METALS, INC
Posted November 18, 2011

The Crisis That Almost Wasn't
Posted November 15, 2011

Ocean Power Technologies, Inc
Posted October 19, 2011

The Mongolian Economic Miracle
Posted October 12, 2011

H. Hunt
The Son of Bunker Hunt
 
Posted August 24,2011

Sandstorm Gold
(SNDXF - NASDAQ)
Posted August 15, 2011

"Silver At $200
Posted July 29, 2011

"First Majestic Silver Corp
 Posted July 26, 2011

"Interview with Brian Kirwin,
President
American Bonanza Gold Corp"

Posted July 21, 2011

"Interview with Ian Foreman
President
Yale Resources Ltd."

Posted June 16,2011

"Interview with Brandon Mckee
Callinan Mines
By Andrew Racz "

Posted June 1, 2011

"Andrew Thompson Interview Soltoro Ltd."
Posted May 15, 2011

"Great Panther Silver Limited"
Posted March 29, 2011

"The 21st Century's Marshall Plan"
Posted March 17, 2011

"Interview With
Houston Hunt"

Posted February 23, 2011

"Esperanza Resources Corp."
Posted February 23, 2011 

"Douglas Lake Minerals"
Posted January 11, 2011 

"Do not bet against Casablanca"
Posted December 10, 2010 

"Palladium"
Posted December 8, 2010 

"Full Circle"
Posted November 19, 2010 

"REMX - NYSE ARCA - MV.RARE EARTH/STRATEGIC METALS"
Posted November 8, 2010 

SilverCrest Mines, Inc.
Posted October 26, 2010

Cache Exploration, Inc.
Posted October 22, 2010 

Silvore Fox Minerals Corp.
Posted September 29, 2010 

Almaden Minerals, Ltd.
Posted August 16, 2010 

"The Path Of A Hungarian Immigrant"
Posted August 12, 2010 

"Interview With
Mark Hazout -
Silver Dragon Resources
"

Posted June 24, 2010

"Who Owns Whom At The Final Tally"
Posted June 15, 2010 

"The World Needs
Bunker Hunt.
"

Posted May 24, 2010 

"Arafura Resources "
Posted April 15, 2010 

"MF Holdings LTD"
Posted April 7, 2010 

"Quest Uranium Corporation"
Posted April 5, 2010 

"Lynas Corporation, LTD"
Posted March 19, 2010 

"Rare Element Resources LTD"
Posted February 9, 2010 

"Mexco Energy Corporation"
Posted January 4, 2010 

"Claude Resources"
Posted December 16, 2009

"The Silver Spirit"
Posted November 25, 2009 

"... from Casablanca to Monte Carlo."
Posted November 20, 2009 

"Sutter Gold Mining, Inc."
Posted November 16, 2009 

"Whose Friends Are They Anyway?"
Posted November 4, 2009

"U.S. Energy Corporation"
Posted October 28, 2009 

"Harris & Harris"
Posted October 13, 2009


"They Made A Difference"
Posted September 30, 2009 

"Bridge Bancorp, Inc"
Posted September 22, 2009 

"Entree Gold - September 2009"
Posted September 3, 2009 

"Who Lost Mongolia"
Posted August 16, 2009 

"Mongolian Prime Minister Sanj Bayar -
A politician of the 21st century"

Posted July 16, 2009 

"Romios Gold"
Posted July 7, 2009 

"The Grand Alliance"
Posted July 6, 2009 

"Sandstorm Resources, Inc."
Posted June 22, 2009 

"Ireland, Inc."
Posted June 16, 2009 

"The Brave New World! - Gold at $1000"
Posted June 5, 2009 

"Claude Resources, Inc."
Posted May 28, 2009 

"Bullion Management Group"
Posted May 11, 2009

"Golden Hope Mines, Inc. - Retraction"
Posted May 4, 2009 

"Silvercrest Mines, Inc."
Posted April 1, 2009 

"Silver Dragon Resources"
Posted February 27, 2009

"In Gold We Trust"
Posted February 26, 2009

"Entree Gold: An Unusual Asset Accumulation"
Posted February 20, 2009 

"The Ultimate Colorful Fate of Edmond Safra, Bernie Madoff, and Governor Bill Richardson"
Posted January 12, 2009

"Silvermex Resources, LTD"
Posted December 13, 2008 

"Prime Minister of Mongolia"
Posted December 11, 2008 

"US Gold Corporation"
Posted December 1, 2008 

"Rubicon Minerals"
Posted November 5, 2008 

"Gold Coins & The Money Game"
Posted October 29, 2008 

"Gold and the Chinese Millennium"
Posted October 20, 2008

"JNR Resources, Inc."
Posted September 30, 2008

"Three Immigrants In Front Of The Court"
Posted September 24, 2008 

"Governor
Walter J. Hickel Interview"

Posted September 11, 2008

"The Alaskan Queen"
Posted September 9, 2008 

"Evercore Partners, Inc."
Posted September 3, 2008 

"Stalin In The
White House"

Posted September 2, 2008 

"Cal-Maine Foods Inc."
Posted August 4, 2008 

"The Mongolian Revolution"
Posted July 10, 2008 

"Mongolian Newsletter, First Edition"
Posted July 2, 2008 

"Goldsource Mines, Inc."
Posted July 1, 2008

"The Douglas Lake Story In The Age Of Fear"
Posted June 25, 2008 

"Mongolia: The 10th Richest Country in the World"
Posted June 10, 2008 

"North American Gem, Inc."
Posted June 5, 2008 

"The Emergence of Tanzania"
Posted June 4, 2008

"Tanzania - An Up & Coming Mineral & Agricultural Producer In Africa"
Posted June 2, 2008

"Western Potash Corp.
(WPX-VSE) "

Posted May 12, 2008 

"Judy Garland &
The Subprime Crisis"

Posted April 29, 2008 

"Altek Power Corp."
Posted April 27, 2008 

"Letter to Prime Minister of Mongolia"
Posted April 24, 2008 

"The Mongolian Manifesto"
Posted April 4, 2008 

"Prime Minister Sanj Bayar of Mongolia Receives The Nobel Peace Prize"
Posted March 17, 2008 

"Olympus Pacific Minerals, Inc."
Posted February 28, 2008 

"Tanzania Gold - Douglas Lake Minerals - Harp Sangha"
Posted February 21, 2008

"Warren Buffett Receives A Call From Franklin Roosevelt"
Posted February 19, 2008

"Gold At 2000!!"
Posted February 14, 2008

"Entrée Gold, Inc"
Posted February 11, 2008

"The Unexpected
Mongolian Dilemma"

Posted February 2, 2008 

"Mongolian Gold"
Posted January 8, 2008

"Sir, Do Not Abdicate"
Posted December 27, 2007

"No More Munich -
The Mongolian Version of 1938"

Posted December 11, 2007

"Watergate Saved Nixon's Life"
Posted November 28, 2007

"The Mongolian Wakeup Call"
Posted November 16, 2007 

"Sanj Bayar -
The Prime Minister of Mongolia"

Posted November 15, 2007 

"Stalin & Chavez"
Posted November 9, 2007 

"Tagish Lake Gold Corp."
Posted November 1, 2007 

"Gold Indexed Bonds"
Posted October 11, 2007

"Jasper Mining Corporation"
Posted September 27, 2007

"Ghengis Kahn Returns"
Posted September 27, 2007

"Interview with Professor William Pfaffenberger - Torch River Resources"
Posted September 22, 2007 

"Interview with
Jim Davis - President of Leeward Capital Corporation"

Posted September 4, 2007 

"Interview with
David Hjerpe - Newmac Resources, Inc."

Posted August 27, 2007 

"The Age of Special "Corporate" Relationships"
Posted August 23, 2007

"Entrée Gold Inc."
Follow Up Report #1

Posted July 24, 2007

"Aldershot Resources Ltd."
Posted July 16, 2007 

"Portal Resources"
Posted June 12, 2007 

"Ghengis Kahn Was Hungarian"
Posted May 31, 2007

"Bayswater Uranium Corp."
Posted May 30, 2007 

"Brilliant Mining Corp."
Posted May 22, 2007

"Golden Valley Mines, Ltd"
Posted April 21, 2007

"Warren Buffett - Franklin Roosevelt"
Posted March 15, 2007

"Rubicon Minerals Corp."
Posted March 1, 2007

"Robert Friedland -
The Man of The Year"

Posted February 21, 2007

"Lexam Exploration, Inc."
Posted February 11, 2007

"My Father Died In Auschwitz"
Posted January 19, 2007

"WisdomTree Investments, Inc."
Posted December 26, 2006

"Entrée Gold Inc."
Posted December 13, 2006

"Aero Mechanical Services, Ltd"
Posted November 17, 2006

"This Year I"m Voting For Dick Nixon"
Posted November 7, 2006

"Global Options
Group, Inc."

Posted November 1, 2006

"The Arrival of the
Nickel Billionaires"

Posted October 18, 2006

"The Kennedy-Nixon debate revisited"
Posted October 4, 2006

"Brilliant Mining Corp."
Posted September 17, 2006

"A Matter of Reasonable Doubt"
Ken Lay - Enron

Posted August 30, 2006

"Silver Wheaton - SLW"
Posted August 28, 2006 

"Silver In The
Twenty-First Century"

Posted August 16, 2006

"The Age of Mediocrity"
Posted July 19, 2006

"Let There Be Sunshine"
Kirk Kerkorian

Posted July 12, 2006

"Oil & Gas
Energy Crisis Solution"

Posted July 3, 2006

"I Am An Immigrant!"
Posted June 7, 2006

"Northern Star
Mining Corp."

Posted May 19, 2006 

"Gateway Gold:
It"s A Gold Story"

Posted May 15, 2006

"Ken Lay's Legacy"
Posted May 8, 2006

"The Principal Guest Was Missing"
Posted April 25, 2006

"J.P. Morgan Offers Advice To Ken Lay"
Posted April 11, 2006

"Pocketful Of
Miracles"

Posted April 8, 2006 

"Midway Gold
Corporation
"
Posted March 23, 2006 

"Harvest Gold"
Posted March 2, 2006 
 
"Sparton Resources"
Posted March 1, 2006 

"Interview with
Robert McEwen-
U.S. Gold Corporation
"
Posted February 22, 2006 

 
"A Tribute to
Rudy Giuliani
"
Posted February 15, 2006
 
"Your Money Is Not Yours"
-Enron & Martin Siegel, Esq.

Posted February 9, 2006

"Other People"s Money -Enron & Martin Siegel, Esq."
Posted January 28, 2006

"Northern Star Mining"
Posted January 16, 2006 
 
"Sonesta International Hotels Corporation"
Posted December 29, 2005 

"The Currency of Mass Destruction"
Posted December 5, 2005
 
"Bunker Hunt-Silver-China"
Posted November 28, 2005

"50 Relatives Worse Than Yours"
Posted November 14, 2005

"Then And Now"
Posted November 9, 2005 

"The Business of Hungary is Business!"
Posted October 31, 2005

"Mr. Prime Minister"
Posted October 13, 2005
 
"U.S. Gold Corp."
Posted September 29, 2005

"Orezone"
Posted September 23, 2005

"Mr Clarke -
Call In The Boys"

Posted September 12, 2005
 
"A Letter To
President Bush"

Posted September 8, 2005

"Mr. Smith Goes To Hungary"
Posted September 1, 2005
 
"Orko Gold"
Posted August 18, 2005

 "Near Hit"
Posted August 16, 2005

"An African Queen"
Posted August 11, 2005

"1848 and Beyond"
Posted August 4, 2005

 

 

Andrew Racz. 300 East 54 Street, Suite 26C, New York, NY 10022
Phone: (212) 319-6949 Fax: (212) 753-1944. E-mail: mlikar@aol.com

Copyright © 2011 Andrew Racz. All Rights Reserved.

Disclaimer