Hard Money Newsletter Review

*******************************

Update: 1-20-2010

Mr. Butler was kind enough to clarify his prespective on the difference between Silver and Gold.

Here’s what he had to  say…

Gold had a mini-rally of $5 during yesterday’s trading, but overnight has sold off $9…

I want to make something perfectly clear, that I’ve talked about before regarding Gold… When I talk about Gold, I’m also talking about Silver… I just don’t want to have to type Gold and Silver every time I’m talking about the precious metals… Silver is another store of wealth… In the December Currency Capitalist, I talked about giving the gift of Gold, and teaching whomever you gift it to, the lessons of wealth building… When my older kids were youngsters, I bought them Silver coins, for I could not afford anything else then… Those Silver coins have proved the point of providing a store of wealth, as they have never gone to zero, and have gained in value over the years!

Thanks Chuck!!

*******************************

What can I say?

I nearly fell out my seat the morning when I read Chuck Butler’s, “Daily Pfennig” where, in a mere instant, he had served up  – and efficiently denied, my beloved silver its proper place in the limelight…

Nevertheless, bullishness manifests in mysterious ways, and (perhaps) we should be thankful for the fact that silver is overlooked and misunderstood by the likes of many – and especially people who (we think) ought to know better.

That is part of my rationalization for sticking with the Pfennig.

The other part is that I just like Chuck.

And, you probably will too.

So why would a silver coin bug like yours truly be so interested in this quick and daily synopsis of currency news?

Here’s why:

Currency traders are technical, but the world is so big that they can never take their eye off the fundamentals.

No matter what, the fundamentals always catch up with the markets.  And, you don’t get much more fundamental than silver.

In addition, the heavy technical aspect to currency markets lends itself to being a good place for getting some training in the language of the markets. You can then apply the lessons to other markets.

And lastly, currency trading is ultimately about money trading and silver has always been money…

Oh yeah, I almost forgot — Not anymore, according to Mr. Butler.

More on that in a  moment.

First a brief overview about the Daily Pfennig and Chuck Butler:

This is a free and fun 10 minute read without much at all in the way of direct ads –

Mr. Butler is a great writer. Funny, friendly, and easy to follow – yet full of vinegar and controversy.

The Pfennig always starts with a personal note to warm up and ends that way as well.

He probably takes some heat for this, but I’ll bet a few silver coins that this is one of the main reasons for his success and thousands of loyal readers.

Essentially, the Pfennig (a penny for your thoughts) was designed to give folks on the trading desk an early insight and flavor before the markets open.

It ends up being a really good way to get a quick re-cap of the news…with the focus on world currencies or the macro-perspective.

Why does a silver investor need this?

Well, us little guys always need to stay a step ahead.  So few seem to get it that we can never be too sure that when discussing gold — an analyst also means silver. You need to be careful in making this assumption as I believe the real gold analysts understand the distinction between the two precious metals.

Currencies are important for a silver investor because Silver is/was  currency.

And I know that “currency folks” are mainly talking about fiat currencies, but that is actually the point. In fact, most currency analysts put gold in the currency category, albeit with super-natural status.

Mr. Butler recently (and rightly) took up reading the Creature From Jekyll Island (another time I almost fell out of my seat) and has since been referring the Fed as the Cartel. You GATA love that. Another huge reason to follow him, regardless of my silver gripe.

Anyway.

Understanding how currencies are traded, printed, and manipulated provides insight into the daily practices of centralized monetary policy and part of that mission is to bash confidence in real money.

But, understanding the value of international currencies requires a similar analysis to that which you would apply to a company stock or perhaps a commodity — like silver.

But in case you thought I forgot — silver is also money!

Mr. Butler is a big deal in the FOREX world. Formally of Mark Twain Bank, he is now president of EverBank in St. Louis and if I ever hit really big, I’ll probably open up one of their “market safe” CD’s. (That’s not necessarily a plug, by the way).

Mr. Butler is a character. Like an old friend from the neighborhood who may invoke rock-and-roll song lyrics throughout the middle of an important rant or upon delivering these missives, he is very likable and probably would prefer you call him Chuck.

Nevertheless, he disappointed me on silver.

In a recent Pfennig,

“As I said earlier, Gold reached $1,218 yesterday… Kristin mentioned to me that Silver has risen 69% this year, but all everyone ever talks about is Gold, and wanted to know why…

Well… Silver is another excellent choice of a store of wealth… But, it’s just not Gold! There are a number of reasons for this, but the most compelling one is that Gold used to be money, and to many, it is considered to be the only real currency… The practical reason is the fact that if you wanted to carry Gold in your pocket, two coins, worth $2,400 would be just fine… But if you wanted to put $2,400 worth of Silver in your pocket, you would need a lot of people’s pockets to help you carry it!”

At least he said “excellent choice as a store of wealth”.

And no, it’s not gold — it’s more important than gold. Its everywhere and soon silver will be “no where”.

And there is already less silver than gold.  Maybe he can have Kristin do a little project on silver supply.

From the keys under Mr. Butler’s (self-proclaimed) “little fat fingers”, to the refrigerator, washing machine, IPhone, cell phone, silver is in a much of the stuff we use on a daily basis in the industrialized world.

This also includes airplanes, hospitals, medicines, and plastics!

I know you can’t eat it, but there are small amounts of silver in all this stuff that no one thinks about and totally takes for granted – like all the electrical panel switches in your house that magically work every time you flip the switch.

Why do you think central banks got rid of their silver? They sold it to fuel all of these nice industries.

But don’t forget about the strategic uses- the military needs silver badly in everything from batteries to the lubrication on the jet-engine ball-bearings.

It’s always about the ball-bearings.

I’m not so sure that silver has been actually discontinued as “money” – and certainly not because central banks don’t keep it any longer. Are we to assume that because the The Bank Cartel (by Treasury proxy) sold it — that it is no longer money?

It’s funny that all the silver I own was either circulated as money, looks like money, and feels like money. It says in the US Constitution that silver is money. And I can go sell some at the coin shop and get some paper money to buy stuff with…

And finally we come to the practicality of silver versus gold.

I like traveling light as much as anyone, but $2,400 of silver when Mr. Butler dropped this on (me) his readers was about 6 rolls-worth of silver rounds  – or about 10 pounds.

I’m not trying to brag, but on more than a few occasions, I’ve carried this much silver home in the back-pack that I was also carrying my daughter (25 pounds) in — on my way back from the coin shop! And that was for fun.

Maybe I’m not the average reader, but I’ll bet more than a few Pfennig readers could handle 10 pounds of silver in a paper bag to the car.

It’s good exercise besides.

Did I mention that silver is more rare than gold?

Okay, you get the picture. I could go on and on and on.

I’ll send this over to Mr. Butler. Maybe he’ll share this with his readers, creating a new rush for physical silver that finally pushes the already tight physical market over the edge, sending all the shorts running for the hills and we’ll get this adjustment back to fundamentals over with. And then I can put some into one of those currency accounts — maybe have Mr. Butler pick one for me…..

And of course, I’m not mad. I still love Chuck!

Even though this has been  surreal to say the least.

To almost see “my team” in the spotlight.

And that moment, like a slow motion train-wreck, where silver was lifted it up so high for all those many thousands of readers to see, just long enough for it to be “destroyed” as a credible, and for once, untarnished poor-man’s asset.

The horror!

I’ll keep reading Pfennig (and so should you), pretending that when Mr. Butler brings up gold -that he is also talking about silver — sort of — even if he doesn’t know it.

I’m used to it.

It’s the way the world works.

In the meantime, here’s a more formal take (and shameless plug) about the value of silver and gold.

Ed Steer’s Gold And Silver Daily is a must-read – especially for the new silver coin investor.

http://www.caseyresearch.com/the-casey-difference/our-staff/21/ed-steer/

Ed Steer, correspondent-at-large for Casey Research is a keen observer of the financial scene and a director of the Gold Anti-Trust Action Committee (GATA).

And if that were not enough – he’s a good friend of the esteemed silver guru, Ted Butler.

So yes, The Gold and Silver Daily may be written for the serious (and passionate) silver and gold investor. However, it is a good place to hit the ground running for the relatively new on the silver and gold new scene.

This is an excellent, short and friendly read that can start you off with just about all you need to know for the basics in short term trading.

Now that doesn’t mean than the newly initiated will not to think and do some homework. There is a technical language spoken here.

And you’ll need some knowledge of how options work – especially trading on the short-side.

A few terms you will need to become familiar with include:

• Open interest

• Swaps

• Spreads

• Concentrated Short position

• Bullion banks

• Commercials

And you’ll need to get an overall sense of who these futures traders are. And what is a bullion bank?

Maybe we’ll put together a primer on gold and silver futures trading in the future, but for now, we think that if you’ve made it this far – you can handle jumping right in the what Steer has to offer.

Bookmark the site and from it. Soon your knowledge and passion for this sector will grow.

The Details:

Yes, these daily reports are useful for the more advanced trader, but again, if you are like us, and lets say that from time to time, the opportunity arises where you can add to your investment – this is a place where you can check-in and see about a few ‘extra’ signs that prices are gearing for a dip into negative territory. (Buying a few silver coins on dips).

Also, this the quintessential contrarion or non-mainstream view. In other words, what you need to expose yourself to. The view you GATA have.

The background is this:  Basically there is an ongoing battle to keep gold and silver prices low or in control, stealing money from honest investors in the process.

The gold and silver furtures market (COMEX) basically functions like a mini printing press, papering over physical gold and silver – thereby smothering the value of the physical metal.
t is all to easy to feel helpless and lose hope that there will be a fortunate ending

It is difficult to avoid channeling that helplessness into anger and then walk around with that feeling – which is ultimately unproductive.

Indeed, I cannot count the number of times I’ve begun a civil conversation about the silver markets with the un-initated that didn’t lead to some sort of emotional plea for understanding the outright crime of it all.

Even if you are skeptical that there could exist such a coordinated effort to distort prices, I would highly advise that you educate yourself about this anyway. And the Gold and Silver Daily is as good a (free) place as any.

Go there and live in this for a while and you will come to know the evidence – and probably begin to question a lot of assumptions that society makes about the motives behind those in power.

And of course, you’ll probably want to go out add a few coins to your collection.

Each Gold and Silver Daily contains:

Play by play summary of each trading day’s technicals, including price, open interest, and volume data from the futures market, as well as the mainstream view about the day’s trading.

You also get high-quality, working links to precious metals and financial news from around the world.

You get a concise overview of the latest developments in these markets – with brief comments about those articles.

Plus, from time to time, an update from the trenches of the GATA and Silver (Ted Butler) army.

Here’s an excerpt and a link to give you a flavor:

And lastly is another piece that I highlighted during the transition phase to this new column. It, too, is commentary that is not to be missed. It’s contained in a GATA dispatch with a preamble by GATA’s secretary treasurer, Chris Powell. As I said in my previous comments about this report… it’s certainly above my pay grade in places, but it’s not the parts that I don’t understand that scare me. I urge you to spend some time on this 9-page offering entitled “A Grand Unified Theory of Market Manipulation”… and the link.

There are a few ads, but we didn’t mind. They are easy to scroll through and many of them have Ed’s voice intertwined -so it doesn’t interupt the flow.

In summary:

It’s a good place to go to get a real taste of the nitty-gritty dynamics of the COMEX trade.

There is good flow and easy options to get out and follow a useful link to with the content – if you choose.

This is for more for the serious gold or  silver bug, but I think a good place for the newly initiate who want to make this more than a simple hedge you put away and forget about.

But you’ll need some of that intestinal fortitude as you go deep into the bizarre realm of the short-term, manipulated world, temporarily leaving behind the most important reasons for being here to begin with – the long term factors. I can’t stress this enough.

Those of us with a passion for silver coin investing as not only a way to protect wealth, but also for the opportunity to own something of real (and potentially great) value have a difficult time going down the road of the short-term.

Just as we are reminded of the manipulation and tight control over these (and all) markets.

As we wade into the evidence as commentary at Steer’s Daily, we can add one of the most compelling arguments for holding physical metal.

Bottom line, our world needs more people like Ed and the folks from GATA.

Here’s a list of the posts reviewed for this review. Go ahead a check them out:
What Golden Secret is the Federal Reserve Hiding?
August 22, 2009

The Russians are Coming! The Russians are Coming!
August 21, 2009

“GFMS Cooks the Books to Make Gold Look Bad”
August 20, 2009

European Central Banks Sell No Gold…Again!
August 19, 2009

“Da Boyz” are Back in Town!
August 18, 2009

China Tell Its Citizens: “Buy Silver Now!”
August 15, 2009

ETF’s Backed By Bullion
August 14, 2009

It’s free and you really have nothing to lose in being exposed to this aspect of precious metals world.