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.

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We silver coin investors are a funny bunch. You see, folks lucky enough to have figured out a way and a place to store what little wealth they have left over have come to this from many a direction.

Typically, we are contrarian to begin with, salt of the earth types, with not a lot of extra income lying around to gamble with.

But there is a world that opens up around you when you discover the simplicity in holding silver. (Whether that world is above or below is a matter of debate).

Many find the idea of buying physical silver for investment uncomfortable and about as appealing as a romp through the wilderness on foot that leads to a campsite in the middle of nowhere.

This is okay with us because, as a group, we like low-impact wilderness and the lessons learned in fending for oneself. This includes a level of a preparedness that comes only after considerable thought and research.

As much as we might otherwise find the plushness of the towering casinos and the allure of the fancier things in life, our resource-circumstance limits us to a different existence.

However, we are never fully disconnected from the bright lights, big cities, and indoor pluming – no more than silver can be eliminated from most of inner workings that make these modern wonders possible.

Therefore, our quest includes the need to know how our precious metal functions in the modern world, whether we are considering the markets, the industries that use silver, or the greater macro-economic or geopolitical trends that influence the value of our little stash of silver coins.

So in the quest for knowledge, there is much crossover, and we invariably come across letters and publications like “Investment Underground” – and so will you.

When you have a passion for this market, and an open curiosity, it’s easy to lose a sense of oneself and find yourself pouring over an investment offer carefully designed to lure you in.

Have fun with it. For there will perhaps come a day for this in the not-too-distant future – when you find yourself in a position to ‘leverage’ your silver coin investment. When that day comes, you’ll likely return to this email newlsetter. But for now, here’s the deal:

First off, when you sign up for investment underground,(watch the pop-up),you get a pretty steady flurry of content in your inbox.

And this part of a well-oiled machine. So, you can sit back and dabble a little from time to time – pick out a headline and then leave it be.

This is information marketing at its best. So, you’ll need to learn how to read with your silver coin identity firmly entrenched and allow yourself to dream a little, while checking any remorse for not being able to gamble – at the door.

Much of the content is specifically designed to hook you into reading and then, clicking. More often not, you get stuck reading what turns out to be an advertisement for one or another investing program.

Also, if you’ve read Addison Wiggin or will Bonner over at the Daily Reckoning or if you simply keep up with Chuck Butler’s Daily Pfennig, you can get the gist of what these e-mails cover in a broad macro-sense. You can pretty much stick with those guys. You’ll get the same message:

With the recent and ongoing financial crisis, and the amount of information sloshing around out there, crossing in and out and overlapping with similar content to Investment Underground, it makes it even more strenuous to put up with a message that shoots a little bit to the side or over the head of the typical silver investor.

And as much as I’d like to support the family affair (Will Bonner is Bill Bonner’s son), things must, at some point, come back down to earth for the silver coin investor.

Well, unfortunately for them, it doesn’t speak loud enough to the average investor.

In that most of us are just looking for a way to acquire a few more coins, and get a better understanding of how and why and what goes on in the macro world and how it affects our small world.

We need to make the connections between the broad market conditions and how they impact things that matter most to us like, silver supply tightness, industrial versus investor demand, and the ongoing and relentless price manipulation.

Of course, very few investing news sources currently give the time to those specific areas of interest, but we believe in time they will as more people will need to know.

Like many other newsletter publications, and yes, this one is free (so what could it hurt to try it out), they seem better directed toward where a lot of us are likely to be in a year. Further down along the way, maybe coming up out of the canyon, a little heavier with a few more coins on board.

But again, for the average silver investor, who has a sense of why silver is important, and where it will likely go in terms of price. You can probably skip this one.

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Bear in mind that this is written for a range of readers, including swing and day-traders, market-makers, long-term investors, hedge fund managers, “upstairs” traders and floor pros, as well as laymen who simply enjoy the editor’s acerbic humor.

We like it because it is unconventional.

We look at this and apply the same sort of reasoning to why we follow writers like Chuck Butler or Bill Bonner.

You get some entertaining “voice” about the issues that trickle down to hard money.

Most of us don’t have a ton of cash sitting around waiting to be invested in currencies or in day trading. But we can certainly pay attention and learn about the big picture and do what we have to (add a few silver coins to our little stash from time to time).

And by the way, if you want an overview of Rick’s technical approach to trading, check out his video

Some of you will be intrigued by the technical analysis and one more about the approach that Rick uses for trading.

(To be fair, we only got about 10 minutes into and realized that it it was a little bit over our heads).

But the e-mail newsletter is a different story. It won’t take up much space in your inbox.

Most importantly, he’s in our camp. Through his commentary you’ll find that his opinion and perspective on the macro economy and the news that effects or influences markets is on the same page with those of us who see silver as a way to keep a little nest egg incubating.

Here is where I “discovered” him at GATA.

“Bernanke & Friends are probably throwing everything they’ve got at gold right now to suppress its price. And for all we know, Uncle Sam has loaned every ingot (supposedly) in Fort Knox to carry-traders at J.P. Morgan and Goldman Sachs. The ability of these well-connected bullion bankers to borrow more or less unlimited quantities of physical gold is for them even better than a license to print money, since money itself is most surely not what it used to be. The feather merchants have repaid the government’s kindness by sitting on gold futures prices. This price-fixing operation is all the more impressive because its perpetrators have managed so far to peg bullion to $1,000 even though the U.S. dollar has broken some key technical supports in recent days.”

You can practically say the same thing for silver, though we all know silver is a different animal.

You can find out pretty much everything else you need to know about Rick here.

The nice thing about signing up for feeds and newsletters is that you don’t really have to feel that pressure you get when you  discover a great site, rich in content, and the pressing need to digest it all at once.

You can simply sign up and start getting e-mails to get a ticket to justice what it’s all about.

Okay, so for the average silver investor (that’s me), What does Rick have to offer?

Well first of all, we need to understand silver in the context of not only the macro economy, but also the nano economy.

Nano economy?

Yeah, that’s the economy of the regular guy. The typical silver coin investor.

The guy who just wants to take delivery of a few silver coins to protect his nest egg or maybe just be prepared (diversified) in case of a really big crisis. No one wants to think about bartering with silver coins, but whiskey never lasts long in our house, so that won’t be an option.

So, I was pleasantly surprised after reading through a couple of months of Rick’s posts.

And for those who aspire to get the word out, wake somebody up, or just make it in an Internet publishing capacity, we could learn a lot by the way Rick delivers the goods… Short, up front, wise, and funny.

Anyway, lo and behold, here’s what he has to say on his about page:

“Indeed, we are quite possibly entering an economic period unlike any before it – one in which, paradoxically, deflation’s grip on the global economy has intensified even as credit and money growth have soared to unprecedented extremes. We are not in Kansas any more, for sure, and the old investment strategies are becoming increasingly risky as the weeks and months go by. Forget about doubling your money on the next Big Thing. It is time to safeguard the bulk of your nest egg while setting aside a modest portion of it to pursue exceptional gains. This is where Rick’s Pick’s aims to be of greatest value to you: in shaping your trading and investment decisions so that risk and reward are in optimal balance. Discover how you can confidently chart your own path to a financially secure future.”

As far as the trading stuff and stock picks, I look forward the day, (perhaps not far off), of having the ability to make more of these kind of trading and investment decisions.

I think most silver (coin) bugs understand that this day may come soon. Never hurts to be prepared.

Because after silver really takes off, I might have enough money left to play in the world of chart investing, Elliott wave analysis, or technical fund buying, etc. What fun!

Rick would likely point out that one group of readers who subscribe and join his camp include long-term investors.

Well, what better place to be for a silver coin investor?

Check out Rick here.

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