ted butler and silver by israel friedman

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    Ted Butler and Silver
    By Israel Friedman


    (The following essay was written by Israel Friedman. Investment Rarities does not necessarily endorse these views, which may or may not prove to be correct.)


    For years I've been reading Ted Butler's articles on silver and am always surprised about how they educate you to what a bargain silver is. The articles are never boring.

    None of you know who Ted Butler is. I've known him personally for more than 25 years and we speak many times on the telephone each day. I consider him my friend and know he feels the same.

    Before I go on, let me tell you about myself. My name is Izzy and I am 70 years old. I was born in Transylvania and I am a Holocaust survivor. I came to this country in 1973 and I am proud to say I am a naturalized citizen of the US, the greatest country in the world. I developed an interest in silver in the mid-70's, because of "the gap" (which was what the deficit was called then) and researched it thoroughly. Many people told me then that it was a poor investment because there was too much silver in India. I flew to India to see for myself. What I found was silver, all right, but spread out and not in a form to come to market. It was all jewelry and artifacts.

    While it may not be a large sum for many people, I invested a big percentage of my net worth in silver at around $4.60, in September 1978. I bought futures contracts and took delivery, paying cash. I did not want margin. In 14 months I was lucky enough to sell out at $40 ($39.90 to be exact), in 1980. This was serious money to me and paid for my house and universities for all my children. To those who say that silver will never go to $50 or $100 an ounce, I say why not? There was 2 billion ounces more in the world then and we hit $50.

    Now to Ted Butler. The reason I wrote this article is to set the record straight. It makes me upset when I read people attacking him on the internet. What makes me more upset is others stealing his ideas and hard work. The truth is that he never steals information from anyone, but many steal from him. A few writers mention his name, but most do not. I tell him to defend his turf, but he is a modest guy. I think it is very wrong when someone takes another's ideas. I have never read anything new about silver that he hasn't already written. He is a brilliant guy and a very smart analyst. He lives a modest, Christian life.

    Ted has in his heart the silver bug, like me. He does more for the silver investor and futures investor
    than anybody did before. If today you have 2 to 3 million ounces of silver being purchased by investors monthly, I believe 90% of that is because of what Ted Butler writes. I think he makes the biggest service for the American investor.

    Most of the time I agree with Ted, but sometimes we differ. The biggest difference of opinion is on the manipulation of the silver market. He's fighting day and night against the silver manipulation, and I say it's a gift from God that this silver is manipulated. It is the only reason that today you can buy silver for around five dollars. This is not a buy, it's a steal.

    The only reason that the silver commercials can depress and manipulate the price so low is because the Chinese have decided to sell their stockpiles. They didn't sell their silver when it was 50 dollars, but right now, at 5 dollars they are selling everything. I'm asking you is this is stupidity or bribery, but you have to decide. The bottom line, in my view, is that you have a life opportunity of buying the biggest steal of the century.

    When someone is manipulating you always have the biggest opportunity. When the Hunt brothers manipulated the silver price to 50, you had the biggest opportunity to sell your silver at a good price. So when the commercials are manipulating the price to the downside, you have the biggest opportunity to buy.

    Why to invest in cash silver?

    1. The supply demand situation is unbalanced.

    2. We are in deficit for years.

    3. We are depleting existing silver bullion inventories.

    4. We are coming to a shortage situation

    5. You don't have new mines coming soon.

    6. The old mines' reserves in the ground are minimal and coming to depletion

    7. New uses for silver daily

    8. When inventories will be depleted, silver will be the only metal with monetary value. Monetary value is when central banks are accumulating and they are going to accumulate silver in the future for strategic reasons.

    9. You have 1 billion oz obligations by short sellers and banks that sold certificates with no real silver behind the certificates. This obligation of 1 billion ounces can not be paid back with real silver and must be monetized at dream prices

    10. If you are not going to use 1 oz of silver industrially in the next 50 years, you are still not going to bring the stocks back to old peak levels.

    11. 5000 years we accumulated silver, how many thousands of years will it take to rebuild those inventories?

    12. If you are not going to use one oz of silver industrially in the next five years, the stocks of silver will still be lower than those of gold. And remember, gold is selling for 380 and silver at 5.

    Who is going to invest in silver?

    1. If you have free money to invest

    2. Who made his homework and believes that based upon supply/demand, silver is a good case for investment.

    3. Who believes that silver will rise in coming years to tremendous value but is not interested for a scalp.

    4. Who wants to enrich himself or his family and has a lot of patience for holding.

    The No No's of investing in silver

    1. Don't borrow money, use only free, extra money

    2. Don't speculate short term.

    3. If you buy a certificate from a dealer or a bank, look at the small print and verify that you can take possession anytime.

    4. Never go short silver and don't sell options. For every contract short, you must be prepared to lose a half million dollars.

    5. Never play the ratio between gold and silver on the Comex. Everything is artificial on the Comex and they are going to take you to the cleaners.

    6. Don't believe any bearish story on silver. They are planted and paid for by the short sellers and the only reasons the stories appear is to take away your silver.

    Value of silver

    Because I am a big believer in silver, probably my silver value is going to be different from other people. I'm going to quote value, not in dollars but in real life values.

    1. For one oz, you are going to able to buy a dinner for 5 in a good restaurant.

    2. For 50 oz, a family of four can live for a month.

    3. For 100 ounces, you can buy a year's tuition in a good university

    4. For 150 oz, you will be able to buy a luxury car.

    5. For 2000 oz, a nice house

    6. For one oz of silver you will buy one oz of gold.

    I gave some examples that I hope are going to come true. And it can be that I am very modest in my thinking of value. And I am not trying to sound bearish on gold. When the Nazis came, my father's gold coins kept us alive. But the big money will be made in silver, not gold.

    Everybody's always asking, why are not silver prices rising? The answer is that silver is manipulated. If there was no manipulation, you wouldn't have the opportunity to buy silver for 5 dollars. Probably with the same supply/demand situation you would have to pay 20 to 25 dollars per oz. So, because the manipulation we are at 5 for a long period of time. For some people to wait is very painful. I know this first hand , my wife asks me, tell me the honest truth -are we going to see those values in our lifetime? And my answer is I hope so. Remember, my wife knows I already sold at $40, and still she doesn't completely believe because it has been so long. I know it must be much harder for others to believe.

    The silver tornado - when is the silver shortage going to come?

    My opinion, because the Chinese hold the balance between supply and demand, constituting 80 to 100 million ounces yearly from their stockpile, you are never going to know the real situation.

    The commercials think that they are going to have advanced notice. Forget it.. The Chinese by themselves probably don't know what is going on. So one day, the commercials are going to wake up and find that the regular shipments are not coming. The silver managers are going to call China and ask, what's going on? The answer will be we don't know, the silver has disappeared. It's gone. The consequences - a tornado on the Comex. Limit up. And more limit ups. And the shorts running to the bathroom. No body can explain what has happened. The COTs are bearish, the commercials are net short in big quantities and caught by surprise, but the Chinese tornado is hitting the Comex. That will be the first sign that silver will be the king of the metals.

    All what I wrote is my opinion only. If you feel like me and you have silver - feel good. And for all the others make your homework and order before it is not too late. Don't leave any silver by the Chinese. I hope many American investors buy it all

    To summarize everything about silver, my private opinion is those who have silver have to have patience. Silver is going to go sharply higher, but only when the shortage comes. The reason? Because it's manipulated. The shortage can come any minute, today, tomorrow or longer, maybe a year or more. So what? When the shortage will come, you are going to enjoy higher prices forever. Silver is going to become wealth to be transferred from generation to generation, like farmland. Remember 5000 years we have accumulated silver and now it's all gone.

    Most of the shorts will be bankrupt, including some mining companies that are hedged medium and long term. For those that don't have silver, if you buy before the shortage you are going to enjoy the future wealth. If not, it will be a great lost opportunity.

    Don't forget, silver is the real gold. Thank you, Izzy
 
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