Silver Coin Commerce™

Silver Shortages Continue

According to Pan American Silver CEO Geoff Burns, “…end users on the commodity side are having trouble locating silver…”

Burns continues to describe that from his perspective he sees pricing support that will in turn, uptick the flow of silver into the markets as investors come back into the market to capitalize on the high silver prices.

Deutsche Bank has forecast $50 silver in 2012. Investors are going to stay with silver because the value of the dollar is going down each day they wake up.

Burns has been focused on silver and is planning to expand silver operations over time.

-Pete Skenandore

Source:
King World News

Renminbi

Renminbi (RMB) is the official currency of the People’s Republic of China (PRC). It is the legal tender issued by the People’s Bank of China in the mainland of China.

The yuan is the Chinese base unit of a number of modern Chinese currencies. It get’s confusing but the distinction between yuan and renminbi is that a yuan is the unit of account while renminbi is the actual currency.

Think of “yuan” as being similar to the word “dollar”. We might refer to a U.S. dollar, a Canadian dollar, an Australian dollar and such. Yuan would need similar distinction between Taiwanese yuan, and Chinese yuan.

Importantly, Russia and China announced that they would forgo using the U.S. dollar and would instead use their own national currencies for future bilateral trade. Maybe the U.S. Fed should stop making/lending/borrowing greenbacks? This move is a pretty strong vote of non-confidence in the U.S. dollar.

China also effectively turned off their silver export spigot in 2010. It is believed that they were shifting strategies into hard assets and that’s why they stopped shipping the shiny metals out of their country. Another component is that China’s middle class is growing at a meteoric rate. It is estimated that roughly half of China’s urban population will be middle class by 2025.

Now for the important bit. According to the China Statistical Yearbook Chinese citizens currently save a whopping 25% of their post-tax income. That’s 25% of a lot of people that want secure savings. Is there a huge potential to keep demand up for silver. Silver has a long history of being “every day Joe’s” money. Maybe it’s also going to be “the peoples republic” savings.

Pete Skenandore

Sources:
Seeking Alpha
Wikipedia
Wikinvest
fx-rate.net

Silver/Gold Ratio

…and why you should care.

In 1840 the Gold/Silver Ratio was 15.5, or 1:15.5. As an example:If one ounce of silver cost $1.29 and an ounce of gold would cost $20.00, you would need 15.5 ounces of silver to exchange for one ounce of gold. Or, conversely, one ounce of gold could be traded for 15.5 ounces of silver.

It is interesting to note that a few decades earlier in 1792 the gold/silver ratio was fixed by law in the U.S. at 1:15. And then in 1837 it was re-established by U.S. Congress at 1:16. However, in 1873 silver was demonetized leaving gold as the sole standard of the nation’s currency.

Other historical records:

323 B.C. – The ratio stood at 12.5 upon the death of Alexander the Great.
Roman Empire – Set the ratio at 12.
1980 – Previous surge in gold and silver prices had the ratio at 17.
1991 – Silver hits lows, ratio peaked at 100.
2007 – Average for the entire year was 51.

You can see from the above graphic that since silver was demonetized, the gold/silver ratio has had some pretty wild fluctuations. One thing that overwhelmingly draws your attention is that silver never again hits the 15/16 to one (for gold) range.

As of this writing: Silver is 28.69 and gold is 1370.80 which would mean that today, the ratio would be 1:47.77, or one ounce of gold equals 48-ish ounces of silver.

Getting back to why you should care, and maybe why you shouldn’t.

If you’re interested in amassing more metal then you might care, because you can watch the spikes and trade accordingly. These types of trades, however, may not procure more dollar-value profits as this is not a primary reason for engaging in the practice. Quantity, over quality, so to speak, the relative value of the metal is considered unimportant.

An example: A trader watches the ratio spike to 1:75, gold is sold and silver purchased at this ratio and then the trader waits until the ratio comes back down and reverses the process selling his silver to buy more gold than he had previously.

Not a bad way to go, but you will have to exercise patience.

In today’s world, and as we’ve highlighted in many of our articles here at Silver Coin Commerce™, silver’s industrial use is trending upward, but as this demand increases, so shall mining and refining. Will this stabilize prices? Will this stabilize the gold/silver ratio? As you can see from the above illustration the silver/gold ratio is all over the place in the larger timeline creating prime opportunities for speculative [and patient] investing.

Sources:
Wikipedia – image
Investopedia
GoldAlert – image

Pete Skenandore

About Palladium

Palladium is an element with the chemical symbol Pd. It is a rare silvery-white metal discovered by William Hyde Wollaston in 1983. William named palladium after the astroid Pallas.

Palladium, rhodium, ruthenium, iridium, osmium are a group of elements commonly referred to as the platinum group metals (PGMs).

One in four goods manufactured today either contain platinum group metals or has manufacturing processes facilitated by PGMs.

Over half the supply of palladium goes into catalytic converters. Other uses of palladium are computers, mobile phones, capacitors, component plating, televisions, dentistry, medicine, fuel cells, and jewelry.

The rarity of the platinum group metals means extraordinary prices.

-Now you know why that catalytic converter you had to replace cost so much.-

The Research

University professor Hiroshi Kitagawa and his team figured out a way to mix rhodium and silver to produce a new composite metal with similar properties to palladium.

The process nebulises the rhodium and silver by gradually mixing them with heated alcohol. This produced stable material at the atomic level.

DOING THE MATH:

As of this writing rhodium is $2380.00 per ounce, silver is at $30.90 per ounce and palladium is $800.00 per ounce. So, take one ounce of rhodium at $2380. and one ounce of silver at $30.90 and you might net two ounces of palladium-like material. For only $2410.90 + expenses. Or, for around the same cost, you could just buy 3 ounces of real palladium.

Keep working to keep the dream of alchemy alive boys.

Sources:
Kitco.com
Physorg.com
Wikipedia.com
Luxurypalladium.com -image-

Pete Skenandore

Silver Polymer Batteries

Are we past the tipping point on electric vehicle use? According to MSNBC.com, there will be 10 electric cars available for purchase in the U.S. in 2011.

Here’s the list:

• Nissan Leaf $32k
• Chevrolet Volt $41k
• Ford Focus Electric n/a
• Ford Transit Connect n/a
• Mitsubishi I-MiEV $30k
• Honda Fit EV n/a
• Tesla Roadster n/a
• Fisher Karma n/a
• Think n/a
• GEM $7.5k

So, there is a performance issue challenge that all electronic vehicles have in common:

Weight, size, and storage capacity of batteries. You cannot have an electronic vehicle without them. A major focus of manufacturers and scientists will be how to improve battery performance.

Hello Silver Polymer Batteries. Here’s an overview thanks to peswiki.com:
“The Silver Polymer Battery utilizes divalent silver oxide to achieve very high energy and power, yielding up to twice the energy and volume of current lithium ion and lithium polymer batteries.”
“The Silver Polymer Battery has the following advantages:

• Up to 10x the energe to weight ratio of current lead acid and up to 4x energy to weight ratio of NiMH.
• No memory and low self discharge
• Tunable price/performance from low cost to maximum performance preference.
• Dramatically safer than large lithium batteries which are now subject to severe transportation limitations.

I think if one simply does the math. 10 new battery dependent automobiles on the U.S. market. That’s a big deal. What’s around the corner? Are we at the tipping point to bring electronic vehicles into mainstream use? Maybe so… And if that’s the case, then it is safe to assume that we will want better [battery] performance. Silver Polymer Batteries may be the next step. If so, the near $30 per ounce price we’re seeing may just be the tipping point as well, or maybe the tip of the iceberg as far as what silver valuation is and could be in even a small scale conversion from petro burning vehicles.

Pete Skenandore

The U.S. dollar was leading to the biggest drop in six weeks after the recent U.S. government jobs report that showed fewer jobs added in November with unemployment at 9.8 percent. More than likely this will lead to more money pumping into the financial system by the Federal Reserve.

Silver has increased 74 percent in 2010. We’re near the end of the year and it looks like it will continue the upward march as we near $30 per ounce. This leads silver to the biggest annual increase since 1979.

This week alone the price of silver jumped 9.3 percent, the most since January of this year.

Something to think about: In today’s age almost all newly mined silver ore travels through the smelting and fabrication operations of China. China offers a better deal to mine owners with upfront cash for ore, and higher prices than other competitors around the world, some of which have had to close leaving China the only game in town for silver miners. Since most of our electronics are built there anyway… maybe this isn’t such a bad thing?

Pete Skenandore

General Coin Information

Minted by the Australian Perth Mint, the Kookaburra is the only major silver bullion coin to change its design yearly.  The altering of its form and pattern every year is intended to help compete with other mints worldwide by attracting collectors as well as investors. These coins have a superior quality finish which incorporates delicate, proof-like frosting within the central design. Kookaburra silver coins are legal tender under the Australian Currency Act 1965.

Kookaburras are a bird known to many, not by its appearance, but by its call. Native to Australia, the Kookaburra’s call has been used many times in the movies and televisions. It sounds extremely similar to loud human laughter and is used mainly to greet its mate after being apart for any reason. It is the world’s largest Kingfisher, with a body length of up to ½ meter. They are also known as “laughing jackasses” due to their chattering calls. They form community groups within Eastern and Southern Australia, marking and defending their territory both with their calls and with force, if necessary. 

The Kookaburra is carnivorous and survives on a diet of mostly small mice. However, it is also known to eat other small creatures like snakes, lizards and sometimes other small birds.

First introduced in 1990 by the Perth Mint, the Kookaburra silver coin has proved successful for two decades, its purity and weight are guaranteed.

It is issued in four popular sizes, 1oz., 2oz., 10oz. and kilo (32.15 troy oz. – the worlds largest silver bullion coin) through the Perth Mint. Many variations exist with extra stamps or seals issued for special occasions & coin shows.

Obverse Design

The obverse contains an image of Queen Elizabeth II along with the inscriptions “Queen Elizabeth II”, “Australia”, “year minted” and “1 Dollar” ( “1″ changes based on the size.)

Reverse Design

The reverse design incorporates an image of the Kookaburra. Encircling the bird around the top of the coin is the inscription “”The Australian Kookaburra.” Underneath the Kookaburra are “1 oz” ( “1 oz” changes based on the size), “999 Silver” and “year minted”.

Australian Kookaburra Silver Coin Specifications

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References:

• worldmintcoins.com
• apmex.com

The Thaler was a silver coin used throughout Europe for almost four hundred years. Its name lives on in various currencies as the dollar and tolar.

The dollar (often represented by the dollar sign: “$”) is the name of the official currency in several economies, including the United States, Australia, New Zealand, Canada, the Eastern Caribbean territories, Hong Kong, Taiwan, Singapore, Brunei, East Timor, Ecuador, Suriname, El Salvador, Panama, and Belize.

The “Dollar” originated in the city of Joachimsthal in Bavaria (now Germany). Beginning in 1518, silver from the mines near Joachimsthal was minted into silver “thalers”, with a standardized weight of 29.2 grams. “Thal” means “valley” in German, therefore a “thaler” is a person or a thing “from the valley”.

Eventually, governments throughout Europe adopted this standardized coin for commerce. The silver came from many locations, and many different governments produced the coins, but they were all basically identical. Europe was on a “Dollar standard”…

European “thaler” coins from the 16th-18th centuries are shown above with a modern US quarter for comparison.

The Spanish silver Dollar emerged from the rich mines of the Spanish colonies of the New World, particularly Mexico. The Spanish Dollar became the most common coin in the American colonies, although silver dollars from throughout Europe also circulated.

In 1792, after the American Revolution, Congress adopted the European “thaler” or dollar as the standard in the new United States. They were following standard practice throughout Europe. The US Dollar was just a bit lighter than the original thaler, at 27.0 grams of silver.

In those days, gold and silver traded at a ratio that hardly varied over centuries. It was known as a “bimetallic” system. About 15 or 16 ounces of silver had the same value as an ounce of gold. Thus, the silver “thaler” system was also, in a sense, a gold system.

In time, gold became the central monetary basis rather than silver. Britain went to a “monometallic” (gold-only) system in 1816. The United States effectively put gold on top in 1834, although British-style monometallism was not wholly adopted until 1900. The Coinage Act of 1834 set the value of the US Dollar at $20.67/ounce of gold, or 1/20.67th of an ounce. This works out to 1.5048 grams of gold.

Thus, we see that the “dollar” as roughly 1.5048 grams of gold, or $20.67/ounce, has a history that dates back to the early 16th century and encompassed all of Europe. The “dollar” was an unchanging unit of account for 415 years, until 1933.

During this time, there were many experiments with floating, paper currencies. The US colonies had a wave of hyperinflation in the 1740s, and again in the 1780s. There was another round of currency devaluation during the Civil War. However, after the smoke cleared, they returned again and again to the stable gold Dollar.

Devaluation of the US Dollar took place during the Great Depression. In 1933, the Dollar’s value was reduced to $35 per ounce, or 1/35th an ounce of gold (0.8887 grams). The introduction of floating currencies in 1971 was then something of an accident. It was an unplanned consequence of Richard Nixon’s “easy money” policies of 1970. It was supposed to be temporary. As we can see now, however, it was one of the biggest changes to Western civilization in the past 500 years.

ArminVoigt                                                                                                                                                                                                                                                                                                                                                                                                                        Via ProBlogPartners™       

References:

• Wikipedia.com
• goldnews.bullionvault.com

This Australian Investment Coin has been  issued by the Perth Mint since 2007. The reverse shows the motive of a Koala bear, which is changed on a yearly basis. The other side of the coin depicts a portrait of Queen Elizabeth II, as is common practice with coins of the Commonwealth. The Perth Mint has been minting the koala coin in ½ ounce(oz), 10oz and 1kg sizes since 2008. This coin is also available in gold, specifically for coin collectors. However, the gold coin cannot be considered as a classical investment coin, due to the fact that it only appears in small editions with limited numbers of copies and a relatively high premium on the original material value.

The Silver Koala can easily be confused with the Australian platinum investment coin, which has been wearing a koala motive from 1988 till 2000.

The silver koala coin is a legal means of payment in Australia. However, the material value is by far higher than the nominal value indicated.

General Coin Information

The 2010 Australian Koala Silver Coin marks the fourth issue of this popular series. The coins are struck in four sizes – 1 kilo, 10 oz, 1 oz, and 1/2 oz, with the 1 kilo size bearing a slightly different design. These collectible coins are struck on a mint to order basis, and total production will be determined when the 2011 design is announced, thus closing the 2010 offering.

The koala, native to Australia, is practically an icon synonymous with the country. Probably the only other animal to claim the same distinction would be the kangaroo, a fellow marsupial.

Living almost entirely on a diet of eucalypt leaves, the koala’s habitat is restricted to areas of Australia capable of growing the trees.

Koalas were hunted almost to extinction in the early 20th century for their fur, but their numbers have grown steadily under the protection of the government.

Some key points for the coins include their government assurance of weight and purity, their Australian legal tender status, limited mintages, versatile sizes and new annual reverse designs.

Obverse Design

An image of Queen Elizabeth II is shown on the obverse along with the inscriptions “Queen Elizabeth II”, “Australia”, “2010″ and the denomination.

Reverse Designs

The reverse features a young koala on a tree branch eating gum leaves. Also present are the inscriptions of the weight, “999 Silver” and the Perth Mint’s historic ‘P’ mintmark.

Australian Koala Silver Coin Specifications

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Reference:

worldmintcoins.com

Euro gold and silver commemorative coins are special euro coins minted and issued by member states of the Eurozone. They are minted mainly in gold and silver, although other precious metals are also used on rare occasions. Austria was one of the first twelve countries in the Eurozone to introduce the euro (€), on 1 January 2002. Since then, the Austrian Mint has been minting both normal issues of Austrian euro coins (which are intended for circulation) and commemorative euro coins in gold and silver.

These commemorative coins are legal tender only in Austria, unlike the normal issues of the Austrian euro coins, which are legal tender in every country of the Eurozone. This means that the commemorative coins made of gold and silver cannot be used as money in other countries. Furthermore, as their bullion value generally vastly exceeds their face value, these coins are not intended to be used as means of payment at all—although this remains possible where they are also legal tender. For this reason, they are usually named Collectors’ coins.

Such coins usually commemorate the anniversaries of historical events. They can also draw attention to current events of special importance. Austria mints more than ten of these coins on average per year, in gold, silver and niobium, with face values ranging from €1.50 to €100 (though, as an exceptional case, 15 coins with face value €100,000 were minted in 2004).

Summary

As of  2008, eighty variations of Austrian commemorative coins had been minted: eleven in 2002, twelve in 2003, fourteen in 2004, thirteen in 2005, thirteen in 2006, nine in 2007 and eleven in 2008. These special high-value commemorative coins are not to be confused with €2 commemorative coins, which are coins designated for circulation and have legal-tender status in all countries of the Eurozone.

The Vienna Philharmonic coin is struck in pure gold, 999.9 fine (24 karats). It is issued every year, in four different face values, sizes and weights. It is used as an investment product (bullion coin), although it inevitably ends up in private collections. According to the World Gold Council, it was the best-selling gold coin worldwide in 1992, 1995 and 1996.

A design of musical instruments representing the Vienna Philharmonic Orchestra, as well as the text Wiener Philharmoniker (“Vienna Philharmonic”), can be seen on the reverse of the coin.

The subject of the obverse is the great organ in the Golden Hall in Vienna’s Musikverein, the concert hall of the Vienna Philharmonic Orchestra. The face value in euros, the weight, alloy purity and year of issue are also inscribed on this side of the coin.

Since 1 February 2008, the coin has also been minted in silver. The design of the silver coin is identical to that of the gold coin, except for its face value of 1.50 euro.

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References

1. Austrian Mint. http://austrian-mint.at/cms/start.php