Chinese Panda 2001 - 2010 Price List

please make this price list available for LSGG only. DO NOT disclose out of LSGG. Thank you.

Year -- Mintage -- Price
2001 -- 500k -- 380/pc
2002 -- 500k -- 430/pc
2003 -- 600k -- 650/pc
2004 -- 600k -- 530/pc
2005 -- 600k -- 370/pc
2006 -- 600k -- 490/pc
2007 -- 600k -- 300/pc
2008 -- 600k -- 330/pc
2009 -- 600k -- 320/pc
2010 -- 1500k --210/pc
2011 -- 6000k -- 160/pc **better get from SLS with cheaper price this.
1 set 2001-2010 (10pcs) -- RM4000

2009 30th Anniversary -- 300k -- RM290

1set 1989-2011 (23pcs) -- RM12988

*The price is based on loose pc. if JOINT purchase in TRAY would be cheaper at least RM10/pc for now.
**This is the price i get from China Distributor. if anyone of you find cheaper and original particular year of panda please do not hestitate to tell me or us so that we can get from cheaper sources. Thank you!!

The Oil of the 21st Century

The Oil of the 21st Century
Thursday, 19 January 2012 – Melbourne, Australia
By Kris Sayce

• The Oil of the 21st Century
• The Scramble for Resources in Central Asia

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82%, 58% and 75% gains from shale gas stocks in 2011. Is shale still a buy for 2012? According to Dan Denning, high oil prices, geopolitical tension plus the US shale boom should all underpin the long-term case for the development of an Aussie shale gas industry. "The only wildcard, of course, is domestic politics and whether the industry is killed by politics. But that's the political risk you run when you buy Australian stocks these days." Click here to read Dan's compelling-and controversial-case for shale...

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In today's Money Morning: ... more taxpayer money needed to bail out banks and governments...having an emergency plan...there are still profitable ideas...a part of the world set to boom...

The Oil of the 21st Century

Yesterday the papers splashed the latest warning from the World Bank.

The Financial Times reported:

"Predicting significantly slower global growth in 2012 than it expected last summer even if the eurozone muddles through its crisis, World Bank economists said that if financial markets deny funds to eurozone economies, global growth would be about 4 percentage points lower than even these figures, with poorer economies far from immune."

There's no doubt there will be another downturn. The pieces are already in place for it to happen. The only unknown is when.

Of course, the knee-jerk reaction is to say, what would the World Bank know? It nevergets things right. But it is worth remembering what the Bank wrote in 2007...

"A soft landing remains likely, but the global economy has reached a turning point and many factors could result in a more pronounced slowdown. A faster-than-expected weakening of housing markets in high-income countries could generate a much sharper downturn and even recession, with potentially significant effects for developing countries. Much slower growth would likely cause commodity prices to weaken more than already projected..."

But we won't big-up the World Bank too much. After all, the guys over at our sibling newsletter The Daily Reckoning banged on about the economic meltdown as early as 1999.

Besides, it's important to understand why the World Bank is making this prediction. It's not to warn investors about the risks of investing. It's not to admit that the world is now paying for the mistakes of the past. No. It's simpler than that...

It wants more taxpayer dollars.

Or rather, it wants governments to give taxpayer money to the International Monetary Fund (IMF) so the IMF can give more cash to broken banks and corrupt governments.

If you needed any proof, right on cue the following report appeared in the FT yesterday:

"The International Monetary Fund has asked its member countries for an extra $500bn in firepower to combat the world's spreading fiscal emergencies, which it estimates will generate demand for bail-out loans totalling $1tn over the next two years."

Coincidence? No.

It's the latest attempt by meddling bureaucrats to stall the inevitable: a full-scale economic collapse. Whether it's a repeat of 2008 or something much worse is anyone's guess.

That's why it's vital you have an emergency plan...

Building Wealth From Gas

Last year, Australian Wealth Gameplan editor, Dan Denning suggested where you should have your assets to prepare for "complete financial collapse". He provided the following handy chart...

How to Protect Your Wealth In A Complete Financial Collapse

Source: Australian Wealth Gameplan

Dan's advice was to move into assets that had real value... assets you could use to sustain life and trade. The break-up was partly tongue in cheek... but the idea behind it was not.

The one problem is that it's almost impossible to know when the collapse will happen.

Will it be this year? Or next year? Or will it be in 30 years...

That's why even though you may have a big picture, macro-economic view on the state of the economy, it's still important to think about the small things. And that means earning a living and building your wealth through the right investments... regardless of when the collapse happens.

Remember, despite the poor state of the economy, businesses and ideas still carry on. Business owners and managers still look to make profits... entrepreneurs still think of new ideas and take risks... and, share prices can still go up.

It was this kind of thinking that got Dan interested in the shale gas industry. And in particular, three stocks he backed last year to benefit from this booming industry.

If you're not familiar with shale gas, in simple terms it's gas that's trapped in deep rock formations. It's different to conventional gas. With conventional gas, the gas forms in porous rocks and can be easily "sucked out" by drilling into the rock.

But with shale gas, the rocks aren't porous. They need to be cracked apart (fractured) to allow the gas to escape. Only then can it be "sucked out" through the well.

It's this kind of innovation that provides benefits to shale gas investors (such as the readers who invested in Dan's recent stock tips) and to consumers. As this report fromBloomberg notes:

"A shale-driven glut of natural gas has cut electricity prices for the U.S. power industry by 50% and reduced investment in costlier sources of energy."

Buy Gas While the Price is Low

Yesterday we mentioned how the natural gas price was back to 2008/09 levels. Overnight it has fallen further, to just USD$2.49 per million British thermal units.

At some point you'll see a floor under the gas price. After all, with all the money spent on exploring and producing the stuff, gas producers aren't going to give it away for free.

That's what makes taking a punt on natural gas (and especially unconventional natural gas) a good bet right now. The best time to buy an asset that's about to leap in demand is when prices are low. Compare that to oil which is still at USD$100.

The longer things stay this way and with more big gas discoveries, there's a big chance natural gas will be the energy source to replace oil. And when that happens you can expect a boost to the natural gas price and big rewards for the companies and investors who take a punt while the price is low.

Cheers.
Kris.

P.S. We've written about shale gas for some time. But you're mistaken if you think it's too late to join in the boom, because it's only now starting to hit the mainstream. As a report in today's the Age proves: "Australian shale assets 'next big thing' for investors".

The report notes, "While shale assets in Texas sold at $US25,000 an acre this year and a holding in Ohio and Pennsylvania changed hands at about $US15,000 last month, shale properties owned by Australia's Beach Energy can be bought for $US406 per acre..."

Could Aussie shale assets increase 6,057% to the same price as Texas shale assets? Why not? To find out which shale stocks Dan Denning has picked to benefit from the shale gas boom, click here for a no-obligation trial to Australian Wealth Gamplan...

Related Articles

Special Report: Six Extraordinary Resource Investment Opportunities for 2012

How Global Oil Supplies Could Fall 40% Overnight

The Markets Rally Like It's 2008

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Global financial meltdown leaves one strategy standing... The 3-Step Punter's Plan to Play This Crazy Market for 75%-458% Gains ENOUGH about Europe! If you're looking for a POSITIVE Australian investment idea and you're up for a bit of carefully controlled risk,CLICK HERE

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The Scramble for Resources in Central Asia
By James McKeigue, Contributing Editor, Money Morning (UK)

Life in central Asia's former Soviet republics has never been easy. The larger states - Kazakhstan, Uzbekistan and Turkmenistan - are dominated by tree-less steppes and arid, sprawling deserts. The terrain of the smaller countries, Kyrgyzstan and Tajikistan, consists of little more than mountains. Throw in the fact that the whole region is landlocked, and has no navigable rivers and little decent agricultural land, and it's no surprise that the five 'Stans' are among the most sparsely populated countries on earth. On average, there are only five people for every square mile in the region. Or to put it another way, a population roughly the size of Britain's is spread out over a region 17 times as large.

Yet despite the harsh geography and sparse population, some of the region's economies are booming. Why? One reason is the demand-fuelled surge in commodity prices over the last decade. The Stans are host to vast amounts of natural resources, many of which were underexploited during the years of Soviet rule. As a result, the last ten years have seen a horde of Russian, Chinese and Western firms pile into central Asia in a dash to secure the best assets.

But it's not just about the hunt for resources. Thanks to the growing power of China and India, and the war in Afghanistan, the Stans have also gained in geopolitical importance. As a result, the US and Chinese governments are desperately trying to expand their political and military influence in the region.

This renewed interest is critical to the development of the Stans, says geopolitical analyst and publisher Stratfor. The vast, barren landscape of the Stans means that, "with the exception of commodities, central Asia is endemically impoverished and will always have massive infrastructure demands. The central Asian states can therefore only be remotely functional if they can tap the capital supplies of a larger state outside the region. Without outside assistance, they will continue struggling to maintain the capital necessary to maintain existing infrastructure, and developing new infrastructure will pose an even greater challenge." Indeed, in the 1990s, neglected by Russia, the Stans largely stagnated. Now, however, the region is tapping the capital of three larger states, which are all jockeying for influence - and that spells opportunity for bold investors.

Central Asia's treasure trove

So just how large are the region's commodity reserves? It differs from country to country, but the short answer is 'enormous'. Take Kazakhstan. It is home to 3% of the world's oil, 4% of the world's coal and 15% of its uranium. It has the world's largest reserves of zinc, lead and chromite, and it is in the top ten for supplies of copper, iron ore, gold and manganese. This may seem surprising until you realise that Kazakhstan is the world's ninth-largest country: it's five times the size of France. The only resource Kazakhstan doesn't have much of is people. With only 16 million citizens, little of these precious commodities are needed at home, leaving more for exports.

Turkmenistan is also rich in energy, with almost 4.5% of the world's natural gas. Again, it uses little, freeing up most of the gas for export. It also has 500 million barrels of oil. Uzbekistan has significant natural gas reserves, about 0.8% of the world's total - about the same amount as Libya - and sizeable gold, copper, lead and uranium reserves. It's also the most populous 'Stan', with 26 million people.

That's more than enough to get less resource-rich nations envious. But geologists believe there is a lot more commodity wealth yet to be discovered in the Stans. Dr David Robson, chief executive of Tethys Petroleum, a small London-listed firm operating in central Asia, believes the region's Soviet past has left some areas underexplored. "We have just made a find in Tajikistan. In Soviet times Tajikistan was a rural part of the economy and not thought of as a source of oil and gas, but we believe it has similar geological traits to other hydrocarbon-rich parts of the region."

Location, location, location

The Stans are also well-positioned geographically to benefit from this resource wealth. Since before the time of Christ, trade between Asia and Europe has travelled through central Asia along the Silk Route. Today that positioning means that Kazakhstan is in the perfect position to satisfy demand both from Europe, and the growing economies of Asia.

However, until recently, it has been difficult for miners and oil firms to take advantage of central Asia's great location. Miners need good road or rail networks to get their goods to international markets. These already exist in established resource areas, but large swathes of central Asia are underserviced.

Another problem is that much of the transport infrastructure that does exist was built in the Soviet era and, as a result, is aimed towards servicing Russia. Oil and gas travels by pipeline to Russia, which pays a low price for it. "We sell gas to the local market but effectively the price is dominated by what the Russians pay for the exported gas," says Robson. Meanwhile, minerals must travel through a Russian-controlled river and canal network if they are to leave landlocked Kazakhstan and reach the Black Sea.

Infrastructure is expanding

But since independence, governments in the area have pushed ahead with new infrastructure projects designed to increase their access to new markets. In 2009, the first gas pipeline to be built without Russian involvement came into operation, linking Turkmenistan, Kazakhstan and Uzbekistan to China. Qiang Xiaoyun from Shanghai Business School Journal estimates that Chinese gas imports will double between 2010 and 2020, most of which will come from central Asia. This will help to reduce China's reliance on liquefied natural gas (LNG) imports, which travel by sea and are therefore more vulnerable to terrorism and piracy.

China is also making heavy investments in Kazakhstan's oil fields and mineral projects. Economic cooperation between China and the five Stans has grown steadily. Over the past few years, the volume of trade has increased by 40% a year, reaching around $20bn in 2010, and this growth shows no sign of stopping.

China isn't the only one with an eye on the region's gas. India and Pakistan are both struggling to meet demand amid rising gas usage. On 11 December last year, Turkmenistan, Afghanistan, Pakistan and India signed an inter-governmental agreement on the TAPI gas pipeline. This agreement provides for the construction of a 1,735 km gas pipeline at a cost of $8bn. When completed in 2013-2014, the pipeline should enable Turkmenistan to export 33 billion cubic metres of gas in total, with five billion cubic metres going to Afghanistan and 14 billion cubic metres to Pakistan and India.

Western oil firms are also well established in the region. American firms dominate, controlling 75% of new oil fields. Their overall investment of $30bn represents around 40% of foreign investment in Kazakhstan and Azerbaijan. But energy companies from Britain, France, Italy, Iran, and Japan are also present. For example, British firm BG Group leads a consortium in Kazakhstan's massive Karachaganak oil and gas field.

The great game revisited

Central Asia also forms an important plank of US foreign policy. America is keen that the region continues to provide support for Afghanistan, especially when American troops leave. America's 'New Silk Route' strategy focuses on bolstering north-south trade - linking India and Pakistan via Afghanistan to the Stans. Notably - if unsurprisingly - Iran, an important post on the original Silk Route, has been left out of the plan.

Perhaps feeling that he needed to regain the initiative, Russian prime minister Vladimir Putin has in turn proposed investing $500m in a joint project with China that would transmit electricity from central Asia to India and Pakistan. The Stans have always been Russia's backyard. The country still has a network of military bases, infrastructure and political alliances in the region that give it clout for now, and it certainly doesn't want other powers gaining the upper hand in its sphere of influence.

"The central Asian countries are benefiting from competition between the powers," says Xie Wenxin in China Economist. "They have maintained close relations with Moscow, since much of their oil and gas exports continues to transit via Russia. But for technical and financial reasons, they are in the process of re-examining their cooperation with Western oil companies." Rivalry between the great powers should help central Asia fund the infrastructure it needs to exploit its resources, and in turn open up more lucrative markets to sell to. Where there's reward, there's risk

Of course, while central Asia may be full of commodities, it is also full of risk for investors. First, there are the internal politics. In all five countries, former Soviet strongmen seized power when the region gained independence in the early 1990s. One such leader has been forced out by death (Tajikistan), another by revolution (Kyrgyzstan), but the rest stay in power. Indeed, despite what their well-paid Western PR agencies might try to tell you, all apart from Kyrgyzstan are dictatorships.

The most politically stable of the Stans is Kazakhstan. It is ruled by Nursultan Nazarbayev, the former first secretary of the Kazakh Communist Party, who became president when the country gained independence in 1991. Despite maintaining close links with Russia and keeping most of the Soviet-era bureaucracy, Nazarbayev has opened the economy up to foreign investors. The autocrat didn't have an easy ride in the 1990s. "Like most Commonwealth of Independent States (CIS) countries, Kazakhstan's economy collapsed in the 1990s in the wake of the break-up of the USSR," says Baillie Gifford's Andrew Stobart in the firm's Trust magazine. The economy almost halved in size, between 1989 and 1998. "Inflation peaked at nearly 3,000% in 1994."

Yet eventually Nazarbayev's focus on opening the economy up began to pay off as production of oil, minerals, metals agriculture and heavy industry increased. The economy grew at around 10% a year between 2000 and 2007. But the boom drove a debt-fuelled property bubble that burst in 2007 when cash-strapped European banks started calling in loans (sound familiar?). The crisis tested Kazakhstan's young financial institutions, and the nation's sovereign wealth fund had to buy stakes in two listed banks to prop up the sector. But, unlike in the West, growth has returned, and Stobart reckons it can be maintained at "high-single digits" for the next few years.

This year, Nazarbayev was re-elected president with 95% of the vote. These elections were neither free nor fair, but most analysts think Nazarbayev - who is well liked for raising living standards - would win even if they were. Kazakhstan is also the best bet for investing in central Asia. It has the most resources, the largest economy and welcomes foreign investors.

James McKeigue
Contributing Editor, Money Morning (UK)

Publisher's Note: This is an edited version of an article that first appeared in Money Morning (UK).

Gold-Silver Price Ratio Getting Silly Again - Silver Gold Malaysia

Although both the gold and silver markets have been subjected to extreme manipulation, it is clear that manipulation of the silver market has been much more severe. There are two related numbers which illustrate this point.

Knowledgeable investors know that the long-term price ratio of gold versus silver (i.e. over roughly 5,000 years) has averaged approximately 15:1. This closely coincides with the ratio of the natural occurrence of these two elements in the Earth's crust (approximately 17:1). Not only did this price ratio remain relatively constant over several millennia, but the fact that the price ratio so closely mirrors the rate of occurrence of the two metals shows that (in relative terms) our species has demonstrated a roughly equal preference for the two metals throughout recorded history.

These facts establish beyond any possible contradiction that over the medium or long term the price of silver must remain at close to a 15:1 ratio versus the price of gold. There is only one factor which could alter this arithmetic: if our preference toward the two metals changed. Has any such change in preferences occurred? Yes. Silver has become much more popular.

This increased popularity comes in two distinct forms. Modern technology has established silver as the most valuable/versatile of all metals, with more new silver-based patents being created than for any other metal. Along with that there has been an even more stunning/dramatic surge in investor demand for silver -- a consequence of silver being perennially and extremely undervalued.

In 2011, the United States sold nearly 40 million Silver Eagle 1-oz coins while only selling approximately 1 million Gold Eagles -- a near 40:1 ratio. This ratio is more than double the 5,000-year price ratio, and more than double the relative natural occurrence of silver. In other words, over the long-term this demand profile is totally unsustainable -- and must result in (first) the total depletion of silver inventories, and (second) a rise in the price of silver sufficient to stifle silver demand sufficiently for balance to be restored.

However, the demand profile of silver is literally only half the story here -- and the supply-side illustrates the futility of bankster manipulation in even more absolute terms. Given that silver is 17 times more plentiful in the Earth's crust, we would expect the world's mining industry to be producing about 17 times as much silver as gold each year. In fact actual production numbers are nowhere near this ratio.

To attempt to conceal the ridiculous imbalance between silver mining and gold mining, the banksters' agents report silver mine production in (Imperial) ounces, while reporting gold production in (metric) tonnes. Fortunately anyone able to employ a calculator can overcome this clumsy attempt at deceit.

Converting all mine production to ounces, gold mine production was over 100 million ounces in 2010 while silver mine production was a mere 735 million ounces. Thus we have the miners producing only approximately 7 times as much silver as gold in 2010, while investors are exhibiting a 40:1 preference in buying silver versus gold. Meanwhile the gold/silver price ratio is an utterly insane 55:1 at the present time.

Keep in mind that the preference for silver over gold industrially is just as extreme. While industrial demand for gold has essentially remained flat over recent years, industrial demand for silver has risen by roughly 50% over the past 10 years -- and by 18% in 2010 alone. This rabid industrial demand for silver (along with relatively little recycling) has resulted in global stockpiles of silver being decimated, with silver inventories plummeting by 90% between 1990 and 2005 alone.

Conversely, virtually every ounce of gold ever mined is still available today. As a result of decades of yet another gross imbalance in this market, there is less silver in the world today (relative to gold) than at any time in thousands of years. A precise ratio is impossible to construct, however estimates range from a (conservative) 6:1 level to the estimates of the more bullish commentators in the sector, who insist there is more (above-ground) gold in the world today than silver. This means that relative to supply, silver is under-priced by a factor of ten (if not more).

At the same time that silver is at its most popular point in history, there is less of it around (relatively) than at any time in history. Anyone with the slightest comprehension of markets understands what must happen: the price of silver must explode to a level which simultaneously dramatically depresses demand, while causing an explosion in silver mining activity. And note that the current parameters discussed here were after the 1,000% price increase over the past decade. Not only has the supply deficit remained despite that 1,000% price increase, it's gotten larger. Thus we might (conservatively) estimate that another 1,000% increase in the price of silver might just be enough to restore balance to the market.

What we have observed generally with respect to the gold and silver markets over the past few decades is nothing more than a long-term illustration of the principles of supply and demand, along with the absolute dictates of arithmetic. The extreme manipulation of the precious metals sector during the last decade of the last century has led to massive price increases in the prices of gold and silver in the first decade of this century -- despite the banksters redoubling their efforts to suppress these markets.

Silver was suppressed even more extremely during those previous years, and so it nearly doubled the gains of the gold market over the past decade. This is nothing but a reiteration of one of the most obvious common-sense principles of human commerce: if you put something "on sale" you will increase buying and burn through inventories. If you price something at an extreme discount, you simply burn through inventories much, much faster.

The gold/silver price ratio has once again reached an absurd manipulation extreme. This in turn is conclusive proof of the current, extreme suppression of silver taking place in this market -- as unequivocally demonstrated by the supply/demand parameters previously detailed. What does this mean over the longer term? That $500/oz silver is now a certainty in the future.

maple real vs fake

maple real vs fake

By admin | Published January 12, 2012 | Full size is 1173 × 578 pixels

First Time Ever: Silver Sales Surpass Domestic Production | Steve St. Angelo | FINANCIAL SENSE

First Time Ever: Silver Sales Surpass Domestic Production

BY STEVE ST. ANGELO01/04/2012

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The demand for American Silver Eagles and Canadian Maple Leaf coins has increased tremendously over the past several years. 2011 will be the first time in history in which official coin sales will surpass domestic silver production in both countries.

Even though each country has seen declines in their domestic silver production over the past decade, U.S. silver production declined a whopping 30% yoy (year over year) in October. According to the USGS in their most recent Silver Mineral Industry Survey, silver production fell to 81,400 kilograms in October—compared to 117,000 kilograms the same time last year.

Click here for larger image

As of October this year, the United States has produced 923,000 kilograms or 923 metric tonnes of silver. This number will change as revisions are made, but currently U.S. silver production is down 15% compared to the first ten months of 2010. At this rate, the U.S. will produce an estimated 35 million ounces of silver this year. This is significant, as production will yield less than the approximate 40 million ounces of American Silver Eagle sales for 2011.

American Silver Eagle Sales Overtake Total U.S. Silver Production in 2011

Click here for larger image

Here we can see that U.S. silver production has declined 50% since its high of 70 million ounces in 1997. In 1997 American Silver Eagle sales were 3.6 million, which accounted for only 5% of domestic silver production. Contrasted to today, Silver Eagle sales are estimated to reach 40 million while domestic mine supply will decline to 35 million ounces in 2011. Thus, American Silver Eagle sales will be 114% of the total U.S. silver supply in 2011… what a difference in 14 years. This trend is also taking place in the country’s northern neighbor

Canadian Maple Leaf Sales Outperform Silver Eagles in Percentage Growth

Canadian silver production has declined 57% from its recent high in 2002 at 44.1 million oz to an estimated 18.6 million oz this year. According to the Royal Canadian Mint’s 2003 Annual Report (and including figures from previous years), there were only 576,196 Silver Maple Leaf coins sold in 2002— making up about 1.3% of the total Canadian domestic silver production.

In 2011, this figure is estimated to reach approximately 22.5 million Silver Maple Leaf (SML) sales or almost 30% higher than its previous year’s total of 17.9 million. In comparison, 2011 American Silver Eagle sales are estimated to increase only five million sales over last year’s figures— or a 15% increase.

In the graph below we can see just how apparent this change of domestic silver supply vs. SML demand has become in the past several years:

Click here for larger image

The figure of 22.5 million SMLs for 2011 was estimated from the data obtained from the Royal Canadian Mint’s Third Quarter Report Fiscal 2011:

Sales of Silver Maple Leaf (SML) coins jumped to 6.1 million ounces during the quarter from 4.5 million ounces in the same period in 2010….During the 39 weeks to October 1, 2011, sales of SML coins increased by 56.1% to 17.8 million ounces.

If we consider that American Silver Eagle sales have declined in November, it would be appropriate to conclude that Silver Maple Leaf sales did as well. Assuming that fourth quarter SML sales would be approximately five million (as expressed in current trends) it would give us a figure of 22.8 million oz in 2011… rounded down to 22.5 mil oz to be conservative.

If these figures are correct and the Royal Canadian Mint does sell 22.5 million Silver Maple Leaf coins in 2011, it will be at a rate of 121% of their domestic silver production. 2011 will be the first year in which both the U.S. and Canada will sell more Silver Eagles & Maples than what is available from their respective silver mining supplies.

Does the U.S. Mint Have to Use Domestic Silver Mine Supply for its Silver Eagle Production?

There has been a great deal of discussion on the internet on whether or not the U.S. Mint is by law forced to use domestic silver production for their minting of American Silver Eagles. I have spoken with Michael White at the Office of Public Affairs at the U.S. Mint concerning this issue. Mr. White provided me the link to Senate Bill S. 2954, passed into law in 2002, which allows the U.S. Mint to purchase silver on the open market to produce American Silver Eagles. Wikipedia has also documented this below:

Program extension, 2002

The authorizing legislation for the American Silver Eagle bullion program stipulated that the silver used to mint the coins be acquired from the Defense National Stockpile with the intent to deplete the stockpile's silver holdings slowly over several years. By 2002, it became apparent that the stockpile would be depleted and that further legislation would be required for the program to continue. On June 6, 2002, SenatorHarry Reid (D-Nevada) introduced bill S. 2594, "Support of American Eagle Silver Bullion Program Act," "to authorize the Secretary of the Treasury to purchase silver on the open market when the silver stockpile is depleted." The bill was passed by the Senate on June 21 and by the House on June 27 and signed into law (Pub.L. 107-201, 116 Stat. 736) by President Bush on July 23, 2002. http://en.wikipedia.org/wiki/American_Silver_Eagle

If it were true that domestic silver was required to mint these coins, the U.S. Mint would have only produced approximately 35 million oz of Silver Eagles in 2011— instead of the supposed 40 million currently estimated. This is also true for the Royal Canadian Mint as it is now producing more Silver Maples than it can supply through Canada’s own domestic silver production.

Even though the U.S. and Canada produce more Silver Eagles and Maples than their domestic mine supplies, neither country has regarded this as a problem because they each have enough imported silver to meet all of their industrial and investment demands. However, this situation may change in the future as the global economy worsens and each country loses further trust in their respective fiat currencies.

The Myth Behind the So-called Silver Surplus

The investing public has been led to believe that the world is now producing a surplus of silver. This so-called surplus was provided by information put forth by GFMS. According to GFMS and its World Silver Surveys, there has been an annual global deficit of silver since 2003. In 2004 the world hit its first small surplus and has continued to grow. In 2010, the surplus was 175.4 million ounces.

To get its annual supply-deficit figure, GFMS uses a certain equation:

(Mine Production + Silver Scrap) – (Fabrication - Coin & Medal) = Surplus- Deficit

If we plug in 2010’s figures this is the result:

(735.9 + 215) = 950.9 – (878.8 - 101.3) = 775.5 = +175.4

GFMS has decided that coin and medal demand should not be included in the Fabrication total but rather as a form of bullion supply. So the higher the coin and medal demand, the more it adds to the so-called silver surplus. The majority of this category of “Coin & Medal” consists of official government coins that are in high demand and are not of the type that would be sold for melt and recycled back into scrap supply. If we look at the chart below, we can see how GFMS has created this so-called silver surplus:

Click here for larger image

101.3 million of those 175.4 million oz of so-called surplus came from coin & medal demand in 2010. I find it interesting that GFMS has decided to treat the “Coin & Medal Category” (the majority of which are coins not readily available for melt and recycle) as supply rather than demand, but allow silver scrap from recycled fabrication to be used as a form of supply.

If we think about it for a minute, the whole idea of a surplus as expressed by GFMS is nothing more than an accounting gimmick. In 2010, there was 215 million oz of silver scrap added to the total supply. A large portion of this amount came from recycling silver from industrial scrap. Every year a certain amount of silver supply goes into industrial fabrication and of that amount, a percentage gets recycled into silver scrap which becomes supply in the following years.

Ask yourself this question… what would be considered more of future supply? Would it be comprised of official government coins that are in high demand and held for many years for their investment potential or a percentage of recycled silver from industrial fabrication? Even if investors sell Silver Eagles or Silver Maples back to a dealer, that dealer normally resells these coins back to other investors. These coins are the least likely to be melted and recycled.

Even if we were to go by the GFMS and their silver surplus vs. deficit figures, there is another interesting trend taking place. As coin and investment demand has risen, so has the price of silver. During the years attributed to a silver deficit, the price of silver remained relatively flat. As the so-called surplus has increased, so has the price of silver. Either way, silver investment is pushing the price of silver higher.

There have been several analysts who have stated that future silver surpluses will keep a lid on the price of silver. Here we can see that this is not the case at all. On the contrary, it has been due to investment demand that both the price of silver and the so-called surplus supply have grown.

The Coming Paradigm Shift in Silver

This is the subject of my next article which will be out shortly. The paper-backed situation in the world’s economies and financial system is grim. Silver should be priced at a level several times higher than it presently trading. Too many investors are becoming hypnotized by the technical analysis. However, technical analysis is a valuable tool in a FREE MARKET. Unfortunately, the markets and the silver charts are being manipulated while analysts who recreate these charts in their articles may not realize that they are actually helping the manipulators do their work by legitimizing its function on the internet’s financial websites.

Even though supply and demand factors contribute to the price of silver, it will be the shift in psychology that will propel the price of silver towards the heavens. This psychology has been slowing changing as the graphs above reveal an interesting trend taking place in the U.S. and Canada. In 2002 both countries produced 87.5 million oz of silver and sold 11 million Silver Eagles and Maple Leaf coins. These coins sales accounted for 12.6% of U.S. and Canadian silver production.

In 2011, just nine years later, the U.S. and Canada are estimated to mine only 53.6 million oz of silver combined, while their total Silver Eagle and Maple Leaf coin sales are to surpass approximately 62.5 million. Thus, their coin sales are 16% greater than their total domestic silver mine supplies.

Investors in increasing numbers over the years have been buying physical silver. While this number is growing, it is still a fraction of a fraction of the country’s population. Even though 40 million Silver Eagles were sold in 2011, this accounts for one coin for every eight Americans.

The Great Stampede in Silver is yet to come

UPDATE: Since the completion of this article, the U.S. Mint has updated its 2011 American Silver Eagle sales. The grand total for 2011 turns out to be 39.8 million Silver Eagles sales while the month of January 2012 starts off with a whopping 3,197,000 sales on the first business day of the year. This is speculation on my part, but instead of updating the Silver Eagle figures during the last few days of 2011(as it normally does on a more regular basis), the U.S. Mint decided to dump all the remaining sales onto January 2012.