First on silver:

Silver's Gross Underperformance,..

Bill,..
Where are CFTC when you need them,..

Just looking through the charts,..

Gold is currently less than 10% off it’s 09 highs,..

Platinum is less than 8%,..

Palladium is less than 10%,..

Copper is less than 10%,..

Silver,........ Still circa 18% below it’s recovery high,.. A recovery high that was in itself way back from most of the field,..

The arguments for it’s poor performance get harder and harder to rationalise,.. As a currency it has tracked Gold miserably, but even as an industrial entity it’s performance in comparison to Platinum, Palladium and Copper has been woeful,..

Don’t get me wrong, I’m not criticising silver,.. It’s my favourite speculation,.. I only point out how undervalued it looks on almost every basis whether one’s expecting Industrial recovery or financial Armageddon,.. This imbalance cannot last forever regardless of certain entities who might wish otherwise,..

I’m convinced that the most painful nuts of all will be those trapped in a pair of ‘silver shorts’when the spike finally arrives,..

And a long but interesting discusssion of metal stocks:

Bill H yesterday:

To all; recently there have been many doubts, questions, etc. regarding the action in the mining shares vs. the metals themselves. Since May 2006 the shares have certainly underperformed physical but looking back to the 1999-2001 time frame the HUI has gone up better than 10 fold vs. a little better than a 4 bagger in the metal.

Over the last 3 1/2 years the shares have acted in different manners depending upon their "class" The major producers for the most part have been the most resilient followed by the juniors and then the exploration plays. The exploration companies which historically have offered the most upside potential have not gotten back to their 2006 peaks unless they've reported phenomenal drilling results. These however should provide the long awaited rocket fuel in the not too distant future.

There have been indications that the overall sector has experienced heavy short interest including illegal "naked shorts". This shorting has served to retard performance and make "funding" operations very difficult because of the low share prices. Back in 2007-08 there was talk that the industry was under attack to be bankrupted. In my opinion this operation has been entirely about buying "the future monetary system" for pennies on the Dollar because "they (the operators) knew". The shares were hammered allowing accumulation of panicked shares by these operators.

Back in 2008-early'09 many companies were trading for less market cap than cash in the bank. Equipment, reserves, etc. were priced at zero. The action served to demoralize the community to the point where many long term Gold warriors have just given up. To this extent the operation has worked as planned. However some have fled the shares which has created mores demand on physical at a time where supply is already shrinking. This will serve to put an end to the "paper games" that much sooner.

The shares have, had, and will have both operating and financial leverage working in their favor. I have maintained for years that shareholders of mining concerns will be "charter members of the next banking system" and I believe this now more than ever. Fiat will fail without any doubt and any new currency MUST have some type of metals backing to be trusted or accepted after the current failed experiment. In my opinion this is a given.

How do I know this? Without trying to sound arrogant, us "pinheaded conspiratorialists" who don tinfoil hats have been right for years and for the right reasons. It has taken more time than we anticipated but the process has unfolded nearly verbatim to what was thought years ago to be heresy uttered by lunatics. We called the stock markets overvalued in '98-'99 even as Wall St. declared Warren Buffet washed up, they were and he wasn't. Stocks peaked in real terms for good early in 2000 and yet another recession was averted by flooding the system with credit.

Next came the bubble to end all bubbles (but not in real terms) where stocks, real estate, commodities, and even bonds all levitated to uneconomic and just plain stupid levels on a global basis. Back in 2008 some of us posited that because recessions had been postponed for year after year and governments were spending (borrowing) enormous and ridiculous sums, governments would go broke. Though we were laughed and scoffed at the time, now even someone not really paying much attention knows that governments are in the cross hairs and the era of "sovereign dominos" has begun. The Fiat system along with many sovereign nations and their central banks have already been mathematically bankrupted, all that now remains is "acknowledgment by panic".

In the final analysis, Gold and Silver ARE money and they WILL be considered "reserve" currencies once again. Once the thought process finally arrives at this reality, the shares will be THE place to be. When all is said and done the operating and financial leverage will assert themselves thus making the mining shares "fortune makers". If you want to preserve and enhance your purchasing power then own the physical metal. If you want to make a fortune, you must own the shares.

That said, a stock market crash of historical proportions is in my opinion upon us which will give you one last chance to join the club of "charter members". The risk is that the casino may close early and those not already holding these future "blue chips" won't get a chance to enter. I am of the opinion that if you are not "in" by the time the casino closes, you cannot "win" and if you are currently "in", long term you cannot lose. My advice is to keep the faith and do not let a stock market crash shatter your convictions even if "your babies get thrown out with the bath water"as they will grow up to be financial Titans virtually over night! Regards, Bill H