this comes from peter cooper at prison planet:

"In silver the premium paid for bullion bars is up to 50 percent above the spot price as dealers are running low and demand remains very strong. Why are silver premiums higher than gold: simply because silver stocks are tighter.

This is the classic case of tugging on a piece of elastic fixed to a brick. The pull of the retail price is suddenly going to increase the silver spot price. It just has to as bullion dealers replace their stocks.

We now also have an official enquiry into the shorting of the silver market by two US banks over the summer that crashed the price. No matter that the banks will probably be exonerated. They have removed their short positions – so there is nothing there to prevent silver prices surging ahead.

Supply shrinking

Meanwhile on the supply side things could hardly be better for price rises in precious metals. Central banks are withdrawing planned gold sales while output is falling at the major producers.

Silver stocks have always been tight as unlike gold the metal is consumed by industrial processes; but silver is also a precious metal which tracks gold as ‘the poor man’s’ alternative. Silver production is increasing but only at a snail’s pace.

Will silver prices again outperform gold by a factor of two as they have in the 2000s so far? It is not guaranteed but looks to be a fair assumption. And once stock markets have ceased to fall silver producers look like an excellent buy, as will the junior gold exploration companies.

However, if this is not a tipping point for gold and silver prices then it can only be a matter of weeks or a couple of months until we reach one. Mostly likely this is it.

From the 1975 correction up to 1980, gold prices grew eight-fold and silver 20-fold - and history has a habit of repeating itself. It never is different this time…"

http://www.prisonplanet.com/have-gol...