these are david morgan's views on the silver market:

silberinfo: David, 2008 had a great beginning with silver over $21 but it ended poorly. From a fundamental point of view not much has changed. Why the high volatility?

D. Morgan: From my perspective the market was overbought in March 2008 and in fact I sent a sell signal to all Morgan Report subscribers telling them to take some money off the table. Many did. I did not put out a buy signal until September 2008 but was too early and watched the market go down further. The last buy signal was around the 10th of December 2008, after the metals market had made a clear bottom. We have already taken partial profits on that.

For those who wish to trade, using our signals, we recommend no more than 25% of the portfolio. The rest is held for long-term gains.

There are several reasons for the volatility in silver:

• The over leverage used in all assets classes, including the precious metals
• Banks short selling of silver in massive quantities
• Price movement gets exaggerated due to silver being such a small market

silberinfo:

Do you expect a similar volatility for 2009?

D. Morgan: Yes, at this point (subject to change) I do not expect to see silver take out the $21 level this year. I want to be cautious here—silver can at almost any time take off on its own, without rhyme or reason. I have studied this market for more than 30 years and yet silver can confound the best of us. Because so little physical silver remains for investment or industrial use, we are in a “setup” that could launch the silver price at any time. Having said all of that, it is still my studied view that because all asset classes have been falling so hard for so long, the deflationary mentality will continue for many more months. This could abate silver’s next big move up for several months. Investors should take advantage of this by planning purchases of real silver and gold for the next several months. Also this applies to the mining equities as well, but right now I favor the physical market over equities, for many reasons.

silberinfo:

The Gold-Silver Ratio currently lies around 1:70. What is your opinion regarding the future development?

D. Morgan: Over time I expect to see the ratio move in silver’s favor. At the top of the market it would not surprise me to see 16 to 1 or even 10 to 1. This would be on a buying panic and I do not expect that ratio to hold for very long.

silberinfo:

You are an American and also a bit of a patriot. Do you agree with Ted Butler’s excellent work regarding the allegations of a silver price manipulation on the COMEX?

D. Morgan: Basically yes, and if there is any difference it is this. My view is that the basic trend cannot be manipulated. In other words, silver and gold are in massive uptrends that will unfold for years—in my opinion, at least 10 and more likely 15 to 20. Within the major trend, the price movement can be controlled to a certain extent by selling pressure or buying pressure. I have been over this so many times . . . I urge your readers to go to www.Silver-Investor.com and look at my past work. You can read what I have said again and again about how all markets move and in particular the silver market.

silberinfo:

The iShares Silver ETF states an inventory of around 250 million ounces. Do you have knowledge regarding the whereabouts of this enormous inventory, and above all, would you say that the entire 250 million ounces physically exists in their vaults?

D. Morgan: I think that the silver they “display” does exist but not necessarily in their vaults. I recently did a radio interview on this at www.financialsense.com, and I also wrote a public domain article titled, “Silver—Draw the Line” (both in English). These outline many of my thoughts on the Silver ETF.

http://news.silverseek.com/SilverInv...