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June 26, 2009

Silver Market Update
by David Morgan

The following is an excerpt from the June issue of The Morgan Report. Although I recently wrote about the silver as money issue, many precious metals investors are rather under informed about some aspects of the silver market. Our readers have been kept up to date about the thrust for getting Mexico and other Latin countries to use silver along with their paper currencies.

Most of you know something that has hardly had any mention in the mainstream press at all, and this is the valiant effort of Hugo Salinas Price to work for the reinstitution of silver into the monetary system of Mexico. Mr. Price is trying to bring silver back into circulation, in parallel with paper and digital money, in Mexico; see www.plata.com.mx. He has several articles written in Spanish, many translated into English. His latest effort was defeated, but Hugo assured me that the silver cause has more friends than ever and some of these will be Diputados, or Representatives as they are known in the U.S. So the battle will go on.

This is a memo I recently received from Hugo.

Dear friends -

Just to let you know that my high hopes for monetization of the silver ounce have been dashed due to various factors in conflict in the Lower House. The Left is angry with TV Azteca, and the Silver Bill was perceived as being actually a TV Azteca legislative project. So, thumbs down!

I am going to stand-by till September, when a new and perhaps more amenable Legislature is installed after elections coming up soon.

We have good support in the Senate, which will wait till September for further possible collaboration with the Lower House "Diputados Federales".

Sorry for the bad news, but that's the way it is. Who knows what further disasters we may see in the world financial stage, from here to September?

With best regards,

Hugo

Later, Hugo sent this...

I believe that the only hope for our civilization is to begin by silver, which is "the people's money". The tremendous obstacles which our Central Bank has offered to this project, [are] based on the fact that silver is outside the scope of banking. That is the only way we are going to save our civilization - by placing a limit on banks, a limit which is not a limit decreed by a law, but by the way in which people will strongly desire to have this money in their own possession, and not deposited in banks. This will checkmate the Keynesians.

Here begins the limitation of the scope of banking, which today owns the world. Money as something independent of banks, existing on its own.

It is our view that 2009 marks a watershed year for the precious metals, because the mainstream propaganda that gold and silver are archaic relics is giving way to the reality that both gold and silver are the new wealth for the new standard of living. In other words the general population will begin to wake up, and once a larger money flow starts into this market it will cause some problems for the latecomers, as the amount of paper debt that can be replaced by gold and silver is very small, relative to the amount of paper in existence. We may see various governments enact some type of tax or reporting on precious metals transactions. As your publisher learned recently, some country-to-country travel now requires reporting of any amount of precious metals moving between some borders.

Our view so far has been that the precious metals may not have a big run to the upside during the summer months and we expect the precious metals market will be kept in a wide trading range by the large traders. The other factor in our thinking is that, due to pressure to keep their ability to buy the basic essentials, many people, who might otherwise want to enter into the precious metals markets, will be kept away by the commonly referred to deflationary forces. This is becoming a difficult call, because we do see a shift in attitude and new market participants coming in at this time. As always we will be watching price and volume data to keep you informed if the market proves that the next launch date for the precious metals is earlier than forecast.

It is an honor to be.

Sincerely,

David Morgan
Silver-Investor.com

Mr. Morgan has followed the silver market daily for over thirty years. Much of this Web site, www.silver-investor.com, is devoted to education about the precious metals.

Mr. Morgan has been published in The Herald Tribune, Futures magazine, The Gold Newsletter, Resource Consultants, Resource World, Investment Rarities, The Idaho Observer, Barron's, and The Wall Street Journal. Mr. Morgan does weekly Money, Metals and Mining Review for Kitco. He is hosted monthly on Financial Sense with Jim Puplava. Mr. Morgan was published in the Global Investor regarding Ten Rules of Silver Investing, which you can receive for free. His book Get the Skinny on Silver Investing is available on Amazon or the link provided. His private Internet-only newsletter, The Morgan Report, is $129.99 annually. To suscribe to the Morgan Report click here.

Information contained herein has been obtained from sources believed to be reliable, but there is no guarantee as to completeness or accuracy. Because individual investment objectives vary, this Summary should not be construed as advice to meet the particular needs of the reader. Any opinions expressed herein are statements of our judgment as of this date and are subject to change without notice. Any action taken as a result of reading this independent market research is solely the responsibility of the reader. Stone Investment Group is not and does not profess to be a professional investment advisor, and strongly encourages all readers to consult with their own personal financial advisors, attorneys, and accountants before making any investment decision. Stone Investment Group and/or independent consultants or members of their families may have a position in the securities mentioned. Investing and speculation are inherently risky and should not be taken without professional advice. By your act of reading this independent market research letter, you fully and explicitly agree that Stone Investment Group will not be held liable or responsible for any decisions you make regarding any information discussed herein.