UPDATE: March 16/08 -

The run and subsequent collapse of Bear Stearns (one of the world's leading investment banks) combined with the news on Friday that Lehman Bros (also one of the world's leading investment banks) has had to secure a $2 Billion line of credit indicates an extreme degree of risk in the US financial system. The collapse of Bear Stearns, combined with the redemption halts in dozens of multi-billion dollar hedge funds, among many other factors, indicates the risk of a major U.S. bank-run or bank-holiday is growing greater. If you want to partially insure yourself against a bank failure, you should purchase approx. 3 - 6 months worth of your living expenses in either Gold or Silver Bullion, and then stash it somewhere in your house (don't tell anybody though, not even your friends) only to be used in an extreme financial emergency. Should you get caught in a bank failure, you can take a portion of your Gold or Silver coins/bars to your local Bullion dealer, where you can then convert it to cash, and then use that cash to pay your credit card bills, gasoline bills, food bills etc, etc. In these increasingly uncertain financial conditions, once you convert some of your cash or stocks to the equivalent of approx. 3 - 6 months worth of living expenses into Gold or Silver Bullion and stash it in your house, you'll sleep alot better at night, I guarantee it. And don't take my word for the need to insure yourself against the growing financial crisis; the I.M.F. just warned last week to prepare for worsening financial conditions.

March 3/08  -  When the credit, subprime, housing, and stock markets starting blowing up last year, many investors began/increased their position primarily in the safety of Gold bullion... the subsequent increasing demand on Gold resulted in the Gold price noticeably out-performing the Silver price.

While the Gold price has noticeably out-performed the Silver price since the credit/housing/stock markets starting blowing up last year, we are now seeing a leadership change/shift from the Gold price to the Silver price.

The superior Gold price performance has simply made the lagging Silver price to cheap to ignore any longer... Silver, in relation to Gold, has simply become undervalued, and now, the Silver price has started to play catch-up to it's historical price relationship with Gold during a bull market.

IMO, the Silver price is now in the early stages of a move towards it's historical Silver-to-Gold-price-ratio of previous precious metals bull markets.

Currently the Silver-to-Gold-price-ratio is approx. 50-to-1.

During the height of the precious metals bull market of 1980, the Silver-to-Gold-price-ratio was approx. 17-to-1.

As you can see from the next table/chart, the Silver-to-Gold-price-ratio shows the Silver price has recently begun closing the gap on the Gold price... IMO, Silver will eventually re-adjust back to it's historical bull market ratio of close to or under 20-to-1 before this precious metals bull market is over.
 

Also, Silver has begun to perform very well as a safe-haven investment and an inflation hedge... you can see from the current charts below; Silver's performance (Silver is shown as the blue line in the charts) over the past 6 months against the top 5 stocks by market capitalization across 10 different sectors... as you can see, Silver is generally outperforming all other major sectors... and just like Gold, Silver has begun acting as a safe-haven investment and inflation hedge during these uncertain times in the credit, housing, and general stock markets...
 

Silver vs. the Top 5 Wall Street Investment Banks ...

Silver vs. the Top 5 Home Builder Stocks ...

Silver vs. the Top 5 Money Center Bank Stocks ...

Silver vs. the Top 5 Mortgage Company Stocks ...

Silver vs. the Top 5 Biotechnology Stocks ...

Silver vs. the Top 5 Auto Dealer Stocks ...

Silver vs. the Top 5 Retail Stocks ...

Silver vs. the Top 5 Internet Stocks ...

Silver vs. the Top 5 Transport/Trucking Stocks ...

Silver vs. the Top 5 Oil Stocks ...

The Barclay's iShares Silver ETF (symbol: SLV) is probably the easiest, most cost effective, and least risky way for investors world-wide to invest in the Silver Bullion market in the near-term... SLV is essentially a proxy for Silver Bullion ownership... each share of SLV represents ownership in 10 ounces of Silver Bullion that is held in trust.

In the near-term, IMO, the Barclay's iShares Silver ETF has a couple main advantages over the purchase of either Silver coins/bars and/or Silver stocks (with the possible exception of the Silver stock: CDE... IMO, CDE is the Silver stock best positioned to possibly outperform SLV over the next 3 - 6 months... my recent research on Silver stocks indicates that CDE may be the most undervalued Silver stock trading today).

One of SLV's major short-term trading advantages over Silver coins/bars is: SLV has a very low brokerage commission structure... SLV trades just like a stock, essentially meaning; with today's cheap on-line trading platforms, SLV can be bought or sold for only approx. $9.95 per trade at a discount brokerage company like E-Trade.com (although I wouldn't use eTrade these days due to it's financial problems)... whereas, traditional Silver Bullion Dealers in comparison charge hefty premiums, Silver Bullion Dealers typically charge approx. a 10 percent commission to buy and sell Silver (rates vary from dealer to dealer)... in other words, to make a "net" 5% return on a $5,000 investment in SLV, the price of Silver only needs to increase by approx. 5.5% to cover your misc. trading costs... while to make a "net" 5% return on a $5,000 Silver Bullion investment purchased from a Bullion Dealer, the price of Silver needs to increase by approx. 25% (to off-set the cost of Dealer commissions & other miscellaneous costs). 

Also, one of SLV's other major short-term trading advantages over Silver stocks is: SLV has virtually none of the numerous built-in risks that are so prevalent in mining stocks... mining stocks are loaded with numerous risks... SLV sheds virtually all of the following risks (some of which have been severely dogging many of the mining stocks over the past 1 - 2 years);

• no reserve replacement risks,
• no production risks,
• no geo-political risks,
• no stock dilution risks,
• no financing risks,
• very limited management risks,
• no labor strike/union risks,
• no manpower shortage risks,
• no equipment breakdown risks,
• no equipment shortage risks,
• no cost inflation risks,
• no permitting risks,
• no weather risks,
• no environmental risks,
   

Many mining stocks have been especially dogged by stock dilution-financing risks over the past 1 - 2 years, stock dilution-financing opens a company up to myriad of different risks, and can stack the deck very heavily against the retail investor, stock dilution-financing can have a very toxic effect to the share price... buying Silver Bullion as opposed to Silver stocks bypasses incompetent (or dishonest) CEO's, naked short-sellers, and loan-shark like financing activity, all of which can very quickly damage and devastate a public company, especially small cap companies.

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