Independent Living

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Special Silver Edition 2010

The Coming Silver Revaluation

History Suggests Price Objective of At Least $130
By Stefan Gleason and Seth Van Brocklin
4 It’s fact, not fiction. New information
on how silver prices have been artifi-
cially suppressed.
4 With more claims on silver in existence
than could possibly be delivered, an
upside price explosion is setting up.
4 Positioning yourself to profit from the
coming silver mania – it’s never been
easier!
If Independent Living subscribers have assumed
that we like silver, they would be wrong. We love it
– and for good reason!
The supply and demand picture for silver is, in our
view, extraordinarily bullish. Meanwhile, develop- Of course, circumstances were different then. The
ments in global financial markets coupled with a Hunt brothers attempted to corner the market. (There
growing global scramble for hard assets to hedge was no true shortage, and they were easily thwarted
against currency debasement only adds to the bull by regulators who abruptly changed the rules on the
case. Silver prices – still under $20 per ounce – paper trading market.) Double-digit inflation was
seem destined to rise dramatically. raging, but the Federal Reserve actually responded by
raising rates dramatically. And the market collapsed
Historical precedent coupled with current fundamen- as spectacularly as it had risen.
tal drivers
“Historical precedent point to the Silver’s Fundamental Picture
likelihood Looks Super-Bullish
coupled with current of an
fundamental drivers explosive But in many ways, the fundamentals today auguring
point to the likelihood of in the spike super for far higher silver prices are far more compelling
silver and more sustainable than they were in the 1970s.
an explosive super spike price and a A corner may well be developing in the silver mar-
in the silver price...” high price ket, but it’s the whole world doing the cornering
plateau this time! Some key points to consider:
beyond
that. The last super spike in silver began in 1979, • The U.S. monetary system is now far more over-
after silver had risen steadily for a decade from extended and at far greater risk of breaking
prices below $2.00 per ounce. After a decade of down. In 1980, the national debt was a mere
gains, silver had been trading at around $5.50 per $930 billion. Today, it’s closing in on $13 trillion
ounce. Just 12 months later, in January 1980, silver officially, with tens of trillions more in “off bud-
recorded a blow-off top at $49.45 – an incredible get” debts and obligations having been accumu-
ILB2010NL

800% upsurge over the course of a single year! See Coming Silver Revaluation, next page
 -2- Independent Living
Coming Silver Revaluation
continued from previous page
lated since silver hit $49.45 three decades ago.
• World silver inventories are far lower. Silver
companies, governments, and industry once main-
tained a 10-billion-ounce stockpile. Today silver
stockpiles may have dwindled to only 140 million
ounces, less than three months’ worth of supply.
(Even when taking into account the roughly 400
million ounces scooped up by investment funds in
the past 5 years, there still has been a dramatic 15-
fold decline in readily available above-ground sil-
ver over the last sev-
eral decades.)
• Mining production
seems destined to
peak at or near cur-
rent levels and then
decline permanent-
ly. According to
the U.S. Geological
Survey, there may
be no more than 18
billion ounces of
extractable silver
left. The pace of
new mining supply
of the past 25 years, which saw 12 billion new
ounces brought into the market, does not
appear sustainable even if prices rise dramati-
cally. Moreover, three quarters of all silver
produced is mined as a byproduct of other met-
als such as lead, zinc, copper, and gold. This
means that higher silver prices do not necessar-
ily make it possible for mines to ramp up pro-
duction, because silver is incidental to the eco-
nomics of most mines.
• Global industrial demand is higher. In 1980,
the world population was 4.6 billion. China
was still a pre-industrial economy. We’ve
since added another 2.2 billion people. Places
such as China and India are growing like gang-
busters, and silver is required in myriad indus-
trial, consumer, health, electrical, and energy-
related applications critical to today’s modern
economy. (Silver is the world’s best conductor
of electricity and heat, best natural biocide, and
best reflector of light.)
Independent Living, 377 Rubin Center Drive, Suite 203
2010
More than 800 million ounces are consumed
each year, most of which come from new mine
supply. Unlike other metals, silver is consumed
in very small increments, making recycling very
difficult. In other words, once silver is used, it
is usually gone forever. At the same time, silver
is generally an incidental cost in the products
that use it – such that a dramatic increase in the
price will not necessarily cause substitution. A
hint of shortages could cause industry users sud-
denly to hoard the metal and drain remaining
available inventories.
• Investor demand is surging. From 1990 to 2005,
investors had been net sellers of silver. In 2006,
we witnessed what
appears to be a major
sea change in the mar-
ket. The public again
became net buyers of
silver. In the first
quarter of 2010,
demand for silver
American Eagles
soared to a record-
high 9,023,500 coins,
for example.
Physical-silver-backed
exchange traded funds
(ETFs) and other vehi-
cles have seen dramatic inflows since 2006.
• The gold/silver ratio is currently above 60, which
suggests silver is undervalued. The ratio of silver
to gold in the earth’s crust is 17.5:1 – and the price
ratio has hovered in that range for most of record-
ed history (see graph). If history is any guide, the
bull market in precious metals could see silver
outperform gold by a factor of 4 or more.
• Save for recent decades, silver has been used
as money throughout human history and is in
the process of reassuming that role. As faith in
government fiat money (such as Federal
Reserve notes) diminishes, savers and
investors worldwide are embracing gold and
silver as a store of value.
Silver-Dependent Industries Begin to Hoard
as a Dramatic “Demand Squeeze” Forms
With investors and industry fighting to get their hands
on a metal that is now in a structural supply deficit,
• Fort Mill, SC 29708
 Special Silver Edition Independent Living -3-

silver analyst David Morgan projects that a “demand Reserve officials desiring to keep the U.S. dollar look-
squeeze” on silver will lead to an explosive move in ing strong despite massive money printing). What’s
prices, the magnitude of which will “make the tech unique about the short position in silver is that no
bubble look like a warm-up.” other commodity market is being sold down by a total
of just four traders to such an extent that more of the
Forward-thinking silver-dependent manufacturers are commodity is owed than could ever be delivered.
moving with deliberate speed to secure
direct access to mine production so the The institutional big boys
expected squeeze does not suddenly “Forward-thinking sil- who are manipulating the
leave them high and dry. One silver use ver-dependent manufac- silver market with gigantic
short positions can contin-
insider, Reed Larsen, General Manager of turers are moving with ue getting away with it
the prestigious Old Glory Mint in Salt
Lake City, told us that “At the first whiff
deliberate speed to only so long as they are
of shortages, industrial giants worldwide, secure direct access to never forced to deleverage
who have billions of dollars invested in mine production...” and make good on their
infrastructure, will lock up the future sup- promises – to cover their
plies they need at any cost. It could naked short sales with
eventually be difficult to get the metal at any price, actual, physical silver. Whistleblower Harvey
which is why we have already started locking up all Organ stated in a recent interview, “The game ends
the silver in the ground we need to serve our rapidly when the people that own all these paper obliga-
growing pool of bullion investors.” tions say ‘enough, I’m going to be taking deliv-
ery’… The Comex [futures exchange] will be
Price Suppression Schemes drained, and just about every physical facility glob-
Will Eventually Unravel ally will be drained.”

The reason why silver prices have so far been con-
tained well below their 1980 highs is largely the
result of central bank and government dishoarding
over several decades combined with financial
shenanigans. Big-name financial institutions – in
fact, some of the biggest names of all – have, with
the blessing and encouragement of government, cre-
ated a sham trading market for silver based on
promises that are literally undeliverable.
According to silver expert Jeffrey Christian of the
CPM Group, the derivatives trading market for silver
is fully 100 times bigger than the physical market to
which it is supposedly tied! This kind of leverage in
any market is generally considered reckless – a situa-
tion that could lead to a run on physical silver if just
a few more buyers stand for delivery than normal.
Banks and related players are selling contracts for sil-
ver they don’t own and never intend to acquire. It
has the effect of soaking up demand that would oth-
erwise go into the real, physical market.
The silver market is dominated by a concentrated
short position (the largest of which is believed to be
held by JPMorgan Chase, which a recent whistleblow-
er further confirmed is carrying out market interven-
tions, including those benefiting Treasury and Federal
Commodities Futures Trading Commission (CFTC)
hearings into this situation in March had the potential
to roil the markets, but the mainstream media have so
far ignored the situation (save for a single article that
appeared in the New York Post).
Meanwhile, there are hints a “run on the bank” in silver
may already be developing. Between February 26th
and April 16th, 17.9 million ounces of silver were
physically withdrawn from the largest silver exchange
traded fund (SLV) by “authorized participants,” with
12.5 million of that in the first half of April alone. That
amounts to almost eleven days’ worth of the entire
world’s production of silver, and 5% of the entire pur-
ported physical holdings of the fund.
“These enormous withdrawals are further evidence
that the supply of silver is tightening dramatically –
large entities need silver so badly, so quickly, and in
such large amounts, that they must resort to getting it
from the silver ETF,” noted Larsen.
Why $130 Per-Ounce Silver May Be Too
Conservative a Price Projection
Exactly when a full-fledged “run on the bank” in sil-
See Coming Silver Revaluation, back page

Independent Living, 377 Rubin Center Drive, Suite 203 • Fort Mill, SC 29708
-4- Independent Living 2010

Coming Silver Revaluation landish to most, but there is really no telling what
continued from previous page could happen if widespread shortages develop in this
vital metal. Silver is a notoriously volatile metal and
ver will occur is difficult to predict. How high prices can be expected to pull back swiftly and severely
will ultimately go in the panic that ensues is impossi- after any manic move.
ble to say. But it is reasonable to expect that long-
term investors who buy physical However, unlike the last time around, which saw sil-
silver at today’s prices will be ver give up the gains produced
richly rewarded. “...the derivatives by the super spike (with sub-$4
levels seen in the 1990s), this
We believe that sometime in the trading market for sil- move likely isn’t going to be a
relatively near future, the phony ver is fully 100 times fluke. The supply shock that’s
market for silver will rupture, coming will affect the market
taking prices to multiples of bigger than the physi- on a more permanent basis.
where they’re at today as a mad
scramble for limited quantities
cal market to which it The “poor man’s gold” could
collapse from a hypothetical
of actual, physical silver ensues. is supposedly tied!” peak of $250 back down to $50
To equal the 1980 high in 2010 or $100, for example, but we
dollars (based on the Bureau of Labor Statistics’ aren’t likely ever to return to the conditions that
Consumer Price Index) silver would have to reach allowed for silver under $10.
$130.20. That is our minimum target price.
Not Too Late to Beat the
But based on more realistic measures of inflation Coming Silver Mania – Yet
(there’s no perfectly precise measure, but the govern-
ment’s methodology has been corrupted by efforts to If you’re not on board with a position in physical sil-
understate price-level increases), silver would have ver, there is still time to buy before the mania phase
to get up to around $250 just to equal its 1980 peak begins. But there may not be a whole lot of time
in real terms. left. Once the run on the bank begins and what little
inventories still exist are depleted, it may become
Because currency depreciation is an ongoing process, next to impossible to acquire silver through normal
any price targets based on inflation adjustments will channels at a fair price.
need to be revised upward over time. And because
the fundamentals for silver are more compelling now One of the best ways to get started, as we have
than ever before, it’s quite conceivable that silver always emphasized, is by accumulating one-ounce
prices will move much higher in real terms than they silver rounds/coins in your physical possession.
did in January 1980. In fact, a few well-regarded They are easy to handle, easy to sell or barter with,
analysts are calling for silver to get as high as $1,000 and can be esthetically pleasing to hold and display.
someday. Predictions like these might seem out- Contact us as indicated below to get started.

Buy Silver Outright or Accumulate It Every Month!

Independent Living Bullion’s monthly silver bullion accumulation program is now avail-
able to subscribers. For details, simply e-mail our Director, Clint Siegner, at
clint.siegner@americanlanternpress.com or call 800-800-1865. Clint and his staff will
provide you with the program description and enrollment form. (This document can
also be accessed from www.independentlivingbullion.com.)
One Troy Ounce
Pure Silver Coin -
Whether or not you sign up for the monthly plan, you may make individual silver pur-
chases whenever you wish. Premiums above the silver spot price for our one troy ounce rounds are
minimal! To make an individual purchase, simply call 800-800-1865. You lock a price over the
phone, send payment, and we ship via insured/registered USPS.

Independent Living, 377 Rubin Center Drive, Suite 203 • Fort Mill, SC 29708