Silver Market Update

By: David Morgan | Fri, Jun 26, 2009
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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 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,


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.




David Morgan

Author: David Morgan

David Morgan

David Morgan

David Morgan ( is a widely recognized analyst in the precious metals industry; he consults for hedge funds, high net-worth investors, mining companies, depositories and bullion dealers. He is the publisher of The Morgan Report on precious metals, the author of Get the Skinny on Silver Investing, and a featured speaker at investment conferences in North America, Europe and Asia. You can receive a free 30 day trial subscription here

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.

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