Dividen Bank Rakyat 15%

Source:http://utusan.com.my/utusan/info.asp?y=2011&dt=0225&pub=Utusan_Malaysia&sec=Ekonomi&pg=ek_01.htm
KUALA LUMPUR 24 Feb. - Buat tahun ke-12, Bank Kerjasama Rakyat Malaysia Bhd. (Bank Rakyat) mengumumkan pembayaran dividen sebanyak 15 peratus bagi tahun kewangan berakhir 31 Disember 2010.

Dividen itu membabitkan pembayaran sejumlah RM294.9 juta yang akan mula dibayar kepada anggotanya mulai esok.

Menteri Perdagangan Dalam Negari, Koperasi dan Kepenggunaan (KPDNKK), Datuk Seri Ismail Sabri Yaakob berkata, agihan dividen yang konsisten oleh bank itu hasil keuntungan sebelum cukai dan zakat Bank Rakyat sebanyak RM1.72 bilion.
Ia merupakan kenaikan sebanyak 10.8 peratus atau RM167.1 juta berbanding RM1.55 bilion pada 2009.

Pertambahan keuntungan itu dipacu oleh pertumbuhan pembiayaan terutama pembiayaan peribadi dan pendapatan berasaskan yuran serta kenaikan deposit.

''Bank Rakyat turut merekodkan keuntungan bersih sebanyak RM1.34 bilion berbanding RM1.13 bilion pada tahun sebelumnya,'' katanya pada sidang akhbar bagi pengumuman prestasi Bank Rakyat di sini hari ini.

Sementara itu, Pengarah Urusannya, Datuk Kamaruzaman Che Mat berkata, bank itu masih mengekalkan pemberian dividen sebanyak 15 peratus meskipun keuntungan meningkat.

''Kita akan membawa keuntungan yang diperoleh untuk menjana pendapatan pada masa depan,'' tambah beliau.

Kamaruzaman berkata, untuk tahun ini, bank itu mengunjurkan peningkatan pendapatan meningkat sebanyak 10 peratus, lebih rendah berbanding tahun-tahun sebelumnya.

Beliau menyifatkan pertumbuhan 10 peratus itu adalah kadar yang selesa bagi Bank Rakyat selepas mengalami pertumbuhan besar pada 2010.

''Unjuran yang dibuat itu adalah normal, tanpa ada sebarang ekstra dan kita jangkakan prestasi masih kekal kukuh sekiranya kadar faedah stabil,'' ujarnya.

Beliau berkata, pada tahun ini Bank Rakyat berhasrat untuk menambah lapan lagi cawangan sedia ada yang berjumlah 127 buah dengan membabitkan pelaburan sebanyak RM1 juta setiap sebuah.

Bank Rakyat juga merekodkan kenaikan pendapatan kasar sebanyak 24.3 peratus kepada RM4.70 bilion manakala pendapatan bersih selepas agihan keuntungan kepada pendeposit sebanyak RM3.05 bilion berbanding RM2.61 bilion tahun sebelumnya.

Pendapatan sumber pembiaya melonjak kepada RM4.04 bilion, yang mana 92 peratus atau RM3.71 bilion disumbangkan oleh perbankan pelanggan dan bakinya sejumlah RM323.9 juta melalui perbankan komersial.

Pendapatan berasaskan yuran juga bertambah sebanyak RM92.3 juta.

Jumlah aset meningkat sebanyak 22.3 peratus atau RM11.27 bilion kepada RM61.91 bilion berbanding RM50.64 bilion pada tempoh sebelumnya.

Jumlah deposit Bank Rakyat naik kepada RM52.49 bilion bagi tahun lalu dan kedudukan kecairan kekal kukuh pada kadar 27.3 peratus berbanding 25.2 pada 2009.

Dana pemegang saham Bank Rakyat juga meningkat kepada RM5.95 juta dengan bilangan anggota seramai 758,356 orang.
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Silver Shortage!?! - Cris Sheridan - Financial Sense

If you're familiar with this site, you'd know that we've been long time advocates of precious metals. However, when clients begin to call in asking to sell their conservative holdings in order to buy as much silver as they can get their hands on, one has to wonder why the sudden alarm? Well, recently, rumors have been afloat all over the internet about a potential silver shortage, especially in 100 oz bars. Often when such sensational news stories like this go viral it's good to do a little digging and see how much truth there is to it before going into panic mode, liquidating your entire portfolio, and buying your weight in silver bars.

I spoke to Kathryn Derbes, CEO of KDerbes Precious Metals LLC, and asked her whether this was just hype or an actual cause for alarm. According to her, there weren't any current shortages in the silver market to speak of except for secondary-market specialty bars, specifically Engelhards, that haven't been manufactured since the late 1980s. Unfortunately, this small overlooked detail may have been the only source of all the news that's currently going around.

Also, Kathy related that dealers who bought 100 oz silver bars near the peak earlier this year would naturally be stuck with high-priced inventories that they'd be reluctant to sell and take a loss on—holding out, of course, until prices rise back to where they could make a profit. Thus, the apperance of a shortage may just be due to the unwillingess of dealers to sell at currently supressed prices unless they can make up for it with higher premiums.

All in all, whether or not this is the beginning stage of an actual silver shortage or just the natural course of doing business, time will tell. Fortunately, if you'd like to hear more about the current state of the silver market and what's really going on, Kathy will also be speaking on Jim's show tomorrow for a special interview regarding this very topic.



Sourcehttp://www.financialsense.com/contributors/cris-sheridan/silver-shortage

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A Simple Shake Could Set Silver Free - Dr. Jeffrey Lewis - Silver Seek

There is no more silver! Really, there isn’t any left.

There is a danger lurking in the shadows of the COMEX silver market. Prices are (generally) rising, but the supply of silver is falling, and it’s falling quickly. Why, you ask? Unfortunately, there has been confusion in the paper and physical metals market…as if silver investors hadn’t already noticed.

Silent Market in Control

With the rise in silver prices came new speculative interest from bankers, average investors, and even the next-door neighbor. The problem is very simple: the supply of silver for the investing class is imaginary—a product of the banking system and fractional reserve silver.

In order to supply investment demand, investment banks (JP Morgan and others) have been selling off paper silver in droves, hedging their bets on the futures market, and hoping that no one ever bothers to take delivery. It has become evident, especially in this most recent move toward $30, that the price of silver and the supply of silver are no longer related.

What we have now is a market where the real, physical silver is flying out of the COMEX (since few seeking to buy real silver are interested in certificates or exchange-traded funds), and the tangible stocks are replaced with paper silver.

What happens when the market realizes that the well is tapped, there is no remaining silver, and that the positions most hold are diluted to a point that they hold only a small percentage of what they believe they hold?

Future Surge in Silver Prices

It has become commonplace for analysts, investors and others to forecast higher and higher silver prices. These analysts, investors, and analysts are 99% wrong.

Most of them are playing the fool’s game, buying and selling paper silver to accumulate paper. The remainder sees opportunity for silver that brings silver prices higher, and they’re wrong as well.

Silver prices are not technically rising, but they’re becoming realistic. The current pricing structure is dependent on a supply of silver that does not exist. When this realization comes to life, silver prices will rise, but in truth, prices have already exploded.

Those trading the COMEX are paying $25-30 for the CHANCE at taking delivery of an ounce. If we put the current, real supply of silver at 10% the open interest, then prices are already $250 per ounce.

How Disconnects Happen

In a previous article, we discussed the divergence and growing crevices in the silver market. Prices from the COMEX trickle to the NYSE where the SLV ETF is traded, which then trickles back to the futures market, and then to the average investor, who through his or her own market action, sends that information down to the retail coin shop. Thus, the physical markets on the local level are selling silver based on a price that flows from a crooked market. Is it any wonder demand is high, and supply (individual investors are the only ones who can actually prove ownership) is shrinking? I think not.



Source: http://news.silverseek.com/SilverSeek/1296169564.php

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Chinese Silver Buying Just Beginning - Dr. Jeffrey Lewis - Silver Seek

Just a few decades ago, China the Giant was barely a mortal. It produced most of what it consumed, and the corporate mega-producers installed during the darkest days of Asian freedom and democracy produced all the commodities the country might need within its own borders.

One such commodity was the one we all love: silver. In fact, China produced so much that it couldn’t use all of it, nor was it interested in holding onto the metal. The country was a net exporter until four years ago, when at the height of the most recent credit bubble, net imports materialized. Today, China consumes more silver than it ever has in history.

It’s not that China isn’t still producing silver—it is, but it’s consuming and hoarding more of it. Through 2010, net imports increased some 15%, while exports fell by nearly 60%. Such a fast swap from exporter to importer means additional strain on the silver markets. From 2009 to 2010, total net imports surged three hundred percent in just one year.

Demographic Complexity

Of the more than one billion people who live in China, most live at or near poverty, while only recently a select few have been moving to middle class. While the number of people advancing through society in raw percentage terms is declining, the number of people who are achieving greater purchasing power is exploding in nominal terms.

If, for example, only 5% of the Chinese population were to rise to the ranks of “middle class,” it would be the equivalent of one out of five Americans doing the same. Such an increase is mild, to say the least, but it commands even more from an already limited silver market. Imagine what happens when many millions or even billions of newly middle-class Chinese demand cell phones, personal computers or other electronic devices. Each contains silver, and each is a hot commodity in the developing world.

Rising Middle Classes

As has been covered previously, not all of the new demand is purely consumption. As gold continues its rise, silver is slowly becoming the new “poor man’s gold,” a trend that appears not only in the developing world, but in the developed world as well. In fact, it is becoming increasingly common for jewelry to contain diluted gold to reach consumer-level price points. What are jewelers using for such dilution? Silver.

Asian societies, governments, and populations have always had respect for gold and silver that is perhaps unmatched by any other geographic region. For centuries and for many millennia, gold and silver were used exclusively for trade, as a currency and store of value. Even through modern times, gold and silver are appreciated for their beauty and significance of wealth.

It would be wise to expect that any net increase in tangible wealth in the Asian markets will be met with nearly equal shifts in the consumption or savings of precious metals. Timing is of the essence here. With both India and China expected to achieve nearly double-digit growth rates, many millions more people are soon to join the growing class of silver stackers.



Source: http://news.silverseek.com/SilverSeek/1296784269.php

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The Rarest Earth - Theodore Butler - Silverseek

Those who keep up with business news will have no doubt read about the recent developments in the category of minerals known as rare earth elements (REE’s). These are minerals that are vital to modern industrial applications, ranging from lasers, batteries, alternative energy, and superconductors to all sorts of important high-tech applications. There are 17 minerals classified as REE’s with exotic names like scandium, yttrium, lanthanum, cerium, and praseodymium. Don’t worry, this is not a technical discussion and this will probably be the only time I write about rare earth elements.



Actually, these minerals are not all that rare, in the strictest sense of the word. Many are quite abundant in the earth’s crust. What makes them rare is that they are generally not concentrated in ore bodies offering economically feasible extraction. The first rare earth mineral was discovered around 1800, in a village in Sweden named Ytterby, and several REE’s are named after that village. Up until about 1950, most rare earth production came from India and Brazil. In the 50’s, South Africa was a big producer, then California took the lead from 1960 through the 1980’s. Then, China came to be the dominant producer by far, and currently produces 97% of world production.



Due to booming world demand, production has strained to keep pace. This was recently exacerbated by China’s new export restrictions, due to falling ore reserves and environmental concerns. This sent the price of rare earth elements soaring by hundreds of percent, prompting a world-wide effort to ramp up production. However, you just don’t flip a light switch and begin new mine production. It can take years to develop a mine and begin production. In the meantime, industrial consumers must compete for available supplies by bidding up the price. This is the essence of the law of supply and demand.



Since I’m not a REE expert why am I writing about them? The answer has to do with silver. Silver shares many characteristics with the rare earth elements and there is a lot to learn from them in our analysis of silver. In fact, the purpose of this article is to make the case that silver is the rarest of all the rare earth elements.



One of the common characteristics between silver and the rare earth elements is that many REE’s are mined in conjunction with other minerals, the same as silver with its by-product mining profile. Mining for both tends to concentrate on the easiest to exploit properties first. Consequently, the remaining properties tend to be lower-grade and more expensive and difficult to develop. Both silver and REE’s have seen the emergence of China as the chief producer of each. (In the case of silver, the production reliance includes the processing of scrap material not mined in that country.) Silver production from China is nowhere near 97% of world production, as it is in the rare earth elements, but it still is significant. Environmental issues and restrictions inhibit the production of both silver and the REE’s. And with both, higher prices don’t automatically guarantee immediate new production. For instance, last year on an 80% increase in silver price, the mine production of Peru (the world’s largest miner) declined 7% or 12 million ounces. That’s a million silver ounces less per month than from a year earlier. Recently, the price of REE’s skyrocketed, due to China’s sharply curtailed exports. Should any major silver producing country sharply restrict the export of silver, the price would soar.



In most industrial applications, there is a small, but necessary amount of silver and rare earths used which is resistant to substitution. The chemical properties of silver and rare earth elements are usually unique in the specialized industrial applications which mandate their use. Generally, the consumption of silver and rare earth elements is price-inelastic, meaning sharply increasing prices of each do little to discourage consumption, due to the lack of substitutes. As was seen recently in the rare earth elements, the industrial users panicked when the supply was curtailed. This will also happen in silver, as I have long predicted.



Where do I get off with the statement that silver is the rarest earth element of them all? This point is the easiest of all to make and should prompt you to rush out to buy silver immediately. What separates silver from the REE’s is the one stark factor which is unique to only silver. You can actually buy and hold silver in its purest elemental form, unlike other rare earth elements. Try calling some dealer to invest in pure yttrium, or promethium or gadolinium. And if by some miracle you can find someone to buy from, try to imagine how you could possibly sell or determine a fair price?



The thing that separates silver from all other REE’s is that you can invest in it directly. Sure, you can buy stocks in companies that mine silver or REE’s, but only silver has the dual role of basic investment asset and industrial material. That’s what makes silver the rarest of the rare. What separates silver from any other natural resource is thousands of years of primal attraction, held by man as a form of wealth, and simultaneously a vital and strategic industrial material necessary to modern life. It’s just not practical for the average investor to buy a pound of a rare earth, a barrel of oil, or a bushel of corn for investment purposes. I suppose a case can be made about investing in platinum or palladium, both important industrial metals, but there has never been any evidence of a world-wide rush to buy these metals as there has been in silver. Buying or selling an ounce or a pound of actual silver is as easy as falling off a log. The United States Mint sells Silver Eagles by the millions of ounces every month. And while many invest in gold, it doesn’t have that investment asset and industrial material dual role unique to silver. That’s what makes silver so rare.



The amazing thing is how few of the world’s potential investors appreciate the uniqueness of silver’s rare dual role. The ease of investing in silver is taken for granted by the world. Just a few decades ago, silver was in common coinage. This explains why people have difficulty comprehending how such a formerly abundant material could be considered rare today. How many people know that world silver stockpiles are down 90% since 1940? That’s precisely what creates the investment opportunity of a lifetime – seeing something before the crowd.



It seems preposterous that a material like silver, which the common man carried in his pocket for bus fare or a newspaper could somehow transform itself into a rare material about to enter into a profound shortage. That shortage is virtually guaranteed by silver’s unique dual role. The coming rush into silver by investors seeking profits and industrial users looking to stockpile a vital manufacturing component makes a shortage almost certain. There is no way production can ramp up nearly as quickly as the combined force of investment and user demand.



For all intents and purposes, silver has been the best investment over the past decade. Those investors who studied the facts objectively and bought silver, have reaped multiples of their original investment. Silver will likely be the best investment of the next decade as well. Those who study the facts and act on them by buying silver will be generously rewarded. There is no way anyone can turn the clock back to single digit silver. Those days are long gone. But in some ways, the more exciting time lies ahead.



Ten years ago, it was difficult to convince people to buy silver. The stock market was flying high and real estate was just entering a major bull market. Crude oil was sliding towards $20/barrel and most commodities were flat. Silver was under $5, gold under $300, and the term rare earth was mostly unknown. Anyone investing in natural resources needed to have their heads examined. Even though silver was in a deficit consumption pattern, there was little interest in buying it as an investment.



Today, things are different. Natural resources are more widely appreciated, in light of burgeoning world populations and the growth in living standards. Now it is a question of which natural resource will experience the next supply and demand crunch, rather than will there be any crunches.



In the last decade, silver rose due to the cumulative effect of a 60 year deficit and the start of net investment demand. This decade, it will be investment demand driving silver higher, along with the end of the short selling manipulation. This termination appears underway. Thanks to great price performance, more investors will be drawn to silver. Thanks to the Internet, a great manipulative force that restricted the price cannot last much longer. While it may be hard to achieve the 7-fold increase in price from the extreme lows of ten years ago, the gains will still be spectacular and should come quickly. At some point the buying momentum will overwhelm those shorts trying to hold back the tide. The big shorts look tired of the manipulation and appear ready to stand aside on the next big rally.



How many neighbors and friends and relatives and fellow citizens do you know that have made a serious investment in silver? I doubt you can discover one in a hundred, or one in a thousand. Despite the impressive price gains over the past 5 or 10 years, silver is still vastly under-owned and under-appreciated. The investment flows into silver, compared to any other investment class, have been tiny. However, the amount of real silver available for investment is so small that the small investment flows to date have been sufficient to power silver higher. As more investors become aware of the silver story, the money coming into silver will only increase, propelling the price to levels once thought impossible. Importantly, the money flowing into silver appears to be for physical buying and not margin. Bubbles only occur when people are so enamored of an investment that they recklessly borrow to buy as much as possible. We’re a very long way from that in silver. That’s yet to come.



There are now $2 trillion in assets in hedge funds (the pre-financial crisis levels). This is hot money that comes into any promising investment theme in a flash. It is big money, always on the prowl for a good investment idea. To my knowledge, there has been no rush yet into silver by the hedge fund sector. Remarkably, silver recorded an 80% gain last year and a 170% gain over the past two years with no visible participation from the biggest and hungriest investors of all. There is no doubt in my mind that before the silver price saga is finished, the hedge funds will have come into silver in a big way. If silver can climb 80% and 170% without them, what can it climb with them knocking down the doors to get in? The silver story is just getting out. Please take the time to study the facts and act before the big surge.



Source:http://news.silverseek.com/SilverSeek/1297276845.php

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Buying Silver While It’s Still Relatively Cheap - SilverSeek

Richard Daughty, The Mogambo Guru

James Cook of InvestmentRarities.com reminds us, in his “Market Update” newsletter, that the silver inventory held above ground totals 1.4 billion ounces, and that annual industrial use of silver is 900 million ounces, so that a year and half’s worth of silver exists, “although a third of it is destined for industrial consumption,” which has been increasing its use of silver by 18% in 2010.

And it surely will be used in industrial consumption, because as Mr. Cook says, “it’s hard to fathom all the bullish aspects credited to silver. You have a rare metal used in so many important industrial applications as to be termed miraculous,” so much so that “the billions of ounces mined over 2,000 years are gone forever.”

In fact, I am considering raising money to launch a Discovery Channel special, which will be a revealing new documentary that blows the lid off the explosive situation in silver, beginning with how things would have been worse a long time ago if the Neanderthals had invented electrical generation and a distribution network, both silver-consuming, 100,000 years ago.

And ditto those Renaissance hotshots who everybody thinks are so hot, but couldn’t even come up with a good cell-phone, or how Thomas Edison can invent a light bulb and the phonograph, but not take the logical next step of inventing the CD and CD player, which would have produced much better sound quality than those stupid, scratchy, tinny wax cylinders of his.

Now, as interesting as all this is, it is not enough to enthrall us because we have such short attention spans, but as soon as we say, “Bah! Show me how to make money on it!” and reach for the remote control with which to change channels, our ears prick up in sudden rapt attention when he says, “The disappearance of this hoard should have sent the price to much higher levels. It didn’t.”

This seemed so odd that Theodore Butler went to “track down the reason” and, as I understand it, discovered the gigantic short futures position in silver, and all of that slimy, illegal rigging of the silver futures markets, and by extension, all the rigged markets, and all of it made possible only because the foul Federal Reserve created the excess money to finance it all! Hahahaha!

Of course, rigged markets are nothing new, and again our interest wanes, and soon we are beginning to think of pizza, and our stomachs gurgle, “BurrRRRrrRRrrRRp!”

This was unfortunate, because while we were distracted, we almost missed the whole point, which is making a lot of money without working. And on that subject, the aforementioned Theodore Butler writes that JP Morgan, apparently the biggest naked short-seller of silver futures and thus the biggest price suppressor, looks like it has decided to get out of the business of depressing the price of silver by creating and selling so much “paper silver” futures out of thin air, and has unexpectedly “covered roughly 4,000 contracts in the past month and 8,000 contracts in the last two months, the equivalent of 40 million ounces” of silver.

Familiar with the explosive results of suppressed prices that stop being suppressed, I am beside myself in Greedy Mogambo Glee (GMG) in anticipation of silver shooting to the moon, and I am humming the tune “We’re in the money! We’re in the money! We got a lot of what it takes to get along!”

Mr. Butler, who is much more professional than I, calmly and cautiously opines that “This holds profoundly bullish implications for the future of silver prices,” which may have something to do with the fact that covering a naked short position when the price of silver is rising means taking a loss, and, “In the history of the silver manipulation going back to 1983, never has the big concentrated silver short ever covered shorts on rising silver prices.”

I am always impressed with the use of the word “never,” probably because of that time when I was young and full of hormones, when I asked Debra Sue, the hottest girl in the tenth grade and who knew it, too, to go out with me, but she pretended not to hear me, but who told her friend Jessica, who told her friend Mary, who told her boyfriend Bob, who was my friend, who told me that Debra Sue said she would never – never! – go out with me because she thinks I am “icky.”

Sure enough, she never did go out with me! Or even acknowledge my existence, for that matter, except to once say to me, in the hallway outside of the chemistry lab, “Get out of my way, creep!”

That girls think I was creepy is not interesting, not surprising to anybody, but probably the most interesting fact about silver is that it is “used in tiny amounts in its multitude of applications. This makes much of its usage insensitive to price.”

If you are not sure what being “insensitive to price” means, imagine that you are the CEO of a company manufacturing Mogambo Hair-Growing Machines (MHGM) under license from Mogambo Interstellar Enterprises (MIE).

In the course of production, you use one ten-thousandth of a cent of silver per unit, meaning that you use 10 cents worth of silver a day to make a full day’s run of 100,000 units, most of which are defective because my design is bad and I insist that you use the cheapest and shoddiest of materials and labor so as to keep profit margins high enough to make the most money on the front-end before people find out what a worthless rip-off my stupid hair-growing machine really is, and people stop buying the damned things because word gets around that they don’t work.

In my defense, the business plan looked good on paper, but my lack of ethics as the price of greed is neither here nor there, and the point is that you are “insensitive to price” if the price of silver doubles to 20 cents a day. “Ho-hum,” you would say, unconcerned about such a trifle.

And you don’t care if the price triples to 30 cents a day, either, as would be evidenced by another bored “ho-hum” were you even told of this trifling news.

Ditto if the price quadruples to 40 cents a day, or quintuples to 50 cents a day.

And you don’t even care if the price of silver goes up by a thousand-fold to cost you $100 per day, even though there will plenty of people who will care if the price of silver is $29,000 an ounce!

And now with China, a third of the world’s population is going to want electrical and electronic things that all must have silver in them, insensitive to price as those things are, the upper end on the price of silver is so hard to imagine that I don’t even try, and I just buy it now while the price is still ludicrously low.

Whee! This investing stuff is easy!



Source:http://news.silverseek.com/SilverSeek/1297148400.php

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Silver to outperform gold in 2011 - Eric Sprott - PDF Print E-mail Mineweb

Eric Sprott believes that silver is likely to be the investment of the decade and could easily get to $50 per ounce by the end of the 2011
Author: Marc Davis
Posted: Tuesday , 08 Feb 2011

VANCOUVER B.C. (WWW.BNWNEWS.CA ) -

Silver promises to become the next big buzzword among investors in 2011 and beyond, according to one of the investment industry's most prescient and successful experts on precious metals.

Eric Sprott is the founder of the Toronto-based investment firm, Sprott Asset Management LP. His renowned hedge fund, Sprott Hedge Fund LP, is heavily weighted in precious metals and has generated an estimated 23% annualized return over the past decade. Other similarly oriented funds under his stewardship have also been stellar performers in recent years.

He's now so bullish on silver that he launched the $575 million Sprott Physical Silver Trust in November of last year as he believes that: "Silver will be the investment of the decade."

"I think that silver could easily get to $50 this year," he tells BNWnews.ca.

This all bodes especially well for publicly traded companies that are already mining silver, he says. Likewise for ones that are developing primary silver deposits or gold deposits with plenty of silver as a byproduct.

"If the price of silver continues to go up, silver stocks are going to perform even better," Sprott adds.

Meanwhile, Sprott says the big catalyst for surging silver prices in the coming years will be exponentially increasing investment demand, which is already beginning to overwhelm existing silver supplies. The mining industry only produces around 800 tonnes of silver per annum. This is a relatively inelastic supply, regardless of silver prices, he adds.

As household investors are becoming increasingly jittery about the debasement of the U.S. dollar and other major currencies, they are loading up in record numbers on silver bars, coins and silver-denominated exchange traded funds, Sprott says.

However, there's also a quantum shift in investment demand taking place among big players in the precious metals market, including India (which is aiming to increase its imports by about 77 million ounces per annum), and of course China.

"China's net imports of silver were 112 million ounces last year. In 2005, they were net exporters of 100 million ounces," he says.

"That's a 200 million ounce shift in an 800 million ounce annual market that seldom ever grows because production hardly ever goes up. So where's it all going to come from? We don't know."

In fact, silver promises to outshine gold over the coming years, Sprott says. "Silver is the poor man's gold. Gold has had a great run for the past 11 years. But I absolutely believe that silver will outperform gold this year. Currently, there's more investment dollars going into silver than into gold."

Such a game-changing scenario should recalibrate the gold to silver pricing ratio in silver's favor, thereby eventually restoring it to its traditional level of about 16 to 1, he says. "It's the easiest call of all time."

"Silver as a currency always traded in a ratio of around 16 to 1 compared to gold, when it was a currency in the U.S. and the U.K. The current ratio is 48 to 1. If we go back to a 16 to 1 ratio, the implied price for silver would be $85.62 (per ounce)." he adds.

"On that basis, if gold goes to $1,600, then that would value silver at $100. And we certainly think that gold is going to $1,600. In fact, I'm willing to bet that this ratio will overshoot on the downside. It might even get to 10 to one."

The only reason why silver is still trading at a 48 to 1 ratio to bullion's spot price is that its price is being "manipulated" by big banks, Sprott says. That's because they don't want precious metals to become a popular alternative currency to Fiat money (currencies that are not backed by hard assets).

"Then there's also a huge short position out there on silver," he adds.

But time is on silver's side, he says, as the sovereignty debt crisis deepens in Europe and a continued policy of qquantitative easing in the U.S. continues to undermine the value of the greenback.



Source: http://www.mineweb.com/mineweb/view/mineweb/en/page103855?oid=120073&sn=Detail&pid=102055

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