Hi, this is Jennifer from Lone Star Silver Exchange. I hope everyone enjoyed Thanksgiving, I know I did.
Silver moved out of its tight trading range, and increased $.30 since the last newsletter. On Thursday, the spot price closed above $8 in NY for the first time since April. Supply continues to decrease, as COMEX warehouse stocks are down to 102.8 million ounces, 14.8 million ounces lower than July.
Argentina Buys Gold
The Central Bank of Argentina announced that it purchased 55 tons of gold so far this year. At the current spot price, this totals almost $806 million. Argentina's move contrasts with the sentiment of bankers in France and Germany who have stated their intention to sell more gold. Instead of making payments on the country's foreign debt, Argentinian bankers chose to invest in a stable asset.
This decision put further strain on the relationship between Argentina and the International Monetary Fund (IMF). Despite following the IMF financial program in the 1990s, the country's economy deteriorated. By December 2001, widespread poverty led to violent demonstrations in Buenos Aires. Soon afterwards, Argentina defaulted on its debt. The IMF now admits its policies worsened the crisis by continuing to make risky loans to Argentina that the country couldn't afford to repay.
Russians and the U.S. Dollar
In the October 18th newsletter, I summarized Oleg Mozhaiskov's speech to the LBMA. Mozhaiskov, an official with the Russian Central Bank, denounced American economic policy, and praised investors who bought hard assets with their dollars. Last week, Alexei Ulyukayev, a senior deputy of the bank stated, "Most of our reserves are in dollars, and that's a cause for concern." He announced that the Russians were considering exchanging some of their dollars for euros. He also implied that the euro was a more stable currency. The dollar weakened further after India and China hinted they might diversify their reserves into rival currencies. The euro hit a record high against the dollar Friday at $1.3452.
AIG Settles
In the last newsletter, I mentioned that AIG, insurance company and former silver dealer, was under investigation by the SEC and the DOJ. Last week, AIG agreed to pay fines totalling $126.3 million, and allow an independent auditor to examine their financial records. This cooperation with the government may lead to other prosecutions, as investigators study the transactions of companies who conducted business with AIG.
Thanks!
I want to thank all the customers who have been members of the Discount Silver Club for a year or more. All the silver you bought in 2003 is up at least 35%! As the dollar disintegrates and inflation heats up, you've chosen a smart and safe way to preserve your assets.