Silver Wheaton is Silver Streaming

In September, silver outperformed gold. Silver gained 11%, compared to a 6% gain for gold, according to Barclays Capital. Is this going to continue. History would suggest that we are in line for a massive increase in inflation in the upcoming years. Although now deflation continues to be a concern, it is very likely that going forward the opposite will happen. An interesting way to play a possible gold runup, is a silver catch up. Looking at historical prices, silver is cheap when compared to gold. Also, silver tends to move upward with gold in this scenerio. This could mean that SLW could have a huge runup. They have been signing contracts with silver miners to purchase portions of mines before they begin to mine the metal. The largest silver streaming company in the world, it purchases product ahead of time in hopes the metal's price will increase and they will not only realize growth from production but also pricing. Their website is here http://silverwheaton.com/main/. Revenue estimates have an increase of 206% for next quarter year over year. Growth for next year 73%. Triple top breakout on Oct 6th looks bullish.

TRIPLE TOP BREAKOUT

Seems the wait may be over. Silver, after trading within a range, has broken out to the upside. On September 3rd, the SLV experienced a triple top breakout. The new long term price target of $24.50 is now my projection. Given the current level of $16.50 per share, there could be nice upside.

P&F CHART HAS BREAKOUT

On September 3rd, the SLV which tracks the price of silver experienced a triple top breakout. The SLV currently sells for $16.50, but if the chart holds in its current position, a price objective of $24.50 should be reached.

INFLATIONARY PRESSURES

Going forward, silver and gold are both solid investments. The Fed has decided that deflation is what they want to combat and that will probably lead to an overshoot and inflation sometime next year.

STOCK MARKET

Although the markets have been quite bad, silver should hold up in the bad times and continue forward during the economy.

SILVER HEDGE AGAINST INFLATION

When an investor needs a hedge against inflation they purchase gold. Gold has a general value that is shared between economies, so the price is directly related to the inflating or deflating of currency. In the United States, we are currently cutting rates and these cuts because more liquidity to hit the market to consumers has more money and the ability to obtain debt. When more money hits the market, the value of the currency is stripped and decreased. This decrease is what is called currency devaluation. The opposite could be seen in an economy like Australia. The Australian dollar has been inflating in value as they raise rates to slow their fast economy. If rates were not increased the economy of Australia could overheat. By increasing rates, it makes it more difficult for consumers to get credit so there are less dollars and this inflates the value. In Australia you can buy more gold with their dollar because it is worth more, just like if you were to try to exchange a US dollar for an Australian dollar you would get less back.
Another hedge against inflation is silver. Although it isn't directly related to it, it is still a sister metal to gold. Silver has an interesting quality as it is used in many products. It's not just used in jewelry, but also industrial applications and electronic equipment. This has helped the price of silver to be worth more than three times the value of 2002. This is much better than gold investors have done. Demand is not tapering off either. Last year use was up 28%. This is amazing because the use of silver in photography is way down. Supply is on pace with demand, as countries have amassed large amounts over the years and are selling it now to make some money. Without this selling demand would be much higher than current supply. It doesn't look like current mining capacities are going to keep up with current demand either. Demand has been pushed by the BRIC nations are they are currently increasing. At some point current stockpiles will run out and there could be a huge spike in price.
Current US economic policies should continue to push the price of silver. On January 10th Bernanke stated that there will be a lowering of interest rates. The most important is the Fed's new stance that they will have to lighten their views on inflation. Gold hit an all time high on that day, just stopping shy and pulling back from $900. This says a lot about the concern over the economy in the United States. The conservative moves are over as people are beginning to get scared and want to pull their money from investments. Right now it is impossible to own anything that is not tied to international markets. Their strong economies and currencies are also the reason to buy silver, as they will keep demand up as the dollar falls more. The last important aspect for silver is there were no hints this is the last of the cuts either. We may see rates go down another point and a half or two before this is over. Either way, it is much easier being bullish silver than the US economy.