Silver Wheaton Corp. (USA) (SLW)

Silver Wheaton – SLW and Hecla (HL) are probably my two favorite silver miners. These guys are serious silver miners, generating 100% of its revenue from silver production. They produced more than 13M oz Silver last year at a cost of $3.91/oz. They have mines / partnerships in Mexico (Goldcorp), Sweden (Lundin – another mining favorite of mine), Peru (Glencore), Greece (Hellas). Based on these contracts and Measured and Indicated Reserves in these mines, the company expects to increase silver sales to 15M in 2008, 19M in 2009 and 25M in 2010. SLW is completely unhedged, and with the production increase estimates and the price of Silver going up, SLW is a huge winner at these prices. I have averaged down to $14.67 and I am sticking with this company for awhile.

Gold and Silver - Relationship to the USD
Gold and Silver are money. Most people think they are commodities, which is not inaccurate. To some degree they are; Gold is a reasonably useful industrial material, and silver is a highly useful industrial material. But gold and silver's value is because they have represented wealth for so long. They are money, and they have value because they are non-dilutive.

Why is Gold and Silver going up? The question is incomplete. The complete question is why is gold and silver going up relative to the US Dollar. Remember, gold and silver are money. And like any form of money it must be valued relative to other currencies. Gold and Silver are going to continue their rise (in terms of USD) because of the extremely inflationary actions of the FED and the current government (and most likely the next government as well). It is a very sad and very unfortunate fact that the USD is being debased and devalued by the current government's fiscal policy. The US Dollar Index is on a very steady decline. There is no reason for it to rise in the current environment. The FED is printing money and trying to inflate the US out of its current economic dilemma. In order to make any kind of dent in inflation The FED has to take a much tougher stance. ... Their most recent "tough talk" on inflation... "We may not cut interest rates next meeting, and it might stay at 2% for the next several sessions"... Wow, that is the FED being "hawkish" on inflation. Meanwhile liquidity is being pumped into the system and the dollar is being devalued.

The recent gold and silver correction has provided a good buy-in opportunity. It is already on it's way out of the correction, having made up >50% of its retracement already. It is not too late yet. Once gold goes back over $1000 again, there is nothing on the horizon to hold it back. The FED has made it clear that dealing with inflation takes second seat to proping up the financial system. Unless something drastic (such as a major rise in interest rates) occurs, gold and silver will keep rising. And even with a major interest rate rise, that would only delay the upward progress. The US is still accumulating bad debt, and is still backing those loans by rapidly depreciating assets. Until there is a major recession and house prices come down substantially from where they are AND the US economy transitions from consumption based to production based, the USD will continue its death spiral. Gold and Silver will continue to rise.