Divine Planet
Hip Imports and Tropical Flair

Kapaa Town: 821-1835
Kukui Grove Center: 246-3535

There is no limit to what you can create with PMC! Rings, beads, pendants, clasps, objets d'art, and more...

April Happenings
There's lots to see and do this month at the Planet! Starting April 14, we will be having a huge silver trunk show at both stores. See below for details.

We just got out PMC supplies in, so we will be selling this cool new product and offering classes as well. PMC stands for Precious Metal Clay, a cool new clay that is made with microscopically small bits of silver held together with an organic binder to make a clay-like material.

With PMC, you can mold, shape, layer and emboss an artistic creation like you would with ceramic clay. Once the piece is air dried, it can be placed in a kiln or heated with a butane torch to burn off the organic binder. What remains is a piece of jewelry that is 99% pure silver, and adorable adornment.

Potential projects include pendants, beads, rings, charms, and just about anything else you can imagine! PMC is a revolutionary product that will open new doors to your creativity. Look for classes starting in May.

New Location
In case you haven't heard, we are moving our Kapaa store. The building was sold and our lease has not been renewed. What may have been a sow's ear has been turned into a silk purse, because our new location will be much nicer!

We have taken a space in the Kauai Villages Shopping Center, between Safeway and Starbucks. We will be in the old "Underwater Girl" store. The new store is light and airy, will feature lots of natural wood and best of all will have lots of open space. Best of all, we will have parking right in front of the store.

We are hoping to open on May 1, but more will be revealed. Please stay tuned as the date gets closer...

That may be the case, but there is definitely a grain of truth to the claims of rising prices in the precious metals market. In February this year, silver reached its highest price in 22 years. Not since the run up in silver in the 1980's had we seen prices above $10 per ounce. Looking back, $10 seems downright cheap!

On Wednesday, April 12, silver closed at $12.67 per ounce. Silver has gone up 20% just in the past month, and is up more than 33% since the beginning of the year. Prices almost doubled in less than nine months.

So what's a bead store guy doing writing about the precious metals commodity market? The answer is simple: silver beads and findings. So much of what we use in the making of fun beading projects relies on silver. Silver clasps, silver crimp beads, silver wire, silver pendant centerpieces, silver spacer beads... Well, you get the picture. As the silver market goes, so go prices at your local bead shop and silver jewelry store.

So what is driving prices up so dramatically? The current run-up is in anticipation of approval by the SEC (Securities and Exchange Commission) of Barclays Global Investor ETF Fund. At present, silver in the US is sold only in its physical form. When you buy and sell silver, you are literally buying an ounce of silver. Gold on the other hand is traded both physically and as Exchange-traded funds. In an ETF, the owner of the commodity doesn't take physical possession, but rather buys and sells certificates redeemable for a specific amount of the commodity.

In 2005, the SEC approved gold ETF's, which helped gold trade at a 25 year high. With the approval of an ETF for silver, the demand for silver will increase dramatically, which many people believe will lead to a further spike in price. According to well-respected silver analyst Ted Butler, whether the ETF is approved or not, silver will continue to rise in price.

Last week, Barclay's Bank received preliminary approval from a key Security and Exchange Commission advisory committee that sent silver to new highs... yet again. To see the run up in silver prices, click here an illustrative chart. Be sure to check the bottom of the page showing the one month, six month and one year graphs for silver.

Recent price increases have many people in the silver jewelry industry reeling. The suddenness and unprecedented magnitude of the increase has created waves of panic among silver jewelry manufacturers and cast much uncertainty into the ordering process for wholesalers world wide.

Many have adopted a "wait and see" attitude that has them kicking themselves for not buying when prices were at $10 per ounce. For those who have waited, the price rise has been the source of ever more uncertainty. Will the silver price continue to rise, or will it top out and decline? Orders I placed in January were locked in, since they were prepaid, but new orders will be at these new prices.

Here is an example of how crazy it has been. I called my supplier in India on a Tuesday to order silver beads for our silver trunk show. He sent me an invoice the next day for payment. I sent the money the following day, which he received on Friday. Between when I got the invoice and when he received the transfer, the cost of my silver beads had increased 12%!

All is not gloom and doom, however. The arrival of the ETF (discussed in the last newsletter as a primary motivator in the current price rise) may actually send prices lower. According to Tim Evans of IRF Markets, "the introduction of commodity-oriented ETF's 'quite often occurs at market tops." The old adage "buy on the rumor, sell on the news" may be applicable here, as many speculators may well pull out once the ETF is approved. That might usher back the "good old days" of March when the cost of an ounce was "just" $10.

For an interesting article published April 7, 2006 by MarketWatch, click here.

What does this mean for the lowly purveyor of silver merchandise, and more importantly for that person's customers? It means inevitably, higher prices. We have held the prices as long as we could, and we will only increase them slightly in comparison with market rises, but go up they must. After our Silver Trunk Sale we will be increasing our price on silver and gold vermeil beads by about 20%. You will see other slight increases across the board over time with items like silver findings and silver jewelry. If there is a price decrease below January 1, 2006 levels, you can bet we will be right back to our old prices.

The show will feature a huge selection of silver beads and clasps brought in special just for this show. After the show, our silver bead price will increase from $1.25 to $1.50 per gram. Hill Tribe and vermeil will also increase incrementally. Take advantage of this fantastic display of silver beads and findings direct from India and stock up before the price increase.

Please let me know if you have any thoughts or suggestions on what we can do to improve. We are always open to new ideas and constructive criticism.

Aloha,

Mike McGinnis
Divine Planet
821-1835 Kapaa
246-3535 Lihue
http://divine-planet.com