Why I got into silver
(Thinking back over 10 years)
Silver Stock Report
by Jason Hommel, December 17th, 2009
When I started working for myself, I made my very first money, enough to save for the very first time, but I was working so hard, over 80 hours a week! I guess God finally caught up to me, because, at some point, I began to think. And that's when it all started.
I thought: Why am I working myself to the bone, sleep depriving myself, to save up little pieces of paper in a bank, that does not even have the pieces of paper that they say are in my account? It's fraud upon fraud.
Yes, yes, I know what they tell us, that they are lending my money out, to be able to provide a return, enough to pay me the "interest". Sorry, 1% is not enough to get excited about, not when I've been living with 4-5% inflation my whole life. I saw the increases in the prices of candy and comic books in the 70's when I was a kid. I know.
I heard at the gun store from a guy who said that gold was cheap at anything under $350/oz., because the miners can hardly produce it for that, he was amazed at the low prices, and he thought that buying it was a zero risk opportunity to make some money.
I forget now, but I probably did a little research on the internet, which confirmed what he was saying.
So, I bought some gold and silver from the local coin shop at Tebo Coin in Boulder, Colorado, something I wanted to do my whole life, but never had the money to do.
I got 4 ounces of gold, and about 400 silver dimes. I got an American Eagle, a Kruggerand, a Mapleleaf, and a Philharmonic. I think I paid about $300 each for them, or so.
I had already bought a gun, because it seemed to be the responsible thing to do, but this was really cool. Now I had Gold, silver, cash, and a gun!
I kind of felt like an outlaw or something. I felt like I was robbing the banks, but legally!
I also stocked up on some food. But I quickly sold the food, and moved home.
I had to convince my dad. Y2K was coming up. He had way more money than me to protect, and he could prepare much better than I could, "just in case". We spent less than 1/2 of 1% of his net worth on preparations, and converted less than 10% of his wealth into silver and gold. Not too bad.
One day, my dad asks me, "Which is better, silver, or gold, and how do you know?"
Good question. It forced me to research more. I already knew the silver market was smaller, and that there was no investment demand, and thus, any new investment demand that went into silver would push the price way up.
Back in 1998, there was more investor selling than buying. Coin shops would send excess silver to refiners. From their perspective, they were drowning in silver. From an investor's perspective, the silver coming from investors selling is an "unsustainable supply source" one that, when it ends, will cause a whipsaw price change to the upside, even without any new investor buying!
In 1999, investors started buying 90% "junk" USA silver coinage dated 1964 or earlier, to prepare for Y2K, in case the banks crashed from computer failure, or bank runs. Prices for on those silver coins soared from about 5% over spot, to 50% over spot of $5/oz., in just a few months. We got a bit scared at that, and held on.
My grandmother had some bonds. My father next suggested that we try to convince her. So, I wrote up a small report about what I learned. I detailed that silver mine supply was about 500 million ounces, recycling was about 200 million more ounces, and government selling was about another 50 million ounces. Recycling included "investor selling".
Demand consumed it all, all 750 million ounces produced or recycled each year. Demand consisted of about 45% industrial demand, mostly in electronics, 25% jewelry & flatware demand, and 25% photography demand, and about 5% coin/medallion production.
The shocker was the relative numbers. At $5/oz., the size of the annual silver market was a tiny $3.7 billion, world wide.
In monetary terms, that was nothing. The money in US banks stood at $4 trillion, 1000 times as large.
She seemed a bit convinced, but where would she get silver, and where would she put it? She was too old to guard it, she was nearly 80. Sigh.
Very little has changed in 10 years.
Photography demand has dropped by about 10%, and investor demand has increased to about 10%, effectively replacing it, creating no new significant investment buying pressure.
Silver Eagle production has increased from 10 million coins to 20 million coins per year. In a 600 million oz. annual mining market, it's almost an insignificant change, this increase in coinage of 100%.
Silver has gone from $5 to $17.
M3, money in the banks, has gone from about $4 trillion to about $15 trillion.
The increase has been at about the same rates. Silver is just keeping pace with the inflation.
No significant money has yet flowed into silver, which is the event that will cause silver to vastly outpace in value all other investments or real property.
Popular press that writes about how much silver the ETF's "have obtained", have no clue about how much the ETF's have, since their silver is not able to be audited.
JP Morgan is the custodian of the silver for SLV.
JP Morgan has the largest short position in silver at the COMEX.
SLV's silver cannot be audited, as JP Morgan has the right to have sub custodians and sub sub custodians hold silver for the SLV. READ THE PROSPECTUS!
This means they can back up the SLV with long positions in futures, since "someone else" has the silver. So, SLV is backed by futures, and futures can now be backed by SLV.
It's now fraud backing fraud. But business as usual for the banks!
JP Morgan has $80 trillion in derivatives exposure, while the next largest banks have only $35 trillion, and the 4th largest has only $4 trillion.
What has changed significantly is that the fraud of "holding silver for investors", silver that was never purchased, and does not exist, has vastly increased.
Creating "paper silver" is similar to inflation. The effects of rising prices for REAL silver are not seen right away, there is a delay. The delay will one day manifest itself in silver rising much faster than it did in 1980.
The 1980 peak saw silver rise to $50/oz.
You can adjust for inflation in many ways.
1. If you go by government CPI numbers, the former peak would be about 2.5 times higher, or $125/oz.
2. If you go by the increase in M3, the increase in the paper money creation, which is the real inflation, then the increase is about 8 times higher, from about $1.8 trillion to about $15 trillion, so silver's "inflation adjusted" high would be $400/oz.
Silver moved up $10/day back then. We could see silver thus move up by $80 day sometime in the future, when things "blow up" in the financial world, or even more per day.
3. The third kind of inflation is the derivatives. There are a notional $1000 trillion of derivatives, mostly interest rate derivatives, or bets on the change in interest rates. People don't really buy very much gold in this era, they mostly place bets on the way they think interest rates will go, using highly leveraged bets. Mostly interest rates are flat. I suspect most of the bets thus fail. You need a change in rates for people's bets to pay off.
The comparative numbers are that the world's annual mine production of gold is about 2400 tonnes, or about 75 million oz., worth about $85 billion.
All the gold in all the world, ever mined in all of human history, stands at about 155,000 tonnes, or about 5 billion ounces, worth about $5.5 trillion.
The $1000 trillion of notional value of mostly "interest rate" derivatives simply dwarfs the gold market.
I write that more for future students of history than for people today. Most fools alive now simply don't get it. Future generations would simply not believe the stupidity of this generation, unless I wrote it down.
4. The fourth kind of inflation is a narrow subset of derivatives, including all the different kinds of "paper silver". This would include futures, options, ETF's, silver pools, silver certificates from Perth or Canadian Banks, and "over the counter" silver obligations.
For ten years, I was told that the "over the counter" silver obligations were unknowable, but probably the biggest kind of fraud.
Last year, I finally got a hold of some data on the over the counter silver derivatives.
The BIS report on commodity derivatives.
It shows there is $203 billion in "other precious metal" notional derivatives owed by all the world's banks.
That's mostly $203 billion of silver fraud, because the silver market is a $10 billion market, with investors only buying $1.7 billion per year!
We ought to know who the BIS is. The BIS is the Bank for International Settlements.
http://www.bis.org/
http://en.wikipedia.org/wiki/Bank_for_International_Settlements
"The Bank for International Settlements (BIS) is an international organization of central banks which "fosters international monetary and financial cooperation and serves as a bank for central banks." It is not accountable to any national government.
The latest report shows an increase in the "notional amounts outstanding" in the "other precious metals" category, from $96 billion in Dec. 2008 to $203 billion in June 2009. They only report twice a year.
Please note, the entire annual silver mine production is about 600 million ounces, at $17/oz., is $10.2 billion.
Thus, the banks owe 20 times more "other precious metals" than silver is produced per year.
Does the "other precious metals" category include platinum and palladium? Sure. But those markets are as small, if not smaller, than silver!
The world produces about 8 million ounces of each.
Source
Sunday, December 20, 2009
Thursday, December 17, 2009
GoldMoneyBill.org Fundraiser
The fundraiser is to help offsets the costs of maintaining the website. The Goldmoney bill orginally was created for the state of New Hampshire. Although the bill did not pass, it has spawned an awareness to return to sound money. Currently there are 6 states that have Gold bills on the table. Sound Money is a basis of a Constitutional government. Your rights are based on the back of a metal-backed currency. The term coin money was put in the constitution, because it was integral to a just government backed by the rule of law. The creation of the Federal Reserve and the revocation of the Gold standard are the causes of the destruction of the American Republic.
The most fundamental change to bring back a just and legitimate government is the return of a metal-backed sound money. If I make the $300 goal, I will be selecting at random one lucky person for a 1oz U.S. Silver Eagle.
Goldmoneybill.org to download the Gold Money Bill for your state.
The most fundamental change to bring back a just and legitimate government is the return of a metal-backed sound money. If I make the $300 goal, I will be selecting at random one lucky person for a 1oz U.S. Silver Eagle.
Goldmoneybill.org to download the Gold Money Bill for your state.
Monday, November 30, 2009
Eliot Spitzer takes on the Federal Reserve
Ron Paul is becoming a star, no shit. Spitzer after he has been dressed down, is now becoming a human being. The banks bad debts are a pile of garbage. The fed is piling garbage on top of garbage on the American people and wants the power to remain above an audit. Thanks Barney Frank, a true american hero.
UScivilflags-promoting peace and routing out the scoundrels. The vertical striped flag breaks the mind meld of blind patriotism.
China Populace buying Silver now
China populace starting to buy Silver. The gold price is currently running at a multiple of 63x the price of gold. Historically Gold is 16x the price of Silver. In the days of rome, a day's wage was 1/10 oz of Silver. That would price Silver at $190oz right now. Apmex- low-cost silver supplier, very reliable.
U.S.Civilflags- promoting the return to sound money and the rule of law.
Colloidal Silver- Kills over 660 known viruses.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
An Argument for Silver at $2000oz
Silver has lagged behind gold for years, even though most of the Silver is now going into industrial applications. Gold has hit it's high, but Silver is not even close to the $50 per oz in 1980. EFT's in gold and silver are both controlled by the same people that have been creating massive fraud and currency expansion in the banking system. The cat is out of the bag. Silver only going up, how high is the question
Goldmoneybill.org promoting a smooth transition back to sound currency and great government.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
Friday, November 27, 2009
Silver is a better investment than Gold
Silverstockreport.com
Jason Hommel
Recently many of my readers have been asking, "Why is silver lagging gold?"
After all, in March, 2008, gold hit $1020, and silver exceeded $20, yet here we are now, with gold now above $1145, and silver at $18.33, not even at $19!
The really funny thing is the way the popular media spin the price relations.
When silver underperforms gold, they say, "Silver is not confirming gold's rise, therefore, gold prices are due for a fall."
And when silver outperforms gold, they say, "Silver is exceeding gold's rise, therefore, this bull run is overdone, and thus, gold prices are due for a fall."
In other words, we have a manipulated market. Not only is the price manipulated, but so is the news coverage!
Of course, the media could give opinions the other way, and say, "With silver lagging gold, it shows that gold has much further to run, and also silver is due to catch up and exceed gold's pace, thus making silver the much better buy now." Or, after silver outperforms, they could say, "Silver's outperformance has confirmed everything the silver bulls have been saying for the last ten years." But they never do that, do they?!
As it is, the price ratio changed from 64 on Friday to 62 on Monday, so silver far outperformed gold on Nov. 16th.
Gold moved from $1118.50 on Friday to $1139.80, a rise of $21.3/oz., or a 1.9% increase.
Silver moved from $17.42 on Friday to $18.40, a rise of $.98/oz., or 5.6% increase.
Silver sure didn't lag behind gold on that day!
So, is all news that is bearish on silver evidence of "manipulation?" Of course not. Some commentators are not colluding on purpose, they are simply willfully ignorant.
The silver to gold ratio is the red line. You can see it topped out at 100 in 1990, when it took 100 oz. of silver to buy 1 oz. of gold. This ratio dropped to nearly 50 in 1997. It went back up to 80 both in 2003, and 2009, and now has gone back down to about 64, and now 62 today.
So, depending on the time frame, silver has out paced gold, or gold has out paced silver. As the red line goes down, silver is better. As the red line goes up, gold is better.
The Vertical Striped Striped flag- The flag of liberty and Sovereignty
But if you use a selective time frame, only 10 years, you can see that the silver to gold ratio was about 60 ten years ago, and is 62 today, showing that gold slightly outperformed during that selective time period in question. But what is the main thrust of Gary's argument? That the future must be like the past? And that the past only consists of the last ten years? Clearly, neither premise is not even remotely true, and the entire argument would deny the reality of economic cycles. Clearly, Gary is not ignorant of the economic cycle, so why did he forget that his argument would not be valid? Did emotionalism get the best of Gary?
As we can see from the big picture, Gold would have been a better investment than silver until 1990, the key turning point. Gary's claim to the foundation of his "correctness" is being good at making interim market calls, and that he is old. Did he tell his subscribers to load up on silver in 1990? I have no idea. Did Gary tell his subscribers to load up on silver when it hit $8.50/oz. in the last year? No. I know. I've been a paying subscriber of his since he tried to discredit me. In his own words, "His "market calls" were utterly useless when it mattered."
Furthermore, the dollar/gold price charts, and dollar/silver price charts do not "tell all" as he claims. Such charts contain zero information about how many dollars have been printed up in the past, and have yet to show up in futures prices of the metals. Such charts contain zero information about how much silver has been consumed and lost in the age of electronics that have ended up in landfills at concentrations too low to economically recover. It is only bad theory that the price charts contain "all the information" you need to know to make a future prediction on prices.
The charts Gary chose to present are not even "objective facts". All gold/dollar and silver/dollar price charts are misleading, as the dollar is not a constant measuring tool, but a varying one. What if I showed you a growth chart of my 15 month old boy, but used a ruler made out of silly putty and stretched it at different rates at varying intervals? Certainly, nobody would call such a chart an "objective fact". Charts are also not "objective facts" when you can produce them over select time frames to distort the overall picture. Gary's price charts from the year 2000 are not as useful as the long term ratio chart above, if you want to try to use a chart to make long term predictions.
Parallel State Gold currency bill
Is anyone here planning on living for longer than a time frame of the next ten years? (Well, Gary might not, he's old, remember.) If you plan to live longer, you might want to consider longer time frames. I know I want to. After all, I'm only 39, and if I live to be 90, I can use an investment that might not pay off in 10 years, or even 20, but should come to fruition within my time frame of up to the next 50 years. For me, silver is it.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
Wednesday, November 25, 2009
U.S. Mint Suspends Gold and Silver Sales
What do you think is going to happen to the price of Gold and Silver? Go up or down? Kevin Goldmoneybill.org
The United States Mint has suspended sales of gold and silver yet again. 2009 has seen an unprecedented demand for the 2009 Gold American Eagles and 2009 Silver American Eagles as investors have clamored to secure their assets and protect their wealth against the rising tide of inflation.
This suspension in sales is temporary as the U.S. Mint continues to produce these highly sought after coins. At APMEX, we have a very limited supply of both 2009 Gold American Eagle and 2009 Silver American Eagle coins in stock and ready to ship. Buy your gold and silver bullion coins now while they are still available in the marketplace.
Mint shortages have traditionally caused a significant increase in premium – however, at APMEX, we still have these coins available at very reasonable prices. Buy your gold and silver coins today before market conditions change more and prices are driven up from excessive demand.
The news from the U.S. Mint comes on the heels of the recent news of gold's all-time highs. It seems like every day, gold reaches a new high! Already this morning, gold reached $1,186.30 per ounce as investors continue to react to major financial news about gold.
News like this will only drive demand and prices higher, and supplies lower. Get your 2009 Gold American Eagle and 2009 Silver American Eagle coins at Monex while we still have a supply to meet our customer's needs.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
Friday, November 6, 2009
If we went back to the Gold Standard. Gold would be $54,000 oz
The truth is the truth is the truth. All you need is a pencil and paper to figure out that Gold is heading north with Silver about to break into a sprint. Eventually all lies will come out in the wash and the free market will reign supreme. As the dollar and yes the Euro crumple, there will be a mad rush to precious metals. This march is already beginning in certain sectors such as the tiny American patriot community, who buy up to 25% of the world's silver supply. World Gold demand is $80 billion. The world Silver market is only 1 billion. Americans currently buy less than .2% of the world's physical gold supply while they invest about 25% of the Silver market. Clearly, Americans are aware that Silver has more upside potential. If you take the Gold high of $850 in 1980 and you adjust it for inflation with the rigged U.S. government statistics, you should have a gold price of $2,275. If you factor in that there is actually $14 trillion dollars in circulation, then the fiqure shoots to $53,000 and change. Hey, mister can you spare a dime...
The facts are this the price is only going to go north in the next few years with any dips as merely buying opportunites. Until there is an expansion of Gold and Silver mining, there will be no new supplies added to the market to offset demand. We have not even factored in the population growth which has easily doubled since 1980. Eventually sanity will return to the world with the return of commonsense and yes a gold standard. It's inevitable as you study historical cycles.
To read up on the historical relationship of Gold to money there is the Creature from Jekyll Island.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
The facts are this the price is only going to go north in the next few years with any dips as merely buying opportunites. Until there is an expansion of Gold and Silver mining, there will be no new supplies added to the market to offset demand. We have not even factored in the population growth which has easily doubled since 1980. Eventually sanity will return to the world with the return of commonsense and yes a gold standard. It's inevitable as you study historical cycles.
To read up on the historical relationship of Gold to money there is the Creature from Jekyll Island.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
Silver set to outpreform Gold, Gold at all-time high $1096
Jason Hommel founded the New JH MINT this year to support his national online silver auctions. In 2008, Hommel was selling 5000 ounces of silver per day. He could have sold more, but the turn around times were the limiting factor. It took about 2-4 weeks to obtain 1000 oz. bars, and it took another 3-8 weeks to manufacture 1 oz. rounds. Selling any more than 5000 oz. per day would risk selling out. On a peak day in 2008, Hommel sold 13,800 oz. of silver, which weighed nearly 1000 pounds.
During the fall of 2008, most coin shops around the nation, and around the world, were sold out of silver, and most continue to hold very little silver in inventory.
In contrast, the JH MINT holds over 30,000 oz. of physical silver in inventory at the present time.
After minting nearly 300,000 rounds at a cost of $.50 each but which took over 8 weeks, or minting at $1.50 per round for a faster turn around time, it seemed feasible to found the JH MINT, both to save costs, and to speed up the turn around time.
Opening up a coin shop at the front of the JH MINT was an afterthought. Hommel explains, "I didn't really expect that the community of Grass Valley and Nevada City of about 30,000 people would be able to support a coin shop of our capitalization and size. Usually shops of our size are located near a big city. When my family was buying silver and gold, I was driving all the way down to the Bay Area to buy bullion. Fortunately, our national auctions of silver got big enough to be able to support founding the JH MINT, which allowed for space for the coin shop in the front of the building. So, technically, our shop did not need to be supported by local dealing, we do more business on a national basis, shipping everywhere in the USA."
"However, we have sold about 9 times as much to the public than we have bought, so we have had to re-supply from other gold and silver wholesalers. For over 15 years, the opposite was usually the case, where coin shops would generally buy from the public, and then dump to refiners. But in 2008, the public turned into net buyers when silver prices exceeded $20/oz., and when gold exceeded $1000/oz. for the first time.
"I was pleasantly surprised by our good business volumes the first month of operation, which showed comparable volumes to the Rocklin Coin Shop, which has been in operation for 5 years, which we bought in April, 2009. Perhaps our national presence has helped our local marketing efforts, as many locals are aware of my newsletter at www.silverstockreport.com. And also, it seems our national sales volumes are up due to having founded and opened up a real mint, which seems to have helped our credibility, which is important in the gold and silver business.
"Locals living in our historic gold mining district seem to know that gold and silver prices are too cheap. After all, our town's gold mines are still mostly non operational. If gold prices were really too high, then our town would be a gold boom town again, and clearly it's not. We don't have any major new tunnels in construction, we don't have any mine shafts being built, the old Empire gold mine is still a museum, no timber is being clear-cut to support massive construction of underground tunnels, none of that is happening yet. I'm sure most locals are aware of the attempt of Emgold (www.emgold.com) to re-open the Idaho-Maryland Gold Mine, but it's still just in the development and feasibility phase.
Gold may be at "all time high prices" but those are in nominal terms. If you adjust for inflation, the high of $850/oz. in 1980 can be seen to be about $2,275, if adjusted for inflation in CPI terms. But those are "official government" inflation numbers, which understate inflation. A better inflation adjustment might be found in M3 numbers, or money in the banks, but the government is no longer reporting that statistic. Private sources suggest that M3 has grown by about 8 times since 1980, suggesting an inflation adjusted price of $6,800/oz.
Some have suggested that the US government might back the dollar with a 10% gold backing. But that is completely unrealistic. The JH MINT could back the dollar by 10%. To do that you just need to over value gold by about 10 times. If we offered gold at $11,000 per oz., I'm sure there would be no takers, and we could say that we have "enough gold" to back the dollar by 10%. So a partial gold backing for the currency is just a clever way to disguise the current fraud of the dollar. In truth, the US government cannot even back the dollar even 2% with gold. Official statistics show that the US government has 261 million oz. of gold. With money in the banks exceeding $14 trillion (and a trillion is a million million), that's $14 million / 261 = $53,639/oz.
But other researchers show that the US does not even have 261 million oz. (about 8117 tonnes) of gold, since www.GATA.org researchers suggest there was a 3000 tonne gold swap with Germany.
GATA's thesis is that central banks have been manipulating gold prices for the past 15 years, and are losing the battle to keep prices low. Central banks have been selling and leasing about 1000 tonnes of gold into the market each year, which suppresses the price, acting as additional, and unsustainable, supply. In 2008, central banks finally became net gold buyers.
This month, India bought 200 tonnes of gold from a long awaited sale of 400 tonnes of gold from the IMF. But since India was a custodian of IMF gold, this might have been short covering with no movement of physical gold.
India is now importing about 18% of the world's supply of gold, 450 tonnes per year, yet spends only 1% of India's GDP to do so.
I'd estimate that Americans, in general, purchase only about $2 billion of gold per year, out of a GDP of about $14,400 billion, showing that Americans spend 0.01% of GDP on 2% of the world's gold supply. Clearly, American sentiment is not setting the price, except to say that Americans are helping gold prices remain low by not buying it in significantly meaningful quantities.
In 2009, the US Mint has produced over 1 million oz. in Gold Eagle coins, and I'd estimate that gold eagle sales are half of what we sell to the American public. At $1000/oz., that suggests an annual demand of a paltry $2 billion for America.
Of course, many Americans buy the ETF's, or "exchange traded funds" or have "bullion accounts" with large banks. But those are probably all fraud, in my opinion, since the BIS, the Bank of International Settlements, has calculated the "over the counter" gold derivatives of as high as $600 billion, and in "other precious metals" accounts, which would be mostly silver, as high as $190 billion.
Those numbers are just impossibly high, since the total annual silver mine supply is about 600 million oz., which, at $17/oz., is only a $10 billion annual silver market.
It seems that most Americans who are aware of precious metals seem to know better than people around the world that silver is set to outperform gold.
World gold demand is $80 billion, while world silver investment demand is only $1 billion, or 1/10th of the silver market, with the rest of the silver going towards electronics, jewelry, flatware, and movie production.
So world investors buy 80 times as much gold as silver. But at our coin shop, it's about 50/50, with half of sales being silver, the other half being gold. Americans, while mostly not participating yet in buying gold and silver, do seem to understand that silver will outperform gold.
We have many customers who will bring in gold, and just swap it for silver. We don't have any customers who will give us silver for gold.
Warren Buffett made a curious comment about gold in 1998 at Harvard that has been quoted frequently since, "It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."
But gold has a perfect utility. It's a store of value. Anyone with half a brain knows that you protect valuable things from being stolen, you don't leave them unprotected, because there are dishonest people in the world. Gold protects men from other dishonest men. And that's quite a useful value, besides being valuable in itself.
And Gold becomes even more valuable, when other men cannot see the value of gold, because that's when you can buy it cheap, like today. And if you can buy gold cheap, then it's not only a good store of value, but probably it will be an excellent store of value, as it continues to gain in price much faster than most other investments.
Since 2001, gold has increased over four times from $250/oz, to $1090, the last quote on Thursday, Nov. 5th.
SilverStockreport.com
Miracle Mineral Supplement- A real answer to swine flu.
Goldmoneybill.org working to restore the Gold standard.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
During the fall of 2008, most coin shops around the nation, and around the world, were sold out of silver, and most continue to hold very little silver in inventory.
In contrast, the JH MINT holds over 30,000 oz. of physical silver in inventory at the present time.
After minting nearly 300,000 rounds at a cost of $.50 each but which took over 8 weeks, or minting at $1.50 per round for a faster turn around time, it seemed feasible to found the JH MINT, both to save costs, and to speed up the turn around time.
Opening up a coin shop at the front of the JH MINT was an afterthought. Hommel explains, "I didn't really expect that the community of Grass Valley and Nevada City of about 30,000 people would be able to support a coin shop of our capitalization and size. Usually shops of our size are located near a big city. When my family was buying silver and gold, I was driving all the way down to the Bay Area to buy bullion. Fortunately, our national auctions of silver got big enough to be able to support founding the JH MINT, which allowed for space for the coin shop in the front of the building. So, technically, our shop did not need to be supported by local dealing, we do more business on a national basis, shipping everywhere in the USA."
"However, we have sold about 9 times as much to the public than we have bought, so we have had to re-supply from other gold and silver wholesalers. For over 15 years, the opposite was usually the case, where coin shops would generally buy from the public, and then dump to refiners. But in 2008, the public turned into net buyers when silver prices exceeded $20/oz., and when gold exceeded $1000/oz. for the first time.
"I was pleasantly surprised by our good business volumes the first month of operation, which showed comparable volumes to the Rocklin Coin Shop, which has been in operation for 5 years, which we bought in April, 2009. Perhaps our national presence has helped our local marketing efforts, as many locals are aware of my newsletter at www.silverstockreport.com. And also, it seems our national sales volumes are up due to having founded and opened up a real mint, which seems to have helped our credibility, which is important in the gold and silver business.
"Locals living in our historic gold mining district seem to know that gold and silver prices are too cheap. After all, our town's gold mines are still mostly non operational. If gold prices were really too high, then our town would be a gold boom town again, and clearly it's not. We don't have any major new tunnels in construction, we don't have any mine shafts being built, the old Empire gold mine is still a museum, no timber is being clear-cut to support massive construction of underground tunnels, none of that is happening yet. I'm sure most locals are aware of the attempt of Emgold (www.emgold.com) to re-open the Idaho-Maryland Gold Mine, but it's still just in the development and feasibility phase.
Gold may be at "all time high prices" but those are in nominal terms. If you adjust for inflation, the high of $850/oz. in 1980 can be seen to be about $2,275, if adjusted for inflation in CPI terms. But those are "official government" inflation numbers, which understate inflation. A better inflation adjustment might be found in M3 numbers, or money in the banks, but the government is no longer reporting that statistic. Private sources suggest that M3 has grown by about 8 times since 1980, suggesting an inflation adjusted price of $6,800/oz.
Some have suggested that the US government might back the dollar with a 10% gold backing. But that is completely unrealistic. The JH MINT could back the dollar by 10%. To do that you just need to over value gold by about 10 times. If we offered gold at $11,000 per oz., I'm sure there would be no takers, and we could say that we have "enough gold" to back the dollar by 10%. So a partial gold backing for the currency is just a clever way to disguise the current fraud of the dollar. In truth, the US government cannot even back the dollar even 2% with gold. Official statistics show that the US government has 261 million oz. of gold. With money in the banks exceeding $14 trillion (and a trillion is a million million), that's $14 million / 261 = $53,639/oz.
But other researchers show that the US does not even have 261 million oz. (about 8117 tonnes) of gold, since www.GATA.org researchers suggest there was a 3000 tonne gold swap with Germany.
GATA's thesis is that central banks have been manipulating gold prices for the past 15 years, and are losing the battle to keep prices low. Central banks have been selling and leasing about 1000 tonnes of gold into the market each year, which suppresses the price, acting as additional, and unsustainable, supply. In 2008, central banks finally became net gold buyers.
This month, India bought 200 tonnes of gold from a long awaited sale of 400 tonnes of gold from the IMF. But since India was a custodian of IMF gold, this might have been short covering with no movement of physical gold.
India is now importing about 18% of the world's supply of gold, 450 tonnes per year, yet spends only 1% of India's GDP to do so.
I'd estimate that Americans, in general, purchase only about $2 billion of gold per year, out of a GDP of about $14,400 billion, showing that Americans spend 0.01% of GDP on 2% of the world's gold supply. Clearly, American sentiment is not setting the price, except to say that Americans are helping gold prices remain low by not buying it in significantly meaningful quantities.
In 2009, the US Mint has produced over 1 million oz. in Gold Eagle coins, and I'd estimate that gold eagle sales are half of what we sell to the American public. At $1000/oz., that suggests an annual demand of a paltry $2 billion for America.
Of course, many Americans buy the ETF's, or "exchange traded funds" or have "bullion accounts" with large banks. But those are probably all fraud, in my opinion, since the BIS, the Bank of International Settlements, has calculated the "over the counter" gold derivatives of as high as $600 billion, and in "other precious metals" accounts, which would be mostly silver, as high as $190 billion.
Those numbers are just impossibly high, since the total annual silver mine supply is about 600 million oz., which, at $17/oz., is only a $10 billion annual silver market.
It seems that most Americans who are aware of precious metals seem to know better than people around the world that silver is set to outperform gold.
World gold demand is $80 billion, while world silver investment demand is only $1 billion, or 1/10th of the silver market, with the rest of the silver going towards electronics, jewelry, flatware, and movie production.
So world investors buy 80 times as much gold as silver. But at our coin shop, it's about 50/50, with half of sales being silver, the other half being gold. Americans, while mostly not participating yet in buying gold and silver, do seem to understand that silver will outperform gold.
We have many customers who will bring in gold, and just swap it for silver. We don't have any customers who will give us silver for gold.
Warren Buffett made a curious comment about gold in 1998 at Harvard that has been quoted frequently since, "It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."
But gold has a perfect utility. It's a store of value. Anyone with half a brain knows that you protect valuable things from being stolen, you don't leave them unprotected, because there are dishonest people in the world. Gold protects men from other dishonest men. And that's quite a useful value, besides being valuable in itself.
And Gold becomes even more valuable, when other men cannot see the value of gold, because that's when you can buy it cheap, like today. And if you can buy gold cheap, then it's not only a good store of value, but probably it will be an excellent store of value, as it continues to gain in price much faster than most other investments.
Since 2001, gold has increased over four times from $250/oz, to $1090, the last quote on Thursday, Nov. 5th.
SilverStockreport.com
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Goldmoneybill.org working to restore the Gold standard.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
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Friday, October 23, 2009
The Threat of Confiscation of Gold and Silver
Risks of Silver in an IRA
(Confiscation, bankruptcy, & theft risks!)
Silver Stock Report
by Jason Hommel, October 22nd, 2009
A summary of the main risks:
1. Custodian theft risk
2. Custodian bankruptcy risk
3. IRA rule change risk
4. Confiscation by government risk
5. Third party common theft risk
6. Lack of IRA benefits risk
7. ETF custodian risk
8. ETF sponsor risk
9. Confiscation by government risk
1. Custodian theft risk - All IRA money must be held by a broker, who is the custodian of the IRA account. If you keep up with the news you occasionally hear of brokers who clean out client accounts, and disappear. The largest of such thefts are in the Billions.
2. Custodian bankruptcy risk - The company that is the IRA custodian may go bankrupt. In theory, IRA accounts are safe from such bankruptcy, but only if the custodian was playing by the rules. Companies go bankrupt also, and drain their own employee 401k accounts, too.
3. IRA rule change confiscation risk - The Federal Government, early last year, was contemplating forcing investors to put IRA money into government bonds, "for the safety of the investor" of course.
4. Confiscation by government risk - At present prices, a government confiscation order of silver or gold seems unlikely, due to the relative size of the markets. IE, the $1-2 billion silver investment market is too small to signify anything to the budget of the USA government.
Furthermore, it's unlikely given that the government continues to mint and sell Silver Eagles and Gold Eagles, which can be held in an IRA. Gold Eagle sales are also under $1 billion in the USA.
However, defaults, meaning, the failure to deliver metal, and the massive rise in precious metals prices that follow, happen when they run out of metal, not at certain prices. If the past is any indication, they will run out of metal, while metals prices are still relatively low, and then the price will take off.
I think a confiscation order will be made for several reasons, and will have several effects. It will first be used to let JP Morgan off the hook for their massive precious metal delivery requirements, and it will let them "cover and pay out" all such precious metals over the counter contracts in paper cash, while paper cash prices are low.
Second, a confiscatino order can be used to confiscate the precious metals in all private, non-bank, warehouses where there are storage programs that honestly have the metal. The banking establishment hates competition, and may wipe it out by executive order.
Third, after obtaining precious metal by theft of those institutions who honestly held it for third parties, they can continue their price manipulations for a second season.
5. 3rd party theft risk - Pooling money or metal together into one place always increases the risk of theft by regular and common robbers & thieves. When asked why they robbed banks, the famous robbers said, "Because that's where the money is."
Which one of the following is more safely held and harder to steal? Is 10 million oz. of gold in one place safer, or 10 million oz. of gold held by 10 million armed individuals safer?
6. Lack of IRA benefits risk - The whole point of putting money into an IRA is to let it increase in value, tax free. There are no capital gains taxes when you sell in an IRA, but there taxes are when you "cash out", at which point, the IRA money is counted as real income. If income taxes ever increase to 80-90%, as they did during the Great Depression, then nearly all of your "tax free gains" will go right back to the government, and you will not significantly benefit from the capital gains in your IRA accounts. (ROTH IRAs are an exception.)
The whole point of bullion is that it is private. Once it is in your hands, no government has any ability to track it. After all, you could sell your bullion at any time once you buy it, and there are very few reporting requirements on silver or gold sales. There is a cash transaction report (CTR) required if you sell 10 bags of 90% silver, which would be $10,000 in "cash", and there is a reporting requirement if you sell 25 Gold Eagles at one time. And that's about it. So, for the majority of people, for the majority of bullion sales, they can sell their precious metals at any time, with no reporting requirement, and thus, it is entirely up to them to volunteer the information about their capital gains that they may have "earned".
7. ETF custodian risk - Many people put IRA money directly into the ETF's for convenience, so I will now talk about ETF risks. The ETF custodian is the one who vaults the precious metal. Ok, if you do choose an ETF, please choose CEF, the Central Fund of Canada. They are the only one who I think actually has a good chance that they actually have the metal. But even CEF is not safe, as they are in Canada, and the Canadian government has no gold or silver. Thus, in the event of a Canadian currency crisis, Canada is likely to confiscate the metal in CEF or any other Canadian storage program or bank. Canadian banks, in general, are not more sound than those in the US, they are less sound, in my well researched opinion. Many Canadain banks issue silver certifictes, yet there were many reports of people last year who could not obtain silver at any price from their banks in 2008 during the retail silver shortages.
The SLV and GLD ETF's in my opinion, are total frauds. The custodian of SLV is JP Morgan, who is the largest silver short at the COMEX, and who has the largest position in over the counter derivatives at over $80 trillion. That's a tremendous conflict of interest, and a clear warning sign. In my opinion, the silver in the SLV is already "long gone", or they only have a tiny fraction of the silver on hand. What's worse is that they can now deliver SLV shares to futures contract holders, and they can deliver futures contracts to back up SLV shares. Ponzi behind Ponzi, fraud backing fraud. The GLD custodian is HSBC, a similar bullion bank with similar positions and problems.
8. ETF sponsor risk - The ETF's are also at risk if their sponsor goes bankrupt. It could disrupt trading, or the viability of the whole thing. Or, it could be used as an excuse by the custodians to default on delivery of silver, trying to place the blame on the structure or sponsor of the ETF, instead of their own fraud. In fact, the custodians could force the bankruptcy of the sponsor, as an excuse to fail to deliver, or as an excuse to confiscate what little bullion the fund may actually have, and then deliver futures instead.
9. ETF short selling risk - Also, there is the short selling risk, as the EFTs can be sold, naked short, which circumvent the entire point of each share being backed by metal. Shares sold short are not backed by metal deliveries, and can be used to manipulate prices lower. In my opinion, investors who put money into the ETFs are helping to manipulate precious metals prices lower. Demand for physical metals is diverted by these paper alternatives.
9. Confiscation by government risk - Yes, I'm listing this twice, actually, three ways. IRA money is at risk of confiscation by government, simply by being in an IRA. IRA moneies can be forced to be invested in bonds, or they can be taxed at extremely high rates upon withdrawl. But the third government confiscation risk is if the government confiscates the ETFs, as a means to let the custodians who are practicing fraud off the hook, as a method of "bailout".
Confiscation will never include the government sending thugs to all 100 million USA homes to do room to room, and vault to vault searches. It never has, and never will, not in America, not as long as the people still have guns and working vaults. Government confiscation thugs would get to the 10th house, be blown away, and promptly end the searches. If lazy pot smokers have been able to hide pot from the government for all these years, and the "war on drugs" been a total failure, isn't that any guide at how much more impossible it would be to take silver or gold from the militant, ready, anxious, wise silver and gold investors, many of whom are veterans? The government would and could only confiscate the silver in known storage locations, such as the ETF's or other popular precious metals storage programs that actually have the bullion.
If you are comfortable with all these risks, please pay attention to the news on a regular basis so you might be able to take appropriate action at the appropriate time.
I used to have money in an IRA. I no longer do. I did not have to pay the 10% penalty upon withdrawl, because it was in inherited IRA. I cashed out my IRA because I have been paying close attention to the news.
Remember, governments steal. It's what they do.
That's the entire point of owning gold and silver. They are the hardest assets to find, and the hardest to steal.
The government is already confiscating money through taxation, and inflation through bank bailouts. The bailouts also indicate that the assets those banks hold have been stolen long ago. To trust them with your IRA accounts, or ETFs, is just begging for trouble.
So, what to do? Take it home. Get a home security vault. Vaults work. It's why they make them. They make many sizes, ranging from a small cash box, to a large gun vault the size of a refrigerator. Bolt the vault down from the inside to wall studs, or to concrete in your garage floor. Maybe disguise the vault with a cabinet. Have multiple vaults if you can afford it, or need it. Get a security system, burgler alarm, & dogs if necessary. Gates or bars outside your home or driveway are another option. it's very simple, and reliable, and people have been doing that for hundreds of years with great success.
if you are afraid to put one in your own home, consider moving to a better neighborhood. Consider putting a vault in your parents' or childrens' home for diversification. You don't have to give them the combo, if they are nice about it.
Home theft risk is very very small by comparison. Common home theives getting into a secure vault is very, very rare. It's so rare, they love to put it on the news if it happens, as a way to condition you to trusting the banks.
==========
I strongly advise you to get real gold and silver, at anywhere near today's prices, while you still can.
Call us today.
Yes, we sell silver, and gold at the JH MINT!
Buy it now! Buy Silver or Gold Now!
Inventory & Price List
Call the JH MINT, 10AM to 5PM Pacific, Monday to Friday:
100 oz. silver minimum, USA shipping, wire transfer only!
(530) 273-8175
Janelle (530) 913 0553 silver_support1@vzw.blackberry.net
jhmint.com
Active, live price quotes list:
Goldmoneybill.org Working to restore a sound based metal currency as per the U.S. Constitution.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
(Confiscation, bankruptcy, & theft risks!)
Silver Stock Report
by Jason Hommel, October 22nd, 2009
A summary of the main risks:
1. Custodian theft risk
2. Custodian bankruptcy risk
3. IRA rule change risk
4. Confiscation by government risk
5. Third party common theft risk
6. Lack of IRA benefits risk
7. ETF custodian risk
8. ETF sponsor risk
9. Confiscation by government risk
1. Custodian theft risk - All IRA money must be held by a broker, who is the custodian of the IRA account. If you keep up with the news you occasionally hear of brokers who clean out client accounts, and disappear. The largest of such thefts are in the Billions.
2. Custodian bankruptcy risk - The company that is the IRA custodian may go bankrupt. In theory, IRA accounts are safe from such bankruptcy, but only if the custodian was playing by the rules. Companies go bankrupt also, and drain their own employee 401k accounts, too.
3. IRA rule change confiscation risk - The Federal Government, early last year, was contemplating forcing investors to put IRA money into government bonds, "for the safety of the investor" of course.
4. Confiscation by government risk - At present prices, a government confiscation order of silver or gold seems unlikely, due to the relative size of the markets. IE, the $1-2 billion silver investment market is too small to signify anything to the budget of the USA government.
Furthermore, it's unlikely given that the government continues to mint and sell Silver Eagles and Gold Eagles, which can be held in an IRA. Gold Eagle sales are also under $1 billion in the USA.
However, defaults, meaning, the failure to deliver metal, and the massive rise in precious metals prices that follow, happen when they run out of metal, not at certain prices. If the past is any indication, they will run out of metal, while metals prices are still relatively low, and then the price will take off.
I think a confiscation order will be made for several reasons, and will have several effects. It will first be used to let JP Morgan off the hook for their massive precious metal delivery requirements, and it will let them "cover and pay out" all such precious metals over the counter contracts in paper cash, while paper cash prices are low.
Second, a confiscatino order can be used to confiscate the precious metals in all private, non-bank, warehouses where there are storage programs that honestly have the metal. The banking establishment hates competition, and may wipe it out by executive order.
Third, after obtaining precious metal by theft of those institutions who honestly held it for third parties, they can continue their price manipulations for a second season.
5. 3rd party theft risk - Pooling money or metal together into one place always increases the risk of theft by regular and common robbers & thieves. When asked why they robbed banks, the famous robbers said, "Because that's where the money is."
Which one of the following is more safely held and harder to steal? Is 10 million oz. of gold in one place safer, or 10 million oz. of gold held by 10 million armed individuals safer?
6. Lack of IRA benefits risk - The whole point of putting money into an IRA is to let it increase in value, tax free. There are no capital gains taxes when you sell in an IRA, but there taxes are when you "cash out", at which point, the IRA money is counted as real income. If income taxes ever increase to 80-90%, as they did during the Great Depression, then nearly all of your "tax free gains" will go right back to the government, and you will not significantly benefit from the capital gains in your IRA accounts. (ROTH IRAs are an exception.)
The whole point of bullion is that it is private. Once it is in your hands, no government has any ability to track it. After all, you could sell your bullion at any time once you buy it, and there are very few reporting requirements on silver or gold sales. There is a cash transaction report (CTR) required if you sell 10 bags of 90% silver, which would be $10,000 in "cash", and there is a reporting requirement if you sell 25 Gold Eagles at one time. And that's about it. So, for the majority of people, for the majority of bullion sales, they can sell their precious metals at any time, with no reporting requirement, and thus, it is entirely up to them to volunteer the information about their capital gains that they may have "earned".
7. ETF custodian risk - Many people put IRA money directly into the ETF's for convenience, so I will now talk about ETF risks. The ETF custodian is the one who vaults the precious metal. Ok, if you do choose an ETF, please choose CEF, the Central Fund of Canada. They are the only one who I think actually has a good chance that they actually have the metal. But even CEF is not safe, as they are in Canada, and the Canadian government has no gold or silver. Thus, in the event of a Canadian currency crisis, Canada is likely to confiscate the metal in CEF or any other Canadian storage program or bank. Canadian banks, in general, are not more sound than those in the US, they are less sound, in my well researched opinion. Many Canadain banks issue silver certifictes, yet there were many reports of people last year who could not obtain silver at any price from their banks in 2008 during the retail silver shortages.
The SLV and GLD ETF's in my opinion, are total frauds. The custodian of SLV is JP Morgan, who is the largest silver short at the COMEX, and who has the largest position in over the counter derivatives at over $80 trillion. That's a tremendous conflict of interest, and a clear warning sign. In my opinion, the silver in the SLV is already "long gone", or they only have a tiny fraction of the silver on hand. What's worse is that they can now deliver SLV shares to futures contract holders, and they can deliver futures contracts to back up SLV shares. Ponzi behind Ponzi, fraud backing fraud. The GLD custodian is HSBC, a similar bullion bank with similar positions and problems.
8. ETF sponsor risk - The ETF's are also at risk if their sponsor goes bankrupt. It could disrupt trading, or the viability of the whole thing. Or, it could be used as an excuse by the custodians to default on delivery of silver, trying to place the blame on the structure or sponsor of the ETF, instead of their own fraud. In fact, the custodians could force the bankruptcy of the sponsor, as an excuse to fail to deliver, or as an excuse to confiscate what little bullion the fund may actually have, and then deliver futures instead.
9. ETF short selling risk - Also, there is the short selling risk, as the EFTs can be sold, naked short, which circumvent the entire point of each share being backed by metal. Shares sold short are not backed by metal deliveries, and can be used to manipulate prices lower. In my opinion, investors who put money into the ETFs are helping to manipulate precious metals prices lower. Demand for physical metals is diverted by these paper alternatives.
9. Confiscation by government risk - Yes, I'm listing this twice, actually, three ways. IRA money is at risk of confiscation by government, simply by being in an IRA. IRA moneies can be forced to be invested in bonds, or they can be taxed at extremely high rates upon withdrawl. But the third government confiscation risk is if the government confiscates the ETFs, as a means to let the custodians who are practicing fraud off the hook, as a method of "bailout".
Confiscation will never include the government sending thugs to all 100 million USA homes to do room to room, and vault to vault searches. It never has, and never will, not in America, not as long as the people still have guns and working vaults. Government confiscation thugs would get to the 10th house, be blown away, and promptly end the searches. If lazy pot smokers have been able to hide pot from the government for all these years, and the "war on drugs" been a total failure, isn't that any guide at how much more impossible it would be to take silver or gold from the militant, ready, anxious, wise silver and gold investors, many of whom are veterans? The government would and could only confiscate the silver in known storage locations, such as the ETF's or other popular precious metals storage programs that actually have the bullion.
If you are comfortable with all these risks, please pay attention to the news on a regular basis so you might be able to take appropriate action at the appropriate time.
I used to have money in an IRA. I no longer do. I did not have to pay the 10% penalty upon withdrawl, because it was in inherited IRA. I cashed out my IRA because I have been paying close attention to the news.
Remember, governments steal. It's what they do.
That's the entire point of owning gold and silver. They are the hardest assets to find, and the hardest to steal.
The government is already confiscating money through taxation, and inflation through bank bailouts. The bailouts also indicate that the assets those banks hold have been stolen long ago. To trust them with your IRA accounts, or ETFs, is just begging for trouble.
So, what to do? Take it home. Get a home security vault. Vaults work. It's why they make them. They make many sizes, ranging from a small cash box, to a large gun vault the size of a refrigerator. Bolt the vault down from the inside to wall studs, or to concrete in your garage floor. Maybe disguise the vault with a cabinet. Have multiple vaults if you can afford it, or need it. Get a security system, burgler alarm, & dogs if necessary. Gates or bars outside your home or driveway are another option. it's very simple, and reliable, and people have been doing that for hundreds of years with great success.
if you are afraid to put one in your own home, consider moving to a better neighborhood. Consider putting a vault in your parents' or childrens' home for diversification. You don't have to give them the combo, if they are nice about it.
Home theft risk is very very small by comparison. Common home theives getting into a secure vault is very, very rare. It's so rare, they love to put it on the news if it happens, as a way to condition you to trusting the banks.
==========
I strongly advise you to get real gold and silver, at anywhere near today's prices, while you still can.
Call us today.
Yes, we sell silver, and gold at the JH MINT!
Buy it now! Buy Silver or Gold Now!
Inventory & Price List
Call the JH MINT, 10AM to 5PM Pacific, Monday to Friday:
100 oz. silver minimum, USA shipping, wire transfer only!
(530) 273-8175
Janelle (530) 913 0553 silver_support1@vzw.blackberry.net
jhmint.com
Active, live price quotes list:
Goldmoneybill.org Working to restore a sound based metal currency as per the U.S. Constitution.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
Sunday, October 11, 2009
Gold At $5000 per oz Do the Math, just do the Math
(So little gold at $1000/oz. for China, Germany, or Oil nations!)
Silver Stock Report
by Jason Hommel, October 9th, 2009
There is very little understanding of the relative size of the gold market, let alone the silver market.
In the gold market, the IMF has continued to "threaten" to sell 400 tonnes of gold, about once or twice a year, for the past ten years, to help "relieve the poverty" (yeah, right) of indebted nations who generally produce gold, and would actually be benefited by a higher gold price, not a lower gold price. This always results in a flurry of news stories, and usually panic among gold investors who are on leverage, who know next to nothing.
You never hear about how China actually was buying 500 tonnes over the last 8 years.
You never hear in the popular news how China wants to buy $80 billion more gold.
That would use only a tiny fraction of China's $2131 billion of foreign exchange reserves.
$80 billion in gold, at $1000/oz., is 80 million oz., which, divided by 32,151 oz/tonne, is 2488 tonnes, which is almost exactly the same amount as the annual production of all the world's gold mines.
You never hear that China has so many dollars that they want to buy all the world's annual gold mining production, as a small and tiny diversification, for years to come. But I just provided all the proof for that statement.
You never hear in the mainstream press how Germany swapped about 3000 tonnes of gold with the US, and wants their gold back, which again, is just over the entire world annual gold mining production.
You never hear that if the oil producing nations decided to sell oil for gold, what that would mean for the gold price.
Well, actually, we did hear something similar to that this week, a "vicious rumor" that led to the current $50 rally in the gold price.
Recent article:
The demise of the dollar
In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading
By Robert Fisk
Tuesday, 6 October 2009
But this might mean only that "gold should go up" is maybe all you'd hear. And actually, we quickly heard denials of the rumors that the Saudis would sell oil in something other than dollars.
But what are the implications? Anyone run the numbers? Why is it that in today's world, no journalist knows how to run the numbers to see the implications? Was everyone born after 1950 a failure in basic math classes? I mean, come on, this kind of analysis only requires the application of 7th grade math!
I ran the numbers eariler this year, in March.
At $40/barrel, the world spends $1.2 trillion, or $1,200 billion, on oil per year.
Oil is now $71/barrel. So $1.2 x 71/40 = $2.3 trillion spent on oil per year now.
Gold is now $1055/oz., which, at 80 million oz., is $85 billion on gold per year.
Thus, if all the world's new annual oil production was sold for all the world's new annual gold production, gold prices would have to rise by a factor of 2,300/85 which equals 27 times, or 27 x $1055 which implies a gold price of $28,500 per oz.
And that would, of course, allow no room for China to buy any of the 2500 tonnes of gold that they want, nor allow the US any room to buy back Germany's 3000 tonnes of gold that they sold to manipulate the market downward to fool the world into thinking that the dollar was somehow "strong".
I don't know why people don't get this. Math matters. To engineers, it's life and death when building a bridge. You'd think that the world's engineers and math teachers would be screaming at the top of their lungs to get people to buy gold, simply because of the implications of the math. Where are they? The thing I don't understand is why most people refuse to run the numbers. And why don't they understand the implications of the numbers that I present?
It's clear to me that gold is going higher than I can imagine or forecast, and that silver will do a lot better.
I strongly advise you to get real gold and silver, at anywhere near today's prices, while you still can.
Call us today.
Yes, we sell silver, and gold at the JH MINT!
Buy it now! Buy Silver or Gold Now!
Inventory & Price List
Goldmoneybill.org Promoting fiscal sanity. Support a return to metal-backed currencies through state sound money bill.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
Silver Stock Report
by Jason Hommel, October 9th, 2009
There is very little understanding of the relative size of the gold market, let alone the silver market.
In the gold market, the IMF has continued to "threaten" to sell 400 tonnes of gold, about once or twice a year, for the past ten years, to help "relieve the poverty" (yeah, right) of indebted nations who generally produce gold, and would actually be benefited by a higher gold price, not a lower gold price. This always results in a flurry of news stories, and usually panic among gold investors who are on leverage, who know next to nothing.
You never hear about how China actually was buying 500 tonnes over the last 8 years.
You never hear in the popular news how China wants to buy $80 billion more gold.
That would use only a tiny fraction of China's $2131 billion of foreign exchange reserves.
$80 billion in gold, at $1000/oz., is 80 million oz., which, divided by 32,151 oz/tonne, is 2488 tonnes, which is almost exactly the same amount as the annual production of all the world's gold mines.
You never hear that China has so many dollars that they want to buy all the world's annual gold mining production, as a small and tiny diversification, for years to come. But I just provided all the proof for that statement.
You never hear in the mainstream press how Germany swapped about 3000 tonnes of gold with the US, and wants their gold back, which again, is just over the entire world annual gold mining production.
You never hear that if the oil producing nations decided to sell oil for gold, what that would mean for the gold price.
Well, actually, we did hear something similar to that this week, a "vicious rumor" that led to the current $50 rally in the gold price.
Recent article:
The demise of the dollar
In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading
By Robert Fisk
Tuesday, 6 October 2009
But this might mean only that "gold should go up" is maybe all you'd hear. And actually, we quickly heard denials of the rumors that the Saudis would sell oil in something other than dollars.
But what are the implications? Anyone run the numbers? Why is it that in today's world, no journalist knows how to run the numbers to see the implications? Was everyone born after 1950 a failure in basic math classes? I mean, come on, this kind of analysis only requires the application of 7th grade math!
I ran the numbers eariler this year, in March.
At $40/barrel, the world spends $1.2 trillion, or $1,200 billion, on oil per year.
Oil is now $71/barrel. So $1.2 x 71/40 = $2.3 trillion spent on oil per year now.
Gold is now $1055/oz., which, at 80 million oz., is $85 billion on gold per year.
Thus, if all the world's new annual oil production was sold for all the world's new annual gold production, gold prices would have to rise by a factor of 2,300/85 which equals 27 times, or 27 x $1055 which implies a gold price of $28,500 per oz.
And that would, of course, allow no room for China to buy any of the 2500 tonnes of gold that they want, nor allow the US any room to buy back Germany's 3000 tonnes of gold that they sold to manipulate the market downward to fool the world into thinking that the dollar was somehow "strong".
I don't know why people don't get this. Math matters. To engineers, it's life and death when building a bridge. You'd think that the world's engineers and math teachers would be screaming at the top of their lungs to get people to buy gold, simply because of the implications of the math. Where are they? The thing I don't understand is why most people refuse to run the numbers. And why don't they understand the implications of the numbers that I present?
It's clear to me that gold is going higher than I can imagine or forecast, and that silver will do a lot better.
I strongly advise you to get real gold and silver, at anywhere near today's prices, while you still can.
Call us today.
Yes, we sell silver, and gold at the JH MINT!
Buy it now! Buy Silver or Gold Now!
Inventory & Price List
Goldmoneybill.org Promoting fiscal sanity. Support a return to metal-backed currencies through state sound money bill.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
Saturday, September 26, 2009
The Tiny Silver Market ready to explode with new investors
Silver Stock Report
by Jason Hommel, September 25th, 2009
The Silver Market is small. Very small. I don't think people quite understand how small it is, nor understand fully the implications, meaning how much higher silver prices must go as the market grows to accommodate future silver buyers.
Confusing matters is that the terms million, billion, and trillion mean different things, in different nations, and other nations also have different notations for how to write numbers exceeding 1000. Furthermore, most Americans are also unfamiliar with the terms, since most people don't use these terms in daily life. Who needs a billion french fries? But you do need to understand the numbers, in order to interpret political events, such as the amounts being spent by Congress.
Here are the American conventions, which I use in my writings. A thousand is written as 1000 and is notated with commas as 1,000. In America, we use a comma after every three zeros, starting from the far right, so every comma signifies another multiple of 1000.
A million is a thousand thousand. 1000 x 1000 = 1,000,000, also written as a million.
A billion is a thousand million. 1,000 x 1,000,000 = 1,000,000,000 also written as a billion.
A trillion is a thousand billion. 1,000 x 1,000,000,000 = 1,000,000,000,000 also written as a trillion.
A quadrillion is a thousand trillion 1,000 x 1,000,000,000,000 = 1,000,000,000,000,000 also written as a quadrillion.
Knowing that, we can now interpret the following key figures:
The annual Federal Budget these days is about $3 trillion, which can also be written as $3000 billion, or $3,000,000 million, or $3,000,000,000,000.
Federal Budget
World annual silver production is about 600 million ounces. World annual silver investment is about 50-100 million ounces. All of mine production, and more, including recycling, is consumed by industry, leaving very little left over for any investment.
At $16/oz., x 75 million oz. = $1,200 million, or $1.2 billion, or $0.0012 Trillion.
Again, let's compare:
US annual government spending: $3 trillion
World annual silver investment demand: $0.0012 Trillion
Can you say, "The US government is spending way more than exists in the entire world?" I can. It sounds funny to say it, but I understand what I mean when I say it.
But that's only silver, some will protest. But adding gold to the mix does not help. Watch.
World annual gold mine production is 2500 tonnes, which is (x 32,151 oz/tonne) is 80.3 million ounces. At $1000/oz., that's $80 billion dollars, or $0.08 Trillion.
See, not even all the gold in the entire world's annual production would help the US budget. Gold would have to increase by a factor of 3000 / 80, which is 37.5 times, in order for the entire world's gold production to equal the US government's annual budget. See, gold will go way above $37,500/oz. by the time this bull market in gold is finished, because there are other people in the world who want gold in addition to the US government.
China wants gold. China has said they want $80 billion worth of gold. China has $2130 billion to spend on gold, or $2.13 trillion of foreign exchange reserves.
China's Foreign Reserves.
If China tries to buy a mere $80 billion of gold within one year, the gold price will likely head to $1500 to $2000/oz. this year. But China does not want to push up the price of gold to make it double in price. If they do, the value of the remainder of their $2130 billion will be cut in half.
Too bad for China, they have no choice. The value of their paper money will be cut by 95% or more anyway, even if they do nothing, as other nations, besides the US and China, also want gold. So it will come down to the reality, for everyone, that some gold is better than no gold! And silver, of course, is always better than gold, because silver will increase in value much faster!
How will $2,130 billion of China's foreign exchange reserves fit into the annual silver market of $1 billion? Think about it. Think carefully. Think hard. Think!
Here's what I think. If China's people started buying $1 billion of silver per year, the silver price would head to $25/oz.
If China's people started buying $10 billion of silver per year, the silver price would head to $75/oz.
If China's people started buying $100 billion of silver per year, the silver price would head to about $750 per oz.
Can you say "Not enough silver!"? I can. There is a world silver shortage, and there will be a world silver shortage for the next few decades to come, probably until silver exceeds thousands of dollars per ounce in price!
There is no possible way that the silver price can be contained for very long, unless they discover a way to divert investment demand away from the limited physical silver, and convince people to hold things like ETFs, or futures contracts, or 'bullion accounts' instead. Oh yes, they have. But not for long, as the truth is getting out.
Sprott's Embry warns investors to make sure ETFs backed by precious metals
EFT's
The Bank of International Settlements reports there are $111 billion in "Other Precious Metals (IE, Silver) over the counter derivatives, as of Dec. 2008. (We await June 2009 stats.)
BIS
from
June 09 BIS
A man asked me this week at the JH MINT, "How'd you get into this?" I laughed and said, "The obvious!" He laughed too. What's not obvious to me is why everyone else is so deceived by paper money. It's really not all that special at all. it's just numbers on paper, signifying nothing!
One of my major wholesalers has a bullion precious metals inventory of $1/2 billion including both silver and gold. Another major wholesaler is a major warehouse for the COMEX. I don't think either one would let me order more than a few million dollars at once at a fixed price, because that would probably move the price up.
Yes, we can handle multi million dollar silver orders by placing orders direct with many of the nation's largest wholesalers, but be prepared to move up the price as you buy. And we can order for delivery in Grass Valley at the JH MINT. Call us today.
USCivilFlags.org What America would look like debt-free, based on the original US Treasury flag.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
by Jason Hommel, September 25th, 2009
The Silver Market is small. Very small. I don't think people quite understand how small it is, nor understand fully the implications, meaning how much higher silver prices must go as the market grows to accommodate future silver buyers.
Confusing matters is that the terms million, billion, and trillion mean different things, in different nations, and other nations also have different notations for how to write numbers exceeding 1000. Furthermore, most Americans are also unfamiliar with the terms, since most people don't use these terms in daily life. Who needs a billion french fries? But you do need to understand the numbers, in order to interpret political events, such as the amounts being spent by Congress.
Here are the American conventions, which I use in my writings. A thousand is written as 1000 and is notated with commas as 1,000. In America, we use a comma after every three zeros, starting from the far right, so every comma signifies another multiple of 1000.
A million is a thousand thousand. 1000 x 1000 = 1,000,000, also written as a million.
A billion is a thousand million. 1,000 x 1,000,000 = 1,000,000,000 also written as a billion.
A trillion is a thousand billion. 1,000 x 1,000,000,000 = 1,000,000,000,000 also written as a trillion.
A quadrillion is a thousand trillion 1,000 x 1,000,000,000,000 = 1,000,000,000,000,000 also written as a quadrillion.
Knowing that, we can now interpret the following key figures:
The annual Federal Budget these days is about $3 trillion, which can also be written as $3000 billion, or $3,000,000 million, or $3,000,000,000,000.
Federal Budget
World annual silver production is about 600 million ounces. World annual silver investment is about 50-100 million ounces. All of mine production, and more, including recycling, is consumed by industry, leaving very little left over for any investment.
At $16/oz., x 75 million oz. = $1,200 million, or $1.2 billion, or $0.0012 Trillion.
Again, let's compare:
US annual government spending: $3 trillion
World annual silver investment demand: $0.0012 Trillion
Can you say, "The US government is spending way more than exists in the entire world?" I can. It sounds funny to say it, but I understand what I mean when I say it.
But that's only silver, some will protest. But adding gold to the mix does not help. Watch.
World annual gold mine production is 2500 tonnes, which is (x 32,151 oz/tonne) is 80.3 million ounces. At $1000/oz., that's $80 billion dollars, or $0.08 Trillion.
See, not even all the gold in the entire world's annual production would help the US budget. Gold would have to increase by a factor of 3000 / 80, which is 37.5 times, in order for the entire world's gold production to equal the US government's annual budget. See, gold will go way above $37,500/oz. by the time this bull market in gold is finished, because there are other people in the world who want gold in addition to the US government.
China wants gold. China has said they want $80 billion worth of gold. China has $2130 billion to spend on gold, or $2.13 trillion of foreign exchange reserves.
China's Foreign Reserves.
If China tries to buy a mere $80 billion of gold within one year, the gold price will likely head to $1500 to $2000/oz. this year. But China does not want to push up the price of gold to make it double in price. If they do, the value of the remainder of their $2130 billion will be cut in half.
Too bad for China, they have no choice. The value of their paper money will be cut by 95% or more anyway, even if they do nothing, as other nations, besides the US and China, also want gold. So it will come down to the reality, for everyone, that some gold is better than no gold! And silver, of course, is always better than gold, because silver will increase in value much faster!
How will $2,130 billion of China's foreign exchange reserves fit into the annual silver market of $1 billion? Think about it. Think carefully. Think hard. Think!
Here's what I think. If China's people started buying $1 billion of silver per year, the silver price would head to $25/oz.
If China's people started buying $10 billion of silver per year, the silver price would head to $75/oz.
If China's people started buying $100 billion of silver per year, the silver price would head to about $750 per oz.
Can you say "Not enough silver!"? I can. There is a world silver shortage, and there will be a world silver shortage for the next few decades to come, probably until silver exceeds thousands of dollars per ounce in price!
There is no possible way that the silver price can be contained for very long, unless they discover a way to divert investment demand away from the limited physical silver, and convince people to hold things like ETFs, or futures contracts, or 'bullion accounts' instead. Oh yes, they have. But not for long, as the truth is getting out.
Sprott's Embry warns investors to make sure ETFs backed by precious metals
EFT's
The Bank of International Settlements reports there are $111 billion in "Other Precious Metals (IE, Silver) over the counter derivatives, as of Dec. 2008. (We await June 2009 stats.)
BIS
from
June 09 BIS
A man asked me this week at the JH MINT, "How'd you get into this?" I laughed and said, "The obvious!" He laughed too. What's not obvious to me is why everyone else is so deceived by paper money. It's really not all that special at all. it's just numbers on paper, signifying nothing!
One of my major wholesalers has a bullion precious metals inventory of $1/2 billion including both silver and gold. Another major wholesaler is a major warehouse for the COMEX. I don't think either one would let me order more than a few million dollars at once at a fixed price, because that would probably move the price up.
Yes, we can handle multi million dollar silver orders by placing orders direct with many of the nation's largest wholesalers, but be prepared to move up the price as you buy. And we can order for delivery in Grass Valley at the JH MINT. Call us today.
USCivilFlags.org What America would look like debt-free, based on the original US Treasury flag.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
Friday, September 25, 2009
Montana Sound Money Bill Video
The price of Silver has risen 50% this year. Sound Money is the only defense against theft by inflation.
Maryland Gold Money Bill
http://mlis.state.md.us/2009rs/billfile/hj0005.htm#Exbill
With 7 Gold Bill resolution in state houses nationwide, there is a buzz building up for a return to the gold standard. Support your state congressman by downloading the original Gold bill that has been created by Dr. Edwin Vieira, it can be submitted with minor modifications to any state in the union.
U.S.Civil flag- A vertical striped Treasury flag representing America as it should be debt-free and under a gold standard and the common law.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
With 7 Gold Bill resolution in state houses nationwide, there is a buzz building up for a return to the gold standard. Support your state congressman by downloading the original Gold bill that has been created by Dr. Edwin Vieira, it can be submitted with minor modifications to any state in the union.
U.S.Civil flag- A vertical striped Treasury flag representing America as it should be debt-free and under a gold standard and the common law.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
Thursday, September 17, 2009
The Secret Gold Bull Market is back
Silver Stock Report
by Jason Hommel, September 17th, 2009
One trouble with Americans is that we think we are the center of the world. We do have about 5% of the world's population, and use up about 25% of the resources. That's mostly a function of being significantly "wealthier" than the rest of the world. But that's mostly paper wealth. Will it last? Only if we buy at least 25% of the world's silver and gold. Do we? Not in gold, but we do in silver! Let's get to the facts.
Worldwide, the world buys about 80 times as much gold as silver, for investment. The world annually purchases gold worth $80 billion (about 80 million oz., or 3500 tonnes). If American-led Central bank selling did not help meet demand and add to mine supply, then the gold price would go up faster than it already has. Remember, central bank selling is a manipulative and unsustainable supply source.
The annual silver investment market is only $1 billion. Annual production is about 600 million oz., but only about 50-100 million oz. is purchased for investment.
These figures show that the world is buying 80 times as much gold as silver, for investment.
American investors seem to buy more silver than the rest of the world. Why? I would guess that we seem to know more about the supply/demand statistics, and know that the silver market is much smaller, and know that the silver/gold ratio shows that silver is cheaper. Maybe it's because we recently used silver in our currency as late as 1964, and many other nations don't have such a recent history of using silver as money?
Sales of American Gold and Silver Eagles show that Americans are purchasing about only 3 times as much dollar volume of gold Eagles as Silver Eagles per year.
Production figures:
U.S. Mint Gold and Silver Eagles sales.
Show that for 2009, from January to September, the US Mint has produced:
903,000 Gold eagles, and
19,364,500 Silver Eagles.
At an average price ratio of 60 to 1, at about $15 for silver and $900 for gold, we have dollar volumes of:
Silver Eagles: $290,467,500
Gold Eagles: $812,700,000
The last figure, the ratio of 812/290 shows that Americans buy about 2.8 times as much dollar volume of gold Eagles, than Silver Eagles. That's dramatically different than the world ratio of 80 to 1, and thus, heavily skewed towards silver!
But do Americans buy 25% of the world's gold and silver? Not in gold. Gold Eagles are about 1/100th of the overall world gold market. Silver Eagles are just over 1/5th of the world silver investment market (20/100 million oz.!)!
Wow, I never realized that American investors favored silver that heavily. Congratulations, America!
And many silver buyers buy silver other than in Silver Eagles! So, perhaps Americans are buying up to 1/2 of all silver investment demand. Fantastic job America! That implies great news for the future wealth for America.
Unfortunately, the $300 to $600 million that Americans spend on silver is only a tiny, tiny, tiny fraction of the overall investable wealth of Americans. If the word gets out about silver to the majority of Americans, silver prices have no choice but to explode. Imagine if Americans spent ten to one hundred times as much money on silver each year! It's possible, and perhaps even likely, as the truth about every thing tends to be exposed and get out at some point.
Nevertheless, given current national actions, I tend to think that the average coin shop would carry 3 times as much gold as silver, to match overall market demand.
But knowing what we know about silver, we do the opposite, fortunately, for our own future capital gains, and for our customers.
We carry about 3 times as much silver, as gold! And fortunately, our customers buy about the same dollar volume of silver and gold.
Americans are not driving this bull market in gold. In a sense.
What I mean is that Americans are not buying enough gold in significant quantities, as Gold Eagles are 1/100th of the gold market. But rather, American politics, which requires massive printing of US Dollars (Sorry, Federal Reserve Notes), is, indeed, driving gold prices higher.
Americans are not buying enough gold to drive gold prices up.
Americans, over the past decades, have elected politicans whose policy decisions require printing more paper money, and that's driving gold prices up, as other nations see our foolish action of priting up too much money, and other nations are wisely buying gold.
Since I have started dealing silver and gold, maybe I have better observations about the silver and gold markets, and perhaps less time to write about them.
Over the last 6 weeks, we have bought and sold about the same amounts of precious metals to and from our customers, and we have accumulated a bit more gold from the public selling gold for silver. We have not had to order very much from our wholesalers, or other mints. Enough people been cashing out their silver and gold, enough to balance out our trade.
Americans buy less gold than other nations (1/100th of the world market?), and much more silver (40% of the world market?), but could still buy much, much, much, much, much, much, much, much, much, much more of both. This bull market in precious metals is barely getting started.
Between the JH MINT and the Rocklin Coin Shop, we have over 50,000 oz. of silver and 300 oz. of gold, available for immediate purchase. We can also easily handle multi million dollar orders by placing orders direct with many of the nations largest wholesalers. Call us today.
Yes, we sell silver, and gold!
Buy it now! Buy Silver or Gold Now!
Inventory & Price List
Call Breana or Janelle, 10AM to 4PM Pacific, Monday to Friday:
100 oz. silver minimum, USA shipping, wire transfer only!
Breana (530) 913 4359 silver_support@vzw.blackberry.net
Janelle (530) 913 0553 silver_support1@vzw.blackberry.net
by Jason Hommel, September 17th, 2009
One trouble with Americans is that we think we are the center of the world. We do have about 5% of the world's population, and use up about 25% of the resources. That's mostly a function of being significantly "wealthier" than the rest of the world. But that's mostly paper wealth. Will it last? Only if we buy at least 25% of the world's silver and gold. Do we? Not in gold, but we do in silver! Let's get to the facts.
Worldwide, the world buys about 80 times as much gold as silver, for investment. The world annually purchases gold worth $80 billion (about 80 million oz., or 3500 tonnes). If American-led Central bank selling did not help meet demand and add to mine supply, then the gold price would go up faster than it already has. Remember, central bank selling is a manipulative and unsustainable supply source.
The annual silver investment market is only $1 billion. Annual production is about 600 million oz., but only about 50-100 million oz. is purchased for investment.
These figures show that the world is buying 80 times as much gold as silver, for investment.
American investors seem to buy more silver than the rest of the world. Why? I would guess that we seem to know more about the supply/demand statistics, and know that the silver market is much smaller, and know that the silver/gold ratio shows that silver is cheaper. Maybe it's because we recently used silver in our currency as late as 1964, and many other nations don't have such a recent history of using silver as money?
Sales of American Gold and Silver Eagles show that Americans are purchasing about only 3 times as much dollar volume of gold Eagles as Silver Eagles per year.
Production figures:
U.S. Mint Gold and Silver Eagles sales.
Show that for 2009, from January to September, the US Mint has produced:
903,000 Gold eagles, and
19,364,500 Silver Eagles.
At an average price ratio of 60 to 1, at about $15 for silver and $900 for gold, we have dollar volumes of:
Silver Eagles: $290,467,500
Gold Eagles: $812,700,000
The last figure, the ratio of 812/290 shows that Americans buy about 2.8 times as much dollar volume of gold Eagles, than Silver Eagles. That's dramatically different than the world ratio of 80 to 1, and thus, heavily skewed towards silver!
But do Americans buy 25% of the world's gold and silver? Not in gold. Gold Eagles are about 1/100th of the overall world gold market. Silver Eagles are just over 1/5th of the world silver investment market (20/100 million oz.!)!
Wow, I never realized that American investors favored silver that heavily. Congratulations, America!
And many silver buyers buy silver other than in Silver Eagles! So, perhaps Americans are buying up to 1/2 of all silver investment demand. Fantastic job America! That implies great news for the future wealth for America.
Unfortunately, the $300 to $600 million that Americans spend on silver is only a tiny, tiny, tiny fraction of the overall investable wealth of Americans. If the word gets out about silver to the majority of Americans, silver prices have no choice but to explode. Imagine if Americans spent ten to one hundred times as much money on silver each year! It's possible, and perhaps even likely, as the truth about every thing tends to be exposed and get out at some point.
Nevertheless, given current national actions, I tend to think that the average coin shop would carry 3 times as much gold as silver, to match overall market demand.
But knowing what we know about silver, we do the opposite, fortunately, for our own future capital gains, and for our customers.
We carry about 3 times as much silver, as gold! And fortunately, our customers buy about the same dollar volume of silver and gold.
Americans are not driving this bull market in gold. In a sense.
What I mean is that Americans are not buying enough gold in significant quantities, as Gold Eagles are 1/100th of the gold market. But rather, American politics, which requires massive printing of US Dollars (Sorry, Federal Reserve Notes), is, indeed, driving gold prices higher.
Americans are not buying enough gold to drive gold prices up.
Americans, over the past decades, have elected politicans whose policy decisions require printing more paper money, and that's driving gold prices up, as other nations see our foolish action of priting up too much money, and other nations are wisely buying gold.
Since I have started dealing silver and gold, maybe I have better observations about the silver and gold markets, and perhaps less time to write about them.
Over the last 6 weeks, we have bought and sold about the same amounts of precious metals to and from our customers, and we have accumulated a bit more gold from the public selling gold for silver. We have not had to order very much from our wholesalers, or other mints. Enough people been cashing out their silver and gold, enough to balance out our trade.
Americans buy less gold than other nations (1/100th of the world market?), and much more silver (40% of the world market?), but could still buy much, much, much, much, much, much, much, much, much, much more of both. This bull market in precious metals is barely getting started.
Between the JH MINT and the Rocklin Coin Shop, we have over 50,000 oz. of silver and 300 oz. of gold, available for immediate purchase. We can also easily handle multi million dollar orders by placing orders direct with many of the nations largest wholesalers. Call us today.
Yes, we sell silver, and gold!
Buy it now! Buy Silver or Gold Now!
Inventory & Price List
Call Breana or Janelle, 10AM to 4PM Pacific, Monday to Friday:
100 oz. silver minimum, USA shipping, wire transfer only!
Breana (530) 913 4359 silver_support@vzw.blackberry.net
Janelle (530) 913 0553 silver_support1@vzw.blackberry.net
Ohio Honest Money Bill
Although there is no active bill in the state legislature. The people in Ohio are very well organized. Ohiohonestmoney.com
Why does it get harder and harder every year for average Americans to make ends meet?
Why does the quality of products we buy keep decreasing and we seem to get less for our dollar?
Why is virtually everything we buy imported from overseas, and the American manufacturing base has all but disappeared?
Why has America quickly gone from the largest creditor on earth, to the largest debtor on earth?
Money is something that effects almost everything we do, yet very few of us know much about money and how it comes into existence. The answers to the questions above, and the solutions to our current economic problems can be found by looking at the problems with our money, also known as the monetary system.
The founding fathers understood that in order to have a truly free and stable society, people needed to live under a sound and honest monetary system. Yet over the past century we have gone from a monetary system left by the founders based on something real like gold and silver, to a fiat system that is based solely on trust. It is based on trusting that politicians in Washington and a non-governmental banking cartel called the Federal Reserve will always know how much money and credit the economy needs, and will always act in the best interest of the American people instead of their self interest. Yet this has not always been the case.
The Ohio Honest Money Act is a way to address monetary reform at the state level. If you already support sound and honest money in Ohio, we encourage to sign the petition on this site showing your support. If you are still exploring, we encourage you to look over the information on this site like the videos and keep asking questions. The founding fathers believed that government and banks having too much control over our money was one of the greatest threats to liberty and prosperity. The fact they were right is becoming more and more evident every day.
Goldmoneybill.org is the originator of the state sponsored Gold currency bills.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
Why does it get harder and harder every year for average Americans to make ends meet?
Why does the quality of products we buy keep decreasing and we seem to get less for our dollar?
Why is virtually everything we buy imported from overseas, and the American manufacturing base has all but disappeared?
Why has America quickly gone from the largest creditor on earth, to the largest debtor on earth?
Money is something that effects almost everything we do, yet very few of us know much about money and how it comes into existence. The answers to the questions above, and the solutions to our current economic problems can be found by looking at the problems with our money, also known as the monetary system.
The founding fathers understood that in order to have a truly free and stable society, people needed to live under a sound and honest monetary system. Yet over the past century we have gone from a monetary system left by the founders based on something real like gold and silver, to a fiat system that is based solely on trust. It is based on trusting that politicians in Washington and a non-governmental banking cartel called the Federal Reserve will always know how much money and credit the economy needs, and will always act in the best interest of the American people instead of their self interest. Yet this has not always been the case.
The Ohio Honest Money Act is a way to address monetary reform at the state level. If you already support sound and honest money in Ohio, we encourage to sign the petition on this site showing your support. If you are still exploring, we encourage you to look over the information on this site like the videos and keep asking questions. The founding fathers believed that government and banks having too much control over our money was one of the greatest threats to liberty and prosperity. The fact they were right is becoming more and more evident every day.
Goldmoneybill.org is the originator of the state sponsored Gold currency bills.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
Constitutional Homeland Security Book by Dr. Edwin Vieira
Constitutional Homeland Security
A Call for Americans to revitalize the Militia of the Several States. Vol. I Our Republic is on the verge of Revolution with inhabitant unrest fearing; the burgeoning police state under a neo-fascist "homeland security" banner...the cultural and economic threat of unchecked Mexican immigration...the increasing strictures on our God-given rights, the second and fourth amendments. The fake War on Terror conceived to eliminate our rights.
How in the world can the citizens of these 50 sovereign States, return to the liberty and self-government that was guaranteed in our founding documents, the Declaration, Articles and the U.S. Constitution?
In this little guidebook for American citizens, constitutional scholar Dr. Edwin Vieira, Jr leads us back to the rule of law, step by constitutional step! What an erudite, plain-speaking, and eminently "do-able" plan the author presents!
This is no guidebook for rifle-toting "Montana Freemen" nut-cases; it is a measured, historically documented plan of action for truly reclaiming our liberty and our "homeland security", one neighborhood at a time, in concert with local "first responders" (police, fire dept, EMS, et al) but entirely on a volunteer basis: orderly, law-abiding, serious-minded citizenship, just as our colonial-era forefathers -- and the framers of the Constitution -- intended!
After you read this book (believe me, you'll be full of hope and ready to say, "Let's Roll!") just imagine the 4th of July, 2010...in 535 American towns and cities, holding an "AMERICA AGAIN!" rally, to institute the "Citizens' Homeland Security Associations" that Dr. Vieira introduces in this masterful book! I tell you, never in my life have I had such hope in the future of this republic -- if only people will read such books as this one, and actually take them to heart.
This book is the basis of the revitalized militia, it is a blueprint for implementing a well regulated militia in modern times called the committees of Safety.
Missouri Gold Currency Bill
Missouri Gold Currency Bill HB-561. This bill has been proposed on August 28th, 2009. It is currently not on the calendar as of yet. The original bill can be downloaded at Goldmoneybill.org to be submitted to your state legislature.
Want cheap Healthcare? Try MMS known to cure ebola virus and a host of auto-immune conditions in addition to the Big C.
Want cheap Healthcare? Try MMS known to cure ebola virus and a host of auto-immune conditions in addition to the Big C.
Colorado Gold Money Bill
This is a copy of the Gold Money Bill HB09-1206 in the state legislature in Colorado.
The original bill was submitted in the New Hampshire state legislature. It failed by a narrow margin in the house. You can download a copy of the original bill and take it to a state congressman in your locale. It has been written where it can be submitted anywhere in the nation with minor modification.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
The original bill was submitted in the New Hampshire state legislature. It failed by a narrow margin in the house. You can download a copy of the original bill and take it to a state congressman in your locale. It has been written where it can be submitted anywhere in the nation with minor modification.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
Edwin Vieira on Economic Federalism
Economic Federalism - Dr. Edwin Vieira. Ph.D, J.D. from StandUpForLiberty on Vimeo.
Dr. Vieira is the writer of the Gold Money Bill and the novel Crashmaker about a libertarian winning the Presidency and the federal reserve being crashed by a rogue trader.
Wednesday, September 16, 2009
Indiana Gold Money Bill
This is a byproduct of Dr. Edwin Vieira Original Gold money bill for the state of New Hampshire found at Goldmoneybill.org
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
Tuesday, September 15, 2009
Ron Paul on Morning Joe New Economic bubble solution to Old Bubble
Obama's solution? Just make bigger bubbles. Housing Bubble, currency bubble, debt bubble. If you want to capitalize on the bubble and hedge against these bubbles. Apmex.com a reliable silver supplier. I buy physical metal only, forget etf's they are paper held by the same people blowing smoke up your rears. Did you know the origen of the term blowing smoke up your ass? They actually used to do smoke enema's? I kid you not.
Smoke enema's
Ascensionenergyprogram.com Energy programs that sharpens the mind, body and spirit. Become a hero in these troubled times. We are in the Hero-making business.
Ron Paul Warns of a Global bank
Steve Watson
Infowars.net
Friday, Nov 28, 2008
Texas Congressman Ron Paul has warned that international forces are planning the creation of a global central bank that will see a new fiat monetary system come to dominate the world economy.
The 2008 presidential candidate also warned that Barack Obama’s administration will only represent a change in faces and not in policies.
Speaking about the recent G20 meeting Paul told Russia Today:
“I think something will come of it but you probably didn’t hear about it yet. There was some pomp and ceremony that the public knew about, but behind the scenes they were talking about the future and what they are going to do to try to internationalize all regulations, going in the opposite direction of free market and more towards international regulations. I’m sure they even talked about an international central bank.”
Paul also pointed out that global bankers have been holding their own talks on the same matter:
“At the same time the G20 was meeting, we also had the central banks meeting in Europe. Bernanke was over there, and they are doing the same type of planning, so real planning will not be out in the open, until they want us to know about it.” the Congressman said.
“The system that we have today where the fiat dollar is a reserve currency of the world, it’s losing that status and they have to replace it. Hopefully they’ll have enough sense to realise that another international agreement along the Bretton Woods will be no more successful than the last one.” Paul continued.
The Congressman argued that more regulations administered by central banks, rather than placed on to central banks, represents a dangerous move away from the free market.
“We could restructure by getting rid of all the central banks, then you would have honest money come up because nobody could commit fraud. Governments get away with committing fraud – that’s what fiat money is.” Paul commented.
The Congressman warned that an Obama presidency offers no alternative to the economic policies that have led the U.S. and the world to the brink of economic meltdown. Paul Described the kind of change Obama offers as:
“Just change in faces and change in party labels. Both parties represent the same special interests, they both have to represent big business. Obama’s supposed to be a man of the people, well he collected $750 million, more money than anybody else ever collected. Wall Street supported him, the media supported him, all the big money supported him, so his change is not going to be much change at all. He’s not talking about changing monetary policy, the Federal Reserve or getting rid of the income tax or bringing our troops home.”
Paul also commented that he does not believe Obama will withdraw troops from Iraq and pointed out that he has never said he will close down the military bases throughout the country and eliminate the huge embassy in Baghdad.
“Policy will remain interventionist,” the Congressman warned. “We will remain in the middle east and we will not be coming home, we’ll stay in Korea, we’ll stay in Europe, we’ll be in eastern Europe, we’ll be doing all these things. Even though Obama benefited tremendously from ‘change’, all we are changing is the face of our government.”
Paul also warned that the stage has been set for fresh terrorist attacks in the U.S. as a consequence of a sustained interventionist foreign policy.
PrisonPlanet.com
Watch the Ron Paul Interview here.
AscensionEnergyProgram- Spiritual tools of the 21st century for the common man. Unified field technologies that remove fear and negativity.
Infowars.net
Friday, Nov 28, 2008
Texas Congressman Ron Paul has warned that international forces are planning the creation of a global central bank that will see a new fiat monetary system come to dominate the world economy.
The 2008 presidential candidate also warned that Barack Obama’s administration will only represent a change in faces and not in policies.
Speaking about the recent G20 meeting Paul told Russia Today:
“I think something will come of it but you probably didn’t hear about it yet. There was some pomp and ceremony that the public knew about, but behind the scenes they were talking about the future and what they are going to do to try to internationalize all regulations, going in the opposite direction of free market and more towards international regulations. I’m sure they even talked about an international central bank.”
Paul also pointed out that global bankers have been holding their own talks on the same matter:
“At the same time the G20 was meeting, we also had the central banks meeting in Europe. Bernanke was over there, and they are doing the same type of planning, so real planning will not be out in the open, until they want us to know about it.” the Congressman said.
“The system that we have today where the fiat dollar is a reserve currency of the world, it’s losing that status and they have to replace it. Hopefully they’ll have enough sense to realise that another international agreement along the Bretton Woods will be no more successful than the last one.” Paul continued.
The Congressman argued that more regulations administered by central banks, rather than placed on to central banks, represents a dangerous move away from the free market.
“We could restructure by getting rid of all the central banks, then you would have honest money come up because nobody could commit fraud. Governments get away with committing fraud – that’s what fiat money is.” Paul commented.
The Congressman warned that an Obama presidency offers no alternative to the economic policies that have led the U.S. and the world to the brink of economic meltdown. Paul Described the kind of change Obama offers as:
“Just change in faces and change in party labels. Both parties represent the same special interests, they both have to represent big business. Obama’s supposed to be a man of the people, well he collected $750 million, more money than anybody else ever collected. Wall Street supported him, the media supported him, all the big money supported him, so his change is not going to be much change at all. He’s not talking about changing monetary policy, the Federal Reserve or getting rid of the income tax or bringing our troops home.”
Paul also commented that he does not believe Obama will withdraw troops from Iraq and pointed out that he has never said he will close down the military bases throughout the country and eliminate the huge embassy in Baghdad.
“Policy will remain interventionist,” the Congressman warned. “We will remain in the middle east and we will not be coming home, we’ll stay in Korea, we’ll stay in Europe, we’ll be in eastern Europe, we’ll be doing all these things. Even though Obama benefited tremendously from ‘change’, all we are changing is the face of our government.”
Paul also warned that the stage has been set for fresh terrorist attacks in the U.S. as a consequence of a sustained interventionist foreign policy.
PrisonPlanet.com
Watch the Ron Paul Interview here.
AscensionEnergyProgram- Spiritual tools of the 21st century for the common man. Unified field technologies that remove fear and negativity.
Monday, September 14, 2009
$5000 oz Gold Coming to a theatre near you soon
Goldmoneybill.org A return to a gold standard through the state governments.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
Monday, September 7, 2009
China says Silver is Vastly undervalued
Energy program that removes Fear and Negativity.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
Friday, September 4, 2009
China Recommends Buying Silver to it's Populace
This is a brillant strategy if you really wanted to take down the International bankers. The manipulation of Gold and Silver in the world markets can be stopped in a jiffy when the John Q. Public starts to buy up the physical metal supply. Trading back and forth EFT, just supports the bankers illusion that they have not leveraged their Gold and Silver supplies to make there fake paper currencies look legit.
We are indebted again to Paul Mylchreest's Thunder Road Report for news that will bring big smiles to gold and silver investors everywhere. Apparently China is pushing the idea of buying gold and silver for investment purposes to the general population in the way that Western television sells soap powder. If 1.3 billion Chinese citizens start buying gold and silver, even in tiny quantities, imagine what that will do to the market!
The report notes that China's Central Television, the main state-owned television company, has run a news programme letting the public know how easy it is to buy precious metals as an investment. On silver investment the announcer is quoted as saying " China has introduced its first ever investment opportunity for silver bullion. The bars are available in 500g, 1kg, 2kg and 5kg with a purity of 99.9%. Figures show that gold was fifty times more expensive than silver in 2007, but now that figure has reached over seventy times. Analysts say that silver has been undervalued in recent years. They add that the metal is the right investment for individual investors and could be a good way to cash in."
What appears to have happened in China is a total relaxation of strictures on holding precious metals by the individual with the government pushing gold and silver as an investment option, seemingly at every opportunity. This is a far cry from the situation only a few years ago where the distribution of gold and silver was strictly controlled. Now, the Thunder Road Report notes that every bank will sell gold and silver bullion bars in four different sizes to individuals and gold related investments are said to be soaring in popularity.
Around a year ago, Leyshon Resources managing director, Paul Atherley, in an investor presentation in London - and no doubt delivered elsewhere in the world too - commented that some employees at the company's gold mining project in northern China would, on pay day, go to the local bank and buy a small gold bar as an investment and wealth protector. To an extent we put this down at the time to mining company hype - but this seems to be exactly the same phenomenon noted by Thunder Road. The Chinese are being converted from being the lowest per capita gold consumers in the world to a nation of small precious metals investors. Now, by next year, Chinese consumption of gold is likely to exceed that of India, which has been for years the world's biggest gold market. And one suspects that the potential for gold purchasing by individuals is only in its earliest stages. As more and more Chinese move into the cities and individual wealth grows, this trend is only likely to accelerate.
Paul ends the piece on Chinese gold and silver potential with the following comment: "Simply put, the Chinese government is trying to trigger a national gold craze...and it's working. The Chinese public now has gold trading platforms on steroids.... ...Also, for the first time in history, Chinese investors can even trade gold abroad (in London) with the swipe of a ‘Lucky Gold' card. I can't even get Bank of America to open a foreign currency account."
Cont @ Source
Energy program that removes Fear and Negativity.
We are indebted again to Paul Mylchreest's Thunder Road Report for news that will bring big smiles to gold and silver investors everywhere. Apparently China is pushing the idea of buying gold and silver for investment purposes to the general population in the way that Western television sells soap powder. If 1.3 billion Chinese citizens start buying gold and silver, even in tiny quantities, imagine what that will do to the market!
The report notes that China's Central Television, the main state-owned television company, has run a news programme letting the public know how easy it is to buy precious metals as an investment. On silver investment the announcer is quoted as saying " China has introduced its first ever investment opportunity for silver bullion. The bars are available in 500g, 1kg, 2kg and 5kg with a purity of 99.9%. Figures show that gold was fifty times more expensive than silver in 2007, but now that figure has reached over seventy times. Analysts say that silver has been undervalued in recent years. They add that the metal is the right investment for individual investors and could be a good way to cash in."
What appears to have happened in China is a total relaxation of strictures on holding precious metals by the individual with the government pushing gold and silver as an investment option, seemingly at every opportunity. This is a far cry from the situation only a few years ago where the distribution of gold and silver was strictly controlled. Now, the Thunder Road Report notes that every bank will sell gold and silver bullion bars in four different sizes to individuals and gold related investments are said to be soaring in popularity.
Around a year ago, Leyshon Resources managing director, Paul Atherley, in an investor presentation in London - and no doubt delivered elsewhere in the world too - commented that some employees at the company's gold mining project in northern China would, on pay day, go to the local bank and buy a small gold bar as an investment and wealth protector. To an extent we put this down at the time to mining company hype - but this seems to be exactly the same phenomenon noted by Thunder Road. The Chinese are being converted from being the lowest per capita gold consumers in the world to a nation of small precious metals investors. Now, by next year, Chinese consumption of gold is likely to exceed that of India, which has been for years the world's biggest gold market. And one suspects that the potential for gold purchasing by individuals is only in its earliest stages. As more and more Chinese move into the cities and individual wealth grows, this trend is only likely to accelerate.
Paul ends the piece on Chinese gold and silver potential with the following comment: "Simply put, the Chinese government is trying to trigger a national gold craze...and it's working. The Chinese public now has gold trading platforms on steroids.... ...Also, for the first time in history, Chinese investors can even trade gold abroad (in London) with the swipe of a ‘Lucky Gold' card. I can't even get Bank of America to open a foreign currency account."
Cont @ Source
Energy program that removes Fear and Negativity.
Saturday, August 15, 2009
How Gold is debased by counting Gold stores and Gold Recievables as the same event
© 2003 by The Freemarket Gold & Money Report.
One of the statistics complied by the International Monetary Fund is the quantity of gold owned by the world's central banks. That weight is reported to be 32,291 tonnes of gold. Most people accept this number at face value and without questioning its accuracy. However, central banks actually own less gold.
In reality central banks own 32,291 tonnes of gold AND gold receivables. This distinction is important. From both a legal and an accounting point of view, gold in the vault is clearly very different from gold owed to you. The reason is that gold in the vault is much less risky than someone's promise to pay you gold.
This distinction between these two unlike assets is one of the most basic principles of accounting, namely, that cash is different from a receivable. For this reason, cash and accounts receivable appear as two different line items on balance sheets prepared according to generally accepted accounting principles. But some central banks do not report their gold assets using these sound and well-established accounting standards.
For example, the Bundesbank discloses in its 2002 annual report that it has €36,208 million of "Gold and gold receivables". It further sustains the fiction that these two different assets are one asset by stating in the footnotes to its financial statements: "At the end of 2002 the Bank's holdings of fine gold amounted to 111 million ounces." The Bundesbank does not, however, state anywhere in its annual report what portion of its gold is stored in vaults and what portion has been removed from the vault and placed at risk by being loaned.
Another central bank with a large gold asset is the Banca d'Italia. According to its 2001 annual report, which is the latest report available: "Monetary gold reserves were 48.1 trillion lire (EUR 24.8 billion, or $21.9 billion)." One would think from this statement that this "gold reserve" is sitting safely in secure vaults, as a reserve. But this central bank too has been withdrawing gold from the vault and placing it at risk. Its balance sheet also records "Gold and gold receivables", and like the Bundesbank, it fails to disclose how much of its gold has been loaned.
In contrast to these reports by the German and Italian central banks, the annual report of the Banque de France shows that none of its gold has been loaned. There is no gold receivable reported by it, so none of its gold has been placed at risk by being loaned.
There is also a third category of reporting. The Swiss National Bank, for example, uses generally accepted accounting principles to prepare its financial statements. Not only does it disclose that 254.7 tonnes of its 1,661.9 tonnes have been loaned, it provides information to assess the level of risk. For example, 158.7 tonnes were loaned on an unsecured basis.
Another central bank that discloses its gold lending is Banco de Portugal. According to its latest annual report, it has removed from the vault and placed at risk 434.1 tonnes of its 606.7 tonnes, or 71.6%, which is relatively much greater than the percentage of gold placed at risk by the Swiss National Bank, which is 15.3%.
Accordingly, there is no question that some central bank gold has been removed from vaults and loaned into the market. But because the level of reporting by the central banks is inadequate, it has been impossible to precisely determine the exact weight of gold removed from central bank vaults. This unknown weight of gold has become one of the most contentious issues within the gold industry. And the debate that has arisen as a result is well warranted.
If gold is removed from a vault and sold into the market, this dishoarding obviously will have an impact on gold's rate of exchange to the dollar and other currencies. This result from dishoarding is a basic principle of economics, but with a twist. An adaptation is necessary in a post-Gold Standard world to account for the fact that national currencies are no longer directly tied to gold.
Economic models prove that the extension of credit debases a currency, which is a principle that is true for any money, whether dollars, euros or gold. However, because goods and services are today priced in terms of national currencies - all of which are fiat and are only exchangeable for but not redeemable into gold - the impact of credit extensions in gold is different than the impact of credit extensions in national currencies.
When credit is pumped up using a national currency, it's a process that usually results in inflation; the prices of goods and services rise. The new extensions of credit increase the supply of the national currency, and if this growth in supply is greater than the demand for the currency (which has always been the case since the abandonment of the last remnants of the Gold Standard in 1971), the currency loses purchasing power. In other words, it is debased, and that debasement is reflected by rising prices. Each unit of currency purchases less and less. However, goods and services are no longer priced in terms of gold, so gold credit extensions have a different result on gold's purchasing power.
If gold credit extensions are greater than the demand for gold, it is debased, and like national currencies, it's purchasing power declines. But because goods and services are priced in national currencies, gold's debasement is manifested by a decrease in its exchange rate, or to put it in the terms commonly used, the ‘gold price' falls. In other words, gold when debased in this way purchases less national-currency-denominated goods and services. Thus, it is clear from this analysis that it is important to know how much central bank gold has been loaned, so that these credit extensions can be analyzed to assess their impact on gold's rate of exchange - the so-called ‘gold price' - compared to the many national currencies.
In recent years several efforts have been made to overcome the inadequate reporting of central banks in order to determine the weight of gold dishoarded from their vaults. Many people continue to accept the results prepared by Gold Fields Mineral Services, which have generally stated that around 5,000 tonnes have been removed from central bank vaults. However, I dismiss this number because GFMS surveys do not capture the weight of gold borrowed by commercial banks to fund their national currency assets, and my assessment is that this weight of gold represents the largest portion of gold loaned out by central banks.
Continued at Source
James Turk is the founder of Goldmoney.com and a supporter of Goldmoneybill.org
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
One of the statistics complied by the International Monetary Fund is the quantity of gold owned by the world's central banks. That weight is reported to be 32,291 tonnes of gold. Most people accept this number at face value and without questioning its accuracy. However, central banks actually own less gold.
In reality central banks own 32,291 tonnes of gold AND gold receivables. This distinction is important. From both a legal and an accounting point of view, gold in the vault is clearly very different from gold owed to you. The reason is that gold in the vault is much less risky than someone's promise to pay you gold.
This distinction between these two unlike assets is one of the most basic principles of accounting, namely, that cash is different from a receivable. For this reason, cash and accounts receivable appear as two different line items on balance sheets prepared according to generally accepted accounting principles. But some central banks do not report their gold assets using these sound and well-established accounting standards.
For example, the Bundesbank discloses in its 2002 annual report that it has €36,208 million of "Gold and gold receivables". It further sustains the fiction that these two different assets are one asset by stating in the footnotes to its financial statements: "At the end of 2002 the Bank's holdings of fine gold amounted to 111 million ounces." The Bundesbank does not, however, state anywhere in its annual report what portion of its gold is stored in vaults and what portion has been removed from the vault and placed at risk by being loaned.
Another central bank with a large gold asset is the Banca d'Italia. According to its 2001 annual report, which is the latest report available: "Monetary gold reserves were 48.1 trillion lire (EUR 24.8 billion, or $21.9 billion)." One would think from this statement that this "gold reserve" is sitting safely in secure vaults, as a reserve. But this central bank too has been withdrawing gold from the vault and placing it at risk. Its balance sheet also records "Gold and gold receivables", and like the Bundesbank, it fails to disclose how much of its gold has been loaned.
In contrast to these reports by the German and Italian central banks, the annual report of the Banque de France shows that none of its gold has been loaned. There is no gold receivable reported by it, so none of its gold has been placed at risk by being loaned.
There is also a third category of reporting. The Swiss National Bank, for example, uses generally accepted accounting principles to prepare its financial statements. Not only does it disclose that 254.7 tonnes of its 1,661.9 tonnes have been loaned, it provides information to assess the level of risk. For example, 158.7 tonnes were loaned on an unsecured basis.
Another central bank that discloses its gold lending is Banco de Portugal. According to its latest annual report, it has removed from the vault and placed at risk 434.1 tonnes of its 606.7 tonnes, or 71.6%, which is relatively much greater than the percentage of gold placed at risk by the Swiss National Bank, which is 15.3%.
Accordingly, there is no question that some central bank gold has been removed from vaults and loaned into the market. But because the level of reporting by the central banks is inadequate, it has been impossible to precisely determine the exact weight of gold removed from central bank vaults. This unknown weight of gold has become one of the most contentious issues within the gold industry. And the debate that has arisen as a result is well warranted.
If gold is removed from a vault and sold into the market, this dishoarding obviously will have an impact on gold's rate of exchange to the dollar and other currencies. This result from dishoarding is a basic principle of economics, but with a twist. An adaptation is necessary in a post-Gold Standard world to account for the fact that national currencies are no longer directly tied to gold.
Economic models prove that the extension of credit debases a currency, which is a principle that is true for any money, whether dollars, euros or gold. However, because goods and services are today priced in terms of national currencies - all of which are fiat and are only exchangeable for but not redeemable into gold - the impact of credit extensions in gold is different than the impact of credit extensions in national currencies.
When credit is pumped up using a national currency, it's a process that usually results in inflation; the prices of goods and services rise. The new extensions of credit increase the supply of the national currency, and if this growth in supply is greater than the demand for the currency (which has always been the case since the abandonment of the last remnants of the Gold Standard in 1971), the currency loses purchasing power. In other words, it is debased, and that debasement is reflected by rising prices. Each unit of currency purchases less and less. However, goods and services are no longer priced in terms of gold, so gold credit extensions have a different result on gold's purchasing power.
If gold credit extensions are greater than the demand for gold, it is debased, and like national currencies, it's purchasing power declines. But because goods and services are priced in national currencies, gold's debasement is manifested by a decrease in its exchange rate, or to put it in the terms commonly used, the ‘gold price' falls. In other words, gold when debased in this way purchases less national-currency-denominated goods and services. Thus, it is clear from this analysis that it is important to know how much central bank gold has been loaned, so that these credit extensions can be analyzed to assess their impact on gold's rate of exchange - the so-called ‘gold price' - compared to the many national currencies.
In recent years several efforts have been made to overcome the inadequate reporting of central banks in order to determine the weight of gold dishoarded from their vaults. Many people continue to accept the results prepared by Gold Fields Mineral Services, which have generally stated that around 5,000 tonnes have been removed from central bank vaults. However, I dismiss this number because GFMS surveys do not capture the weight of gold borrowed by commercial banks to fund their national currency assets, and my assessment is that this weight of gold represents the largest portion of gold loaned out by central banks.
Continued at Source
James Turk is the founder of Goldmoney.com and a supporter of Goldmoneybill.org
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
James Turk on the Gold Cartel
By James Turk, Editor
Freemarket Gold & Money Report
http://www.fgmr.com/
Sunday, May 3, 2009
Copyright 2009 by James Turk. All rights reserved.
This week Bill Murphy and Chris Powell, co-founders of the Gold Anti-Trust Action Committee Inc. (www.gata.org), will be in London, England. Their trip is part of GATA's ongoing effort to raise awareness of the gold cartel and its surreptitious intervention in the gold market.
Bill and Chris will meet with the British news media to explain GATA's findings. They will also attend an important fund-raising event being held in support of GATA's work. Their trip is another important step by GATA aimed at creating a free market in gold, one which is unfettered by government intervention.
Governments want a low gold price to make national currencies look good. Gold is recognizable the world over as the "canary in the coal mine" when it comes to money. A rising gold price blurts the unpleasant truth that a national currency is being poorly managed and that its purchasing power is being inflated.
This reality is made clear by former Federal Reserve Chairman Paul Volcker. Commenting in his memoirs about the soaring gold price in the years immediately following the end of the gold standard in 1971, he notes: "Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake." It was a "mistake" because a rising gold price undermines the thin reed upon which all fiat currency rests -- confidence. But it was a mistake only from the perspective of a central banker, which is of course at odds with anyone who believes in free markets.
The U.S. government has learned from experience and has taken Volcker's advice. Given the U.S. dollar's role as the world's reserve currency, the U.S. government has the most to lose if the market chooses gold over fiat currency and erodes the government's stranglehold on the monopolistic privilege it has awarded to itself of creating "money."
So the U.S. government intervenes in the gold market to make the dollar look worthy of being the world's reserve currency when of course it is not equal to the demands of that esteemed role. The U.S. government does this by trying to keep the gold price low, but this is an impossible task. In the end, gold always wins -- that is, its price inevitably climbs higher as fiat currency is debased, which is a reality understood and recognized by government policymakers.
So recognizing the futility of capping the gold price, they instead compromise by letting the gold price rise somewhat, say, 15 percent per year. In fact, against the dollar, gold is actually up 16.3 percent per year on average for the last eight years. In battlefield terms, the U.S. government is conducting a managed retreat for fiat currency in an attempt to control gold's advance.
Though it has let the gold price rise, gold has risen by less than it would in a free market because the purchasing power of the dollar continues to be inflated and because gold remains so undervalued notwithstanding its annual appreciation this decade.
These gains started from gold's historic low valuation in 1999. Gold may not be as good a value as it was in 1999 but it nevertheless remains extremely undervalued.
For example, until the end of the 19th century, approximately 40 percent of the world's money supply consisted of gold, and the remaining 60 percent was national currency. As governments began to usurp the money-issuing privilege and intentionally diminish gold's role, fiat currency's role expanded by the mid-20th century to approximately 90 percent. The inflationary policies of the 1960s, particularly in the United States, further eroded gold's role to 2 percent by the time the last remnants of the gold standard were abandoned in 1971.
Gold's importance rebounded in the 1970s, which caused Volcker to lament the so-called mistakes of policymakers. Its percentage rose to nearly 10 percent by 1980. But gold's share of the world money supply thereafter declined, reaching about 1 percent in 1999. Today it still remains below 2 percent.
From this analysis it is reasonable to conclude that gold should comprise at least 10 percent of the world's money supply. Because it is nowhere near that level, gold is undervalued.
So given the ongoing dollar debasement being pursued by U.S. policymakers, keeping gold from exploding upward to a true free-market price is the first thing they gain from their interventions in the gold market. The other thing they gain is time. The time they gain enables them to keep their fiat scheme afloat so they can benefit from it, delaying until some future administration the scheme's inevitable collapse.
So how does the U.S. government manage the gold price?
They recruit Goldman Sachs, JP Morgan Chase, and Deutsche Bank to do it, by executing trades to pursue the U.S. government's aims. These banks are the gold cartel. I don't believe that there are any other members of the cartel, with the possible exception of Citibank as a junior member.
The cartel acts with the implicit backing of the U.S. government, which absorbs all losses that may be taken by the cartel members as they manage the gold price and which further provides whatever physical metal is required to execute the cartel's trading strategy.
How did the gold cartel come about?
There was an abrupt change in government policy around 1990. It was introduced by then-Federal Reserve Chairman Alan Greenspan to bail out the banks back then, which, as now, were insolvent. Taxpayers were already on the hook for hundreds of billions of dollars to bail out the collapsed "savings and loan" industry, so adding to this tax burden was untenable. Greenspan therefore came up with an alternative.
Greenspan saw the free market as a golden goose with essentially unlimited deep pockets, and more to the point, saw that these pockets could be picked by the U.S. government using its tremendous weight, namely, its financial resources for timed interventions in the free market, combined with its propaganda power by using the news media. In short, it was easier to bail out the insolvent banks back then by gouging ill-gained profits from the free markets instead of raising taxes.
Banks generated these profits through the Federal Reserve's steepening of the yield curve, which kept long-term interest rates relatively high while lowering short-term rates. To earn this wide spread, banks leveraged themselves to borrow short-term and use the proceeds to buy long-term paper. This mismatch of assets and liabilities became known as the carry trade.
The Japanese yen was a particular favorite to borrow. The Japanese stock market had crashed in 1990 and the Bank of Japan was pursuing a zero-interest-rate policy to try reviving the Japanese economy. A U.S. bank could borrow Japanese yen for 0.2 percent and buy U.S. T-notes yielding more than 8 percent, pocketing the spread, which did wonders for bank profits and rebuilding the bank capital base.
Gold also became a favorite vehicle to borrow because of its low interest rate. This gold came from central bank coffers, but central banks refused to disclose how much gold they were lending, making the gold market opaque and ripe for intervention by central bankers making decisions behind closed doors. The amount lent by central banks has been reliably estimated in various analyses published by GATA as between 12,000 and 15,000 tonnes, nearly half of total central bank gold holdings and four to six times annual gold mine production of 2,500 tonnes. The banks clearly jumped feet first into the gold carry trade.
The carry trade was a gift to the banks from the Federal Reserve, and all was well provided that the yen and gold did not rise against the dollar, because this mismatch of dollar assets and yen or gold liabilities was not hedged. Alas, both gold and the yen began to strengthen, which, if allowed to rise high enough, would force marked-to-market losses on those carry-trade positions in the banks. It was a major problem because the losses of the banks could be considerable, given the magnitude of the carry trade.
So the gold cartel was created to manage the gold price, and all went well at first, given the help it received from the Bank of England in 1999 to sell half of its gold holdings. Gold was driven to historic lows, as noted above, but this low gold price created its own problem. Gold became so unbelievably cheap that value hunters around the world recognized the exceptional opportunity it offered and demand for physical gold began to climb.
As demand rose, another more intractable and unforeseen problem arose for the gold cartel.
The gold borrowed from the central banks had been melted down and turned into coins, small bars, and monetary jewelry that were acquired by countless individuals around the world. This gold was now in "strong hands," and these gold owners would part with it only at a much higher price. So where would the gold come from to repay the central banks?
While the yen is a fiat currency and can be created out of thin air by the Bank of Japan, gold is a tangible asset. How could the banks repay all the gold they borrowed without causing the gold price to soar, worsening the marked-to-market losses on their remaining positions?
In short, the banks were in a predicament. The Federal Reserve's policies were debasing the dollar, and the "canary in the coal mine" was warning of the loss of purchasing power. So Greenspan's policy of using interventions in the market to bail out banks morphed yet again.
The gold borrowed from central banks would not be repaid after all, because obtaining the physical gold to repay the loans would cause the gold price to soar. So beginning this decade, the gold cartel would conduct the government's managed retreat, allowing the gold price to move generally higher in the hope that, basically, people wouldn't notice. Given gold's "canary in a coal mine" function, a rising gold price creates demand for gold, and a rapidly rising gold price would worsen the marked-to-market losses of the gold cartel.
Continued at Source
ames Turk is founder and chairman of GoldMoney.com, editor of the Freemarket Gold & Money Report, co-author of "The Coming Collapse of the Dollar," which was recently updated in a new edition as "The Collapse of the Dollar" (www.dollarcollapse.com), and a consultant to the Gold Anti-Trust Action
Goldmoneybill.org is the original state gold currency bill currently being proposed in 6 state legislatures nationwide.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
Freemarket Gold & Money Report
http://www.fgmr.com/
Sunday, May 3, 2009
Copyright 2009 by James Turk. All rights reserved.
This week Bill Murphy and Chris Powell, co-founders of the Gold Anti-Trust Action Committee Inc. (www.gata.org), will be in London, England. Their trip is part of GATA's ongoing effort to raise awareness of the gold cartel and its surreptitious intervention in the gold market.
Bill and Chris will meet with the British news media to explain GATA's findings. They will also attend an important fund-raising event being held in support of GATA's work. Their trip is another important step by GATA aimed at creating a free market in gold, one which is unfettered by government intervention.
Governments want a low gold price to make national currencies look good. Gold is recognizable the world over as the "canary in the coal mine" when it comes to money. A rising gold price blurts the unpleasant truth that a national currency is being poorly managed and that its purchasing power is being inflated.
This reality is made clear by former Federal Reserve Chairman Paul Volcker. Commenting in his memoirs about the soaring gold price in the years immediately following the end of the gold standard in 1971, he notes: "Joint intervention in gold sales to prevent a steep rise in the price of gold, however, was not undertaken. That was a mistake." It was a "mistake" because a rising gold price undermines the thin reed upon which all fiat currency rests -- confidence. But it was a mistake only from the perspective of a central banker, which is of course at odds with anyone who believes in free markets.
The U.S. government has learned from experience and has taken Volcker's advice. Given the U.S. dollar's role as the world's reserve currency, the U.S. government has the most to lose if the market chooses gold over fiat currency and erodes the government's stranglehold on the monopolistic privilege it has awarded to itself of creating "money."
So the U.S. government intervenes in the gold market to make the dollar look worthy of being the world's reserve currency when of course it is not equal to the demands of that esteemed role. The U.S. government does this by trying to keep the gold price low, but this is an impossible task. In the end, gold always wins -- that is, its price inevitably climbs higher as fiat currency is debased, which is a reality understood and recognized by government policymakers.
So recognizing the futility of capping the gold price, they instead compromise by letting the gold price rise somewhat, say, 15 percent per year. In fact, against the dollar, gold is actually up 16.3 percent per year on average for the last eight years. In battlefield terms, the U.S. government is conducting a managed retreat for fiat currency in an attempt to control gold's advance.
Though it has let the gold price rise, gold has risen by less than it would in a free market because the purchasing power of the dollar continues to be inflated and because gold remains so undervalued notwithstanding its annual appreciation this decade.
These gains started from gold's historic low valuation in 1999. Gold may not be as good a value as it was in 1999 but it nevertheless remains extremely undervalued.
For example, until the end of the 19th century, approximately 40 percent of the world's money supply consisted of gold, and the remaining 60 percent was national currency. As governments began to usurp the money-issuing privilege and intentionally diminish gold's role, fiat currency's role expanded by the mid-20th century to approximately 90 percent. The inflationary policies of the 1960s, particularly in the United States, further eroded gold's role to 2 percent by the time the last remnants of the gold standard were abandoned in 1971.
Gold's importance rebounded in the 1970s, which caused Volcker to lament the so-called mistakes of policymakers. Its percentage rose to nearly 10 percent by 1980. But gold's share of the world money supply thereafter declined, reaching about 1 percent in 1999. Today it still remains below 2 percent.
From this analysis it is reasonable to conclude that gold should comprise at least 10 percent of the world's money supply. Because it is nowhere near that level, gold is undervalued.
So given the ongoing dollar debasement being pursued by U.S. policymakers, keeping gold from exploding upward to a true free-market price is the first thing they gain from their interventions in the gold market. The other thing they gain is time. The time they gain enables them to keep their fiat scheme afloat so they can benefit from it, delaying until some future administration the scheme's inevitable collapse.
So how does the U.S. government manage the gold price?
They recruit Goldman Sachs, JP Morgan Chase, and Deutsche Bank to do it, by executing trades to pursue the U.S. government's aims. These banks are the gold cartel. I don't believe that there are any other members of the cartel, with the possible exception of Citibank as a junior member.
The cartel acts with the implicit backing of the U.S. government, which absorbs all losses that may be taken by the cartel members as they manage the gold price and which further provides whatever physical metal is required to execute the cartel's trading strategy.
How did the gold cartel come about?
There was an abrupt change in government policy around 1990. It was introduced by then-Federal Reserve Chairman Alan Greenspan to bail out the banks back then, which, as now, were insolvent. Taxpayers were already on the hook for hundreds of billions of dollars to bail out the collapsed "savings and loan" industry, so adding to this tax burden was untenable. Greenspan therefore came up with an alternative.
Greenspan saw the free market as a golden goose with essentially unlimited deep pockets, and more to the point, saw that these pockets could be picked by the U.S. government using its tremendous weight, namely, its financial resources for timed interventions in the free market, combined with its propaganda power by using the news media. In short, it was easier to bail out the insolvent banks back then by gouging ill-gained profits from the free markets instead of raising taxes.
Banks generated these profits through the Federal Reserve's steepening of the yield curve, which kept long-term interest rates relatively high while lowering short-term rates. To earn this wide spread, banks leveraged themselves to borrow short-term and use the proceeds to buy long-term paper. This mismatch of assets and liabilities became known as the carry trade.
The Japanese yen was a particular favorite to borrow. The Japanese stock market had crashed in 1990 and the Bank of Japan was pursuing a zero-interest-rate policy to try reviving the Japanese economy. A U.S. bank could borrow Japanese yen for 0.2 percent and buy U.S. T-notes yielding more than 8 percent, pocketing the spread, which did wonders for bank profits and rebuilding the bank capital base.
Gold also became a favorite vehicle to borrow because of its low interest rate. This gold came from central bank coffers, but central banks refused to disclose how much gold they were lending, making the gold market opaque and ripe for intervention by central bankers making decisions behind closed doors. The amount lent by central banks has been reliably estimated in various analyses published by GATA as between 12,000 and 15,000 tonnes, nearly half of total central bank gold holdings and four to six times annual gold mine production of 2,500 tonnes. The banks clearly jumped feet first into the gold carry trade.
The carry trade was a gift to the banks from the Federal Reserve, and all was well provided that the yen and gold did not rise against the dollar, because this mismatch of dollar assets and yen or gold liabilities was not hedged. Alas, both gold and the yen began to strengthen, which, if allowed to rise high enough, would force marked-to-market losses on those carry-trade positions in the banks. It was a major problem because the losses of the banks could be considerable, given the magnitude of the carry trade.
So the gold cartel was created to manage the gold price, and all went well at first, given the help it received from the Bank of England in 1999 to sell half of its gold holdings. Gold was driven to historic lows, as noted above, but this low gold price created its own problem. Gold became so unbelievably cheap that value hunters around the world recognized the exceptional opportunity it offered and demand for physical gold began to climb.
As demand rose, another more intractable and unforeseen problem arose for the gold cartel.
The gold borrowed from the central banks had been melted down and turned into coins, small bars, and monetary jewelry that were acquired by countless individuals around the world. This gold was now in "strong hands," and these gold owners would part with it only at a much higher price. So where would the gold come from to repay the central banks?
While the yen is a fiat currency and can be created out of thin air by the Bank of Japan, gold is a tangible asset. How could the banks repay all the gold they borrowed without causing the gold price to soar, worsening the marked-to-market losses on their remaining positions?
In short, the banks were in a predicament. The Federal Reserve's policies were debasing the dollar, and the "canary in the coal mine" was warning of the loss of purchasing power. So Greenspan's policy of using interventions in the market to bail out banks morphed yet again.
The gold borrowed from central banks would not be repaid after all, because obtaining the physical gold to repay the loans would cause the gold price to soar. So beginning this decade, the gold cartel would conduct the government's managed retreat, allowing the gold price to move generally higher in the hope that, basically, people wouldn't notice. Given gold's "canary in a coal mine" function, a rising gold price creates demand for gold, and a rapidly rising gold price would worsen the marked-to-market losses of the gold cartel.
Continued at Source
ames Turk is founder and chairman of GoldMoney.com, editor of the Freemarket Gold & Money Report, co-author of "The Coming Collapse of the Dollar," which was recently updated in a new edition as "The Collapse of the Dollar" (www.dollarcollapse.com), and a consultant to the Gold Anti-Trust Action
Goldmoneybill.org is the original state gold currency bill currently being proposed in 6 state legislatures nationwide.
Silver is your means of preserving your wealth. Monex is the low-cost Silver retailer. Jump on the 500% rise in Silver over the next two years. 800-949-4653 x2172
use Kevin from Goldmoneybill as referral to help support this site.
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