Showing posts with label Jason Hommel. Show all posts
Showing posts with label Jason Hommel. Show all posts
Monday, October 4, 2010
The Silver Market is Extremely Undervalued, huge upside potential! Jason Hommel
Another argument for the massive potential upswing in the price of silver to multiples of 50x. There is less than 1% of the masses that actually have Silver. It is the future money and safe-haven of the common man.
There will be more Silver millionaires here in America than anywhere else in the world. Take advantage of the early movement back to the Gold and Silver standard. As an American patriot, you have inside knowledge for the explosion in the price of Silver. 1000oz in the near future may make you a millionaire.
Paul Bea Monex- 800-949-4653 x2172 Use Kevin from Goldmoneybill.org as referral. 100oz min.
Apmex- for small purchases.
Wednesday, May 26, 2010
Silver Top Ten Reasons Hommel
Ten Topics on Silver
(Each in exactly 101 Words!)
Silver Stock Report
by Jason Hommel, May 24th, 2010
Usury.
Lending at interest (usury) is the bane of our era, the highest crime of the ages, condemned by prophets, regulated by God, and ignored by modern man. God said no usury, unless you loan to other nations, but every seventh year is supposed to be a time of debt forgiveness, thus, it's a plan to teach the nations about God, yet abused instead to enslave people into perpetual bondage. Usurers want the whole earth, plus 6%! Lending is not so much a problem as is the interest! When gold is money, gold grows more valuable over time, so "increase" is built in!
The Big Picture for Silver.
No nation on earth uses silver or gold as a circulating medium of exchange, or common currency. This trend to not use silver started over 150 years ago, and has come to an end. If monetary demand for silver changes, it can only go up. Money is also a store of value, and people are recognizing that more and more. About 65 years ago, at the end of WWII, the world entered the age of electronics, and the demand for silver in electrical contacts soared tenfold. This has consumed more than half of all the silver ever mined since the beginning of time.
Supply and Demand for Silver.
The world annual mine output for silver is about 600 million oz., with about another 200 million oz. from recycling, and another 100 million oz. from selling from other sources. Industrial consumption is about 45%, jewelry consumes about 25%, photography is down to about 15%, leaving about 15% for investor demand. Investors buy about 100 to 150 million oz. of silver per year, which is barely $2 billion. Yet the BIS estimates that most all of the worlds' banks have $200 billion in "other precious metal" (or silver) notional value worth of derivatives on the books, indicating that all paper silver is all fraud. Paper money, unbacked by silver, is fraud, too.
Eternal Properties of Silver.
Silver is rare, dense, fungible, divisible, transportable, non perishable. These qualities unique to both silver and gold make them both an excellent store of value, unit of account, and medium of exchange. Silver is the best reflector, and the best electrical conductor in the world, and is a great germ killer, too. These qualities make silver valuable in tiny quantities to industry. Gold conducts less well than silver, does not kill germs, is too expensive to consume, and is not a viable alternative. Neither is paper. Gold coins smaller than 1/10 of an oz. are not practical, making silver essential as money.
Exchange Traded Silver Funds.
JP Morgan is the custodian of the silver for the silver ETF, SLV. JP Morgan is also the largest trader of derivatives on the earth, and the holder of the large excessive and concentrated short position in silver on the COMEX, and is being investigated by both the CFTC and the US Justice Department. The proof is not on me to prove they don't have the silver. Proof should be on them to prove that they are an honest custodian. SLV's silver is not able to be audited, and you can't take delivery. Silver is payment in full, not a promise.
Futures Contracts.
Many people are deceived by greed, thinking they can earn more money if they buy silver on leverage, putting only part of the money down as payment, to enable them to "control" more silver. But if they don't take delivery of silver, then they are not buying silver, and not controlling any silver, but only get a phantom promise of silver from entities who could not possibly have enough silver to make full delivery. It's like the fraud of fractional reserve banking, but business as usual today. I believe it is a moral failure to be deceived by these con games.
Silver Certificates.
Certificates and storage programs are a worse con. Pay full price to be conned with storage of silver that does not exist! Canadian banks and Morgan Stanley have both been caught selling non existent silver to clients in the past ten years, and their defense is that it is business as usual; that everybody does it. Sending brokerage statements showing silver amounts, when no silver exists, should be one count of mail fraud for every customer! It amazes me that many people do not have the courage and responsibility that is required to guard their silver. No work equals no results.
Collector Coins.
Many investors are lured into the precious metals market by dealers such as Goldline who is advertised on Glenn Beck. They mark up "collector" coins anywhere up to 30-100% over spot. There is no crime in charging a high price, but the scheme is borderline criminal. By selling older coins as "non-confiscable," they confiscate nearly half of an investor's money right off the top! By selling those same coins through a leverage program, they don't even have to deliver if the customer does not come up with all the money, and thus, may be selling collector coins that do not exist.
Silver Stocks.
I was guilty of talking up silver stocks, as a way to gain leverage to the rising price of silver. What the market gave, it took away. Even my extremely profitable newsletter that showed a look at my portfolio is now in the dustbin, a relic of internet history. But new internet investors have popped up, claiming great gains as they bought on the dip in 2008. Too late to chase such gains now. Stocks are subject to capital gains, nationalization risk, mismanagement risk, debt risk, funding risk, futures market hedging risk, mine collapse risk, strike risk, tax risk. Why risk it?
Bullion Items
When you buy physical silver, it comes in the form of actual shapes, which we call products. Popular forms of 99.9% pure silver are 100 oz. bars, 10 oz. bars, 1 oz. rounds, 1 troy oz. silver Eagles. There is also 90% silver coinage dated from 1964 and earlier. Occasionally, we get odd weight silver bars, 5 oz. silver bars, 1 oz. silver bars or other odd shaped silver pieces. And there are also the 1000 oz. COMEX bars, each one varies by weight up to 10%, with the exact weight stamped on the bar. Ten oz. bars are popular; they used to be the most expensive form, but now, the cheapest.
JH MINT & Coin Shop, Grass Valley, CA
(530) 273-8175
http://www.jhmint.com/
Monex- The lowest cost Gold and Silver retailer. Paul Bea account rep.
800-949-4653 x2172 Use Kevin from UScivilflags.org as referral to support this site.
(Each in exactly 101 Words!)
Silver Stock Report
by Jason Hommel, May 24th, 2010
Usury.
Lending at interest (usury) is the bane of our era, the highest crime of the ages, condemned by prophets, regulated by God, and ignored by modern man. God said no usury, unless you loan to other nations, but every seventh year is supposed to be a time of debt forgiveness, thus, it's a plan to teach the nations about God, yet abused instead to enslave people into perpetual bondage. Usurers want the whole earth, plus 6%! Lending is not so much a problem as is the interest! When gold is money, gold grows more valuable over time, so "increase" is built in!
The Big Picture for Silver.
No nation on earth uses silver or gold as a circulating medium of exchange, or common currency. This trend to not use silver started over 150 years ago, and has come to an end. If monetary demand for silver changes, it can only go up. Money is also a store of value, and people are recognizing that more and more. About 65 years ago, at the end of WWII, the world entered the age of electronics, and the demand for silver in electrical contacts soared tenfold. This has consumed more than half of all the silver ever mined since the beginning of time.
Supply and Demand for Silver.
The world annual mine output for silver is about 600 million oz., with about another 200 million oz. from recycling, and another 100 million oz. from selling from other sources. Industrial consumption is about 45%, jewelry consumes about 25%, photography is down to about 15%, leaving about 15% for investor demand. Investors buy about 100 to 150 million oz. of silver per year, which is barely $2 billion. Yet the BIS estimates that most all of the worlds' banks have $200 billion in "other precious metal" (or silver) notional value worth of derivatives on the books, indicating that all paper silver is all fraud. Paper money, unbacked by silver, is fraud, too.
Eternal Properties of Silver.
Silver is rare, dense, fungible, divisible, transportable, non perishable. These qualities unique to both silver and gold make them both an excellent store of value, unit of account, and medium of exchange. Silver is the best reflector, and the best electrical conductor in the world, and is a great germ killer, too. These qualities make silver valuable in tiny quantities to industry. Gold conducts less well than silver, does not kill germs, is too expensive to consume, and is not a viable alternative. Neither is paper. Gold coins smaller than 1/10 of an oz. are not practical, making silver essential as money.
Exchange Traded Silver Funds.
JP Morgan is the custodian of the silver for the silver ETF, SLV. JP Morgan is also the largest trader of derivatives on the earth, and the holder of the large excessive and concentrated short position in silver on the COMEX, and is being investigated by both the CFTC and the US Justice Department. The proof is not on me to prove they don't have the silver. Proof should be on them to prove that they are an honest custodian. SLV's silver is not able to be audited, and you can't take delivery. Silver is payment in full, not a promise.
Futures Contracts.
Many people are deceived by greed, thinking they can earn more money if they buy silver on leverage, putting only part of the money down as payment, to enable them to "control" more silver. But if they don't take delivery of silver, then they are not buying silver, and not controlling any silver, but only get a phantom promise of silver from entities who could not possibly have enough silver to make full delivery. It's like the fraud of fractional reserve banking, but business as usual today. I believe it is a moral failure to be deceived by these con games.
Silver Certificates.
Certificates and storage programs are a worse con. Pay full price to be conned with storage of silver that does not exist! Canadian banks and Morgan Stanley have both been caught selling non existent silver to clients in the past ten years, and their defense is that it is business as usual; that everybody does it. Sending brokerage statements showing silver amounts, when no silver exists, should be one count of mail fraud for every customer! It amazes me that many people do not have the courage and responsibility that is required to guard their silver. No work equals no results.
Collector Coins.
Many investors are lured into the precious metals market by dealers such as Goldline who is advertised on Glenn Beck. They mark up "collector" coins anywhere up to 30-100% over spot. There is no crime in charging a high price, but the scheme is borderline criminal. By selling older coins as "non-confiscable," they confiscate nearly half of an investor's money right off the top! By selling those same coins through a leverage program, they don't even have to deliver if the customer does not come up with all the money, and thus, may be selling collector coins that do not exist.
Silver Stocks.
I was guilty of talking up silver stocks, as a way to gain leverage to the rising price of silver. What the market gave, it took away. Even my extremely profitable newsletter that showed a look at my portfolio is now in the dustbin, a relic of internet history. But new internet investors have popped up, claiming great gains as they bought on the dip in 2008. Too late to chase such gains now. Stocks are subject to capital gains, nationalization risk, mismanagement risk, debt risk, funding risk, futures market hedging risk, mine collapse risk, strike risk, tax risk. Why risk it?
Bullion Items
When you buy physical silver, it comes in the form of actual shapes, which we call products. Popular forms of 99.9% pure silver are 100 oz. bars, 10 oz. bars, 1 oz. rounds, 1 troy oz. silver Eagles. There is also 90% silver coinage dated from 1964 and earlier. Occasionally, we get odd weight silver bars, 5 oz. silver bars, 1 oz. silver bars or other odd shaped silver pieces. And there are also the 1000 oz. COMEX bars, each one varies by weight up to 10%, with the exact weight stamped on the bar. Ten oz. bars are popular; they used to be the most expensive form, but now, the cheapest.
JH MINT & Coin Shop, Grass Valley, CA
(530) 273-8175
http://www.jhmint.com/
Monex- The lowest cost Gold and Silver retailer. Paul Bea account rep.
800-949-4653 x2172 Use Kevin from UScivilflags.org as referral to support this site.
Sunday, December 20, 2009
Silver @ $400oz adjusted for Inflation from $50 high 1980
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
(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
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.
Friday, November 6, 2009
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
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.
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!
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Call the JH MINT, 10AM to 5PM Pacific, Monday to Friday:
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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.
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.
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
Saturday, August 1, 2009
Why I would manipulate Silver? If...
By Jason Hommel SilverStockReport.com
Goldman Sachs has admitted that they have a computer program that can be used to manipulate markets.
“The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,”
For over ten years,GATA has gathered information and admissions from central bankers and major bullion banks that the price of gold on the world market is manipulated lower than it should be. Well, one more admission is close enough for me to be counted as one more proof.
Many people are paid to deny such manipulation of course, because the people who are doing the manipulating are earning a lot of money from their ability to print money at will, without it showing up in a rising gold price.
One of the more preposterous denials of manipulation is that keeping silver down in a rising market would simply cost too much, as nobody could afford the losses.
That's just propaganda, of course. Losses on bad trades, such as being short the silver market, must be taken by somebody.
But my strength lies in running the numbers, using estimates, and exaggerations, to prove the point.
At the most, I've seen the silver market with a total open interest of up to 800 million ounces. This is a rare top, of course, but it can be used to determine a hypothetical maximum of "total losses" for being short silver during the entire bull market.
Silver has moved from a low of about $4.15/oz. in early 2003. Since then, silver topped out at about $21/oz. in the spring of 2008.
Using those three figures can give us a maximum total estimate of COMEX paper silver losses, assuming 5 unreasonable and exaggerated things.
1. That the short position was all put on, and initiated, entirely, at $4.15 -- which it wasn't, it was put on starting at the former top in 1980 of $50/oz, and major bullion banks have always been short, ever since.
2. That the short position was completely covered at the top of $21 -- which it wasn't, and it got much bigger at the top, and again, after that top, around $16/oz, as the banks sold 41 times more paper silver as was purchased by physical silver investors in a month, which helped to push the price down to $8/oz, which was very profitable for part of their position.
See: A Tribute to 7th Grade Math August 31, 2008
http://silverstockreport.com/2008/7thgrade.html
3. That the short position was one size, and held the entire time with no trading -- which it wasn't.
4. That the short position was always held by entirely one entity -- which it wasn't.
5. That the short position was always a maximum of 800 million oz. -- which it wasn't.
So, given the real facts, the losses on the short position would have been much smaller, but we are not interested in the smallest possible cost, but the largest possible cost, to utterly refute and ridicule the notion that it would be "too expensive" to manipulate the silver market in a rising market.
So, the difference between $21 and $4.15 = $16.85
The loss of $16.85 x 800 million oz. = $13.48 billion
Even with all the exaggerated figures, exaggerated in 5 ways, still brings the total losses in silver manipulation to a theoretical maximum of $13.5 billion. Clearly, the real loss, being short on silver at the COMEX, must have been much less.
But I would guess that they might even have profited along the way, instead of taking losses, for several reasons.
First, they have those "manipulation trading programs" admitted by Goldman Sachs at the start of this article.
Second, their positions are so large, that those who are short, ARE the market, and I'm sure they use their computer programs to only sell "just enough" to move the market price nearly at will.
Third, they know their own clients' books, and stop losses, and can run the price of silver to trigger those stop losses to take over client long positions, so their clients lose money.
Fourth, the COMEX positions are smaller than their OTC positions, which are a much bigger liability.
Fifth, rigging the silver price aids the rigging of the gold price, and both allow the continued existence of a falsely strong U.S. dollar, which they have printed up over $1 trillion of this year, with no new "inflation" showing up in the prices of gold and silver.
And that fifth reason is so profitable, that a $13 billion loss in COMEX trading is just "the cost of doing business", and anyone who can't see that, is either blind, or paid off, and you don't need a sophisticated computer program to realize that, but only the willingness to perform 7th grade math on 3 numbers, as I just went over.
The reason for me doing this simple math exercise is to show by comparison how that maximum figure of $13 billion, is so very miniscule, so very tiny, compared to that other figure listed as my fourth reason above, a very important figure, the BIS OTC silver numbers.
The BIS (Bank of International Settlements) publishes a list of the notional value of outstanding OTC (Over the Counter) commodity derivatives. The category of interest is "Other precious metals", which is mostly all silver. The amount in Jan. 2008, was $190 billion.
That consisted of $86 billion in forwards and swaps, and $104 billion in options.
http://www.bis.org/statistics/otcder/dt21c22a.pdf
In Jan. 2008, the silver price was about $16/oz. Thus, we can see that the number of ounces short in that "OTC" market was $190 billion / $16 = 11,875 million ounces.
This comparison is extremely important, because the OTC market is much bigger than the COMEX, which had reported short positions of a maximum of only about 800 million ounces of silver.
Currently, COMEX silver open interest is 133,000 contracts for 5000 oz. each, which is 665 million oz.
http://news.silverseek.com/COT/1246909610.php
Clearly, a loss of $16.85/oz., during the entire bull market in silver from 2003, over 11,875 million ounces in the OTC market, would be a much bigger loss, as it would be $200 billion!
Yes, in "OTC Bullion Accounts", world bankers have a potential loss of about $200 billion, if they could even deliver 11,875 million ounces that clearly doesn't exist in their vaults, and doesn't exist in the world even to buy!
It is also extremely important to note at this point that the world's silver mines only produce about 600 million ounces, and world physical investment demand is only about 100 million ounces, or about $1.3 billion at the current $13/oz.!
So, if you were one of those bankers, and you had a potential loss of $200 billion wouldn't you rather lose $13 billion trading at the COMEX to save the $200 billion loss in the OTC market? I would.
That must be very near to how they rationalize it.
After all, if you can control the reported price on the open markets, then your losses in the "over the counter" market is much smaller.
And it's a great scam, as long as people continue to be convinced to hold paper silver other than real silver, which they are, as the numbers prove it.
With only $1.5 billion going towards the purchase of actual physical silver in a year, while $200 billion is sitting in OTC "other precious metal" accounts, it goes to show that the vast majority of people who own silver, or about 99% of assets in "silver" are really paper silver, most of which could not possibly exist as real silver.
And that still does not include all the other paper markets!
For example, another paper market is the silver certificates issued by Canadian banks, that the Banks are no longer redeeming. The refusal and inability to redeem Canadian silver certificates has continued without much notice, and no official reports or admission. It's like a silent bankruptcy, not even getting any press or much blog coverage, because, still, so few people even attempt to redeem them. But my point is that I have no idea of the size of that paper market, it could be in the billions, too.
And those BIS numbers also don't include the LBMA accounts that trade up to 30 billion ounces of silver per year, which is about 120 million ounces of silver per day, on a base of 75 million ounces of physical silver, which is another absurdity, of course! Those numbers were reported in the CPM Group's annual silver book for 2008.
And those BIS numbers don't include the ETFs either, since the ETFs are not an "over the counter" market, but a transparent one, and also don't likely have any silver, since the custodian is JP Morgan, who has also been identified as the key bank that is short in the silver market on the COMEX.
So, perhaps much less than 1% of people who think they have silver, actually have any physical silver.
Furthermore, those people who are blissfully happy to let their assets sit in "paper silver" accounts are nearly guaranteed to not make any significant money in silver, if only because when silver does soar past $100/oz., there's no way that those bankers would pay out $100 x 11,875 million ounces = $1,187 billion dollars to those paper silver holders.
And of course, 11,875 million ounces of silver does not exist in the world for them to buy, cover, and pay out, in any event!
Instead, the banks will do as they always do, and merely change the rules, or force a cash settlement (which is a quasi-"bankruptcy") at much lower silver prices. They will simply default, which means that they will fail to deliver silver that they don't have, of course.
Their danger, of course, in doing even that, is that people might begin to wake up, and demand real silver if they can't have paper silver.
After all, paper silver serves its purpose to manipulate silver prices downwards, only if it serves as an alternative to prevent people from buying real silver.
Here's an additional cost of the manipulation. Manipulation only works if they can actually deliver real silver, at lower than market prices. I have heard of offers to miners of up to 4% over spot for access to all of their silver. Isn't that kind of offer evidence that the "spot" price is manipulated lower than the real cost of real silver?
So, let's calculate the maximum potential cost of that. Suppose the world bankers bought 100% of world production this way, at 4% over spot, from the miners and refiners, and then turned it around, to sell it at what becomes "spot", for 4% less, at a manipulated "loss", a loss to manipulate the markets. With 600 million oz. of world mining production, at $13/oz., x 4% is a mere $312 million, a tiny cost of "doing business" to keep manipulation going, and to continue the COMEX rigging, and to prevent the bankruptcy and loss of $200 billion in the OTC markets!
And even that $312 million "loss" could be mitigated, by moving the price of silver lower, at will, on the "spot" futures market, precisely on those days that miners or refiners sell to the bankers "at 4% spot". I've always wondered why miners always seem to report sales prices lower than average for the quarter, while often claiming to be using some sort of price protecting hedges to get "above market" prices. That must explain it, in part.
And so, that's why I would manipulate silver, and gold, if I were a blood-sucking vampire of a central banker, who had no conscience, and no knowledge of the importance of honest dealings.
One of my goals is to fight such wickedness in high places, as I strive to expose those evil ones to the light of truth to end their evil oppression.
I believe the manipulation can end suddenly, at virtually any time, as any one of nearly 1000 billionaires, funds, or nations, could decide to buy silver at any time, causing delivery defaults, and market failures, and major price dislocations.
I believe the manipulation usually ends when they run out of silver to deliver, and then, people begin to stop trusting in paper promises, such as happened to gold in 1933 and 1971. If the failure to redeem Canadian silver certificates is any indication, the world is scraping the bottom of barrel for silver.
I believe that when the manipulation ends, with delivery defaults, precious metals prices will rise with shocking speed, and even my own re-supply sources will likely dry up, and you might not be able to buy silver at any price, for an extended time, until the market price is much, much higher.
Goldman Sachs has admitted that they have a computer program that can be used to manipulate markets.
“The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,”
For over ten years,GATA has gathered information and admissions from central bankers and major bullion banks that the price of gold on the world market is manipulated lower than it should be. Well, one more admission is close enough for me to be counted as one more proof.
Many people are paid to deny such manipulation of course, because the people who are doing the manipulating are earning a lot of money from their ability to print money at will, without it showing up in a rising gold price.
One of the more preposterous denials of manipulation is that keeping silver down in a rising market would simply cost too much, as nobody could afford the losses.
That's just propaganda, of course. Losses on bad trades, such as being short the silver market, must be taken by somebody.
But my strength lies in running the numbers, using estimates, and exaggerations, to prove the point.
At the most, I've seen the silver market with a total open interest of up to 800 million ounces. This is a rare top, of course, but it can be used to determine a hypothetical maximum of "total losses" for being short silver during the entire bull market.
Silver has moved from a low of about $4.15/oz. in early 2003. Since then, silver topped out at about $21/oz. in the spring of 2008.
Using those three figures can give us a maximum total estimate of COMEX paper silver losses, assuming 5 unreasonable and exaggerated things.
1. That the short position was all put on, and initiated, entirely, at $4.15 -- which it wasn't, it was put on starting at the former top in 1980 of $50/oz, and major bullion banks have always been short, ever since.
2. That the short position was completely covered at the top of $21 -- which it wasn't, and it got much bigger at the top, and again, after that top, around $16/oz, as the banks sold 41 times more paper silver as was purchased by physical silver investors in a month, which helped to push the price down to $8/oz, which was very profitable for part of their position.
See: A Tribute to 7th Grade Math August 31, 2008
http://silverstockreport.com/2008/7thgrade.html
3. That the short position was one size, and held the entire time with no trading -- which it wasn't.
4. That the short position was always held by entirely one entity -- which it wasn't.
5. That the short position was always a maximum of 800 million oz. -- which it wasn't.
So, given the real facts, the losses on the short position would have been much smaller, but we are not interested in the smallest possible cost, but the largest possible cost, to utterly refute and ridicule the notion that it would be "too expensive" to manipulate the silver market in a rising market.
So, the difference between $21 and $4.15 = $16.85
The loss of $16.85 x 800 million oz. = $13.48 billion
Even with all the exaggerated figures, exaggerated in 5 ways, still brings the total losses in silver manipulation to a theoretical maximum of $13.5 billion. Clearly, the real loss, being short on silver at the COMEX, must have been much less.
But I would guess that they might even have profited along the way, instead of taking losses, for several reasons.
First, they have those "manipulation trading programs" admitted by Goldman Sachs at the start of this article.
Second, their positions are so large, that those who are short, ARE the market, and I'm sure they use their computer programs to only sell "just enough" to move the market price nearly at will.
Third, they know their own clients' books, and stop losses, and can run the price of silver to trigger those stop losses to take over client long positions, so their clients lose money.
Fourth, the COMEX positions are smaller than their OTC positions, which are a much bigger liability.
Fifth, rigging the silver price aids the rigging of the gold price, and both allow the continued existence of a falsely strong U.S. dollar, which they have printed up over $1 trillion of this year, with no new "inflation" showing up in the prices of gold and silver.
And that fifth reason is so profitable, that a $13 billion loss in COMEX trading is just "the cost of doing business", and anyone who can't see that, is either blind, or paid off, and you don't need a sophisticated computer program to realize that, but only the willingness to perform 7th grade math on 3 numbers, as I just went over.
The reason for me doing this simple math exercise is to show by comparison how that maximum figure of $13 billion, is so very miniscule, so very tiny, compared to that other figure listed as my fourth reason above, a very important figure, the BIS OTC silver numbers.
The BIS (Bank of International Settlements) publishes a list of the notional value of outstanding OTC (Over the Counter) commodity derivatives. The category of interest is "Other precious metals", which is mostly all silver. The amount in Jan. 2008, was $190 billion.
That consisted of $86 billion in forwards and swaps, and $104 billion in options.
http://www.bis.org/statistics/otcder/dt21c22a.pdf
In Jan. 2008, the silver price was about $16/oz. Thus, we can see that the number of ounces short in that "OTC" market was $190 billion / $16 = 11,875 million ounces.
This comparison is extremely important, because the OTC market is much bigger than the COMEX, which had reported short positions of a maximum of only about 800 million ounces of silver.
Currently, COMEX silver open interest is 133,000 contracts for 5000 oz. each, which is 665 million oz.
http://news.silverseek.com/COT/1246909610.php
Clearly, a loss of $16.85/oz., during the entire bull market in silver from 2003, over 11,875 million ounces in the OTC market, would be a much bigger loss, as it would be $200 billion!
Yes, in "OTC Bullion Accounts", world bankers have a potential loss of about $200 billion, if they could even deliver 11,875 million ounces that clearly doesn't exist in their vaults, and doesn't exist in the world even to buy!
It is also extremely important to note at this point that the world's silver mines only produce about 600 million ounces, and world physical investment demand is only about 100 million ounces, or about $1.3 billion at the current $13/oz.!
So, if you were one of those bankers, and you had a potential loss of $200 billion wouldn't you rather lose $13 billion trading at the COMEX to save the $200 billion loss in the OTC market? I would.
That must be very near to how they rationalize it.
After all, if you can control the reported price on the open markets, then your losses in the "over the counter" market is much smaller.
And it's a great scam, as long as people continue to be convinced to hold paper silver other than real silver, which they are, as the numbers prove it.
With only $1.5 billion going towards the purchase of actual physical silver in a year, while $200 billion is sitting in OTC "other precious metal" accounts, it goes to show that the vast majority of people who own silver, or about 99% of assets in "silver" are really paper silver, most of which could not possibly exist as real silver.
And that still does not include all the other paper markets!
For example, another paper market is the silver certificates issued by Canadian banks, that the Banks are no longer redeeming. The refusal and inability to redeem Canadian silver certificates has continued without much notice, and no official reports or admission. It's like a silent bankruptcy, not even getting any press or much blog coverage, because, still, so few people even attempt to redeem them. But my point is that I have no idea of the size of that paper market, it could be in the billions, too.
And those BIS numbers also don't include the LBMA accounts that trade up to 30 billion ounces of silver per year, which is about 120 million ounces of silver per day, on a base of 75 million ounces of physical silver, which is another absurdity, of course! Those numbers were reported in the CPM Group's annual silver book for 2008.
And those BIS numbers don't include the ETFs either, since the ETFs are not an "over the counter" market, but a transparent one, and also don't likely have any silver, since the custodian is JP Morgan, who has also been identified as the key bank that is short in the silver market on the COMEX.
So, perhaps much less than 1% of people who think they have silver, actually have any physical silver.
Furthermore, those people who are blissfully happy to let their assets sit in "paper silver" accounts are nearly guaranteed to not make any significant money in silver, if only because when silver does soar past $100/oz., there's no way that those bankers would pay out $100 x 11,875 million ounces = $1,187 billion dollars to those paper silver holders.
And of course, 11,875 million ounces of silver does not exist in the world for them to buy, cover, and pay out, in any event!
Instead, the banks will do as they always do, and merely change the rules, or force a cash settlement (which is a quasi-"bankruptcy") at much lower silver prices. They will simply default, which means that they will fail to deliver silver that they don't have, of course.
Their danger, of course, in doing even that, is that people might begin to wake up, and demand real silver if they can't have paper silver.
After all, paper silver serves its purpose to manipulate silver prices downwards, only if it serves as an alternative to prevent people from buying real silver.
Here's an additional cost of the manipulation. Manipulation only works if they can actually deliver real silver, at lower than market prices. I have heard of offers to miners of up to 4% over spot for access to all of their silver. Isn't that kind of offer evidence that the "spot" price is manipulated lower than the real cost of real silver?
So, let's calculate the maximum potential cost of that. Suppose the world bankers bought 100% of world production this way, at 4% over spot, from the miners and refiners, and then turned it around, to sell it at what becomes "spot", for 4% less, at a manipulated "loss", a loss to manipulate the markets. With 600 million oz. of world mining production, at $13/oz., x 4% is a mere $312 million, a tiny cost of "doing business" to keep manipulation going, and to continue the COMEX rigging, and to prevent the bankruptcy and loss of $200 billion in the OTC markets!
And even that $312 million "loss" could be mitigated, by moving the price of silver lower, at will, on the "spot" futures market, precisely on those days that miners or refiners sell to the bankers "at 4% spot". I've always wondered why miners always seem to report sales prices lower than average for the quarter, while often claiming to be using some sort of price protecting hedges to get "above market" prices. That must explain it, in part.
And so, that's why I would manipulate silver, and gold, if I were a blood-sucking vampire of a central banker, who had no conscience, and no knowledge of the importance of honest dealings.
One of my goals is to fight such wickedness in high places, as I strive to expose those evil ones to the light of truth to end their evil oppression.
I believe the manipulation can end suddenly, at virtually any time, as any one of nearly 1000 billionaires, funds, or nations, could decide to buy silver at any time, causing delivery defaults, and market failures, and major price dislocations.
I believe the manipulation usually ends when they run out of silver to deliver, and then, people begin to stop trusting in paper promises, such as happened to gold in 1933 and 1971. If the failure to redeem Canadian silver certificates is any indication, the world is scraping the bottom of barrel for silver.
I believe that when the manipulation ends, with delivery defaults, precious metals prices will rise with shocking speed, and even my own re-supply sources will likely dry up, and you might not be able to buy silver at any price, for an extended time, until the market price is much, much higher.
Wednesday, July 1, 2009
Housing Still Going down another 50% Silver going up!
Jason is one of the reasons that I have been investing all of my excess cash into Silver. It is the common man's safe haven. When Silver was money there was a 400% premium on Silver due to coinage from the government. Now there is about 10-15%.
(Sell your House and Buy Silver!)
Silver Stock Report
by Jason Hommel, July 1st, 2009
So far, out of 80,000 readers, nobody has asked me when the housing collapse will end. Funny. I might be regarded as knowing something about that, since I called it in advance, well before the peak, 5 years ago:
Overvalued Housing, Bonds & Stocks July 2, 2004
The lack of questions is a sign that the housing collapse has a long way to go, because, generally, people are still in the first stage of mourning the death of the housing boom: denial. Nobody can ask "When will the housing collapse end?" if they can't admit the phrase "housing collapse".
After Denial, next in the stages of mourning comes Guilt. Then Anger. Then Depression. Then Acceptance.
Unfortunately, people don't start asking questions until they get to the anger phase, and they don't start doing anything about it until the acceptance phase.
Let me help you get there more quickly.
Denial: Wake up! Housing prices will NOT soon stop going down, since in many locations, 10% of all properties are 90 days past due on their mortgages, and those foreclosures have not yet hit the market, and they will.
Guilt: You should have known! Government intervention into the economy always creates distortions, and government sponsored home loans through Fannie Mae and Freddie Mac and corruption at all levels gave everyone with a pulse and the ability to lie to qualify for a home loan, that extra and excessive buying power created the top, and this was easy for anyone to see. Why didn't you see it? Were you asleep?
Anger: But good intentioned democrats who wanted to help their poor constituents achive "the American Dream" of home ownership did nothing of the sort, they helped enslave poor people into debt, not true ownership, due to government meddling. It's the government's fault!
Depression: But what can you do about it? Nothing! No matter how much you work on your yard or keep your neighbors mowing their lawns, or no matter how much you write your congressman, and regardless of electing Obama, home values will continue to go down, and there's nothing you can do about it.
Acceptance: Well, there is one thing you can do. Sell your house! Get out of the way of this oncoming train wreck in motion.
The government is doing everything they can to stop it, but they will fail.
Everyone should know by now that the government is buying up the "toxic assets" of the banks, meaning, the mortgages that are worth more than the homes are worth. Government bought at the top, and they bought the worst of the "assets".
The housing crash will end when the government finally sells all of their housing, and "exits" the market.
That's what marked the bottom of the gold market. When the governments of the world were hell-bent on selling as much gold as possible, back in 1999-2001, when gold bottomed at $250/oz. They are still selling gold, but not as much, since they are running out of gold to sell.
Government intervention always distorts markets.
Housing topped, because of excessive government-backed loans. See, government was really buying housing on the way up, creating the top. The continued government buying, through bailouts, means we are still at the top.
Government buying created the top.
Therefore, government selling will create the bottom.
Tell me when the government, or Fed, will sell all their "toxic" mortgages, or forclose and sell the houses that back them, and I'll tell you when the housing market will bottom out.
Government dumping of all mortgages and housing could be a long way off--perhaps decades.
If we are fortunate, housing prices will drop 50-75% in 4-8 years, and it will be over quickly. That is unlikely, and would require the election of somebody like Ron Paul as President.
More likely, due to continued government intervention, as is taking place, the housing collapse could last another 20-30 years.
Yes, 70% of home sales are either short sales or foreclosures. However, this only means that some banks are selling. Most of the government mortgages are not being sold, and most of the homes owned by people are owned with mortgages, meaning, on leverage, and these are not yet being sold either. Just wait until the public starts dumping homes, AND the government starts dumping at the same time. Then, you will really see a housing crash.
A "normal" housing market will have most homes selling for far LESS than construction costs. After all, homes deteriorate, and a 20 year old faucet is not nearly as nice, or functional, as a new one. People know how to "write off the depreciation" of a home on their taxes, but this generation does not yet seem to understand that real homes, do, in actual fact, depreciate, as a normal function of real life!
If a new car can lose 20-30% of the value the moment it "drives off the lot", why is that not also applicable with homes? It should be the norm. When it's not, it's a bubble. Housing is still a bubble. Grossly overvalued.
=========
I've been reading and writing about silver for 10 years now. Sometimes, it's hard to "come up with something new" about silver, and so, sometimes I touch on real estate, or oil. But I think I have an new and important insight to share.
My education about silver has mostly come from other men who are writing today, who have 20 to 60 years of experience in precious metals, and it comes from my reading of history, and, of course, from my readers.
The historical perspective is important, but sometimes, things get forgotten by historical writers as people forget over time, and yet, knowldge is gained over time as humanity advances.
Back in the depression in the 1930's, silver was valued at around 29 cents per ounce, yet that silver was turned into U.S. silver coinage that was valued at around $1.40 per ounce! That silver thus formed the "backing" for the currency; as it was the currency, but it also formed the backing for the paper currency. In other words, paper could be "redeemed" or "exchanged" for silver currency, and thus, it was said that silver "backed" the currency.
Unfortunately, writers in the metals community lost some perspective on that by 1964, and I believe that negatively influenced my thinking for years.
They wrote statements like this, and see if you can see the inconsistency with the facts above:
"After 1964, 90% silver coins were no longer issued, and silver no longer backed the currency. Thus, without any possibility of redemption, people were forced to hold unbacked paper money, or trade their dollars for other fiat paper currencies, as there was no safe haven."
Or they would write:
"After 1964, 90% silver coins were no longer issued, and silver no longer backed the currency. After that, paper money could be exchanged to buy silver only at excessive premiums which discourage trade. See, when silver was money, you could exchange a $1 of paper, for a silver dollar, at zero cost, paying no premiums."
BUt silver was not valued at $1.40/oz. the entire time that silver was used as currency in dimes, quarters and half dollars for 173 years or so, but as low as $.29/oz! The silver that you could get, when turning in your paper, was up to 400% overvalued, as $0.29 x 5 = $1.45!
These days, we all know a bit more about silver premiums, which is the extra price you pay, over spot, to buy silver. In the last year, premiums for silver coins and bars have ranged from about 50% down to about 5% over spot.
My math tells me that 5-50% is much less than 400%. Wouldn't you agree?
Thus, silver has a much lower premium today, than when "silver was US coinage".
I've written on this before, but here's the insight.
If silver, at 400% overvalued, can "back" the currency, then don't we have a de-facto "private" backing of the currency if you can actually buy silver from private dealers for much less, ranging from 5% to 50% over spot?
Yes, we do. Interesting thought, isn't it?
Here's something else. Over 100 years ago, before the founding of the Federal Reserve which issues all paper money, there were privately issued paper money called dollars. But who issued them? Various banks. Each bank would issue paper dollars that said it was issued by each bank, like the First Bank of Iowa, or some place. Other banks would redeem those dollars, at varying discounts, depending on how far away the issuing bank was from the redeeming bank, and also depending on the reputation of the bank. After all, a redeeming bank would have to trust the issuing bank could deliver the gold or silver upon redemption.
Our markets works shockingly similarly, even today.
Today, coin shops and bullion dealers will redeem Federal Reserve Notes (dollars) at varying discounts, depending on the volume of trade, and also, depending on their supply sources, such as mints, major wholesalers, or public selling. Some of those supply sources tap directly into the large bullion banks that are the owners of the Federal Reserve and/or who have enormous short positions at the COMEX or in over the counter derivatives, and/or are custodians for the bullion ETFs.
Our markets are so free, that we actually have a de facto private precious metals backing for the current paper dollar. By "de facto" I mean "in practice but not necessarily ordained by law".
My main point is that anyone can exchange their paper money, for silver or gold, on much better terms today, at much less premiums today, than during the vast majority of the time that silver "officially" backed the currency!
The fallacy of thought was that silver could be bought for "zero premium" when it was money, while today, you have to pay an "unfair 5-10%". The truth is that when silver was money, government distortions and monopoly pricing created 400% premiums, also called "seniorage".
http://en.wikipedia.org/wiki/Seniorage
Implications? I don't mean that all of our currency is backed by silver. The relative amounts are so different, it's shocking. Dollars in the banks now exceeds $14 trillion, or $14,000 billion, but the amount of money going into physical silver per year, world wide, is only about $1 billion.
I can see the criticism now. People will say that I'm just trying to justify selling silver at up to 10% over spot when other dealers may have it offered at 5% over spot
Of course I am! Every business does that. Quality goods typically cost more.
But the point is that the free market in silver, or multiple sellers and suppliers (not just government currency), is creating the competition that leads to sometimes absurdly low prices, which is great for all silver buyers today.What quality do I offer? Speed & reliability, at a very low price!
You might be able to buy silver cheaper elsewhere than from me, but it may cost you more in terms of time, or you might lose it all in a default. Other dealers still have a 2-5 month delivery delay. Or the other dealers might default, because they might not have the silver, or might be in debt, or their suppliers might not have the silver.
What's worse is that some dealers are slower, less reliable, and more costly than I am!
I have 81,000 oz. of silver that I'm using to deal silver.
Thus, we have the goods, the real silver, ready to deliver upon demand, with zero default risk to you.
If you want to sell your home, and buy silver, you will be a very wise, and rare, customer.
We've heard from a few of our wiser customers, that they've already done exactly that, and they are now renting. In beautiful Grass Valley, CA, in the foothills of the Sierra mountains, where you would be surrounded by evergreen trees and all the modern conveniences of modern life, with access to high speed Comcast Cable internet, you can rent a million dollar McMansion / Ranch on multiple acres, with 5+ rooms, about 4000 sq. feet, for about $2000/month, or even less. We saw one for $1700! Housing must lose about 2/3 of the value, or more, from present day values, to come in line with such rents.
Sincerely,
Jason Hommel
In case you miss an email, check the archives, now on the main page:
http://silverstockreport.com/
See us also at:
Rocklin Coin Shop
4870 Granite Drive, Rocklin, CA 95677
http://rocklincoinshop.com/
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.
(Sell your House and Buy Silver!)
Silver Stock Report
by Jason Hommel, July 1st, 2009
So far, out of 80,000 readers, nobody has asked me when the housing collapse will end. Funny. I might be regarded as knowing something about that, since I called it in advance, well before the peak, 5 years ago:
Overvalued Housing, Bonds & Stocks July 2, 2004
The lack of questions is a sign that the housing collapse has a long way to go, because, generally, people are still in the first stage of mourning the death of the housing boom: denial. Nobody can ask "When will the housing collapse end?" if they can't admit the phrase "housing collapse".
After Denial, next in the stages of mourning comes Guilt. Then Anger. Then Depression. Then Acceptance.
Unfortunately, people don't start asking questions until they get to the anger phase, and they don't start doing anything about it until the acceptance phase.
Let me help you get there more quickly.
Denial: Wake up! Housing prices will NOT soon stop going down, since in many locations, 10% of all properties are 90 days past due on their mortgages, and those foreclosures have not yet hit the market, and they will.
Guilt: You should have known! Government intervention into the economy always creates distortions, and government sponsored home loans through Fannie Mae and Freddie Mac and corruption at all levels gave everyone with a pulse and the ability to lie to qualify for a home loan, that extra and excessive buying power created the top, and this was easy for anyone to see. Why didn't you see it? Were you asleep?
Anger: But good intentioned democrats who wanted to help their poor constituents achive "the American Dream" of home ownership did nothing of the sort, they helped enslave poor people into debt, not true ownership, due to government meddling. It's the government's fault!
Depression: But what can you do about it? Nothing! No matter how much you work on your yard or keep your neighbors mowing their lawns, or no matter how much you write your congressman, and regardless of electing Obama, home values will continue to go down, and there's nothing you can do about it.
Acceptance: Well, there is one thing you can do. Sell your house! Get out of the way of this oncoming train wreck in motion.
The government is doing everything they can to stop it, but they will fail.
Everyone should know by now that the government is buying up the "toxic assets" of the banks, meaning, the mortgages that are worth more than the homes are worth. Government bought at the top, and they bought the worst of the "assets".
The housing crash will end when the government finally sells all of their housing, and "exits" the market.
That's what marked the bottom of the gold market. When the governments of the world were hell-bent on selling as much gold as possible, back in 1999-2001, when gold bottomed at $250/oz. They are still selling gold, but not as much, since they are running out of gold to sell.
Government intervention always distorts markets.
Housing topped, because of excessive government-backed loans. See, government was really buying housing on the way up, creating the top. The continued government buying, through bailouts, means we are still at the top.
Government buying created the top.
Therefore, government selling will create the bottom.
Tell me when the government, or Fed, will sell all their "toxic" mortgages, or forclose and sell the houses that back them, and I'll tell you when the housing market will bottom out.
Government dumping of all mortgages and housing could be a long way off--perhaps decades.
If we are fortunate, housing prices will drop 50-75% in 4-8 years, and it will be over quickly. That is unlikely, and would require the election of somebody like Ron Paul as President.
More likely, due to continued government intervention, as is taking place, the housing collapse could last another 20-30 years.
Yes, 70% of home sales are either short sales or foreclosures. However, this only means that some banks are selling. Most of the government mortgages are not being sold, and most of the homes owned by people are owned with mortgages, meaning, on leverage, and these are not yet being sold either. Just wait until the public starts dumping homes, AND the government starts dumping at the same time. Then, you will really see a housing crash.
A "normal" housing market will have most homes selling for far LESS than construction costs. After all, homes deteriorate, and a 20 year old faucet is not nearly as nice, or functional, as a new one. People know how to "write off the depreciation" of a home on their taxes, but this generation does not yet seem to understand that real homes, do, in actual fact, depreciate, as a normal function of real life!
If a new car can lose 20-30% of the value the moment it "drives off the lot", why is that not also applicable with homes? It should be the norm. When it's not, it's a bubble. Housing is still a bubble. Grossly overvalued.
=========
I've been reading and writing about silver for 10 years now. Sometimes, it's hard to "come up with something new" about silver, and so, sometimes I touch on real estate, or oil. But I think I have an new and important insight to share.
My education about silver has mostly come from other men who are writing today, who have 20 to 60 years of experience in precious metals, and it comes from my reading of history, and, of course, from my readers.
The historical perspective is important, but sometimes, things get forgotten by historical writers as people forget over time, and yet, knowldge is gained over time as humanity advances.
Back in the depression in the 1930's, silver was valued at around 29 cents per ounce, yet that silver was turned into U.S. silver coinage that was valued at around $1.40 per ounce! That silver thus formed the "backing" for the currency; as it was the currency, but it also formed the backing for the paper currency. In other words, paper could be "redeemed" or "exchanged" for silver currency, and thus, it was said that silver "backed" the currency.
Unfortunately, writers in the metals community lost some perspective on that by 1964, and I believe that negatively influenced my thinking for years.
They wrote statements like this, and see if you can see the inconsistency with the facts above:
"After 1964, 90% silver coins were no longer issued, and silver no longer backed the currency. Thus, without any possibility of redemption, people were forced to hold unbacked paper money, or trade their dollars for other fiat paper currencies, as there was no safe haven."
Or they would write:
"After 1964, 90% silver coins were no longer issued, and silver no longer backed the currency. After that, paper money could be exchanged to buy silver only at excessive premiums which discourage trade. See, when silver was money, you could exchange a $1 of paper, for a silver dollar, at zero cost, paying no premiums."
BUt silver was not valued at $1.40/oz. the entire time that silver was used as currency in dimes, quarters and half dollars for 173 years or so, but as low as $.29/oz! The silver that you could get, when turning in your paper, was up to 400% overvalued, as $0.29 x 5 = $1.45!
These days, we all know a bit more about silver premiums, which is the extra price you pay, over spot, to buy silver. In the last year, premiums for silver coins and bars have ranged from about 50% down to about 5% over spot.
My math tells me that 5-50% is much less than 400%. Wouldn't you agree?
Thus, silver has a much lower premium today, than when "silver was US coinage".
I've written on this before, but here's the insight.
If silver, at 400% overvalued, can "back" the currency, then don't we have a de-facto "private" backing of the currency if you can actually buy silver from private dealers for much less, ranging from 5% to 50% over spot?
Yes, we do. Interesting thought, isn't it?
Here's something else. Over 100 years ago, before the founding of the Federal Reserve which issues all paper money, there were privately issued paper money called dollars. But who issued them? Various banks. Each bank would issue paper dollars that said it was issued by each bank, like the First Bank of Iowa, or some place. Other banks would redeem those dollars, at varying discounts, depending on how far away the issuing bank was from the redeeming bank, and also depending on the reputation of the bank. After all, a redeeming bank would have to trust the issuing bank could deliver the gold or silver upon redemption.
Our markets works shockingly similarly, even today.
Today, coin shops and bullion dealers will redeem Federal Reserve Notes (dollars) at varying discounts, depending on the volume of trade, and also, depending on their supply sources, such as mints, major wholesalers, or public selling. Some of those supply sources tap directly into the large bullion banks that are the owners of the Federal Reserve and/or who have enormous short positions at the COMEX or in over the counter derivatives, and/or are custodians for the bullion ETFs.
Our markets are so free, that we actually have a de facto private precious metals backing for the current paper dollar. By "de facto" I mean "in practice but not necessarily ordained by law".
My main point is that anyone can exchange their paper money, for silver or gold, on much better terms today, at much less premiums today, than during the vast majority of the time that silver "officially" backed the currency!
The fallacy of thought was that silver could be bought for "zero premium" when it was money, while today, you have to pay an "unfair 5-10%". The truth is that when silver was money, government distortions and monopoly pricing created 400% premiums, also called "seniorage".
http://en.wikipedia.org/wiki/Seniorage
Implications? I don't mean that all of our currency is backed by silver. The relative amounts are so different, it's shocking. Dollars in the banks now exceeds $14 trillion, or $14,000 billion, but the amount of money going into physical silver per year, world wide, is only about $1 billion.
I can see the criticism now. People will say that I'm just trying to justify selling silver at up to 10% over spot when other dealers may have it offered at 5% over spot
Of course I am! Every business does that. Quality goods typically cost more.
But the point is that the free market in silver, or multiple sellers and suppliers (not just government currency), is creating the competition that leads to sometimes absurdly low prices, which is great for all silver buyers today.What quality do I offer? Speed & reliability, at a very low price!
You might be able to buy silver cheaper elsewhere than from me, but it may cost you more in terms of time, or you might lose it all in a default. Other dealers still have a 2-5 month delivery delay. Or the other dealers might default, because they might not have the silver, or might be in debt, or their suppliers might not have the silver.
What's worse is that some dealers are slower, less reliable, and more costly than I am!
I have 81,000 oz. of silver that I'm using to deal silver.
Thus, we have the goods, the real silver, ready to deliver upon demand, with zero default risk to you.
If you want to sell your home, and buy silver, you will be a very wise, and rare, customer.
We've heard from a few of our wiser customers, that they've already done exactly that, and they are now renting. In beautiful Grass Valley, CA, in the foothills of the Sierra mountains, where you would be surrounded by evergreen trees and all the modern conveniences of modern life, with access to high speed Comcast Cable internet, you can rent a million dollar McMansion / Ranch on multiple acres, with 5+ rooms, about 4000 sq. feet, for about $2000/month, or even less. We saw one for $1700! Housing must lose about 2/3 of the value, or more, from present day values, to come in line with such rents.
Sincerely,
Jason Hommel
In case you miss an email, check the archives, now on the main page:
http://silverstockreport.com/
See us also at:
Rocklin Coin Shop
4870 Granite Drive, Rocklin, CA 95677
http://rocklincoinshop.com/
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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