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-- Posted 6 June, 2004 | Digg This Article
SUNDAY, June 6th, 2004
I'm producing this report on Sunday, because I attended the NY Gold show this week, and was on a plane on Friday eve.
This week's report lists 113 silver stocks. There are 31 silver stocks that list reserves, resources (and exploration potential.) which I calculate by using my "ounce in the ground" forumula. There are 52 explorers. There are about 30 additional "silver" stocks with incomplete information. Additions & Changes from last week are in bold.
If this is the first time you have seen this report, please try to read the entire report before sending me an email. This report goes out now to over 8900 investors each week in email. You can signup, or unsubscribe, to this report at http://www.goldismoney.com/subscription-ss.php
If you are an Accredited or Sophisticated investor and want information I may find out about private placement opportunities in some of the very best silver stocks in my opinion, (This is not a solicitation for any stock, and I'm not brokering any securities) you can sign up to receive such a notice by adding yourself to my private placement list at http://www.goldismoney.com/subscription-pp.php
Because I have a market reach, I also receive a lot of tips about silver stocks. And thus, I believe I may have invested in some of the best ones that came my way. If you believe I may have an edge based on my work and position... then the best way for me to share this with you is to is tell you where I put my money. It's not investment advice. I offer a monthly "look at my portfolio". I do not issue recommendations, and I don't list number of shares or the size of my portfolio, but I will show the top investments in my portfolio, by rank, updated monthly.
Price: $39.95/monthly, or $49.95 for a single month, or $295.00/year
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If you want to receive an email notice of when and where this FREE weekly report is published, sign up at http://www.goldismoney.com/free-ebook.php Anyone who signs up will also get a FREE e-book that explains the bullish case for gold and especially silver. If you have studied the silver market at all, then the time has come that you ought to be a teacher, and you ought to explain the silver story to all who will listen. GoldIsMoney.comis designed to help spread the word. I suggest you email the link to your address book, or email your friends now.
To read about my religious bias, see my other website, bibleprophesy.org There are two essays near the top of the page that explain why I believe the entire world will return to using gold and silver as money again before the end times. Hint, see Ezekiel 38. To read more about my religious bias when it comes to investing, see my essay, Biblical Guidelines for Managing your Money
Kitco reports silver at $5.78/oz. as of Friday, 5:30 PM West Coast US, which was used to calculate the following figures. The CAN $ / US $ conversion factor is .7365. I will use .74 for ease.
How to read the following table:
Stock Symbol that works at Yahoo! Finance (Company name) / Silver oz. "in ground" for 1 oz. silver's worth of stock. / valuation price change since last week relative to silver price change (and stock dilution, and resource changes, if any) / additional comments (EXPT is "exploration potential")
- ABX (BARRICK) 0.91 up --infamous hedger (18 mil oz. gold hedged, 3 yrs production) hedged?
- CDE (COEUR D'ALENE) 1.1 up --(also gold) in debt, produces at a loss.
- IPOAF.PK (INDUSTL PENOLES) 1.7 down --current producer, mostly family owned, hedged?
- SIL (APEX SILVER) 3.1 up --zinc bonus, low grades, cash rich--$345 million! in debt
- GRS GAM.TO (GAMMON LAKE) 3.1 up --current producer, owns 26% of Mexgold
- FSR.TO FSLVF.PK (FIRST SILVER) 4.5 down --current producer, (not profitable '03 3rd q.) unhedged
- CFTN.PK (CLIFTON MINING) 5.3 down -- (125 EXPT) (colloidal silver patent bonus)
- PAAS (PAN AMERICAN SILVER) 4.6 up --current producer debt free
- MFN MFL.TO (MINEFINDERS) 4.7 even --significant gold bonus, $35 mil cash on hand.
- KBR.V KBRRF.PK (KIMBER RSCS) 5.5 down One property, high grades, with exploration potential.
- WTZ WTC.TO (WESTERN SILVER) 5.9 down -- (21 EXPT) large mine development cost. copper & zinc bonus
- MGR.V MGRSF.PK (MEXGOLD RSCS) 6.9## down (##exploration target) -- bonanza grade discovery on Jan 13th
- * TM.V TUMIF.OB (TUMI RSCS) 7.4 up -- (15 EXPT) recent bonanza grade silver discovery
- SSRI SSO.V (SILVER STD RSC) 7.8 up --multi-property company, understands silver story
- ORM.V OREXF.PK (OREMEX RES) 8.7 down (36 EXPT)
- CZN.TO CZICF.PK (CDN ZINC) 9.0 up --large zinc bonus, high grades, low start up costs, great EXPT
- SRLM.PK (STERLING MINING) 11.5 down --(27 EXPT) acquired the Sunshine in Cour d'Alene
- IMR.V IMXPF.OB (IMA EXPL) 13.6 up (54 EXPT) --Explorer in Argentina
- FAN.TO FRLLF.PK (FARALLON RSCS) 13.7 way up --(23 EXPT) low grades, silver 1/3; also gold & zinc bonus.
- GGC.V GGCRF.PK (GENCO RESOURCES) 14.9 up --current producer in Mex. Plans for expansion and acquision
- RDV.TO RDFVF.PK (REDCORP VENTURE) 15.8 down --60% gold bonus
- CHD.V CHDSF.PK (CHARIOT RSCS) 17.2 down (explorer, with inferred resources)
- ADB.V ADBRF.PK (ADMIRAL BAY RSCS) 19.4 up --actively expanding resources. (Huge gas bonus)
- * PLE.V (PLEXMAR RES INC) 23.6 up
- * SVL.V STVZF.PK (SILVRCRST MINES) 24.4 up --(41+ EXPT) --(Silver in Honduras) +
- ASM.V ASGMF.PK (AVINO SILV GOLD) 26.2 up --owns 49% of the Avino +4 other silver props. (silver bonus)
- HDA.V (HUSIF?) (HULDRA SILVER) 28.3 way down --very tiny, zinc bonus, low start up costs.
- * MGN (MINES MGMT) 28.2 down --60% copper bonus (low grades), start up cost ~ $250 mil
- EXR.V EXPTF.PK (EXPATRIATE RECS) 28.1 down --significant zinc bonus 60% zinc, 25% silver (got out Atna)
- ABI.V ABMBF.PK (ABCOURT MINES) 38 down --large zinc & small gold bonus
- UNCN.OB (UNICO INC) 61 down --lease expiring on largest property, June 1 2004?????
* = I own shares
Explorers (by market cap, in millions):
- HL (HECLA MINING CO) .33 down --A PRODUCER (gold bonus) cash rich.
- SPM.V SMNPF.PK (SCORPIO MINING)
- EZM.V EZMCF.PK (EUROZINC MINING)
- CDU.V CUEAF.PK (CARDERO RSCS)
- AOT.V ASOLF.PK (ASCOT RSCS) -- owns percentage of Cardero, CDU.V
- * OTMN.PK (O.T. MINING) very large exploration potential
- MCAJF.PK (MACMIN LTD)
- * FCO.TO FCACF.PK (FORMATION CAPTL) Cobolt (and Sunshine silver refinery)
- * MMGG.OB (METALLINE MINE) --zinc/silver (historic high grade silver) (low cost revolutionary oxide zinc process)
- TVI.TO TVIPF.PK (TVI PACIFIC) --current producer of a dore silver bar 96% silver, 4% gold
- * FR.V FMJRF.PK (FIRST MAJESTIC) -- Bought a former silver producer. Acquiring silver properties.
- * NPG.V NVPGF.PK (NEVADA PAC GOLD) 38-186 "exploration potential" (owns 1 silver property, 10 gold properties)
- MAG.V MSLRF.PK (MAG SILVER)
- IAU.V ITDXF.PK (INTREPID MINRLS) 7 "exploration potential"
- ECU.V ECUXF.PK (ECU SILVER MINI) 4.1 down --(11 EXPT) --50% gold bonus
- CAUCF.PK (CALEDON RES)
- MMM.TO MMAXF.PK (MINCO MINING)
- MAI.V MNEAF.OB (MINERA ANDES) (gold bonus)
- * EDR.V EDRGF.PK (ENDEAVOUR GOLD) A PRODUCER (I could not yet find a listing of resources or reserves)
- PXI.V PNXPF.PK (Planet Exploration Inc.)
- * CBE.V CBEFF.PK (CABO MINING) --Historic Silver and Cobalt district
- QTA.V QURAF.PK (QUATERRA RES)
- BZA.V ABZGF.PK (AMER BONANZA)
- DNI.V DMNKF.PK (DUMONT NICKEL) exploring Clifton's property
- EXN.V EXLLF.PK (EXCELLON RSCS)
- BCM.V BCEKF.PK (BEAR CRK MINING)
- NJMC.OB (NEW JERSEY MIN)
- * CMA.V CRMXF.OB (CREAM MINERALS) 240 "exploration potential"
- * KG.V KDKGF.PK (KLONDIKE GOLD)
- SML.V SMLZF.PK (STEALTH MNRLS)
- (NEW BULLET GP) Amerix Precious Metals Corp (APM.V) 42 - 117 "exploration potential"
- SDR.V SDURF.PK (STROUD RSCS)
- CHMN.PK (CHESTER MINING)
- EPZ.V ESPZF.PK (ESPERANZA SILVR)
- GNG.V GGTHF.PK (GOLDEN GOLIATH) --Historic silver district in Mexico
- GPR.V GPRLF.PK (GREAT PANTHER)
- MMG.V MMEEF.PK (MCMILLAN GOLD)
- SHSH.PK (SHOSHONE SILVER)
- * KRE.V KREKF.PK (KENRICH ESKAY)
- EGD.V EGDMF.PK (ENERGOLD MINING)
- PCM.V PAOCF.PK (PAC COMOX RES)
- LEG.V LEGCF.PK (LATEEGRA RSCS)
- BGS.V BLDGF.PK (BALLAD GLD SLVR)
- * AUN.V AUNFF.PK (AURCANA CORP)
- SRY.V (STINGRAY RSCS)
- TUO.V TEUTF.PK (TEUTON RES)
- ASLM.PK (AMER SILVER MINI)
- BBR.V BBRRF.PK (BRETT RES)
- ROK.V ROCAF.PK (ROCA MINES INC)
- MTB.V (Mountain Boy Minerals Ltd)
- LSM.V LASCF.PK (Langis Silver & Cobalt Mining Co Ltd)
- CBP.V CPBMF.PK (CONS PAC BAY MIN)
* = I own shares
Silver oz. "in ground" means and counts all "silver oz. in the ground" as the same, but they are NOT EQUAL. Some are more certain and others are more speculative. Some are higher grades, some are lower grades. They range from most certain to least certain such as: "proven & probable reserves," "measured, indicated, inferred resources." This single number next to each stock symbol above represents the approximate number of ounces of silver in the ground you are buying title to when you invest the equivalent of one ounce of silver into buying shares in the company at current prices. Here's the math on how to get it. 1. Get a market cap in U.S. dollars. Divide that by the silver price, so the market cap is denominated in terms of silver ounces. Then, divide the ounces in the ground by the market cap as denominated in silver. This tells you how many ounces of silver in the ground you are buying when you give up one ounce of silver in you hand for shares of stock, instead.
(It does not include zinc, or copper, or lead, but it does include gold at a 1:10 ratio of gold:silver.) At goldsheetlinks.com, they add 100% of proven & probable reserves, but only 70% of measured & indicated resources, and only 50% of inferred resources. I don't do that. I count them as all the same.
I believe that the two most important numbers that a silver mining company can report are the resources in the ground, and the number of their fully diluted shares. Of course, there is much more to a mining company than that, but without those numbers, it is extremely difficult to even start an evaluation. This report highlights those key numbers, where possible. If you think those numbers are also important, please email the executives of the mining companies you own, and ask them to make sure their numbers are clearly published at their websites.
To quickly "tab" down to the company you are interested in, note the symbol. Then hit "control-F" to "FIND" the symbol below.
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If I use a word you don't understand and is not listed in the dictionary at www.m-w.com you can look up the meaning at http://investorwords.com/
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WEEKLY COMMENTARY (All new in this section):
I will be speaking in Vancouver on June 13-14, 2004
World Gold, PGM & Diamond Investment Conference,
http://www.goldshow.ca/
I will be speaking at 10:30 - 11:00 AM on June 13th in workshop #2 (a smaller area than the main speaker hall).
I will be speaking at 3:00 - 3:30 PM on June 14th in workshop #4 in a panel discussion on silver.
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I just returned from the NY gold show on June 2 -3. There are several companies that are increasingly deciding to hold their cash in the form of silver bullion. These companies are:
SSRI SSO.V (SILVER STANDARD RSC)
SRLM.PK (STERLING MINING)
NPG.V NVPGF.PK (NEVADA PACIFIC GOLD)
EDR.V EDRGF.PK (ENDEAVOUR GOLD)
One of the things that surprised me was how little other silver companies know what the others are doing. Very few other silver mining executives knew that Silver Standard (SSRI) recently bought silver bullion a month and a half ago, as a place to invest 20% of their cash until they need it. Excerpt from SSRI press release.
As of May 12: The company has budgeted $8.2 million in 2004 for feasibility and scoping studies and exploration of its 15 projects. With cash of $61 million, and marketable securities of approximately $10 million at March 31, the company decided to invest approximately 20% of its cash and securities in physical silver following the decline in silver prices in April and May. Silver Standard now owns over 1.95 million ounces of silver. This silver is held on an allocated and segregated basis and, consequently, is not available to be loaned.
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On my trip to the NY gold show, at an airport, I bought the latest issue of National Geographic, titled, "The end of Cheap Oil". In that issue, there were at least two ads for gold, one said gold could hit $1500/oz.!
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New York City and Wall Street are scared of terrorism. On June 1, I flew to JFK, and took a taxi to Times Square. After checking in at the conference hotel, I had to walk around to see the city for the first time. On nearly every corner in Times Square, there was an emergency vehicle, either an ambulance, fire truck, or police car. It's like they were waiting for a disaster to strike. That night, I took a taxi down to see Wall Street. I wanted to see the buildings, and see the big brass bull outside Wall Street. Wall Street remains closed to all car traffic at all times of the day. Wall Street is deathly scared of terrorism.
They should be more worried about silver--the shortage of which, and the ongoing deficit in silver, will reveal the fraud of the dollar, and will bankrupt many of America's largest institutions.
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Silver bullion inventories, in the registered category available for delivery, at the COMEX, continue to shrink. For a long time, they were 53 million ounces. Today it's down to 46,879,136 million ounces. See http://www.nymex.com/jsp/markets/sil_fut_wareho.jsp
But how much silver exists in the world? It's a very difficult question to answer. The two industry silver reports estimate the number as ranging between about 300 million ounces and 600 million ounces. I suppose we can also estimate what may be left based on historical gold production, and then extrapolate that to historical silver production, based on a simple production ratio.
Today, the two big industry silver reports (CPM group and silverinstitute) say that about 500 million ounces of silver is mined each year, and about 2500 tonnes of gold is mined each year. Translating the silver ounces to metric tonnes, by dividing by 32152 oz./tonne, and we get 15500 tonnes of silver produced each year. That's 6.22 times as much silver produced as gold. I think that's very low compared to historical production standards, but it makes sense since I believe silver is undervalued compared to gold. If silver is undervalued, it's more difficult to mine at a profit as compared to gold. I believe historic production of silver as compared to gold has ranged in the 10:1 to 15:1 ratio of silver to gold. Now, the World Gold Council's position is that 145,000 tonnes of gold have been produced in all of human history, as I report each week:
$1,860,000,000,000: World "official" gold, 145,000 T @ $400/oz. http://tinyurl.com/vrcc
Now, that number may be debatable, given certain claims about the size of Asian gold as reported in the book, "Gold Warriors".
Nevertheless, I suppose we may assume that silver production has been 7.5 to 10 times this gold production. At ten times as much, we have 1,450,000 tonnes of silver. Translated, by multiplying by 32152 oz/tonne, we have 46.6 billion ounces of silver. At 6 times as much, we'd have 870,000 tonnes of silver, or 28 billion ounces. I have seen, but don't remember the source, estimates of world historic silver production range from 30 to 40 billion ounces, and those numbers appear to be correct based on estimated extrapolations I've just done.
The modern world today consumes 800 million ounces of silver per year. 30 billion ounces of silver, divided by 800 million ounces consumed each year, is 37.5 years. Good thing the world did not consume that much silver 37 years ago!!! The major increased use of silver started after World War II, when the U.S. increased its silver consumption many fold, as I reported last week, when I wrote:
The next item in the charts that I find very interesting is U.S. "apparent consumption". Our consumption of silver is significantly higher in the modern age than in the early 1900's. Before 1939, the U.S. never consumed over 1000 tonnes, yet today, we consume from 5000 to 6000 tonnes per year. Consumption really took off during World War II, as by 1942, the U.S. consumed over 3000 tonnes per year, never to dip again below that number.
So, even today, the U.S. barely uses twice the amount of silver the nation used in the post WWII years.
But the population in the U.S. in 1945 was also about half that in 2004.
http://www.census.gov/population/estimates/nation/popclockest.txt
The U.S. had 140 million people in 1945, and over 285 million by 2004 (if you assume growth rates continued the same after 1999).
The point is that silver consumption, per capita, in the U.S. is the same today, in 2004, as it was in 1945.
And what is the per capita consumption of silver in the U.S. today? 5500 tonnes x 32152 = 177 million ounces of silver used per 285 million people. 177 / 285 = .62 oz. silver consumed per year, per person, in the U.S., whether in 1945, or in 2004. Each person in the U.S. today, on average, uses 6 tenths of an ounce of silver.
If the U.S. used .62 ounces of silver, per person, since 1945, then a simple spread sheet calculation based on estimates shows that the U.S. alone has consumed over 7.6 billion ounces of silver from 1945 to 2004!
That is about 25% of historic world production of 30 billion ounces!!! Today, the U.S. also consumes 25% of current production, each year! The rest of the world that consumes 75% of the silver each year has also likely come very close to consuming the other 75% of historic production! Thus, the world is likely very close to running out of all the silver that has been mined in history, and we don't likely have a multi- billion ounce existing supply of silver in the world.
And thus, I trust the research from various sources that say we are down to the last 300 to 600 million ounces of silver in "identifiable" inventories. Unidentifiable inventories, such as hidden stashes of silver by the public, like 90% bullion U.S. coins, are not likely much bigger.
When I say silver has been "consumed" I mean if it has been turned into a ring, it's "consumed", and not coming to market anytime soon. I have a $10 ring that may have 1/5th of an ounce of silver. Thus, I paid the equivalent of $50/oz. for the silver. Buyers of silver items like that do not have any profit incentive to sell unless silver prices are sky high, and/or economic times are very, very harsh.
And how much silver is there in the entire world, per person? 30 billion ounces / 6.5 billion people = 4.6 ounces.
Buy a few ounces, and get "more than your fair share" today!!!
One point to be extrapolated from this, I feel, is that new modern uses for silver are not going to significantly change the per capita consumption rates. Thus, the focus of many silver reports on new uses for silver are focusing on the wrong thing, and they are attempting to forecast trends for the future that have never existed.
In contrast, I focus on monetary demand. This is a demand in the past that has existed, and will likely exist again. Because history has shown that paper money will not last, and that the world will return to using gold and silver as money.
The other main point is that the modern world, first world nations, consume enormous amounts of silver, per person, as compared to the underdeveloped world. As China continues it's march forward economically, their per capita consumption of silver is going to be explosive! That is where real increased demand for silver will come from (besides monetary demand), as nations like China and India modernize.
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I have been bullish on gold and silver ever since I became aware that it was going to be my responsibility to manage my family's money, and that was in 1998. Since then, there have been many monumental stories and occasions that I have considered to be "very bullish" events for gold and silver. One such event was when Harry Shultz became bullish on gold right at the end of the bottom of the gold market. This was bullish because Harry Shultz is a very well respected newsletter writer, the highest paid according to the Guiness book of world records. Another bullish event was when Richard Russell turned bullish on gold, again another of the world's most well respected, highest paid, and accurate newsletter writers, with perhaps up to 10,000 paying subscribers. Finally, another one of those very market bullish events is Bill Bonner being invited, and having accepted, the invitation to be the keynote speaker at the NY Gold show last week, which I attended. Bill Bonner gave a speech about being humble, after having bought gold above $400/oz. recently, thinking it would never again retreat below $400. Evidently, he thought the experience alone was humbling as gold dropped down to $375 afterwards.
Bill Bonner is the author of a free daily market commentary newsletter that you may like. http://www.dailyreckoning.com/
It appears to me that Bill Bonner is now just beginning to understand that silver is better than gold, which is another very bullish event for silver. I say this because Bill Bonner also has an opt-in email list of over 250,000 email addresses.
One of the reasons I decided to go to NY was to speak with Bill Bonner. I met him for about one minute after his speech. I said who I was, and that I had run some ads with the daily reckoning, that were not very successful. (He encouraged me to try again.)
I said I thought it was a market bullish event to see him turn bullish on gold. I think he thought of himself as always having been a "gold bug", but that's not the impression I was getting while reading his market commentary a few years back. I think of him as a gold bug who has lost his way a bit, for he seems too unsure of himself to strongly recommend buying it!
I told him that I had been a gold investor for a few years, although not many, and that now I was more bullish on silver because silver has better supply/demand fundamentals. He replied, "That's what people tell me." And so, I encouraged him to visit goldismoney.com to learn more about silver.
I believe it was a very bullish silver event when Bill Murphy of lemetropolecafe.com turned bullish on silver. Murphy helped to encourage the letter writing campaign to the CFTC, which prompted the CFTC response. But Bill Murphy has only 3600 subscribers, according to the recent article in the June issue of SmartMoney, which did a report on Murphy and GATA's claims that the bullion banks have secretly sold most of their 30,000 tonnes of gold, and only have 16,000 tonnes of gold left.
I believe that Bill Murphy may have helped cause the run up in the silver price to over $8.00/oz. Bill Bonner, could, indeed, help the silver price enormously as well. Bill Bonner may be a bit unsure at this point, but I will say that the silver market is so small that even Bill Bonner's recent interest in silver is a "silver bullish" market event!
(By the way, after I became aware of silver's advantages over gold, it took me a year to make the move in my portfolio. That was partly due to ignorance of available silver investing opportunities, which is partly why I produce this silver stock report.)
On 6-3, The Daily Reckoning sent out an email, "The Metal That Will Make You Rich" (copied below) that is all about silver.
Dear Investor, Here at the Daily Reckoning, we constantly strive to find the next newest and brightest investments. The good news is that we can't find any! That's because the best investments, in our opinion, are the oldest. Truth is, persistent monetary irresponsibility in Washington, will likely help gold and silver outperform almost all other asset classes for the next decade. Sceptical? You should be...we've only been learning about monetary mechanics for twenty years. Below you'll discover why these solid assets have been outperforming their paper counterparts for centuries... Regards, Addison Wiggin,
The Daily Reckoning ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ The Metal That Will Make You RichOn the 12th of March the British magazine MoneyWeek ran a cover story entitled: 'The metal that will make you rich.'
The metal was silver. And the article explained how the two metals - gold and silver - have made thousands of people very, very rich in the past... and how understanding the relationship between the two could make you rich, too, in the months ahead.
While many have gotten rich, many more have used the two metals merely to protect their wealth -- and even their lives -- in dangerous, restless periods in history.
And once again, the world seems to have entered one of those periods... an era when the world's stability, safety, and the value of its money are all called into question.
Think about this: if U.S. dollars continue to lose their value (as measured in gold or silver) at the same rate as over the last two years...
...in 10 years time, the dollar may no longer exist.
And now think about this: the two metals do not move together. Still, they are linked. One usually signals -- far in advance -- what the other might do. Understanding that link could be the key to immense profits... to financial security... even to being able to forecast the major financial trends that will affect you and your family.
Of course, I would like to give you the quick answer: here's how it works... here's what's coming... here's what you should do.
If only it were that easy!
The answer is not necessarily quick or easy... but it is far more interesting... and far more rewarding than anything I could tell you in this letter. And you can have access to it in the new comprehensive collection, The History of Gold and Silver.
Once again, London-based Pickering & Chatto makes publishing history by collecting the most important historical documents and creating a stunning overview of timeless subjects in this case, gold and silver, and the relationship between the two precious metals.
For lovers of the printed word, here is an investment secret you can profit from for generations. Own it. Enjoy it. Learn from it. Use it as your personal guide to secure great wealth and a far deeper understanding of money, trade and value than you've ever experienced before...
The History of Gold and Silver
Dear Friend and Reader,
The 21st century has brought nothing but bad news for the dollar. We are four years into it and still, nothing on the horizon indicates an improvement for the de facto world currency.
How disappointing it would be for most Americans... if they understood what this means to their wealth, retirement ... and perhaps most importantly... their family and freedom, but most remain oblivious to the diminishing value of their paychecks, investments, and retirement plans.
Fortunately for the politicians and central bankers, most Americans are clueless to the fact that they are being robbed blind as their currency is devalued.
In March 2000, as the Great American Stock Market Bubble burst, headlines were made from Alaska to Florida and from Moscow to Tokyo. Eight trillion dollars of paper gains evaporated. A public outcry was heard at home from sea to shining sea. But there is no similar cry of pain regarding the plunge of the Greenback... even though all Americans bear the burden, not only stock market investors.
One hundred years ago, by contrast, Presidents, bankers, economists, and philosophers respected gold and silver - not just because it was currency - but also because it protected America's wealth and freedom... and limited the power of governments to debase the currency at the expense of their citizens.
The History of Gold and Silver presents a foundation for understanding the relationship between real value, paper money, international trade, building wealth and securing freedom. It is essential reading for those who want to be well informed. Not in the sense of what is the burning issue in today's headline, but in the terms of understanding the world and how it works.
I have found that you can better determine the course of future events by studying history than by devouring newspapers. The trials and tribulations of Martha Stewart, Michael and Janet Jackson or even George W. Bush shed little light on the most important issues that will affect where we will find ourselves 10, 20 or 30 years down the road.
Writers whose works have stood the test of time and whose insights have enlightened generations before us offer much more to the intelligent reader today than most journalists or best-selling authors, myself included, could ever hope to achieve.
Seven Centuries of Treasured Economic Wisdom in Three VolumesSilver's history is perhaps richer than gold. Both have served as a means of exchange and store of value for as long as people have been recording history.
The first reference to gold that I am aware of is in the second chapter of the book of Genesis, where it is recorded that in the Garden of Eden flowed a river that separated into four headwaters. One of those, the river 'Pishon winds through the entire land of Havilah, where there is gold. The gold of that land is good...'
I find some comfort in the declaration that God considers gold 'good.' I am happy that we share that conviction.
The first mention of silver comes several chapters later. Abram, equally revered by Christians, Jews, and Muslims, left Egypt with his wife, all of his possessions, and his nephew Lot. The author reports that Abram had become 'very wealthy in livestock and in silver and gold.'
I've tried my hand at livestock, raising dairy goats in southern Maryland. I never made much money from them... but the cheese was good. My wife keeps horses, which have cost me more than I ever made from the goat operation.
Gold on the other hand has been quite good to me as an investment... especially in the last few years. While the value of the money I have in dollars in the bank have fallen drastically... the gold I have on hand has increased by much more.
I have little affection for paper money, dollars, euros or treasury notes. But real money, gold and silver, are another matter all together. (You might be interested to know, although the French franc has been replaced by the euro, the French word for money, argent, is the word for silver. The same is true for Spanish and Italian. Silver is money.)
Silver's Golden Era?I write about gold often in The Daily Reckoning. You can easily find my recent musings on the Midas Metal. I'm bullish on gold. But I don't write much about silver and this book stirred my interest.There's a powerful case to be made for silver today. The silver story differs from the case for gold. Because of its durability, almost every single ounce of gold that has ever been mined is still in circulation today. But not so with silver. Silver supplies are being used by industry and medicine at a far faster rate than it is being produced. Gold is a store of value and prized for jewelry and decorative arts. Silver, although revered as money, is also a precious industrial commodity. Over 90% of all the silver mined in the past 5,000 years has been used up by industry and is gone forever. Silver is disappearing... at least what's above ground. According to James Cook, a respected silver analyst, 'Each year, the silver supply falls 200 million ounces, or about 25% short of industrial demand... Shockingly enough, all of the known and recorded silver in commodity warehouses and elsewhere comes to only 150 million ounces. Industry requires almost 900 million ounces a year. Something has to give.'Maybe that's why the world's most successful investor, Warren Buffet, is also the largest acknowledged holder of silver in the world? When he bought silver he told his shareholders, 'In recent years, bullion inventories have fallen materially, and last summer Charlie and I concluded that a higher price would be needed to establish equilibrium between supply and demand. Inflation expectations, it should be noted, play no part in our calculation of silver's value.'Nothing has changed since then... except that silver is still rising in price. In the December 2003 Forbes, respected analyst James Grant made a powerful case for silver going to $49... Seven times the current price! But these tomes give you something even more important... The big historical picture.For more information, visit: http://www.dailyreckoning.com/
------------------
Another very bullish event for silver this week is that AIG announced they will no longer attempt to short and "fix" or suppress the price of silver. That's not what they admitted of course, that that's what I believe it means, when I read between the lines.
AIG no longer an LBMA market maker in gold, silver
Excerpt:
LONDON, June 1 (Reuters) - AIG International Limited, part of American International Group Inc, will no longer be a London Bullion Market Association (LBMA) market maker in gold and silver, the LBMA said on Tuesday. LBMA Chief Executive Stewart Murray told Reuters AIG had been reclassified as a member and so would still trade, with effect from close of business on Friday May 28. AIG was a first-tier market maker and dealer in over-the-counter spot, forward, option and swap markets in precious metals. Murray said the company requested to be reclassified. AIG was not immediately available for comment. Why would AIG request to be reclassified? Think about it. As GATA reported, this is like the Rothschilds abandoning the gold fix. These are very bullish events for silver. If there is a cabel of silver shorts, what does it mean if they lose their ringleader?
------------------
In fact, now that I realize it, it might be a "silver bullish event" that I will be speaking in Vancouver in two weeks. The reason is that a few years ago, I was not even a voice for silver, and I was just starting to buy. Last November at the SF gold show, it was the only the second time I had even been to a gold show. David Morgan of http://www.silver-investor.com (I subscribe, and recommend) barely had an opportunity to speak. The SF gold show the year before, I think David Morgan only had 15 minutes of total speaking time in the main conference hall--there was such little investor interest in silver.
------------------
I received an interesting email from:
mcclory@safe-mail.com
I have for sale 500 German 1000$ Government 5 ½ Loan
Gold Bonds from 1930, JP Morgan & CO New York. I saw that
you are interested in items like this. For details I can
be contacted at this nr: 0034 667 930 357 and also on
mcclory@safe-mail.net ------------------
I received a troubling letter:
Jason,
I have been a reader of yours since 10/03 and it was your articles that got me interested on silver. I thank you for this.
It was your selling of Clifton Mining and your negative writings that puzzled me in the beginning. I wondered how you can talk a good game about Clifton and suddenly sell. Your explanation about taking profit held water.
It was when I began doing some investigating in various chat rooms that your name came up quite often. It was not very pleasant, what was spoken about you.
It seems that generally speaking, your writings about various silver miners tend to 'pump up' the reader into buying, and as you yourself have stated, 'taking profits' as you 'dump' the stocks after a rise of a few bucks. Even though you disclaim being a financial advisor, you have learned to bend the law to your advantage with the way you operate.
Clifton Mining is coming under scrutiny and being investigated for improper conduct. I wouldn't be surprised if you knew of this and sold all shares of Clifton for that reason.
I have chosen to agree with these individuals that you are indeed a "pump, dump and in your rump" kind of silver trader. Even though you speak from a holy pulpit, you are far from innocent of taking the sheep for a fleecing. There is no wonder why your readers have begun dropping. You cannot fool everyone.
I will no longer praise your name, but instead speak of what I have experienced from your evaluations of silver miners in particular, and of your back room dealings with the miners in general.
There is no need for you to respond to this e-mail. I've read enough of your scriptures.
Apparently, this person thinks I should not be allowed to sell one silver stock for another. To address his accusations:
1. My report contains over 100 silver stocks. Although I admit I'm biased, because every human is and must be to some respect, I believe my report is the most accurate and most comprehensive that there is. One key reason I produce this report is to show that there are many alternatives to buying a single silver stock.
2. I'm not "bending the law to my advantage" with the "way I operate". The law says we have free speech in the U.S.
3. I did not, and do not, know whether Clifton was under scrutiny or being investigated for improper conduct.
And finally, for the record, I have lost about 50% on several silver stocks during the recent drop in silver and gold prices. The stocks I owned that declined the most are Kenrich Eskay, KRE.V, which I bought at $.85 and was down to $.39, now at $.48, so I'm currently down 44% on that one. Another stock where I'm holding a losing position is Golden Eagle, MYNG.OB, where I'm currently down 44%. Golden Eagle is the last gold stock I own.
I met Tim Wood at the NY Gold show, and he suggested I visit the Mineweb website for comments that Clifton made about my holdings of Clifton. See here: http://www.mineweb.net/sections/junior_mining/moellerletter.htm
Excerpt: Date: Thu, 27 May 2004 03:09:48 +0200
From: Keith Moeller <clifton @ cliftonmining.com>
To: tim @ mineweb.net
Subject: Re: Questions for Mr Moeller
Someone else asked me about Bob today. What has Bob got to do with us. There are NUMEROUS people who are and have touted the potential of Clifton stock, who are letter, mining, and biotech, writers. Bob is not a board member or manager or shareholder to my knowledge. If he was smart he picked some up stock for his personal portfolio last year, but I have no idea if Bob has any or not, he has none from us. Nor have we given him any cash, nor any of the other letter and account writers. Dr. Berry told his clients that he holds it in his portfolio and so did Jason H., although Jason told everyone that he sold his at $2.20/share, which now seemed like it was a good move just before metals crashed. Every writer picks a target price, Jason was at obviously $2.20, he said that he still liked the stock but that he had had big gains and was selling.
In my very first silver stock report, I reported Clifton selling at $.29/share. For proof, see
http://news.goldseek.com/GoldIsMoney/1064240475.php
I did not buy at such a low level, but seeing the stock rise from such a low level in such a short time caused me to want to lock in some gains.
It is unfortunate that people ask mining company executives about what newsletter writers are doing and why. Trust me when I tell you that the companies do not know. Furthermore, people should not email me about what mining companies are doing. Trust me when I tell you, I don't know. If you want to know what I'm doing, you have to subscribe to the "look at my portfolio". That's why I sell it. If you want to know what a company is up to, please do them the favor of reviewing their website first, and perhaps also reviewing their latest annual report, and then call them up as a knowledgeable and informed investor.
Please allow me to remind everyone why stock exists, and why we have brokers. Stocks exist not only to eliminate liability, but also so that anonymous ownership can exist. Brokers exist so that people can buy and sell anonymously. If such anonymity did not exist, markets could not exist. Gold and silver are money. Gold and silver are very valuable. To protect such value, you have to keep the existence of it secret. I take a huge risk by deciding to become a public silver bullion advocate. To entice people to sell (and use) the real and hidden wealth, you must allow for them to be anonymous. We cannot expect every holder of gold and silver bullion to proclaim to the world how much metal they have and where they keep it.
Now, although I reveal a few certain things about my personal portfolio, by placing the asterisk by the stocks I own, and by selling the "look at my portfolio", please respect that private property demands privacy. I don't broadcast what I will buy or sell in advance. Such would be financial suicide for myself--especially in the tiny world of gold and silver stocks. I don't even tell my broker how much I intend to buy or sell. And the orders that I place with him, sometimes he tries to spread them out over the course of a day or two days, or even three days, so that the size of the order will not cause the market to move away from our order. For example, if I buy big, sometimes the price will run up, or if I sell big, the price will drop. To get the best price, even my broker tries not to let the other traders know how much we are trying to buy or sell. Therefore, I would never cut off my broker's right hand and betray him and his work by telling 10,000 people in an email list what I was going to do before hand.
There is a reason why I tell you what I own in this report. Although most of my readers look at it as a "recommendation", it's not. It's an SEC requirement, and it's there to protect you. If you don't want to own a stock I'm selling, then don't own any of the stocks I own. I only own about 20 of the 100+ stocks on the list. There's more than enough to go around for us all. However, there is not likely enough silver and silver stocks for the mult-trillion dollars that are parked in bonds.
Please understand, also, that there is a fundamental difference between a "good" company with "good" prospects, which is one thing, and then getting a good company at a great price, which is something entirely different. Several other companies that are making money are Wal-Mart and Microsoft. But I don't think those companies sell for a great price. I could rave about the genius of the business plans of Wal-Mart and Microsoft, and the continuation of profits... but what do those profits cost for the shareholder who buys today? That's an entirely different issue. And you get that number from looking at the P/E ratio.
As a good example: I recently met a man at the NY Gold show at the cocktail reception who told me about uranium. He was raving about good supply and demand fundamentals. (Although I think silver has better ones. Uranium will never have monetary demand for it.) He was raving about recent increases in price, from about $7/pound to $17/pound. He was raving about a company, a uranium miner, that was able to profit from uranium even at $7/pound, so they obviously would have good profits today. He gave me the name of this "secret uranium stock", "for free". I asked him the market cap. He said, $2.5 billion. (Ouch, I winced. I don't think I own a single stock over $100 million market cap at the moment.) He said, "Guess how much electricity in the U.S. is supplied by nuclear power? I said 20-25%. Which was correct. He said, "Guess how much electricity in France is from nuclear? I said 80-85%. He said, "You really know your stuff," and he complimented me. He told me more about this uranium company that has fantastic profits that come from a really high grade of 25% uranium. I asked, "what is the price to earnings, P/E ratio"? He said he did not know! Did not know? I was flabbergasted!!! How can you be excited enough to invest in a company--and tell others about it excitedly--when the story is all about "fantastic current profits" and not even know the P/E ratio? How can there be fantastic profits, but he didn't even know what they were?
Time to pause from writing, and hunt down the name of this company in my notes, so I can find the answer. Ah, Cameco, CCJ on the NYSE. CCJ, at $53.40/share, and a market cap of $3.04 Billion, has a P/E ratio of 20. That means the market cap, which is the "price" is 20 times more than the profits, which must be $152 million. This is a lot like a bond paying 5%, which is 1/20th of the price. More info: Cameco Reports Solid First Quarter Earnings
A statement in the above press release says the company expects better earnings from a higher uranium price next quarter. But so what? The stock price could stay flat, and the P/E could drop to 10 --even if profits double! I don't want a stock that may have a flat share price, and I'm not interested in buying when the P/E ratio is 10 or above. More likely, the market cap will double as profits double, and the P/E ratio may stay the same. But I'm not interested in a stock that "may only double" in a few years.
There is a company, for comparison, that I like. For the last few weeks, this silver stock has had a market cap of under $28 million. I expect this company may have profits of $28 million within a year or two, also given where I think the silver price will go within that time frame. That's an expected P/E ratio of about 1. Other silver projects within this same country as this company have sold for P/E ratios for as low as 2 and 3, so I have strong confidence that this is real. This is why P/E ratios of 20 do not excite me. Why wait for 20 years to get my money back when I think I can get it back in about one to two years? I won't say what the company name is, because if I did, it would be harder for me to buy. But it is on this list.
-------------------
Silver investors' complaints against the CFTC, and the CFTC response, get more press:
A glint of chicanery in the silver market?
By Mike Blahnik
Minneapolis Star-Tribune
Sunday, May 30, 2004
http://www.startribune.com/stories/535/4799894.html
Here's another article:
http://www.spokesmanreview.com/allstories-news-story.asp?date=060204&ID=s1525515
By Becky Kramer
Spokane Spokesman-Review, Washington
Wednesday, June 2, 2004
Mark J. Lundeen says he's not a believer in conspiracies,
but the Minneapolis investor does admit to suspicions
about the price of silver.
In 1994, the retired Navy man began buying up mining
stocks, expecting silver prices to rise.
"It was just common sense, Economics 101," Lundeen
said in a telephone interview last week. "They're using
up more silver than they're mining. You'd expect prices
to rise, based on the laws of supply and demand."
But silver prices have been stalled in the $4 to $6 range
for most of the past decade, a source of frustration to
silver producers and investors alike, and the genesis for
countless Internet chat room discussions about possible
manipulation in the market.
Lundeen joined more than 500 other small investors in
writing to the U.S. Commodity Futures Trading
Commission this year, asking for an investigation of their
suspicions. Last month, the CFTC took the unusual step
of posting a public reply.
In a nine-page letter, Commission Chairman Michael
Gorham dismissed allegations that commodity traders
were acting together to influence prices, a theory put
forth by some of the investors. He also said there's no
indication that silver is trading at artificially low prices.
"As I read these letters, I was touched by the
disappointment expressed by many small investors in
the behavior of the silver market and the heartfelt feeling
that lower-than-expected prices were the result of
collusion by a handful of big players," Gorham wrote.
But those allegations have no backing, he said.
The "collusion" theory runs something like this: World
demand for silver is outpacing the amount of silver
mined each year. That means that silver stockpiles
are diminishing, and prices should be rising sharply.
But the short-selling of large volumes of silver by
commodity traders is depressing on silver prices. Some
investors say it's a 20-year conspiracy to keep prices
low.
"The CFTC has closely monitored the silver market,"
Gorham wrote in the letter. "We found no evidence of
manipulation, and those making the allegations have
provided no evidence of manipulation."
Even if the world's stockpiles of silver are declining, as
some data indicates, there's no shortage of silver,
Gorham said. And that, not market manipulation, is
keeping the prices at current levels, he said.
The rumors are familiar in North Idaho, where domestic
silver mines have struggled for years to stay open.
"It goes all the way back to the Hunt Brothers," said
Jack Lyman, executive director of the Idaho Mining
Association. "You hear these kinds of whispers. ...
I've never seen anything that documents any
substance to it."
In the late 1970s and early 1980s, a Texan named
Nelson Hunt and his two brothers attempted to corner
the world silver market. Silver briefly shot up to $50 per
ounce in 1980, but Hunt's scheme didn't pan out, and
prices fell rapidly.
The fears of market manipulation resurface from time
to time.
In 1989, the chairman of the now-defunct Sunshine
Mining Co. accused large silver users of a "complex
orchestration" to keep silver prices low. His remarks
led to a congressional hearing in Coeur d'Alene.
"We were trying to get the Silver Valley back into
production," recalled U.S. Sen. Larry Craig, R-Idaho,
who scheduled the hearing. "Of course, the price
was the dominant factor."
Craig also promised to launch a congressional
investigation into silver prices in 1989. Last week, he
said he couldn't recall the outcome. His staff members
said no evidence of wrongdoing or manipulation ever
emerged.
At shareholders' urging, silver producer Hecla Mining
Co. has launched its own investigations of silver prices.
"We have twice obtained outside special counsel ... to
investigate whether there were any illegalities in the
commodity trading," said Vicki Veltkamp, Hecla's vice
president of investor and public affairs. "We were unable
to find any evidence that we could act on."
The last investigation occurred about six months ago.
"We decided the best place to put our energy is mining
the metals at low cost," Veltkamp said. "That way the
mines can make money even if the price of silver goes
down."
Rumors have a way of intensifying when metals prices
are low, noted Laura Skaer, executive director of the
Northwest Mining Association in Spokane. When gold
slid below $300 per ounce between 1999 and 2002, the
Gold Anti-Trust Action Committee and an accompanying
Web site, www.gata.org, were born.
"There were really people who thought that central
banks were manipulating the price of gold," Skaer
said. "Obviously, it was a controversial view within
the industry."
With gold prices back near $400 per ounce, Skaer said
she hears fewer rumors. Mining companies are able to
attract the investors to raise money for new mine
development and exploration at that price.
"People are too busy working to worry about whether the
price of gold is being manipulated," Skaer said.
Lundeen, meanwhile, said he appreciates the CFTC's
letter, but isn't entirely convinced by Gorham's response.
He's written numerous letters to governors and
congressmen over the years about silver prices. He said
he's never received a satisfactory explanation.
"He's not looking very hard," Lundeen said of Gorham.
"He has all the information, but he's putting the burden
of proof in me. It's incumbent of them to make sure the
fair market is fair."
-------------------
At the NY Gold show, I was discussing the decreased liquidity, or reduced volume of trading of many of the silver stocks in the last month or so as the price moved down from $8/oz. The general consensus seemed to be that those traders who really understand and believe in the merits of silver and silver stocks are already fully invested. And those of us who are fully invested don't like to sell anything at a loss, myself included. Thus, when all the silver stocks are down, we trade less, to avoid "locking in a loss". We tend to sell once the price comes back at least to what we paid for it, which also tends to create what they call "resistance" in a stock price when it begins to move to a new high. Furthermore, those people who invest in the sector generally don't hold equal portions of cash and silver stocks in order to be able to trade in and out. Instead, people tend to either plunge in, or sell out. And still most people who trade in and out are momentum chasing, instead of buying real value. These tendencies help to cause the increased volatility.
I read that another reason for increased volatility for the precious metals sector was the carry trade. Many funds are beginning to borrow money at low interest rates, and then, they buy commodities, or gold and silver. These buyers who are in debt must avoid a loss. Therefore, they are extremely sensitive to price changes, and especially sensitive to any drop in the price of precious metals. Furthermore, they would be sensitive to rising interest rates, and to a rise in the dollar. Therefore, as the dollar has recently had a mini rally, and as there has been fears of interest rate rises, and a precious metals price decline, some of these funds may have reversed their "dollar carry trade" to buy into precious metals.
It certainly makes sense to me that borrowing money to buy gold and silver can cause increased volatility. After all, the Hunt Brothers leveraged their purchases of silver, borrowing money on the value of their silver holdings, and that is exactly what led to their exit from the silver market.
-------------------
Yahoo Finance had a quiz question this Sunday, very important for gold and silver market observers to understand.
When the market for a stock gets "cornered," who loses the most?
| How respondents have answered: |
| | 134451 votes to date |
| Put writers |  10% | 14617 votes | | Short sellers | 40% | 54847 votes | | Small investors who purchase late | 31% | 42372 votes | | Program traders forced to rebalance portfolios | 16% | 22615 votes |
The correct answer is:
Short Sellers
"Cornering the market" happen rarely now, but it was so common in the post-Civil War period that some contemporary observers argued that "all large fortunes are made by corners."1
A corner arises, according to The Stock Market, when two things happen at the same time. First, some individual or entity begins to amass concentrated ownership of the shares of a stock. At the same time, short sellers, betting that the stock will decline, sell shares short--meaning they borrow shares at today's price, promising to replace them at future prices. However, the short sellers wind up borrowing their shares from the controlling group--there is nobody else to borrow shares from--and in some cases actually borrow more shares than actually exist. This is what it means to be cornered, because at this point, when the short sellers want to cover their shorts--that is, repurchase the shares they borrowed--they have to pay any price the controlling group demands.
Tip: True corners are rare these days, but "short squeezes" are more common. You can watch for a potential short squeeze by keeping track of the shares short in relation to the float. That's found, on Yahoo! Finance, on the Key Statistics page for each stock--for example, IBM, under the Share Statistics section.
More about short selling:
The Basics of Shorting Stocks - About.com
Selling Short - glossary definition
Message Boards - Short Selling
1 Henry Clews, Fifty Years in Wall Street (New York: Irving, 1908), p. 101, cited in Teweles & Bradley, The Stock Market (New York: John Wiley & Sons, 1998).
I put this into my weekly commentary because of two things. First, I believe the women of the world have cornered both the gold and silver markets as more physical bullion has been turned into Jewelry than most people realize. And there are large short positions in silver and gold. And the answer to this question shows that most people do not even realize that the shorts will lose when there is a corner in the market.
Second, the piece quotes an interesting line, "Cornering the market" happen(s) rarely now, but it was so common in the post-Civil War period that some contemporary observers argued that "all large fortunes are made by corners."1
This, I believe, goes to show that there will be very large fortunes made by gold and silver bullion investors, because of the corner in these markets by the women of the world who have bought up so much in the form of jewelry.
-------------------
Now, there are few to zero primary silver companies with significant profits at $6/oz. Of course, silver is mined, but mostly as a by-product of copper, zinc, lead, and gold mining, where the profits come from mining the other minerals. And silver is also mined at a loss by CDE, and sometimes HL. This also goes to show that silver is undervalued if nobody can mine it profitably. So then, why would anyone even invest in a silver miner at these low prices? Because we expect the prices of the stocks to move higher faster than we expect silver prices to move. There may be minimal profits now, but there should be big profits if silver begins to hit $50/oz., and if expenses don't also rise.
-------------------
Because I have a market reach, I also receive a lot of tips about silver stocks. And thus, I believe I may have invested in some of the best ones that came my way. If you believe I may have an edge based on my work and position... then the best way for me to share this with you is to is tell you where I put my money. It's not investment advice. I offer a monthly "look at my portfolio". I do not issue recommendations, and I don't list number of shares or the size of my portfolio, but I will show the top investments in my portfolio, by rank, updated monthly.
Price: $39.95/monthly, or $49.95 for a single month, or $295.00/year
To order: http://www.goldismoney.com/available-reports.html
If you have any questions about billing or order fulfillment, you need to contact my support staff at support@goldismoney.com and not me. I manage a large portfolio, and I don't have time to process billing requests. I don't bill any cards, my support staff handles all of that. The toll free telephone customer support line is: 877-895-6824.
Limited Time Special Offer!
Buy 1 Annual Subscription to Jason's Monthly Top Picks and get ALL other articles FREE!
------------------
Now, I think it's time that the silver community started a letter writing campaign to the editors of newspapers around the world, to tell them about silver. The following links contain email addresses for hundreds of different newspaper's "letters to the editor"
http://www.awolbush.com/papers.html
http://www.results.org/website/article.asp?id=428
http://www.waronfreedom.org/activists/emleted.html
The first two links above have lists of emails, but the third one is awesome because the emails are all in one neat list, so I have copied it to my site, too.
http://www.goldismoney.com/editorsemails.html
This final link lists the email addresses for about 200 world newspapers, and about 100 U.S. newspapers, so you can email them all at once. You have to copy the list, and paste it into your email, and there are direct instructions on tips for submission of letters to the editor. Most editors, most papers, want letters of 250 words or less, and many also want your full name, address and telephone number. So the task is easy. But if 500 people write letters on the silver market to about 300 newspapers around the world, I believe wonderful things will happen.
Here is a sample letter:
May 21, 2004
Dear Editor,
I'm a silver investor. I believe paper money is fraudulent. There is over 30 trillion dollars, U.S., worth of bonds in the world, but less than 2 trillion dollars worth of gold, according to gold.org.
As of April, 2004, the size of M3, the money in U.S. banks, has reached 9.1 trillion dollars, yet due to fractional reserve banking, the total of U.S. currency and coin in circulation is only 724 billion dollars as reported by treas.gov.
At silverinstitute.org and cpmgroup.com, they each report that silver has been in a deficit for about 15 years, where world mine supply has been about 500 million ounces, scrap supply about 200 million ounces, and industrial and jewelry demand about 800 million ounces. The difference, about 100 million ounces, has come from investor and government selling, drawing down reserves of silver. Known supplies of refined silver are down to about 250 to 600 million ounces. At the COMEX, they are down to 48 million ounces of silver left that is registered for delivery, which you can see at nymex.com.
The governments of the world are printing up too much paper money, and the world is running out of real money, silver. I believe this will lead to the price of silver rising dramatically in value, around the world.
I urge your readers to verify the statistics I have provided, and to make their own decisions.
Sincerely,
Jason Hommel
Grass Valley, USA
Goldismoney.com
(530) 274 3450
When I sent out my letter above to that list, I received about 70 "undeliverable/delivery has failed" messages. I sent it BCC, or "blind carbon copy", which means it may be interpreted as spam. It may have had more of an impact if I sent out my letter to each address individually, but I just didn't have the time to do that this week. Maybe next month.
I also did not include my full address, which some editors require. But I'd rather keep a bit of privacy in that regard.
------------------
General Commentary on Silver (slightly modified from last week):
The sponsors of the Sound Money Bill in New Hampshire are now looking for donations so they can take this to other states!
For news on the New Hampshire Sound Money Bill, that proposes to use U.S. Treasury minted Silver Eagles and Gold Eagles as money see:
http://www.nh-inews.org/
http://veritasradio.com/ -- site temporarily disabled.
Current status of the NH bill:
The bill will live until the November elections. It'll have a different #,
but we now have 6 months or so to get EVERYONE we need on board.
Now looking to raise $25,000 to $35,000 for "phase II", to get set up with an office and staff training..
Looking to raise $500,000 for "phase III", to take this to about 5 other states.
Send any donations you can, to:
[These are not political campaign donations.]
SOUND MONEY FOR AMERICA,
c/o Henry W. McElroy,
15 Iroquois Rd, Nashua, NH 03063
ANY AMOUNT, ANY LEGAL TENDER CURRENCY - U.S. OR FOREIGN !
Video copies of the sound money bill press conference are available for a $35 donation.
For more info, contact
Rep. Henry W. McElroy, NH State Representative
Sponsor of the bill
603-233-5892
Harvey Wharfield
978-635-9586
We also need assistance with the following.
1. Please contact your local representative to your state government. Find out whether they might support a similar "sound money bill" in your own state.
To contact your state rep to the federal goverment, see http://www.house.gov/writerep/
To contact your state rep to your local state government, you will have to find that on your own. Try searching for "contact state representative california" and replace the name of your state in the search.
2. If you know of any local representaives to your state government, who may be GOOD, LIKE MINDED REPRESENTATIVES, SENATORS, and GOVERNORS, who may like to support, or sponsor, a sound money bill in your state, please tell them about the NH initative. Copy the above, and send it along to them. And call Henry W. McElroy or Harvey Wharfield, and let them know of the other reps who may assist the cause.
3. If you have an email list to people who may be interested in gold and silver as money, or who may be good conservatives, please send out this notice to the list, so the project can move forward!
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There are two excellent annual silver surveys that are sponsored by industry.
The survey by silverinstitute.org costs $195, 87 pages.
http://www.silverinstitute.org/wssum03.pdf -- 8 page free summary of last year's report.
The survey by cpmgroup.com costs $150, 162 pages.
http://www.cpmgroup.com/SSpress2004.pdf --3 page press release.
The two reports present the case that about 500 million oz. of silver are mined each year, about 200 million oz. of silver comes from scrap, and about 100 million oz. of silver comes from investor dis-hoarding, either by individuals or government sources, in order to meet the annual demand of about 800 million oz. of silver by industry & jewelry. This is wildly bullish, because investors are net selling more than buying, and I think the potential of investor demand is huge, and can be measured by seeing how much paper money there is in the world.
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Here are two U.S. Government produced reports on silver, containing data on years from 1900 to present, on U.S. & world production, and U.S. consumption, and U.S. industry & government stockpiles.
Report #1
http://www.goldismoney.com/ssr/USsilver.xls
Report #2
http://www.goldismoney.com/ssr/USsilver2.xls
I evaluated these government produced reports in my silver stock report #36.
In sum, we are running out of silver. The U.S. government had over 3 billion ounces of silver in 1940, and today, has very little left, or none.
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The Commodities Futures Trading Commission
The CFTC report on the allegations of manipulation in the silver market -- 9 page report
The CFTC report confirmes much of the research above, and almost outlines the bullish case for silver!
--My comments on the CFTC report ar in silver stock report #34 & #35
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See my article: Biblical Guidelines for Managing your Money
As the New York Times, January 11, 1859, page 2 said---
"It is well known that the most colossal fortunes the world ever saw have been based on silver mines..."
--quote found by Charles Savoie
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WHERE and HOW to BUY SILVER BULLION
http://www.goldismoney.com/buy-gold.php
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My 2004-2009 price predictions for gold and silver:
2004: $595/oz. gold, 50:1 ratio = $12/oz. silver
2005: $1011/oz. gold, 30:1 ratio = $34/oz. silver
2006: $1719/oz. gold, 10:1 ratio = $172/oz. silver
2007: $2923/oz. gold, 5:1 ratio = $ 585/oz. silver
2008: $4,969/oz. gold, 1:1 ratio = $4969/oz. silver
2009: $8448/oz. gold, 5:1 ratio = $1698/oz. silver
2010+: infinity dollars/oz. gold, infinity dollars/oz. silver.
I calculate the gold price rise by guessing that by 2009, M3 will have a "gold-value" like it did in 1980, which is to say, M3 was worth 2 Billion oz. of gold or less. It also assumes M3 will about triple in that time. These figures are conservative, because I see no reason that M3 should be valued more than the gold the U.S. actually holds, which is a mere 261 million oz., not billion. Today, the M3 value is $8870 billion / $425/oz. = 19 billion oz. of gold M3 could buy in theory. The silver:gold ratio is also a very, very vague guess, reflective of monetary demand chasing silver, which is more scarce than gold in above ground, refined form. I have no idea when the ratio of 15:1 will be exceeded, I'm just totally guessing. I suppose it could happen this year or next month for all I know. Of course my real price targets are infinity dollars per oz. for both gold and silver when all is said and done, I just don't know how long that will take, nor what year it will be. But my point in producing the price predictions is to show my bullishness for silver and gold.
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I wrote an article predicting that Silver Companies will buy silver, and urging Silver Companies to buy silver with their cash, to use silver as money, and sell silver as needed for expenses. See http://news.goldseek.com/GoldIsMoney/1069879327.php
That article is now having an effect! It is being discussed by several large "cash rich" silver companies, who are seriously considering the idea of holding their cash in the form of silver.
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A great overview on silver: Douglas Kanarowski's 78 Approaching Forces For Higher Silver Prices
See also Douglas Kanarowski's article: What Impact Will Digital Photography Have on Silver?
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See the 600 year silver chart to see how undervalued silver really is:
http://goldinfo.net/silver600.html
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Look at the summary of the world silver survey by GFMS Limited on behalf of The Silver Institute :
http://www.gfms.co.uk/Publications%20Samples/WSS03-summary.pdf
Note, there is virtually no monetary nor investment demand. Note, the 2002 mine production (585 mil oz.) is greatly exceeded by industrial, photo, and jewelry demand. (838 mil oz.). Note the chart on page five, "Supply from above-ground stocks".
The difference between mine supply and industrial demand was met by a combination of three factors: 1. Government selling, 2. Private selling, 3. Recycling
U.S. government selling is ending, as their stocks have run out, or will run out. This factor will reverse, because the U.S. government will need silver to continue their coin program, and/or need silver when they wake up and decide they need to replenish their strategic stockpile for domestic security. Silver is a war material. China's selling of silver will also likely turn into buying, as China will need silver for continued industrial development, or when they also lose faith in the U.S. dollar.
Private selling has been rapidly shrinking and is now almost ended, and should turn into buying, and become monetary demand. Monetary demand is everything in the silver supply / demand situation. It's not now. Now, it's nothing. But it will become something incredible, because the dollar is dying.
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The following is a "must read": Ted Butler's best ever explanation of how silver is manipulated lower than it should be.
http://www.investmentrarities.com/11-04-03.html
Over 3400 people have signed the silver petition to stop the manipulation at the COMEX:
http://www.PetitionOnline.com/comex/
Ted correctly points out that a lower price creates excessive demand from consumers. However, Ted Butler does not point out, and neglects to mention, that a perpetually low price also creates lack of demand from investors who are "trend investors".
I think most silver experts over-analyze all the supply and demand factors of the silver market. No factor is more important than monetary demand. The force of photographic demand is like a light breeze compared to the hurricane or tornado of monetary demand. Monetary demand is everything.
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Consider the gold market for a moment: Even short selling at the COMEX is nothing compared to monetary demand. The short position most certainly helps to depress the price of gold as the short position is growing larger. However, it adds fuel to the fire if there is short covering, and thus, it can boost the gold price later. But the commercial short position on the COMEX is next to nothing compared to the non-reported "over the counter" trading that is done that does not appear on the COMEX.
(Numbers in metric tonnes, 32,152 oz. per tonne.)
870 tonnes -- the paper position at the COMEX, 280,000 contracts for 100 oz. each.
5,000 tonnes -- the official number admitted that the central banks have sold.
15,000 tonnes -- the number GATA research shows that central banks have sold / or leased.
30,000 tonnes -- the number of official central bank gold, minus either the 5000 or 15,000 tonnes.
145,000 tonnes -- all the gold mined in the history of the world.
2,600 tonnes -- annual mine supply
4,000 tonnes -- annual demand
And all of that is nothing compared to the amount of dollars out there that exist that could buy gold. $20 trillion bonds, $9 trillion M3 = $29 Trillion. A mere 1% is $290 Billion, which, at $500 /oz. is a massive demand of 18,039 tonnes. Do you understand what that means? That means that far, far less than 1% of dollars, in either bonds or M3 can buy gold, because there simply is not that much gold available.
Long before 1% of U.S. paper dollars tries to buy gold, gold will be going up well over $1000/oz., and silver will be headed up over $50/oz.
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To scare away investors--that is the entire reason gold and silver are manipulated in the first place. Only the trend investors can be deceived. The problem is that nearly everyone is a trend investor. So few investors understand value. If people knew the facts and used their brains, the available above-ground refined silver would be gone by tomorrow, and the price would be well over $20-50/oz. But don't trust me, check the numbers and follow the links:
1,000,000,000,000: 1 Trillion dollars
1,000,000,000: 1 Billion dollars
1,000,000: 1 Million dollars
$33,000,000,000,000: World bond market, yr end, '01: |
