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-- Posted 29 August, 2004 | Digg This Article
Saturday, August 28th, 2004
A day's wage used to be a silver dime, a silver quarter, or maybe a silver dollar. A silver dime today costs about 48 cents, at $6.74/oz. for silver. About 900 million oz. of silver are consumed annually, and just under 600 million ounces mined annually. Oddly, there is is seven times as much refined gold as silver... Buy real silver, it is scarce, real wealth, and cannot go to zero value. By the time paper money fails mankind once again, as it always does, any silver dime you can lay your hands on will probably be worth more than what $100 to $200 will buy you today. You can buy silver now, or work for it later.
This week's report lists the market capitalizations for 85 silver stocks. There are 31 silver stocks that list reserves, resources (and exploration potential) which I calculate by using my "ounce in the ground" formula. There are 54 explorers. There are about 30 additional "silver" stocks with incomplete information. Additions & Changes from last week are in bold.
Please try to read the entire report before sending me an email. This report goes out now to over 11,700 investors each week.
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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
To read about my religious views, see my other web site, 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. See Ezekiel 38. Also, see my essay: Biblical Guidelines for Managing your Money
Kitco reports silver at $6.58/oz. as of Saturday, 9:27AM West Coast US, which was used to calculate the following figures. The CAN $ / US $ conversion factor is .7616. I will use .76 for ease.
How to read the table below:
Stock Symbol that works at Yahoo! Finance (Company name) / The number that follows the company name, below, represents the company's resources, divided by the market cap as denominated in silver; thus, it is the number of silver oz. "in ground" that you gain title to when you trade away one ounce of silver to buy 1 oz. of silver's worth of stock. The number is the expression of leverage that silver stocks can give you, the higher the number, the better. / Next, I list the valuation price change since last week (and stock dilution, and resource changes, if any) as up/down or even. / Finally, there are additional comments (EXPT is "exploration potential")
Company names in bold have summaries below with updated information since last week. Click on the name to see the summary below.
Please review the new format that has existed in the last few months. If I have updated any information about a company in this week, I put the name in bold. Now, you only need to click on the bold names, and it will take you directly down to the updated company profile, where the updated information will also be in bold, such as new diluted share numbers.
This first list are the companies with information about reserves/resources/exploration potential. The list is ordered/ranked based on the resource picture. The most expensive (with the fewest silver resources given their market cap) are listed first.
- ABX (BARRICK) 1.1 down --producer, hedger (15? mil oz. gold hedged, 3 yrs production)
- IPOAF.PK (INDUSTL PENOLES) 1.6 up --producer, mostly family owned, hedged?
- CDE (COEUR D'ALENE) 2.4 down --producer (also gold) in debt, produces at a loss.
- SIL (APEX SILVER) 3.2 up --zinc bonus, low grades, cash rich--$345 million! in debt
- FSR.TO FSLVF.PK (FIRST SILVER) 4.1 even --producer, (not profitable '03 3rd q.) unhedged
- PAAS (PAN AMERICAN SILVER) 4.7 up --producer, debt free, may hedge to develop
- GRS GAM.TO (GAMMON LAKE) 4.9 down --producer, owns 26% of Mexgold
- MFN MFL.TO (MINEFINDERS) 5.0 down --significant gold bonus, $35 mil cash on hand.
- CFTN.PK (CLIFTON MINING) 5.7 even -- (134 EXPT) (colloidal silver product bonus)
- KBR.TO KBRRF.PK (KIMBER RSCS) 6.0 down --one property, high grades, with exploration potential.
- WTZ WTC.TO (WESTERN SILVER) 6.1 up -- (21 EXPT) large mine development cost. copper & zinc bonus
- * TM.V TUMIF.OB (TUMI RSCS) 7.2 down -- (14 EXPT) recent bonanza grade silver discovery
- SSRI SSO.V (SILVER STANDARD) 7.7 up --large company, many properties, owns silver bullion
- ORM.V OREXF.PK (OREMEX RES) 9.8 up (41 EXPT)
- CZN.TO CZICF.PK (CDN ZINC) 11.0 down --large zinc bonus, high grades, low start up costs, great EXPT
- SHSH.PK (SHOSHONE SILVER) 12.2 down --leased properties; need payments; in Cour d'Alene
- SRLM.PK (STERLING MINING) 12.6 down --(30 EXPT) acquired the Sunshine in Cour d'Alene
- FAN.TO FRLLF.PK (FARALLON RSCS) 14.6 down --(25 EXPT) low grades, silver 1/3; also gold & zinc bonus.
- CHD.V CHDSF.PK (CHARIOT RSCS) 16.1 up --explorer, with inferred resources
- IMR.V IMXPF.OB (IMA EXPL) 18.6 down --(74 EXPT) explorer in Argentina
- HDA.V (HUSIF.PK) (HULDRA SILVER) 18.9 down --very tiny, zinc bonus, low start up costs.
- * SVL.V STVZF.PK (SILVERCREST) 19.3 up --(37+ EXPT) --(Silver in Mexico, El Salvador, Guatemala)
- RDV.TO RDFVF.PK (REDCORP VEN) 20.6 down --60% gold bonus
- GGC.V GGCRF.PK (GENCO RECS) 20.4 down --producer in Mex. Plans to expand and acquire
- ADB.V ADBRF.PK (ADMIRAL BAY) 22.5 up --exploring a silver property in Mex. (Huge gas bonus)
- * MGN (MINES MGMT) 24.5 down --60% copper bonus (low grades), start up cost ~ $250 mil
- ABI.V ABMBF.PK (ABCOURT MINES) 27.7 down --large zinc & small gold bonus
- EXR.V EXPTF.PK (EXPATRIATE) 29.1 down --large zinc bonus 60% zinc, 25% silver (got out Atna)
- * ASM.V ASGMF.PK (AVINO SILVER) 35.3 up --will own 100% of the Avino mine +4 other silver props.
- * PLE.V (PLEXMAR RES INC) 39.7 down --just acquired 2 new projects
- UNCN.OB (UNICO INC) 105 down --lease on largest property,$3 million due by August 31, 2005
* = I own shares
Next list: Exploration companies or producers with limited information on resources. This list is in order (roughly) by market cap, the highest market cap companies are listed first.
- HL (HECLA MINING CO) --A PRODUCER (gold bonus) cash rich.
- MGR.V MGRSF.PK (MEXGOLD RSCS) -- bonanza grade discovery on Jan 13th, 2004
- CDU.V CUEAF.PK (CARDERO RSCS)
- AOT.V ASOLF.PK (ASCOT RSCS) -- owns percentage of Cardero, CDU.V
- SPM.V SMNPF.PK (SCORPIO MINING)
- * FCO.TO FCACF.PK (FORMATION CAPTL) Cobolt (and Sunshine silver refinery)
- * OTMN.PK (O.T. MINING) very large exploration potential
- TVI.TO TVIPF.PK (TVI PACIFIC) --A PRODUCER of a dore silver bar 96% silver, 4% gold
- * NPG.V NVPGF.PK (NEVADA PAC GOLD) Large "exploration potential" (owns 1 silver & 10 gold properties)
- * MMGG.OB (METALLINE MINE) --zinc/silver (historic high grade silver) (low cost revolutionary oxide zinc process)
- MCAJF.PK (MACMIN LTD)
- * FR.V FMJRF.PK (FIRST MAJESTIC) --A PRODUCER Modernized a former producer. Acquiring properties.
- BZA.V ABZGF.PK (AMER BONANZA)
This next list has silver exploration companies with market caps under about $30 million
(Market cap = total number of shares fully diluted, times the share price. It's what the company is "worth" in the market place, given the stock price, and is one of the important numbers I calculate each week in these lists.)
- ECU.V ECUXF.PK (ECU SILVER MINI) --50% gold bonus
- IAU.V ITDXF.PK (INTREPID MINRLS) "exploration potential"
- 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)
- CAUCF.PK (CALEDON RES)
- * CBE.V CBEFF.PK (CABO MINING) --Historic Silver and Cobalt district
- SDR.V SDURF.PK (STROUD RSCS)
- APM.V (Amerix Precious Metals Corp) (NEW BULLET GP)
- QTA.V QURAF.PK (QUATERRA RES)
- PXI.V PNXPF.PK (Planet Exploration Inc.)
This next list has silver exploration companies with market caps under about $15 million - NJMC.OB (NEW JERSEY MIN)
- EPZ.V ESPZF.PK (ESPERANZA SILVR)
- MAG.V MSLRF.PK (MAG SILVER)
- EXN.V EXLLF.PK (EXCELLON RSCS)
- SRY.V (STINGRAY RSCS)
- * KG.V KDKGF.PK (KLONDIKE GOLD)
- SML.V SMLZF.PK (STEALTH MNRLS)
- DNI.V DMNKF.PK (DUMONT NICKEL) exploring Clifton's property
- * KRE.V KREKF.PK (KENRICH ESKAY)
- BCM.V BCEKF.PK (BEAR CRK MINING)
- * CMA.V CRMXF.OB (CREAM MINERALS) Low grade, large "exploration potential"
- CHMN.PK (CHESTER MINING)
- MMG.V MMEEF.PK (MCMILLAN GOLD)
- GPR.V GPRLF.PK (GREAT PANTHER)
This next list has silver exploration companies with market caps under about $7 million dollars: - ROK.V ROCAF.PK (ROCA MINES INC)
- EGD.V EGDMF.PK (ENERGOLD MINING)
- GNG.V GGTHF.PK (GOLDEN GOLIATH) --Historic silver district in Mexico
- LEG.V LEGCF.PK (LATEEGRA RSCS)
- TBLC.PK (TIMBERLINE RES)
- TUO.V TEUTF.PK (TEUTON RES)
This next list has silver exploration companies with market caps under about $4 million dollars: (The real "penny stocks" are those with the smallest market caps, not the lowest share price!)
- PDO.V (PORTAL DE ORO RS)
- * AUN.V AUNFF.PK (AURCANA CORP)
- ASLM.PK (AMER SILVER MINI)
- PCM.V PAOCF.PK (PAC COMOX RES)
- BGS.V BLDGF.PK (BALLAD GLD SLVR)
- * GRG.V (GOLDEN ARROW RESC) IMR.V spin-off. $3.6 mil MC, 35 properties
- MTB.V (Mountain Boy Minerals Ltd)
- BBR.V BBRRF.PK (BRETT RES)
- CLZ.V (Canasil Resources Inc)
- LSM.V LASCF.PK (Langis Silver & Cobalt Mining Co Ltd)
- CBP.V CPBMF.PK (CONS PAC BAY MIN)
* = I own shares.
There are expanded profiles on each company, way below. But before I get to that, let me discuss my methodology, and the problems with it.
See the number above, listed after each company in the first list? That number represents the number of silver ounces in the ground that you get when you buy an ounce of silver's worth of stock. The number treats all reported ounces in the ground as equal, however, they are NOT EQUAL. Some ounces in the ground are more certain and others are more speculative. Some are higher grades, some are lower grades. Some have been well drilled, others have less drill results. They range from most certain to least certain such as: "proven & probable reserves," and then, "measured, indicated, or inferred resources." A reserve has a feasibility study produced for it. A resource, does not.
Here's the math on how I calculate that one number. First, I get a market cap by multiplying the fully diluted shares (which bullishly assumes all options and warrants will be exercised and converted into outstanding shares) by the share price in U.S. dollars. Next, I divide that by the silver price, so the market cap is denominated in terms of silver ounces. Then, I divide the ounces in the ground by the market cap as denominated in silver. This produces the single number of how many ounces of silver in the ground you are buying when you give up one ounce of silver in your hand, for shares of stock, instead. This way, you can not only compare silver stocks to each other, you can compare them to silver directly. This also helps people in other nations, using other currencies, to value these companies.
This valuation 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.
Problems with my methodology: My methodology assumes that the more ounces in the ground, is, in theory, best, given that I expect much higher silver prices. However, unless the price of silver really moves much higher, my methodology may not be the best one. If silver does really move up very high in value as compared to today, then I expect my methodology to be one of the best predictors of rising stock values, because more ounces in the ground mean more leverage to rising silver prices. However, the companies with greater leverage to the upside usually also tend to have greater leverage to the downside, and thus, tend to be more volitile.
Other factors to consider that the single number produced by my methodology does not: A resource calculation number does not tell you the entire picture about a company. The resource calculation number is designed as a starting place for further research. Other very important considerations are as follows: How much existing mining infrastructure is in place? The more the better, so think of it as a "bonus". How much cash does the comapany have on hand, and what is their burn rate? What is the management's attitude towards money, silver, hedging, debt, and dilution? This is why I list "additional comments" in the company profiles, below.
I don't consider grade to be too important (although I list it when I can), because I consider the cost to mine to be the more important consideration. The "cost to mine" is determined in a feasibility study, which is the last thing produced before trying to raise money for final construction of a mine. And usually, they cannot even count silver as a resource unless it is at least somewhat feasable to mine at today's prices for silver. And this is why I count all the ounces as the same. If a low grade ore can be mined more cheaply, and if a higher grade ore costs more to extract, and if it has to be somewhat economically feasible even at these low silver prices to be counted, it balances out quite nicely.
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/
See my June 18, 2004 article: I'm insanely bullish on silver.
WEEKLY COMMENTARY (All new in this section):
This week, John Embry and Andrew Hepburn published a 66 page report on the gold market, making the case that the gold market is manipulated by governments that are not being truthful about how much gold they have sold or leased out of their vaults. The official numbers of gold loaned range about 4000 to 5000 tonnes. More accurate numbers range from 15,000 to 16,000 tonnes loaned out of the 33,000 tonnes of central bank gold. The report can be found at http://www.sprott.com/
Two quotes in the report have been very widely re-printed in gold articles on the internet in the past few years, and summarize the gold story:
Alan Greenspan, in June 1998, before Congress, said,
"Nor can private counterparts restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise."
Next, in 1999, after the price spike in gold from around $270 to around $330 which happened in the few days after the Washington Agreement came out which limited gold sales by many European central banks to 400 tonnes/year, Edward A J. George, Governor of the Bank of England and a director of the BIS, said:
We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore, at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The U.S. Fed was very active in getting the gold price down. So was the U.K.
GATA has long accused the International Monetary Fund (IMF) of encouraging governments and central banks to falsely report gold holdings, to list gold in the vaults, and gold leased out, as one category. Several central banks, such as the Phillipines and Portugal, have confirmed the IMF guidelines, which the IMF denies. This should come as no surprise. The entire reason the IMF was founded was to manipulate, manage, and control the gold price! The point of the IMF was to create another "gold pool", since the London gold pool was overpowered in 1968!
I agree with the GATA numbers, that more gold has been sold than is officially acknowledged.
What is ironic is that, on the one hand, GATA and the Embry report accuse the UK of manipulating the gold price since the UK auctioned off gold reserves in a public manner. On the other hand, GATA also accuses IMF member nations of manipulating the gold price with private and secretive gold sales. Both accusations are technically correct, and I have made similar statements in my many essays.
However, this begs the question. How are nations to sell their official gold reserves, if neither privately nor publicly? If they are going to sell it must be in either a public or private way! Do the gold investors really assert that governments should not be allowed to sell gold? And if they are not to sell their gold reserves, nor back their currencies with it (more IMF rules) what else are they supposed to do with it? Perhaps the real question is, "Is there a more honorable way for governments to sell their gold?" Or even, "Is there any honorable use for government gold?"
I will answer my own question, and say that yes, there is an honorable way for governments to sell government gold hoards. The governments should mint it all into coinage, and pay for everything in gold. In this way, the gold would be distributed widely among the people, to be used as money, as it should be. This would clearly help the economy of the nations that minted gold and gave it to their own people, since it would help to protect them from the abuse and fraud of paper money (which is the main evil action that governments are doing.)
But as it is, government gold is being sold off in secret, and in large chunks, to the bullion banks, who are the bane of mankind AND governments. As much as I have a problem with excess government, government servants are better than the banks who enslave governments by lending to them! The Bible has high praise for government servants, calling them God's servants, as follows:
Romans 13:1Everyone must submit himself to the governing authorities, for there is no authority except that which God has established. The authorities that exist have been established by God. 2Consequently, he who rebels against the authority is rebelling against what God has instituted, and those who do so will bring judgment on themselves. 3For rulers hold no terror for those who do right, but for those who do wrong. Do you want to be free from fear of the one in authority? Then do what is right and he will commend you. 4For he is God's servant to do you good. But if you do wrong, be afraid, for he does not bear the sword for nothing. He is God's servant, an agent of wrath to bring punishment on the wrongdoer. 5Therefore, it is necessary to submit to the authorities, not only because of possible punishment but also because of conscience. 6This is also why you pay taxes, for the authorities are God's servants, who give their full time to governing. 7Give everyone what you owe him: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honor, then honor.
Make no mistake, those in power are put in power by God, who rules in the kingdom of men, and sets up and tears down governments at his command.
Daniel 4:17 'The decision is announced by messengers, the holy ones declare the verdict, so that the living may know that the Most High is sovereign over the kingdoms of men and gives them to anyone he wishes and sets over them the lowliest of men.'
Government servants, God's servants, ought to wake up to the manipulation and secrecy, and should demand to be paid for their services in gold and silver coin. Firefighters, policemen, school teachers, soldiers... demand gold and silver!
So, to sum up, yes, the central banks of the nations are selling gold, and yes, it is being coordinated by the IMF, BIS, and perhaps other powerful interests, and yes, they have most likely sold about 15,000 tonnes of central bank gold, not 5000 tonnes. Interestingly, the Rosthchilds recently announced they were no longer going to participate in the gold fix!
We can either complain about how things are and/or advise how things should be, and both are productive. But the most productive is to accurately see things as they are, and to take advantage of the situation! Governments are stupidly dumping gold and silver, for the express purpose to keep the prices low, and to keep the people's faith in their fraudulent paper money strong, and it is up to us to take gold and silver from them as cheaply as we can, and I think gold and silver investors are succeeding beyond our wildest hopes and dreams! The price-inflation-adjusted high of $800/oz. of 1980 is about $1600/oz. or more! The money-creation inflation-adjusted high of $800/oz., is more like $3500/oz! Any price below that is a great deal, since that price was merely a beginning or a hint of what the price would be if paper failed and if we returned to using gold as money. Obviously, that 1980 price was not a representation of a full return to using gold as money.
Next, for practical purposes, how much do the government sales of gold affect the gold price?
And how much does the endless creation of paper futures contracts at the COMEX affect the gold price?
To answer those questions, you need to look at the numbers, and use your own good judgement.
Government gold sales over 10-15 years are 15,000 tonnes. That's 1000 to 1500 tonnes per year. Current annual gold supply is 2600 tonnes and demand ranges from 4000 to 5000 tonnes. The difference is met by recycling, and government selling. Clearly, government gold sales have a significant price-lowering effect.
COMEX open interest stands at about 260,000 contracts for 100 ounces each. This is 26,000,000 ounces / 32152oz./tonne = 808 tonnes. Clearly, the open interest at the COMEX, paper gold as substitute for real gold, diverts investors away from buying real gold. That is 808 tonnes less gold demanded than there might be. Or, put another way, when 808 tonnes of gold are promised to be delivered in the future, it clearly has a dampening effect on the price.
Over-the-counter derivatives are an unknown size, but I suppose they are huge in size, being the difference between the 808 tonnes at the COMEX and the 15000 tonnes of central bank selling/leasing.
There is another form of short sales: There are gold accounts at the large bullion banks that are short gold. Clearly, those people who think they have gold, as denominated in a bank account at the largest banks in the world, are being swindled on a historic scale.
But how much gold could be demanded, really? The world has $33 trillion in bonds. The US level of money in the banks, M3, stands at $9 trillion. If 1% of that was invested in gold, it would be just over $400 billion worth of gold. China alone has nearly $300 to 350 billion in bonds, so we'd better pay attention to numbers of this size! At $400/oz, that would be a billion ounces of gold. 1,000,000,000 ounces / 32152oz./tonne = 31,100 tonnes!
If China alone dumps bonds for gold, the gold price could easily rally to well over $2500/oz.
As I see it, whoever is in power of creating paper money had better cap the gold price if it begins to rally, otherwise their entire paper house of cards will come crashing down in an instant! As I see it, even though the government caps gold price rallies as a matter of policy, and had done so with the London gold pool in the 60's and 70's, and with the IMF in the 80's until today, they will fail today as surely as they failed in the 1970's. In fact, their next failure stands to be all the more spectacular and profitable than ever before.
So, when and under what conditions will the current gold fix fail? The last gold fix ended, on March 14, 1968, when a mere 400 tonnes was demanded on a single day. Source: Anthony C Sutton, 1977, The War on Gold. A few years later, in 1971, the gold price was finally set free as the U.S. defaulted on the gold contract known as the dollar. Perhaps there will not be a time gap to wait for a price rise the next time when so much gold is demanded, or after the next default on gold contracts.
Interestingly enough, the open interest at the COMEX is now over 800 tonnes, twice as high as the 400 tonne number. But the 400 tonnes was demand of physical gold. 400 tonnes is about 12.9 million ounces. At $405/oz, that's a mere $5.2 billion. Chump change in the world of international finance. Argentina recently acquired 40 tonnes (hurray!), but that's only a mere 1/2 billion dollars!
In other words, although China can collapse our dollar by demanding gold, China is also in trouble, since there is no way they will receive real wealth, gold, for the bonds they hold. And the same goes for other nations, and for all Americans who own bonds, or who have pensions as pension funds are invested in bonds. Oh, yes, and the social security promises will also fail when the dollar fails, or did nobody tell you that's how the false promises of ponzi schemes and communism fail? Gold and silver are quite limited real wealth, and limited things are always bought and sold on a "first come, first served" basis.
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The direct competitors of gold and silver miners are banks. Both create money, but which is the superior product?
Gold and silver miners typically understand that they are in competition with one another. Whoever produces the most, the cheapest, wins. Or, whoever acquires the most ounces in the ground, the cheapest, wins! They know they cannot patent their products, gold and silver. And without a patent monopoly, they are keenly aware that mining is a competitive industry.
But why don't miners understand that the banks are their competitors? Miners produce real money.
The money that the banks create also creates a delayed demand for gold and silver. Every dollar created is potentially demand for real money, gold and silver.
Let's compare the rate of money creation by both industries:
The gold miners, worldwide, produce about 2600 tonnes each year, or 84 million ounces. At $415/oz., that's $35 billion dollars of new gold per year.
The silver miners, worldwide, produce just under 600 million ounces each year. At $7/oz., that's $4.2 billion dollars of new silver per year.
The U.S. banks (not worldwide) are creating money (M3 growth) at 8.6% for the first 6 months of 2004. M3 grew from $8892 billion in January 2004 to $9274 billion in July 2004. That's $382 billion in 6 months. Annualized from January, that's $765 billion. Annualized from July, that's $798 billion of new money per year. But, of course, the rate can change and is nothing like a "constant" to go by.
I have no idea what worldwide fiat money creation might be. It's probably significantly larger than U.S. money creation.
Let's compare the size of the worldwide bond market to the worldwide silver stock market.
Bonds: $33 trillion. Silver stocks: $8 billion.
33,000 / 8 is the ratio. Expressed another way, it's 4125 to 1. Expressed verbally, it's like saying that there is only one dollar invested in silver stocks for every $4125 dollars invested in bonds. Or, if that ratio were expressed in terms of people, then perhaps only 1 person in 4125 investors is invested in silver stocks. Silver stocks are a tiny, tiny, market sector.
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In the free market, business is and must be competitive. Competition is a great thing, as it drives us all to excel. The Olympics are a showcase of ultimate competition. I was a competitive athlete, a ski racer. I was motivated by the competition from others to perform not only my absolute best, but I aspired to perform at a level that was the best mankind can do.
I don't fear if someone competes with me as a silver stock company analyst. I'd welcome the competition, and enjoy the fact that others would be promoting silver and silver stocks.
Recently, a marketer wanted me to sign a "non-compete" clause in a contract, because he wanted a monopoly on his ideas. He said he wanted to teach me how to market my web site, but he didn't want me to disclose his "trade secrets". I said I could not agree, in advance, to not disclose things that I don't know. I asked him, "How do you define your trade secrets?" He said, "That would be obvious." Ultimately, I refused to bind myself to the terms of his agreement, and I chose to retain my freedom. Besides, James 5:12 says: "But above all things, my brethren, swear not, neither by heaven, neither by the earth, neither by any other oath: but let your yea be yea; and your nay, nay; lest ye fall into condemnation."
I hate contracts. Most of my business is done without contracts. As many of you know, I have a small email list of people who want to know about private placements (PPs). And I email my list about PPs, when I find out about them. Right as I was getting started, I had all kinds of fearful and stupid thoughts. I thought, what if I tell someone about a PP, and what if they don't mention they heard about it from me? I would not receive any credit for the finder's fee! And what if I work with a company to help them raise money? The company might not ask the investor where they heard about them, and I would not receive any finder's fee! In theory, a fearful man would want every person on his list to sign a performance contract of some sort, and he'd want a company to sign a contract, too. But I've had experience with contracts, and people, and you know what? You can get all the contracts you want, and if a person changes their mind or does not live up to their end of the deal, what are you going to do? Sue? In most cases, it's ridiculous, and not worth the time and trouble. Besides, how would I even know if someone didn't fulfill their contract? So, I operate entirely without contracts, which just slow things down. If I get credit for a finder's fee, I'm thankful to the person who remembered me, and I'm thankful to the company for keeping track, and I'm thankful to Lord Jesus Christ.
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Paul Van Eden finally writes on silver
http://www.kitco.com/weekly/paulvaneeden/aug202004.html
It appears to me as if Paul is finally getting around to taking a look at silver, much like I first did back in the year 2000. He seems to struggle to understand and explain why silver is so undervalued as compared to gold, and that is a difficult problem. He knows the supply and demand numbers. He knows investment demand is extremely low, despite the fact that he finally wrote on silver due to reader demand. He knows the silver market is tiny, and that investor demand can really drive the silver market. He admits, "I fully expect silver to outperform gold as the bull market unfolds but at some point, I also expect the silver price to collapse again, at which point it could vastly under-perform gold." He concludes that silver is not primarily a monetary metal, and although that is certainly correct today, it could also be said to be true for gold. But history proves otherwise; that silver was more widely used as money than gold.
But, let me say in response, that silver is not only a monetary metal, but silver is also a religious metal! Those people who understand the implications of the supply and demand numbers of the silver market are confronted with some amazing truths. Just like those who encounter God or the Bible. And people's reactions to those truths are mixed.
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As I mentioned above, if God's servants in government ought to wake up and demand gold and silver, then those who are a part of the Church ought to demand gold and silver all the more! So, here are some scriptures for those who already believe the Bible, but may be confused about what it says. (Share this section with your Church pastor, or better yet, make copies and give to your entire Church!):
Scriptures supporting gold and silver as money, and against paper money.
Deuteronomy 25:13 Thou shalt not have in thy bag divers weights, a great and a small.
14 Thou shalt not have in thine house divers measures, a great and a small.
15 But thou shalt have a perfect and just weight, a perfect and just measure shalt thou have: that thy days may be lengthened in the land which the LORD thy God giveth thee.
Proverbs 20:10 Divers weights, and divers measures, both of them are alike abomination to the LORD.
Using honest weights and measures in commerce requires honest money that you can actually weigh and measure. I find it extremely difficult to not have dishonest weights (dollars) in my house or wallet (bag), because merchants put dollar prices on the things they sell, and they don't list the price in silver. But from now on, I'm going to make increasing efforts to buy everything I can with silver. (I have recently paid for an ad in silver, and recently hired a publicity agent with silver.)
Exodus 20:15 Thou shalt not steal.
The dollar is a defaulted promise to pay gold. It is evidence of theft that has taken place. If you pay for things in dollars, you (me too) are not only using a false weight and measure, but you (me too) are continuing the theft; both actions being deceived, and deceiving others.
Galatians 6:7 Be not deceived; God is not mocked: for whatsoever a man soweth, that shall he also reap.
Do you realize what an opportunity we have? Every monetary transaction we make is an opportunity to help spread the truth about money, and our faith. Perhaps I should simply say, "As a Christian, I'm commanded by God to not steal, or use false weights and measures. Therefore, I wanted to give you the opportunity to not be defrauded by paper money. Would you like real silver, instead?"
Luke 16:10 He that is faithful in that which is least is faithful also in much: and he that is unjust in the least is unjust also in much.
11 If therefore ye have not been faithful in the unrighteous mammon, who will commit to your trust the true riches?
12 And if ye have not been faithful in that which is another man's, who shall give you that which is your own?
The true riches of God may be withheld if we are not being faithful with unrighteous mammon!
The dollar system is a system of debt at interest, or usury. Both the Hebrew scriptures and the Greek condemn usury.
Deuteronomy 23:19 Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury:
Luke 6:35 But love ye your enemies, and do good and lend, hoping for nothing in return; and your reward shall be great, and ye shall be the children of the Highest; for He is kind unto the unthankful and to the evil.
God created gold, it belongs to Him.
Genesis 2:12 And the gold of that land is good: there is bdellium and the onyx stone.
Haggai 2:8 The silver is mine, and the gold is mine, saith the LORD of hosts.
God created gold and silver for a purpose.
Rev 3:18 I counsel thee to buy of me gold tried in the fire, that thou mayest be rich; and white raiment, that thou mayest be clothed, and that the shame of thy nakedness do not appear; and anoint thine eyes with eyesalve, that thou mayest see.
Jesus counsels us to buy gold, the gold he created, His gold, and the reason is given--so that we may be rich. Many people try to "spiritualize" Rev 3:18, so that it has no literal meaning. But the topic of money covers many spiritual principles; and gold and silver fulfill God's principles, and paper money is a rejection of all of God's spiritual principles! How can one spiritually obey Rev 3:18 "to buy of me gold tried in the fire," without first obeying the literal command?
The following are scriptures that Christians often mis-interpret, as if saving gold and silver are bad. (What follows is my clarification.)
1 Timothy 6:10 For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.
Some think 1 Timothy 6:10 means that money is the root of all evil, and if gold is money, then gold must be evil. But it is the love, or covetousness, of money that is the root of all evil. Innate objects cannot sin. Only men can sin.
Exodus 20:17 "Thou shalt not covet thy neighbor's house; thou shalt not covet thy neighbor's wife, nor his manservant, nor his maidservant, nor his ox, nor his ass, nor anything that is thy neighbor's."
The Bible does not condemn money, as "money answereth all things".
Ecclesiastes 10:19 A feast is made for laughter, and wine maketh merry: but money answereth all things.
Here is another often misunderstood verse:
Matthew 6:19 Lay not up for yourselves treasures upon earth, where moth and rust doth corrupt, and where thieves break through and steal:
20 But lay up for yourselves treasures in heaven, where neither moth nor rust doth corrupt, and where thieves do not break through nor steal:
Some think Matt 6:19 means that we can't store money for the future. But the condemnation is on storing money for selfish purposes, it says "not for yourselves". There is no condemnation for storing money to further the gospel kingdom. Jesus counsels against storing money in a location where thieves are known to break in and steal--this would include banks, which are institutions of theft. And banks are the thieves, because they only keep a fraction of deposits on hand, as is evidenced when they go bankrupt. Buying gold or silver is a way to store up treasures in heaven, since buying gold is an act of righteousness and obedience, and is a rejection of false weights and measures, and is a rejection of usury.
Here is another often misunderstood verse:
Matthew 6:24 No man can serve two masters: for either he will hate the one, and love the other; or else he will hold to the one, and despise the other. Ye cannot serve God and mammon.
Some think this means that Christians should live in poverty. Not so. There were rich disciples.
Matthew 27:57 When the even was come, there came a rich man of Arimathaea, named Joseph, who also himself was Jesus' disciple:
Christians are called to be able to relieve the poverty of others, and that takes wealth. How can you have extra to give to others, unless you have more than enough for yourself? (2 Corinthians 8 speaks on this, the giving of one's abundance, or surplus.) The whole point of free trade and capitalism is to be able to trade away the surplus of your production. Matt 6:1-4 is about giving alms for the poor. I believe that to "serve mammon, or money" means making money your master instead of making God your master. I believe Matt 6:24 is a condemnation of being in debt. All who are in debt are serving money, to pay the interest.
Proverbs 22:7 The rich ruleth over the poor, and the borrower is servant to the lender.
1 Corinthians 7:23 Ye are bought with a price; be not ye the servants of men.
Next, the parable of the Talents is often also misunderstood as being "against holding gold".
Matthew 25
The Parable of the Talents
14"Again, it will be like a man going on a journey, who called his servants and entrusted his property to them. 15 To one he gave five talents of money, to another two talents, and to another one talent, each according to his ability. Then he went on his journey. 16 The man who had received the five talents went at once and put his money to work and gained five more. 17 So also, the one with the two talents gained two more. 18 But the man who had received the one talent went off, dug a hole in the ground and hid his master's money.
19 "After a long time the master of those servants returned and settled accounts with them. 20 The man who had received the five talents brought the other five. 'Master,' he said, 'you entrusted me with five talents. See, I have gained five more.'
21 "His master replied, 'Well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things. Come and share your master's happiness!'
22 "The man with the two talents also came. 'Master,' he said, 'you entrusted me with two talents; see, I have gained two more.'
23 "His master replied, 'Well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things. Come and share your master's happiness!'
24 "Then the man who had received the one talent came. 'Master,' he said, 'I knew that you are a hard man, harvesting where you have not sown and gathering where you have not scattered seed.
25 So I was afraid and went out and hid your talent in the ground. See, here is what belongs to you.'
26 "His master replied, 'You wicked, lazy servant! So you knew that I harvest where I have not sown and gather where I have not scattered seed? 27 Well then, you should have put my money on deposit with the bankers, so that when I returned I would have received it back with interest.
28 " 'Take the talent from him and give it to the one who has the ten talents. 29 For everyone who has will be given more, and he will have an abundance. Whoever does not have, even what he has will be taken from him. 30 And throw that worthless servant outside, into the darkness, where there will be weeping and gnashing of teeth.'
Some just think it's wrong to store wealth in the form of gold. However, gold and silver are the only things you can use as money that you can weigh out and measure. An unjust weight and measure, such as the dollar, remains an abomination.
Why is the evil servant evil? First of all, the talent was not his money, it was his master's money! His master was sowing with him, giving him money to be put to use. A "talant" was 66-90 pounds of precious metal. It was a large amount of money. The master, representing Jesus, acted as a capitalist, who was investing his money in the man's ability to invest money. (Like an investor who buys a silver stock fund, that in turn, invests in stocks.) But the evil servant did not respect his master's capitalist ways; and he made a false accusation, he said the master reaped where he did not sow. But the master was sowing into the man, rather than into the ground! So, in a sense, the evil servant valued himself as less than dust, because his false accusation implied that it would be better to sow into the ground than into himself! The capitalist who invests with men is not doing an evil thing as the evil servant accused. The evil servant represents a man who despises capitalism, the foundation of which is private property. He despised his master's property, and he was covetous of his master's potential gain. But meanwhile, as one of his master's servants, he was consuming some of his master's property, just to live! He didn't want to work for anyone else's benefit, but felt no guilt about taking benefits from others. But all work, to be profitable, must be to the benefit of other men!
So, the story does not condemn storing gold, the story is an overwhelming support of the entire capitalist system!
Some people think the parable means it's ok to put money in the banks to get interest. But the parable does not teach that. The parable is showing that even putting money in the bank to get interest (an evil action) would have been better than entrusting money to the evil servant, who is like a covetous communist. Jesus often makes comparisons among sins to showcase the greater evil. For example, Jesus said to some:
Matthew 21:31 ...Verily I say unto you, That the publicans and the harlots go into the kingdom of God before you.
In that example, Jesus was not saying that harlotry is not a sin. Harlotry is a sin. Likewise, Jesus was not saying that loaning money at usury is not a sin. Usury remains a sin.
The parable of the talents teaches us the importance of obeying our master (our Lord Jesus Christ), and the importance of making wise investments. Sometimes, investing in silver is the best investment.
Ecclesiastes 3:1 To every thing there is a season, and a time to every purpose under the heaven:
2 A time to be born, and a time to die; a time to plant, and a time to pluck up that which is planted;
Investing in silver, as opposed to bonds, is being obedient to the commands to avoid false weights and measures, and to avoid usury.
Some think the Bible condemns rich men. Not so.
Mark 10: 23 And Jesus looked round about, and saith unto his disciples, How hardly shall they that have riches enter into the kingdom of God!
24 And the disciples were astonished at his words. But Jesus answereth again, and saith unto them, Children, how hard is it for them that trust in riches to enter into the kingdom of God!
Some think the rich cannot enter the kingdom of God. Not so. It is more difficult, because the rich tend to put their trust in riches, instead of trusting in God, and are often not kind to the poor. In fact, again, there are rich men in the true Church, for whom there is specific advice:
1 Timothy 6:17 Charge them that are rich in this world, that they be not highminded, nor trust in uncertain riches, but in the living God, who giveth us richly all things to enjoy;
18 That they do good, that they be rich in good works, ready to distribute, willing to communicate;
19 Laying up in store for themselves a good foundation against the time to come, that they may lay hold on eternal life.
I know my many readers can see that I'm following 1 Timothy 6:18, because I distribute information, and communicate! And I do trust in God, and not my riches, because I know that many gold and silver investors, or potential investors, are scared to death about government confiscation. I know it's a possibility, but God has not given us a spirit of fear, but of boldness for the faith and for truth! In fact, I'm a rather public advocate of holding physical silver. If they are going to confiscate people's silver, they should start with me. So let my boldness help to make you bold.
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Here is a question from a reader: he seems to wonder and fear whether the opportunity he sees will be overlooked by other investors..
I have been receiving your weekly updates for approximately 7 months.
Thank you.
If time allows, I would appreciate your take on these 2 issues.
1. Many silver stocks on the AMEX, NYSE, and NASDAQ have appreciated in price over the couple weeks, However, the majority of silver stocks included in your weekly column that trade under $1 have not participated in this advance, or have even retreated from already depressed levels. Do you think these stocks will again appreciate in price like they did in the early part of 2004, or will these stocks that trade on the Canadian exchanges remain depressed?
2. To follow up on the first question; if the positive fundamentals remain in place for companies like FCO and KRE, when would you expect them to advance in price like their peers on the AMEX, NYSE and NASDAQ? Daily volume on most of these securities clearly indicates a lack of sponsorship.
Sorry for being so long winded.
Sincerly,
(annonymous)
My answer: Hi. I see that the silver stocks have low volume due to the low silver price, and reduced investor interest at the present time. It is nearly always the case that when an investor sees an "under priced" stock, he usually thinks it must be for a reason, for a good reason that he cannot figure out, rather than realizing that the market is making an error. If you realize that the market is making the error, then you realize the opportunity that is staring you in the face.
In other words, if the market saw what you see, the opportunity would no longer exist!
--Jason Hommel
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Note this essay! It corroborates the recent work by John Embry, as mentioned above:
Can the U.S. Return to a Gold Standard?
By Alan Greenspan
http://www.gold-eagle.com/greenspan011098.html
In Alan's essay, he speaks of a "Gold Standard". Please note, his idea of returning to gold as money is entirely different than mine. My concept is using gold and silver coins as money, and ending all the frauds of our current monetary system. See my essay on these frauds here: Major Frauds of the U.S. Monetary System - 26 February 2004
Alan's "Gold Standard" is not about returning to honesty and gold, it is about maintaining the present monetary system of fractional reserve and paper money. He speaks of "gold convertability" as being his view of what a gold standard consists of. Alan's definition of a "gold standard" seems to be that if you can convert your paper to gold, then we are on a gold standard, even if nobody uses gold as money, and even if most people are using paper and credit. Alan's idea is to restore "fiscal confidence" in fraudulent paper money, not to restore the gold standard. I think Alan's idea is "evil genius" because of the way most people think. If they even slightly think about gold at all, they are likely to think, "Why do I need gold now? If I can convert my paper dollars to buy gold at any time, then why would I need to do so now. What is the point, and what is the difference?"
Alan's idea of a "gold standard" is also completely incompatible with using gold and silver as money, because if you use gold and silver as money, no price for gold needs to be fixed. Gold is gold, an ounce is an ounce. Alan, on the other hand, is preoccupied with "fixing" the price of gold in terms of fraudulent paper dollars. In other words, even in Alan's "gold standard", he would refuse to let the free market operate and set the price of gold! The problem with a fixed price, as Alan notes, is that it would always be either too low, or too high, and both create problems. If the government price for gold is below the market price, the government ends up selling gold, and if the government price is above the market price, the government ends up buying gold. Hmm... that's exactly how it works in the market place for you, too. If your price for a stock is below the market, you sell. If your price is higher than the market, you buy. Should be no mystery there.
Alan's idea, therefore is not to "fix" the price of gold, but rather, to make the dollar "sound" and "stable" as gold is sound and stable. But paper is not gold, and the two can never be the same. Paper is a promise to pay, and gold is payment in full.
Another of Alan's ideas to restore confidence in the system (not a return to a gold standard) is to have a limited issue currency or bond, that is convertable to gold. This sounds a lot like gold futures contracts to me. Alan's key point:
The degree of success of restoring long-term fiscal confidence will show up clearly in the yield spreads between gold and fiat dollar obligations of the same maturities. Full convertibility would require that the yield spread for all maturities virtually disappear.
It appears to me that with gold loans long available at 1%, and with the Fed taking fed funds rates down to 1%, Alan has recently attempted his long awaited plan, a narrow spread of maturities. Unfortunately, during this time of Alan's great monetary experiment, the gold price has been rising, and the dollar has lost value against foreign currencies. Read more of Alan's plan, as outlined in 1981, which reads like the policy of the last few years:
A second advantage of gold notes is that they are likely to reduce current budget deficits. Treasury gold notes in today's markets could be sold at interest rates at approximately 2% or less. In fact from today's markets one can construct the equivalent of a 22-month gold note yielding 1%, by arbitraging regular Treasury note yields for June 1983 maturities (17%) and the forward delivery premiums of gold (16% annual rate) inferred from June 1983 futures contracts. Presumably five-year note issues would reflect a similar relationship.
Sure enough, with low interest rates, the budget deficit was reduced under Clinton, as the interest on the debt, as a percentage of the Federal deficit, decreased as interest rates decreased. However, fraudulent accounting was also used, as the government simply stopped counting interest on the debt as a part of the deficit! So the government claimed a surplus under Clinton, when there really never was any surplus! Proof can be found in the ever-increasing Federal Debt. The debt never decreased, it always increased. It increased because the government still had to pay interest on the debt, and although it was not included in annual budged figures, it's still there. See the annually rising debt here:
http://www.publicdebt.treas.gov/opd/opdpenny.htm
Prior Fiscal
Years
09/30/2003 $6,783,231,062,743.62
09/30/2002 $6,228,235,965,597.16
09/28/2001 $5,807,463,412,200.06
09/29/2000 $5,674,178,209,886.86
09/30/1999 $5,656,270,901,615.43
09/30/1998 $5,526,193,008,897.62
09/30/1997 $5,413,146,011,397.34
09/30/1996 $5,224,810,939,135.73
09/29/1995 $4,973,982,900,709.39
09/30/1994 $4,692,749,910,013.32
09/30/1993 $4,411,488,883,139.38
09/30/1992 $4,064,620,655,521.66
09/30/1991 $3,665,303,351,697.03
09/28/1990 $3,233,313,451,777.25
09/29/1989 $2,857,430,960,187.32
09/30/1988 $2,602,337,712,041.16
09/30/1987 $2,350,276,890,953.00
In conclusion, Alan Greenspan is no friend of gold. He has been an advocate of "fiscal confidence" by making just enough gold available for purchase, (limited gold convertability) via central bank leasing at low interest rates, and through futures contracts, as the primary method used to trick people into thinking that the entire fraudulent dollar money system was as good as gold. And this explains why Alan Greenspan rose to the position he has today. He sounds good on the surface, enough to sound politically correct to gold advocates such as Ronald Reagan, as one might think, "Ah yes, Alan speaks of a return to the gold standard," but that was never Alan's plan.
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The power and tragedy of the manipulation!
My portfolio of silver stocks today, both in my personal account and in my marketocracy account, is about the same as it was on Jan 1, 2004, when the silver price was $6.00/oz., and rising. Yet, in the last two weeks, the silver price was ranging from $6.55 to $6.85, about 3/4 of a dollar higher than in January! What's wrong with this picture? Today, six months later, we have experienced a huge spike in the silver price that confirms the shortage. What's wrong with investors? The new bottom put in since the crash in the silver price from $8.40 down to $5.50 was manifested with all sorts of investor apathy and disgust, thus confirming that recent prices were, indeed, a new bottom, a higher low.
The problem with investors today is that they lack conviction. Another problem is that they are not value investors, but trend investors. Investors try to run scared, and sell the silver stocks if silver shows any sign of price weakness. Thus, those who can manipulate the price of the metal can manipulate the price of the stocks almost at will. I think this is beginning to change. I have seen smaller swings in the silver stocks, as I believe silver investors are better educated and have more conviction than gold investors. In fact, the real tragedy falls hardest on those who thought they could jump out and then jump back in during a bull market. They generally end up increasing their trading commissions, handing over their money to their brokers, and ultimately, buying back in at higher prices.
Let's say you are a bank like J.P. Morgan, a huge broker with deep, deep, pockets. You could sell 10,000 futures contracts for 5000 ounces each, thus adding 50 million ounces of paper silver to the market, almost overnight. This could depress the price of silver by about a dollar! Afterwards, you could scoop up silver stocks on sale. Then, you could reverse course, and cover your futures contracts, and push the price of silver upwards. In fact, you could go long, and start bidding up silver in the spot market. Then, since everyone knows the silver stocks have more leverage, you could sell all your silver stocks at the top during high volume to an eager-beaver public that is getting encouraged enough to buy silver stocks again. Finally, after getting out of silver stocks at the top, you could sell another 10,000 futures contracts, and start the process all over again.
Thus, the evil of the silver price manipulation is exposed, for precisely how evil it can be. I believe similar actions take place in the gold market all the time. We investors must protect ourselves from this manipulation, but, at the same time, we must maintain full exposure to the silver market, the fundamentals of which, cannot be denied.
Here is a possible strategy for beating the manipulations, and for increasing one's holdings of silver and silver stocks, while maintaining full exposure to the upside. Since silver stocks provide the greater leverage, then silver prices should be less volatile, and more stable. At silver price highs, the best strategy would thus be to sell the silver stocks, and increase one's holding of physical silver. At silver price bottoms, the best strategy would be to sell silver bullion to acquire the silver stocks. Thus, one could sell silver bullion when silver is down 20%, and acquire silver stocks that are down 50%. And one can sell silver stocks that are up 100%, and acquire silver bullion that is up 25%. I have not yet put my plan into solid action, as the volatility has barely begun to exist to take advantage of this strategy. But as volatility increases, this may yet be a wise trading strategy.
The main problem is how to pick the temporary tops? The problem when silver was at $8.40, was that silver was moving so quickly that I was too scared to sell stocks for silver bullion, because bullion was rising in price from $.35 to $.50 in a day, and I have a three day hold time on funds from stock sales. My only quick alternative to buy bullion is CEF, and I don't like that over 50% of the bullion fund is in gold (a 50:1 ratio of silver to gold in terms of ounces). However, the gold component may help to lend extra price stability for my plan.
The other main problem is that silver can quickly become a mania. I know the silver price could change to $20-30/ounce overnight if one billionaire decides to act and buy silver. Thus, I can NEVER sit in cash while I try and get cute with a trading strategy.
The other problem is that not everyone can participate in this plan. Imagine if the silver manipulators tried to sell silver stocks at a peak, and we did too! The stocks could languish, and the silver price could take off! But then again, not everyone can buy an ounce of silver either, as the remaining 1/2 billion ounces of silver is about 1/10th of an ounce of silver per person on the planet!
As it is, I see that silver stock investors could push the price of silver upwards even today! The market cap of the silver stock world is about $8 billion. If a mere $500 million of silver stocks were sold to buy bullion, we could greatly increase the value of all of our investments. We only need to sell a small percentage of our silver stocks for silver, and we can create a great move. We hold our own destiny in our own hands, but when silver investors run scared, and hold dollars in the meantime, they turn traitor to the knowledge they have.
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Last week, about 40 people signed up to the look at my portfolio, which was about $2500. You could be earning up to 25% of that if you have a web site on gold, or a large email list.
Therefore, I have a second offer. Help me promote goldismoney.com in ways other than the affiliate program. I have money to spend on advertising. Please send me suggestions on how to best spend it. Search engine optimization, opt-in email marketing, etc.
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I also have a new web site, silverstockreport.com The domain name is more appropriate. At the top left at silverstockreport.com
you can find two archives containing about 40 of my essays, and the 47 previous silver stock reports.
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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
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Last week, I included a teaser about a silver stock that I have been buying, that has a large number of resources, about 60-70 ounces of silver in the ground for an ounce of silver's worth of stock. This stock is NOT yet on this Free report, but will likely profile quite favorably when it does appear in this report, (at current stock prices). But I bought some last month, and so, it was in the "look at my portfolio" that I'm selling online. Bottom line is that about 40 people signed up last week to get the name of this company. The stock has moved up about 6% last week on small volume. The market cap is about $15 million or so. I will profile the company on this free report next week. To get the name of this company in advance, please sign up at my new web site, silverstockreport.com
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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 unique position... then the best way for me to share this with you is to is tell you more precisely 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. It includes which stocks are 9% and more of my portfolio, those between 9% and 6%, under 6%, under 3%, and under 1%.
I have two web sites, and two different customer support teams. Use the one that works for you. If you have any questions about billing or order fulfillment, you need to contact the appropriate support staff team, and not me. I manage a large portfolio, create this weekly report, handle private placements, do radio interviews, web marketing, and I don't have time to process billing requests. I don't bill any cards, my support staff handles all of that.
To order: silverstockreport.com
Customer Service: http://www.silverstockreport.com/customerservice.htm
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Customer Service: support@goldismoney.com The toll free telephone customer support line is: 877-895-6824.
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Last week, I was interviewed for about 15 minutes for
http://www.resourceworldradio.com/
I'm the first of three interviews in show #25
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I will be speaking in Idaho at the Silver Summit in September 23-24
Specifically: Thursday, Sept 23rd at 10:00AM, for one hour (maybe more) planned to be in the Idaho Room, North
(No extra cost, no pre-registration. I don't do futures contracts! So, it's first come, first served--like silver itself, and like private placements. Get there early if you think it will be busy. I can't tell what kind of crowd there will be. When I spoke in Vancouver in June, about 10-15 people had to stand.)
http://www.silverminers.org/summit/index.html
I will be speaking in Toronto at the Cambridge Gold Show on October 3-4.
http://www.goldshow.ca/
Toronto schedule:
SUNDAY, Oct. 3
10:30-11:00 Workshops - 1/Bishop2/Hommel 3/
MONDAY, Oct. 4
1:00 Panel - Stock Picks/E. Coffin, MCRoulston/Taylor/Hommel/Turk
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General Commentary on Silver (slightly modified from last week):
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.
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
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I wrote an article:
Miners to Use Silver as Cash - 27 November 2003
Apparantly, I was about 6 months too early in my predictions, but that's ok, I'm a very long term thinker and investor. I did not miss the mark by too much time, and if you think in terms of decades, I was right on the mark.
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)
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The Silver Valley in Idaho is bringing back the use of silver as money. A silver one-ounce coin, a "Sterling" to be used as a $10 piece.
http://shoshonenewspress.com/index.asp?Sec=News&str=2869
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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.goldmoneybill.org/
25 Reasons why the Sound Money Bill Must Be Supported
by Jason Hommel
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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 reeport.
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 are in silver stock report #34 & #35
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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.
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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 calcula
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