-- Posted 25 February, 2009 | | Discuss This Article - Comments:
(This Show was fantastic!)
Silver Stock Report
My speeches were well received. I spoke on my most frequently asked questions about silver, and I will send out a write up of that speech soon. My speech for the workshop was written out, "Why Silver is Money", and I will send that out tomorrow.
I spoke with many enthusiastic readers who said they were fans of my work, which was very encouraging. Everyone was very respectful, appreciative, friendly and supportive. I'm beginning to gain a bit more confidence now, for several reasons. One is that I hear so many of the same questions again and again, which helps to know what the common concerns and thoughts are of people who are buyers or holders of silver, which helps me help people even better.
I got a chance to sit down with my "posse" consisting of my brother Ted Terbolizard, my mom Joyce of www.momsilvershop.com, my business partner Greg Kyle of www.silveriswealth.com and Peter Spina of www.goldseek.com and www.silverseek.com so we could all talk with Thom Calandra about everything we've been up to, regarding minting silver into rounds to auction off at Peter's site at www.seekbullion.com. Thom Calandra said our story deserves to be told in USA Today, which was very encouraging. Thom was gracious to mention us already, here:
Thom's been making what he calls a "comeback" into the precious metals industry, but is being wiser about many things these days.
By the evening dinner on Saturday, there was an excellent panel discussion, where someone asked about the potential gold/silver price ratio in the future.
I answered: "Silver to gold production ratios in the past were 15 to 1, which mirrored the price ratio of 15 to 1 which lasted hundreds of years. But today's ratio of 70 to 80 to 1 does not imply that 80 times more silver is produced than gold. The opposite is true. Since silver is too cheap, too little silver is produced. About 550 million oz. of silver is produced each year, and about 80 million oz. of gold, so it's about a 7:1 ratio in terms of production, which might imply a future 7:1 price ratio.
But historic total production might be a better indicator. There are about 5 billion oz. of gold produced in human history, and about 43 million oz. of silver, but perhaps only about 14-15 billion oz. of silver remain, the rest having been consumed and lost in many industrial applications and ended up in lanfills. So that implies a future 3:1 price ratio.
However, when you realize that if gold and silver ever become money again, and that gold is unsuitable to use as money when an oz. of gold is worth a year's salary, gold is unsuitable for the vast majority of monetary transactions. Therefore, silver has to do all the work. So that might imply an even higher value for silver in the long run, than even the 3:1 ratio."
Another question was asked, "What is the high price for silver that you can see?" I said something like, "Let me, the young man on the panel embarass himself with trying to answer. I've said in the past that silver could hit $10,000/oz., as that is the price suggested by all of the past inflation of money creation that has yet to show up as real inflation. The gold price, based on all of M3 being backed by US gold implies a price of $50,000 to $100,000/oz, which give us a conservative price of $10,000/oz. for silver based on a conservative 10:1 ratio.
But if it takes us 15 years to get there, to change societal attitudes about silver, then the amount that silver has to go up per year, to compound it's way to get there, seems rather tame, as it's only a mere 50% gain each year that would take us there.
But 50% gain each year is about 1 penny per day, starting at today's prices. Thus, since silver has been going up over 10 cents per day, over the last month, that means that silver is now currently rising 10 times faster than my wildest prediction!
The audience went into wild applause, showing they understood the veracity of the argument. I think that was one of my best arguments at the show.
One man asked how difficult would it be to sell silver if silver went to extraordinary high prices, and wondered if crime rates would be very high, and who would be able to buy it, which is a typical question. This is where the panel diverged in opinion. One panelist thought it would be bad, like during the great depression.
I disagree. The great depression is an example of the horror that happens when government abandons the gold standard and many free market principles, like we are doing today. But if very high prices exist for the precious metals, that's a sign they are returning as money, which creates times of freedom, and prosperity.
For example, after gold ran up 24 times from 1970 to 1980, there was business boom times, because a lot of fraud had been eliminated from the system due to the rise in the gold price, taxes were lower, and trade opened up. Society did not turn out like in the movie, "Mad Max, Beyond Thunderdome". I suppose I should elaborate on this more, since it is a common question now, especially because times are hard now.
But times are hard because they are manipulating gold and silver prices too low. See my essay from a few years ago: Rising Gold Prices Will Help The Economy Dec 2, 2003
In that essay, I did not predict that if prices of gold went up a little, such as from $300 to $1000, things would be better, I'm saying that if gold returns to common use as money, such as from $1000 to $50,000 or "no dollar value", things will be a lot better.
In the evenings, we tried showing off, and even "redeeming" our new "beer rounds".
The first evening of the show, we gave one to our waitress, who took the round for herself, and comped a group of 15 adults a round of about 10 shots or more.
The last evening, the bartender said they have "no cash value", as if too many of them had been presented there already before. (We did sell about 50 of them during the show). How interesting. Yes, what he said sounds about right, cash has no value. Silver has value, silver IS value, silver is wealth!
Funny thing about silver. It has no value to 99.9% of the population now, yet stil has value. You can't spend it everywhere, but sometimes you can, depending on if you get a nice waitress.
The last 100 of our Beer Rounds are up for auction here:
So, do they have value? I suppose it mostly depends on who you ask. Even a bum on the street cannot give you anything substantial for a $100 bill. Does that mean cash is already worthless? Heh!
This brings me to another point made on the panel. One man said to not buy any generic rounds, because dealers might not give you anything for them, or might give you less, or, in other words, they might have a wider spread. That's ok. You can actually buy them from me for about $17 each, and sell them for up to $20 each on ebay, or at a mining show, but what do I know? That's actually a negative spread right now, isn't it? One of our plans is to sell the Beer Rounds in gift shops for up to $25-35 each, but again, what do we know?
Oh, many of my Canadian readers do complain that it is hard to get silver in Canada. Canadians can get silver at Border Gold, run by Michael Levy, one of the panelists at the show. http://www.bordergold.com
His prices are competitive, sometimes slightly less or slightly more than ours at www.seekbullion.com.
Two of my gold and silver mentors were at this show, Ted Butler, and Bill Murphy of GATA. Well, I never received any private tutoring from them, but I continue to read them all the time, and have, for at least 8 years or so.
Ted Butler already put his speech into writing, here:
Silver; Past, Present, Future - Phoenix Silver Summit Speech
The thing about giving a speech is that it forces a man to do his best work. That was an excellent presentation by Ted. So if you don't read Ted every week, at least read that one.
I wish I had more time to talk with Ted, but I only had a brief moment after our evening panel. I asked his opinion on the report by Bix Weir about the 400+ million oz. of silver used in the Calutrons used to enrich uranium. It seems that he didn't think it was a valid story. I found his answer disappointing, and last week, I ordered the History Chanel Report mentioned in this report, because I wanted to verify:
The Great Silver Mystery (...and the greatest secret of all time!)
Wikipedia links to two reports that verify that 470 million oz. of silver were used in this way.
I know a man who is great at research, especially on silver, and he may give us more answers in the future. My apologies to Bix, for not reporting on this issue sooner. Bix broke this story on silver over a year ago, maybe two now.
Bill Murphy reports on gold daily, and I read him almost daily at www.lemetropolecafe.com. He offers a free two weeks subscription, and it's definitely worth it, as Bill is more plugged in than anyone. Bill Murphy asked me to ask my readers to see if anyone can help him get on CNBC. Any of you can make your own appeal directly to CNBC to try to get Bill on TV. Here is Bill's appeal:
Bill Murphy of www.GATA.org writes:
I am on the case again and am asking everyone who is not donating to GATA but still wants to advance the gold cause to contact CNBC.
Nothing would be more helpful to our fund raising than to get our story told. In turn that would help your own precious metals investments.
Few in the mainstream investment world can conceive of a gold price above $3,000. In fact, most in the mainstream investment world think gold is just going through its own bubble phase. The more that investors realize where the gold price is going and why, the more they are going to invest in gold and silver mining shares.
Yesterday I called CNBC and reached its Viewer Services desk. After declaring my intentions, I was told to send my pitch by facsimile machine to this number: 201-735-3200. Here is what I sent:
* * *
"To: the producers of 'Fast Money'
"From: Bill Murphy, chairman, Gold Anti-Trust Action Committee
"Subject: The gold market
"I am a big fan of your show and watch it daily. As a former professional football player with the Boston Patriots, I find it amusing to watch some of the
panelists who have 'been there.'
"Last night there was a great deal of discussion about gold. Most of the comments were clueless.
"I have chaired three international gold conferences over the past decade:
" -- The GATA African Gold Summit in Durban, South Africa, on May 10, 2001.
" -- Gold Rush 21 in Dawson City, Yukon Territory, Canada, on August 8 and 9, 2005. Among the participants was Andrey Bykov, an economics consultant to Russian President Vladimir Putin.
" -- GATA Goes to Washington in Arlington, Virginia, on April 18 and 19, 2008.
"My organization placed a full-page color ad in The Wall Street Journal on January 31, 2008, in which we warned of a coming 'catastrophe' and 'disaster' arising from the long manipulation of the price of gold. That ad may be viewed here:
"The press would not give us the time of day. No one asked what we were warning about and why, including CNBC. Ten years ago I was interviewed on CNBC by Ron Insana and have not been allowed back on the network since then, right as I was then. Dylan Ratigan and others are calling for 'transparency.' If transparency is to be achieved, it would be helpful for your viewers to understand what the gold market has been all about and why there is a bigger story here than the Madoff scandal.
"At the Gold Rush 21 conference, when the price of gold was $436) and in our Wall Street Journal ad GATA predicted the price of gold is going to $3,000 to $5,000. It would be helpful for your viewers to understand why. At any rate, we have been correct on the price of gold for nine years.
"Should you wish to check GATA's credentials, please visit www.GoldRush21.com and review our summary video of the conference.
"I look forward to telling the real gold story on your network. I can travel to New York or speak from Dallas, where I live.
"Thank you for your consideration."
* * *
So, friends, most of the work is already done for you. GATA would like you to make your own appeal along the lines of the above and fax it to CNBC in care of one of the following programs:
"Squawk on the Street"
"The Kudlow Report"
If our friends will take just a few minutes to contact CNBC, the network may realize what a big deal this is and how it also can be of value to the network's ratings. If you don't have a fax, please look up the e-mail addresses for these programs and contact them that way.
Our time is here. Let's go for it. Help GATA to help yourself.
Thanks to all of you who are willing to participate in our campaign.
CNBC contact form is here:
If there's one thing I just learned about myself from this show is that I'm a lot nicer in person, and so is everybody else. I'm often too abrasive or too abrupt in email, because I sometimes get too much email, and because sometimes, people are more mean to me in email, too.
I also learned that I would like to speak more, if I get the opportunity, because it's a great learning experience, and it's great to get instant feedback from people in person. However, with a baby at home, I will likely try to stay close to home in my own community, if possible, and maybe speak in local churches, if they will have me.
If you are on Facebook, will you add me as a friend?
-- Posted 25 February, 2009 | | Discuss This Article - Comments: