Gold Prices must go up! A lot! Why?
Paper money is fraud, and paper money growth has been
tremendous. This Spring, the Fed stopped publishing numbers for M3 (M3 is the
best measure of money in the banks) when M3 was about $10.3 trillion. Recently,
I discovered a private company that is keeping track of M3, and M3 is soaring
past $11.2 trillion, a 10% increase this year.
The dollar, which is said to be a "unit
of account",
no longer has any accounting,
and those who print it,
are accountable to no one!
They are accountable to you, but only if you do something
about it, such as buy gold and silver! So let's do some counting!
Central banks are running short on gold, and are starting to buy gold again.
Currently, the U.S. (officially) has 261 million ounces of gold.
If U.S. money, M3, were backed by U.S. gold, there would be over $42,911 dollars
for every one ounce of gold!
The total value of all the paper money and bonds in the world is about $100
trillion, and all the gold ever mined in all of human history is just under
about 5 billion ounces. That�s $20,000 per ounce!
But world central banks are running out of gold, and some are starting to buy
gold, such as Russia, China, South Africa, South Korea, and more! The central
banks claim to have about 30,000 tonnes of gold, but they may have less than
half of that, as most has been lent or leased into the market over the past ten
years.
In sum, at $700/oz., there is about $3.5 trillion dollars worth of gold in the
world, but there is $50 trillion worth of bonds, and $40 trillion worth of paper
money! So, bonds and paper money must go down, and gold must go up!
The Guide to Buying Silver:
The kinds of silver, and where to get it.
What kinds of silver bars and coins are there? What are the advantages and
disadvantages of each? Which is best? Which is most liquid? Which is cheapest?
Which has the narrowest spread? Which kind of silver is most convenient for you?
I'll show you where to get silver at the cheapest published prices.
I'll tell you which dealers generally have at least 100,000 ounces of silver in
their personal inventory, in case you want to buy silver on a "cash and carry"
basis. There are only about 5 such dealers in the whole United States!
I'll provide access to a searchable database showing you where you can get
silver in your local area (in the United States).
Here's why silver is a better investment
than gold...
Silver has all the same monetary properties of gold, and
more!
The historic price ratio of silver to gold shows that about 10 ounce of silver
would buy one ounce of gold, a 10:1 ratio. Recently, the ratio is about a 50:1
ratio (with silver at $13/oz., and gold at $650/oz.) As the silver to gold ratio
returns to historic values, from 50:1 to 10:1,
you may make over 5 times more money investing in silver, instead of gold!
Silver prices may rise to exceed the 10:1 ratio, for the following reasons:
Supply is price inelastic. Higher prices may not cause increased supply
(production). Why not? Because most silver is produced as a by-product of mining
gold, copper, zinc, or lead. Thus, higher silver prices will not substantially
increase the amount of silver mined each year. In 1980, when silver prices went
up to $50/oz., less silver was mined than in 1979!
Demand is price inelastic. Higher prices may not cause reduced demand
(consumption). Why not? Because most silver consumed by industry is used in such
tiny quantities in each application, such as in film or electrical contacts,
that rising silver prices will not easily slow down the growing industrial
demand. Additionally, as paper money continues to fail, people will buy silver
and gold without regard to price, or they will increasingly buy simply because
prices are going up!
Almost all of the silver produced by the mines each year is consumed by
industry, which leaves little to no room for substantial investment demand. The
tiniest bit of investment demand will drive prices sky high.
Silver mines produce about 650 million ounces of silver each year, about 200
million ounces come from scrap recycling, and about 100 million ounces used to
come from investor selling, or government selling. That's a total of about 950
million ounces. Of that, about 42% is consumed by industrial use, about 28%
consumed by jewelry, 20% consumed by photography, 5% consumed in coins and
medallions, and that's 95% of total available silver each year! This implies
either a "surplus", or "investment demand", of about 5% of the total, or about
42 million ounces--for 2004.
Due to silver use, or consumption, lasting decades, silver may now be more rare
than gold, in above ground, refined, deliverable, forms. It is estimated that
there is about 300 million ounces of silver available to the market at the
present time. There are about 125 million ounces of silver at the NYMEX, the big
commodity exchange in New York. (As of April 5th, 2006)
Each silver contract at the NYMEX is a promise. There are too many contracts,
too many promises to deliver silver that may not exist. Each contract is for
5000 ounces. There are often over 175,000 contracts for 5000 ounces, that's a
total of 437 million ounces of silver, promised to be delivered. Yet the
exchange has about 1/3rd of that in real silver. How can they promise to deliver
more silver than exists? If they fail to deliver silver, according to the
promises and contracts that they have made, then confidence in the world's
entire financial system may collapse. Industrial users of silver may have to
shut down their factories. To prevent this, the users will bid silver prices
much higher.
Due to the risk of default in the silver futures contracts, I suggest that you
avoid buying futures contracts, avoid options, and avoid storing your silver
with anyone else! Take delivery of your silver, and put your silver in your own
safe!
Despite silver's intrinsic properties as money, silver began to lose its status
as money starting in the late 1800's, as nations stopped using silver, and
started using only gold as money. Over 100 years of this "demonetization" has
caused a serious drop in silver's value, and this trend is about to be reversed
as investors learn about silver's intrinsic properties (and market fundamentals)
again.
The Silver ETF (exchange traded fund) has created significant investment demand
(about 100 million ounces in the first four months) into the tiny silver market,
and now, many funds with hundreds of billions of dollars are able to buy silver
for the first time.
In the end, as paper money fails completely, the neglect of silver�s use as
money will be over. Once again, silver will be valued based on other measures of
value, such as a day's wage, or a ratio to gold. If silver exceeds its historic
value, as I expect it will, due to the scarcity, from its importance in
electronics and photography, then perhaps a silver dime, silver quarter, or
silver dollar�s worth of silver will be worth far more than a day's wage, as it
once was.
How high will silver prices go? You do the
math on what a day's wage should be, and you tell me!
Will people be hurt if silver and gold prices rise? Not you
if you own some! But also, honest weights and measures used in commerce are
supposed to produce prosperity for all of society, not poverty.
But you must act to benefit from this information.
Don't wait for silver to rise before buying it. Silver prices could rise by over
$20/day to exceed $100/ounce at any time if large funds or billionaires buy with
desperation.
Surprisingly, most large, well-known, major silver stocks are overvalued!
But certain stocks in small companies who explore for silver may rise much
faster than silver itself! Some silver stocks could rise as much as five or ten
times more than silver alone! But prices for silver stocks are volatile,
changing often--and that creates even more profit opportunities. To learn which
silver stocks are the best at any given time, you ought to subscribe to my free
email newsletter -- because you or I can never know, in advance, precisely when
the market will give us a great opportunity. So, web site updates are just not
timely enough. You need to get my free email newsletter.
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