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Please bear with me while I repeat
myself about how tiny the silver market is. Let's start with the facts.
World annual silver mining adds about 600 million ounces of new silver, that includes all silver as byproduct supply from copper,
gold, lead, zinc and other mines. Recycling contributes about 150 million oz.
That's total supply.
That is balanced on the demand side by industrial demand, jewelry demand,
photography demand, and investor demand.
Industrial demand is about 45%, jewelry is about 25%, photography is down to
about 15%, and investors demand about 15%.
Investor demand is about 100 million oz. per year, which, at $18/oz., is
about $1.8 billion dollars.
You can verify those stats at http://www.silverinstitute.org/ or several other outfits that send out
silver surveys.
http://www.silverinstitute.org/supply_demand.php#demand
M3, a measure of money in US banks, is about $14 trillion, but several
trillion is stored with the Fed, and not counted as M3, and the Federal
Budget deficit exceeds $1.5 trillion of new money, so the total is now about
$18,000 billion.
Sources:
http://www.shadowstats.com/charts/monetary-base-money-supply
http://en.wikipedia.org/wiki/United_States_federal_budget
So only $1, out of every $10,000, is being spent on silver as an investment
each year.
That means that less than 1% of 1% of money in US banks is being spent on
silver as an investment each year.
In other words, by the time that 1% of money in US banks recognizes inflation
as a problem, and tries to buy silver to protect itself from monetary destruction,
silver demand by investors will be 100 times higher than it is today.
What will that look like, when $180 billion, instead of the current $1.8
billion, tries to buy silver in one year? And what will that do to the silver
price?
Well, with total supply only about a combined 750 million ounces, we can do
some quick math. It will obviously be a raging bull market compared to today,
with far more buyers than sellers.
$180 billion (or $180,000 million) divided by 750 million = $240/oz.
That price assumption would assume that investors would be buying about 7.5
times as much silver as today. And it would require that consumption by
industry, jewelry, and photography be satisfied only by investor sales.
Often people are confused by such statistics. They try to put their heads
around it. They ask things like:
"If silver's such a great deal, how come nobody is buying it?" They
just answered their own question, if they think twice about it. Silver is
such a great deal because nobody's buying it! If everybody were buying it,
silver would no longer be such a great deal. Or, in fact, if only 1% of
people were buying silver, the silver price would likely be more than 10
times higher than it is today.
Or, they will state, "Well, nobody I know is buying silver, I'll wait
until a few of my friends buy silver, first." But that's a big mistake.
Unless you know of the secret investment habbits of
tens of thousands of people, that not even brokers
would know. Because by the time one person in 100 is buying silver, then the
silver price will be several hundred dollars per ounce!
You could say, the price is too low, because nobody is buying. Or, you could
say that since nobody is buying, it creates a price that is too low. Which is
the cause, which is the effect? It does not matter, they correlate.
The silver story is simple. No nation on earth is using silver as a
circulating medium of exchange. That creates a reduced form of monetary
demand. It does NOT mean that silver is no longer money, since money is at
least three things; a medium of exchange, a unit of account, and a store of
value. So if anyone is buying silver as a store of value, then those people
are using silver as money. Investors who are buying about 100 million oz. of
silver per year are showing that they value silver as money, because they
perceive silver to be a great store of value.
The best news about silver in the last few years is that the US Mint is
minting about 40 million oz. of silver Eagles per year now, up from 28
million oz. in 2009, and up from an average of about 10 million oz.
http://www.usmint.gov/mint_programs/american_eagles/index.cfm?action=sales&year=2010
We estimate that silver eagles are less than half of the silver purchased for
investment at www.jhmint.com
If that is a national trend, then the USA could be responsible for nearly all
of the 100 million oz. of silver purchased for investment each year,
worldwide.
This is great news, since it suggests that US investors
who are buying precious metals, are very educated about silver.
Sometimes I wonder where they learned about silver, but a lot of my customers
have found out about my Silver Stock Report online.
This should be no surprise. My report goes out to 80,000 emails. If money
were people, and if only 1 person in 10,000 is buying silver, then you'd
expect there to be only 31,000 silver buyers in a nation of 310 million.
But this also suggests that as the bull market in precious metals hits the
USA, that silver purchases will continue about equal pace with purchases of
gold!
This trend of the people of the USA so heavily buying silver will
dramatically increase the silver price more than the gold price, given that
the world produces about $80 billion of gold per year, but only about $10
billion of silver.
It is also important to note that paper silver exceeds $200 billion. If only
a small fraction of people who own silver on paper, or on deposit with lying
brokerages (and they all lie), would convert that silver on deposit into
silver in their hands, then the silver price will indeed explode.
I refer you to statistics as reported in my complaint to the US department of
Justice:
http://silverstockreport.com/2010/doj.html
Advertisement: If there are any lawyers reading me who would like to re-write
my DOJ complaint in a more official legal complaint, please propose to me
your fee for doing so, and I will consider your offer.
=====
THE SILVER CIRCLE MOVIE
It is important to note, in light of the tiny silver market, the overwhelming
need for public education, or propaganda, about silver and money, such as a
movie! There is a great movie in the works that will be about silver as
money, called "The Silver Circle Movie", that
will take very little to finance. I've read the script, it's very good, a
nice and suspenseful Hollywood thriller, where the hero has to learn about
the importance of silver, and the evil of the Federal Reserve, in order to
solve a crime. The producers are seeking to raise about $6000 more to hire
actors, which will be painted over with computer animation. Please help out
the cause. I can't do this alone. Here's their online pitch, it's very funny:
http://kck.st/cgDktF
See also:
www.silvercirclemovie.com
=====
Bullion Specials at JH MINT:
As indicated at the JH MINT price board, we have over 50 of the 100 oz.
silver bars that are now only 6.2% over spot.
We also can source a 1 kilo gold bar, that's 31.1 oz. of gold, at 4% over
spot!
=====
I strongly advise you to take posession of real
gold and silver, at anywhere near today's price, while you still can. The
fundamentals indicate rising prices for decades to come.
JH MINT Price Board:
http://hommel.name/cgi/priceboard?store=jhmint.com
Our Coin Shops are open 10AM to 5PM Pacific Time, Monday to Friday, closed
weekends.
JH MINT & Coin Shop, Grass Valley, CA -- our largest store, minimum $1500
to ship, USA shipping only, free shipping.
(530) 273-8175
Kerri: 530 273 -8822 silver_support3@hotmail.com
www.jhmint.com
Rocklin Coin Shop, CA -- 15 min north of Sacramento on HWY 80
www.rocklincoinshop.com
Mom's Silver Shop, Sacramento, CA
www.momssilvershop.com
3510 Auburn Blvd., #12
Sacramento, CA 95821
(916) 481 5656
(Mom will ship with no minimim order size, and
overseas, and take credit cards and paypal.)
Oakland Silver and Gold
www.oaklandsilverandgold.com
3929 Piedmont Ave.,
Oakland, CA 94611
osg2010@gmail.com
Sincerely,
Jason Hommel
www.find-your-local-coin-shop.com
www.silverstockreport.com
www.miningpedia.com
www.bibleprophesy.org
I have 2 major resources on mining stocks to offer
to you.
First, look at www.miningpedia.com It is a FREE comprehensive database of mining
stocks. Anyone can update or enter data, it's like wikipedia.com.
Miningpedia has replaced the "silver stock
report" in that it is doing the legwork on individual stock analysis
that I used to do manually. This frees me up to do what I like best,
which is to write commentary. My commentary retains
the name, "Silver Stock Report", but for individual stocks, please
see miningpedia.com.
Second, I offer a "look at my portfolio"
for $50/month; where I share a peek at which stocks I own, once a
month. You can log in at any time, repeatedly, and also see all my
prior months
Please visit Silver Stock
Report for specific stock picks.
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