The
best witty observation this week came from Bill Murphy with www.gata.org.
Bill noted the irony of how media pundits who bash gold will argue that gold
is in a bubble (gold's expensive) in one breath, and then bash it again by
saying it's a bad investment because gold has underperformed (gold's cheap)
inflation rates since 1980's peak. Murphy's main point is, "how
can an asset be in a bubble if it's underperforming inflation?"
Or, as I'll put it, how
can gold be cheap and expensive at the same time?
If the
gold naysayers had the capacity to utilize at least three sets
of neurons in their brains simultaneously and engage in rational logical
thoughts, they might perceive the contradictory nature of their two
arguments, and recognize that at least one of their assumptions might not be
true. In other words, gold
can not be in a bubble now.
Therefore,
gold must be cheap, which is why it's good to buy as an investment, since
investors should want to buy cheap things that have underperformed inflation,
which then, later, after buying it, it should then outperform inflation, as
gold has been doing quite easily since 2001.
It's
also dizzying to hear other gold bashers claim that "There is no
inflation, and thus no reason to own gold." What?
Well, that's fantastic to hear, because that must mean that all of gold's
recent gains from $250/oz. back in 2001, to $1145/oz. today, must be all pure
profit, showing that gold's recent 8 year performance is clearly
outperforming inflation.
So
that brings me to my main point that I've been asking for years.
Why
are people happy earning 1% or less in their bonds, when gold has been going
up so much for the last 8 years?
How
much has gold gone up, on average, per year?
My
favorite online compound interest rate calculator does the math.
http://www.smartmoney.com/compoundcalc/
From a
$250 initial investment to a $1145 final amount, over 8 years, gold provided
a 21% per year average rate of return.
So,
which is better, 1-4% in bonds or 21% in gold per year?
You
only need half of one synapse firing in your brain to recognize the clear
answer to that question.
In case you were not paying attention, 21%
per year in gold is better.
If you don't own gold (or something better like silver) by now, after 8
years, you have not been paying attention. So, if that includes you,
then pay attention to the following.
I'm shocked to hear people think that higher interest rates will slow down
this gold bull market. Do
they think that interest rates will exceed 21% anytime soon?
Wouldn't
21% interest rates bankrupt many public companies who would not be able to
refinance their debt, and thus destroy stock values, driving many to
zero?
Wouldn't such rates crush the housing market, as nobody would be able to
afford a 30-year loan at 25% interest?
And wouldn't the transition to such high rates destroy the bond market, as
bond values move inversely to interest rates?
Wouldn't 21% interest rates cause the national debt to increase so fast that
they would have to print money to pay the interest which would further
destroy the currency at those rates if not higher?
And if stocks, housing, and bond values and the currency are all
cratering to zero, wouldn't the only place left to put one's assets be gold
and silver?
Gold
will thus be in a bull market until AFTER interest rates exceed 21% again.
I
think it would be wise to assume gold prices will continue to increase
at much higher rates going forward, because the gold price has been
manipulated lower during this recent time frame, through central bank sales
and leases, and the sales of many fraudulent paper gold products (such as
"gold pool accounts," allocated and unallocated accounts,
certificates, and futures and options) which divert investment demand
away from the real thing. But when the manipulation ends, through
recognized defaults, the gold price will go much higher, much faster.
Why is
gold doing so well? It's rare. It's not created as easily as
money on a printing press.
Pay attention now, gold is rare.
How
rare? The World Gold Council at Gold.org has estimated all the world's
gold that has ever been mined at about 155,000 metric tonnes.
How
much is that? We need context. It's said that this much gold
would fit into two Olympic sized swimming pools. Let's review the math
on that.
"Will
all the gold in the world fill 2 Olympic sized swimming pools?"
http://en.wikipedia.org/wiki/Gold
Density
of gold: 19.30 g�cm-3
http://en.wikipedia.org/wiki/Kilogram_per_cubic_metre
1
g/cm3 equals 1000 kg/m3
thus:
19,300
kilos per cubic meter for gold
http://www.google.com/#hl=en&source=hp&q=troy+ounce+per+kilogram&aq=0&aqi=g1&oq=troy+ounce+per+kilo&fp=8ec9ea851cee2c5b
1
kilogram = 32.1507466 troy ounce
620,509
troy oz. per cubic meter
1
tonne = 32,150.7466 troy ounce
19.3
tonnes per cubic meter, acts to check and prove the "kilo per oz."
and "tonne per oz." math is correct.
19,300
kilos = 19.3 metric tonnes per cubic meter.
155,000
tonnes of gold mined in all of human history
divided by 19.3 tonnes per cubic meter,
equals 8031 cubic meters!
Volume
of an Olympic Swimming Pool?
http://hypertextbook.com/facts/2005/JeffreyGilbert.shtml
25
meters by 50 meters by 2-3 meters deep
= 25 x 50 x 2.5 = 3125 cubic meters
8031
cubic meters / 3125 cubic meters = 2.57 pools
Thus,
all the gold in all the world, ever mined in all of human history, will fill
2.57 Olympic Sized swimming pools.
Since
the depth of an Olympic Swimming pool can be deeper, and since the 2-3 meter
depth is a minimum, all the gold in all the world would easily fit into two
slightly deeper than normal, Olympic Sized Swimming pools.
==========
The story of Tungsten Filled Gold bars continues to circulate.
http://news.goldseek.com/GoldSeek/1258049769.php
http://fofoa.blogspot.com/2009/11/is-dollar-good-as-tungsten.html
http://www.gold-eagle.com/editorials_08/willie111809.html
I believe I remember reading somewhere, probably at www.lemetropolecafe.com, that
central bankers tried to get all the central bankers to agree to keep central
bank gold among central bankers, prior to the beginning of their leasing
scams. If so, that
would be the ideal conditions to float tungsten filled gold bars into the
central banking network who would agree to never melt down such bars for
public consumption. Looks like some leaked out.
==========
I
believe silver is better than gold, of course. Not only it is more
rare, but also, likely, more real.
Most
silver has been consumed by industry over the last 60+ years, and is not economically
recoverable, ending up in landfills at concentrations lower than most mining
projects. Thus, men such as Ted Butler, who have researched the
subject thoroughly, believe that silver, in above ground refined form,
is more rare than gold.
See
http://www.butlerresearch.com/index.asp
==========
The
New World Order silver round appeared on the Jack Van Impe
Ministries TV Show. They seemed to find it alarming. We emailed
them to explain our theological interpretation.
http://silverstockreport.com/2009/nwo.html
On the
show, Jack admitted he "re-thought" his prophetic views on the ten
horned beast of Revelation 17-18, and now thinks it is a world government
based on all the scriptural evidence, and also based on the views of several
early Church Fathers.
You
can see the New World Order round on TV here:
http://www.jvim.com/tv/
(MP4 file)
See the Nov. 7th episode, 6 minutes into the show
or
http://www.thegospel.com/clients/jvim-jack-van-impe-ministries/media.asp
(Windows Media and Realplayer for Vista and Mac format)
See the Nov. 11th episode (same show) 6 minutes into the show.
Jack Van Impe
quotes Dan 8:23 & Rev 13:7
Van
Impe says he has new insight, that the New World Order is Global:
In
Daniel Chapter 2, it speaks of the statue that represents world kingdoms.
If the two legs stand for west and east, then Western and Eastern Legs imply
a world empire.
Also,
the rabbis of old, the Early church fathers taught a ten division world
empire. And also, Rev 17:10 is quoted.
We
recently re-stocked 1000 NWO silver rounds directly from the source
See:
http://newworldorder.org/
We have 1000 of the NWO silver rounds for sale at our normal bullion prices,
at about 11% over spot. That price includes no extra fees.
Shipping and commissions are included in that price.
Our
Prices:
http://jhmint.com/cgi-bin/ssrbidask
I strongly advise you to get real
gold and silver, at anywhere near today's prices, while you still can.
Call us today.
Yes, we sell silver, and gold at the JH MINT!
Buy it
now! Buy Silver or Gold Now!
Inventory & Price List
Call the JH MINT, 10AM to 5PM Pacific, Monday to Friday:
100 oz. silver minimum, USA shipping, wire transfer only!
(530) 273-8175
Janelle (530) 913 0553 silver_support1@vzw.blackberry.net
http://www.jhmint.com/
Active, live price quotes list:
http://jhmint.com/cgi-bin/ssrbidask
Sincerely,
Jason Hommel
www.find-your-local-coin-shop.com
www.silverstockreport.com
www.miningpedia.com
www.bibleprophesy.org
Read
all the other articles written by Jason Hommel
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