Gold Prices
have gone up for nearly 12 years now and have stabilized in recent months in
a range around $1600 per troy ounce. This is up 18% per year on average since
$250/oz. in 2001. Americans have yet to understand gold, or get on board the
12 year bull market that started in 1999 and 2001.
Worldwide, 2500
metric tonnes of gold are mined each year. A metric
tonne contains 32,151 ounces, for a total of 80
million troy ounces. At $1600/oz., this is a world gold market of $128
billion.
Americans are
only buying about 1 million American Gold Eagle coins per year, and are
buying perhaps 4.7 times as much for "industry and the arts"
according to the usgs.gov report, page 31.14.
http://minerals.usgs.gov/minerals/pubs/commodity/gold/myb1-2010-gold.pdf
Americans are
thus consuming only about 7% of world gold production, or 5.7 million troy
ounces out of 80 million ounces of newly mined gold, and only 1.25% of that
(1/80) is "consumed" for investment purposes in the form of
American Gold Eagle coins, worth a mere $1.6 billion dollars, which is a mere
a footnote given the size and scale of American finance.
Typically,
Americans consume up to 25% of the world's natural resources, but not so in
gold. Clearly, when some of the world's wealthiest consumers have not yet
bought into an asset class, it has a lot of room left to run up in price.
Officially, The
US Government continues to hold 8,140 metric tonnes
of gold, which is 261 million troy ounces, and yet it has not been
independently audited since the 1960s.
The US gold
hoard, ostensibly, anachronistically, could back up $15.77 trillion in public
debt.
http://en.wikipedia.org/wiki/United_States_public_debt
This would
imply a gold price of $15,770,000 million (which is $15.77 trillion) divided
by 261 million ounces, which implies a gold price of $60,421/oz. That is not
a typo.
Clearly,
letting the US gold be audited may draw too much attention to how little gold
there is (or, it could be less) to back up the debt of the United States. Best
to let the American public remain asleep regarding such things, I suppose.
The other
problem, of course, is the annual debt, which is increasing by $1,200 billion
this year, which is over 9 times as large as the value of world annual gold
production.
The BLS (Bureau
of Labor Statistics) claims that the inflation rate is only 2.3% for April,
2012.
http://www.usinflationcalculator.com/inflation/historical-inflation-rates/
But most people
feel that the inflation rate is substantially more.
The national
debt is increasing at a rate of 7.6%. $1.2 Trillion / $15.77 Trillion = 7.6%.
The NY Post
estimates the real inflation rate is 8% as of March, 2012.
http://www.nypost.com/p/news/national/price_c...wKfAKjxAs0bkVnO
Therefore, the
guaranteed loss holding U.S. bonds that pay 1-3% is now a 5-7% annual real
world loss.
One wonders
when Americans will start buying gold in meaningful amounts to protect their
bond portfolios that are often highly leveraged, and supposedly
"indexed" to inflation, but such movement has yet to be seen.
The US Bond
market ranges in size of about $20-30 trillion, which is about $25,000
billion, and is going down in value by 5-7% per year, while the US gold
market ranges in size of about $9 billion, and gold has been going up in
price by an average of about 18% for 11 years.
$250 at 18% for
11 years since 2001 is $1544, courtesy of the online compound calculator.
http://www.smartmoney.com/calculator/other/compound-interest-calculator-1302835239643/
Clearly, when
$25,000 billion is sitting in one asset class, bonds, and going down, and
only $9 billion is going into gold per year that now has an 11-12 year track
record of an average 18% annual gains, the floodgates of American money going
into gold has not yet started.
Government
reporting of statistics continues to be appalling.
The CBO
released a report yesterday, saying, "By the end of this year, CBO
projects that the federal debt will reach roughly 70 percent of gross
domestic product (GDP)"
http://www.cbo.gov/publication/43288
But the real
debt/GDP ratio is now over 100%.
US debt is
$15.77 trillion.
US GDP is $15 trillion.
And remember,
the world annual gold production is a mere $0.128 trillion, in dollars.
Gold prices may
well continue to wildly fluctuate, but they really only have one way to go,
up.
Some people
wonder about my credibility, or my agenda, or my track record. Please do.
Please follow my links and do your own research, and do you own math, and
while you are at it, do your own thinking. Many people in today's world who
are pushing some form of gold scam may not like me, because I have exposed
them, and they like to slander me or poke fun at me, rather than deal with
the statistics or arguments. Later, they actually use my arguments to lure
people into their gold scams. There are horrible people in this world,
really.
I have been
advocating that people buy gold since the year 2000. Not a bad track record.
What's better,
in my opinion, is that I'm happy to say that I have never once tried to call
a top in this bull market in gold that by all statistical and fundamental
analysis has not yet started, regardless of the minor and temporary
fluctuations in gold prices up and down during this last 12 year period. I
have been able to be both right, and sit tight, a rare combination.
I have clearly
explained why I have no intention of trying to call any dollar based gold
price tops in this gold bull market in my essay here:
Future Gold & Silver Prices
Silver Stock Report
by Jason Hommel, December 21, 2005
http://www.silverstockreport.com/email/Future_Gold_and_Silver_Prices.html
All of my
articles dating back to the year 2000 can be found either at the front page
of silverstockreport.com, or you can follow the link at the bottom of the
front page to all of my articles prior to that, which are published here:
http://www.silverstockreport.com/index2008.html
I started
bullion dealing in August 2008.
Every bullion
product that we have bought and sold from August 2010 through April 2012 can
be seen in these handy charts, which indicate the most popular forms of
bullion in Northern California.
http://jhmint.com/reports.html
As always, this
report is not meant to be confusing. I do advocate and believe in silver far
more than gold, for many reasons. In sum, the silver to gold ratio should go
from today's range of about 55 to 1 and go down to 15 to 1 or better due to
silver's scarcity and strong industrial demand, showing silver's expected
potential outperformance. This report on gold simply confirms that silver
prices will continue to go up, along with gold prices, for many years to
come. In my opinion, gold is better suited to extremely wealthy and older
investors, aged 70-80 and who might pass on before silver outperforms, and
who might not want to lift relatively heavier amounts of physical metals.
I have no
hidden agenda, nor even any significant monetary incentive to "push
gold", or even "push silver". At our shops, we make money
whether we buy or sell gold or silver. I have an open and transparent agenda
and track record of pushing silver because I honestly believe it's the best
thing for you to buy, and we stand by that decade-solid old reliable opinion,
and we stock more silver than gold in our display counters, and back room
vaults. As bullion dealers, who need to stock bullion in order to sell it, we
are happy to hold silver and gold, regardless of whether the price moves up
or down in the near term, and we think you should be happy to hold gold and
silver under today's conditions as well.
The bottom line
is that you need silver and gold. I don't understand why anyone would slave
away at a job for just paper. Nor even save it. Yes, I know you need paper
money to buy things, but it's just paper. For your savings, you should put a
large part of that into gold, and especially silver. What else has gone up
for 18% on average or more for 12 years, and stands to gain a lot more in the
next decade to come?
I strongly advise you to take possession of real
gold and silver, at anywhere near today's prices, while you still can. The
fundamentals indicate rising prices for decades to come, and a major price
spike can happen at any time.
JH MINT & Coin Shop
13241 Grass Valley Ave
Grass Valley, CA 95945
(530) 273-8175
begin_of_the_skype_highlighting GRATUIT (530)
273-8175 end_of_the_skype_highlighting
www.jhmint.com
Minimum telephone order $5000 for free shipping, USA shipping only.
Open 10AM to 5PM Pacific Time, Monday to Friday, closed weekends and bank
holidays. (Also Closed from Dec. 25th to Jan 1st)
Kerri handles internet phone orders:
kerri@jhmint.com
(530) 273-8822
begin_of_the_skype_highlighting GRATUIT (530)
273-8822 end_of_the_skype_highlighting
NEW Location in Auburn,
CA!
JH MINT Silver & Gold
1760 Highway 49 A140
Auburn, CA 95603
(530) 889-1086
begin_of_the_skype_highlighting GRATUIT (530) 889-1086 end_of_the_skype_highlighting
www.jhmint.com
You can also buy
silver from my mom at www.momssilvershop.com
Mom will ship overseas, even large orders up to
$300,000 or larger, and also in lots of more or less than 100 ounces.
3510 Auburn Blvd #12
Sacramento, CA 95821
Sincerely,
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