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Jason
Hommel founded the New JH MINT this year to support his national online silver
auctions. In 2008, Hommel was selling 5000 ounces of silver per
day. He could have sold more, but the turn around times were the
limiting factor. It took about 2-4 weeks to obtain 1000 oz. bars, and
it took another 3-8 weeks to manufacture 1 oz. rounds. Selling any more
than 5000 oz. per day would risk selling out. On a peak day in 2008,
Hommel sold 13,800 oz. of silver, which weighed nearly 1000 pounds.
During
the fall of 2008, most coin shops around the nation, and around the world,
were sold out of silver, and most continue to hold very little silver in
inventory.
In
contrast, the JH MINT holds over 30,000 oz. of physical silver in inventory
at the present time.
After
minting nearly 300,000 rounds at a cost of $.50 each but which took over 8 weeks,
or minting at $1.50 per round for a faster turn around time, it seemed
feasible to found the JH MINT, both to save costs, and to speed up the turn
around time.
Opening
up a coin shop at the front of the JH MINT was an afterthought. Hommel
explains, "I didn't really expect that the community of Grass Valley and
Nevada City of about 30,000 people would be able to support a coin shop of
our capitalization and size. Usually shops of our size are located near
a big city. When my family was buying silver and gold, I was driving
all the way down to the Bay Area to buy bullion. Fortunately, our
national auctions of silver got big enough to be able to support founding the
JH MINT, which allowed for space for the coin shop in the front of the building.
So, technically, our shop did not need to be supported by local dealing, we
do more business on a national basis, shipping everywhere in the USA."
"However,
we have sold about 9 times as much to the public than we have bought, so we
have had to re-supply from other gold and silver wholesalers. For over
15 years, the opposite was usually the case, where coin shops would generally
buy from the public, and then dump to refiners. But in 2008, the public
turned into net buyers when silver prices exceeded $20/oz., and when gold
exceeded $1000/oz. for the first time.
"I
was pleasantly surprised by our good business volumes the first month of
operation, which showed comparable volumes to the Rocklin Coin Shop, which
has been in operation for 5 years, which we bought in April, 2009.
Perhaps our national presence has helped our local marketing efforts, as many
locals are aware of my newsletter at www.silverstockreport.com. And also,
it seems our national sales volumes are up due to having founded and opened
up a real mint, which seems to have helped our credibility, which is
important in the gold and silver business.
"Locals
living in our historic gold mining district seem to know that gold and silver
prices are too cheap. After
all, our town's gold mines are still mostly non operational.
If gold prices were really too high, then our town would be a gold boom town
again, and clearly it's not. We don't have any major new tunnels in
construction, we don't have any mine shafts being built, the old Empire gold
mine is still a museum, no timber is being clear-cut to support massive
construction of underground tunnels, none of that is happening yet. I'm
sure most locals are aware of the attempt of Emgold (www.emgold.com) to
re-open the Idaho-Maryland Gold Mine, but it's still just in the development
and feasibility phase.
Gold
may be at "all time high prices" but those are in nominal
terms. If you adjust for inflation, the high of $850/oz. in 1980 can be
seen to be about $2,275, if adjusted for inflation in CPI terms. But
those are "official government" inflation numbers, which understate
inflation. A better inflation adjustment might be found in M3 numbers,
or money in the banks, but the government is no longer reporting that
statistic. Private sources suggest that M3 has grown by about 8 times
since 1980, suggesting an inflation adjusted price of $6,800/oz.
Some
have suggested that the US government might back the dollar with a 10% gold
backing. But that is completely unrealistic. The JH MINT could
back the dollar by 10%. To do that you just need to over value gold by
about 10 times. If we offered gold at $11,000 per oz., I'm sure there
would be no takers, and we could say that we have "enough gold" to
back the dollar by 10%. So a partial gold backing for the currency is
just a clever way to disguise the current fraud of the dollar. In
truth, the US government cannot even back the dollar even 2% with gold.
Official statistics show that the US government has 261 million oz. of
gold. With money in the banks exceeding $14 trillion (and a trillion is
a million million), that's $14 million / 261 = $53,639/oz.
But
other researchers show that the US does not even have 261 million oz. (about
8117 tonnes) of gold, since www.GATA.org
researchers suggest there was a 3000 tonne gold swap with Germany.
GATA's
thesis is that central banks have been manipulating gold prices for the past
15 years, and are losing the battle to keep prices low. Central banks
have been selling and leasing about 1000 tonnes of gold into the market each
year, which suppresses the price, acting as additional, and unsustainable,
supply. In 2008, central banks finally became net gold buyers.
This
month, India bought 200 tonnes of gold from a long awaited sale of 400 tonnes
of gold from the IMF. But since India was a custodian of IMF gold, this
might have been short covering with no movement of physical gold.
India
is now importing about 18% of the world's supply of gold, 450 tonnes per
year, yet spends only 1% of India's GDP to do so.
I'd
estimate that Americans, in general, purchase only about $2 billion of gold
per year, out of a GDP of about $14,400 billion, showing that Americans spend
0.01% of GDP on 2% of the world's gold supply. Clearly, American
sentiment is not setting the price, except to say that Americans are helping
gold prices remain low by not buying it in significantly meaningful
quantities.
In
2009, the US Mint has produced over 1 million oz. in Gold Eagle coins, and
I'd estimate that gold eagle sales are half of what we sell to the American
public. At $1000/oz., that suggests an annual demand of a paltry $2
billion for America.
Of
course, many Americans buy the ETF's, or "exchange traded funds" or
have "bullion accounts" with large banks. But those are
probably all fraud, in my opinion, since the BIS, the Bank of International
Settlements, has calculated the "over the counter" gold derivatives
of as high as $600 billion, and in "other precious metals"
accounts, which would be mostly silver, as high as $190 billion.
Those
numbers are just impossibly high, since the total annual silver mine supply
is about 600 million oz., which, at $17/oz., is only a $10 billion annual
silver market.
It
seems that most Americans who are aware of precious metals seem to know
better than people around the world that silver is set to outperform gold.
World
gold demand is $80 billion, while world silver investment demand is only $1
billion, or 1/10th of the silver market, with the rest of the silver going
towards electronics, jewelry, flatware, and movie production.
So
world investors buy 80 times as much gold as silver. But at our coin
shop, it's about 50/50, with half of sales being silver, the other half being
gold. Americans, while mostly not participating yet in buying gold and
silver, do seem to understand that silver will outperform gold.
We
have many customers who will bring in gold, and just swap it for
silver. We don't have any customers who will give us silver for gold.
Warren
Buffett made a curious comment about gold in 1998 at Harvard that has been
quoted frequently since, "It gets dug out of the ground in Africa, or
someplace. Then we melt it down, dig another hole, bury it again and pay
people to stand around guarding it. It has no utility. Anyone
watching from Mars would be scratching their head."
But
gold has a perfect utility. It's a store of value. Anyone with
half a brain knows that you protect valuable things from being stolen, you
don't leave them unprotected, because there are dishonest people in the
world. Gold protects men from other dishonest men. And that's
quite a useful value, besides being valuable in itself.
And
Gold becomes even more valuable, when other men cannot see the value of gold,
because that's when you can buy it cheap, like today. And if you can
buy gold cheap, then it's not only a good store of value, but probably it
will be an excellent store of value, as it continues to gain in price much
faster than most other investments.
Since
2001, gold has increased over four times from $250/oz, to $1090, the last
quote on Thursday, Nov. 5th.
See
the JH MINT, and some of our gold inventory, at Youtube here (we
also now have Gold Buffalo 24k coins):
http://www.youtube.com/watch?v=9-ocXNbdEeU
===============
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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