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Here are a few links to useful websites and interesting articles:
www.JSMineSet.com - a service orientated teaching forum that uses the daily market as its text and blackboard. Every commentary carries a lesson. The Spin really does stop here.
www.Kitco.com - The quotes on this page are relevant for trading precious metals in their pure standard exchange approved bar form.
www.GATA.org - The Gold Anti-Trust Action committee works to expose and oppose collusion against a free market in gold, other precious metals, currencies, and related securities.
www.CoinAuctionsHelp.com - not a coin auctions website, but help for United States coin collectors who do buy coins at the online auctions.
The Gold Standard - an article on the gold standard
The Internet Art Database - Find art from thousands of web sites.
The Great Texas Bank Hoard - Click these links to learn more! Part 1 and Part 2
Thunder Road Report - Gold Market: Accident waiting to happen or crime scene?
CoinLink - unbiased access to rare coin news, articles and resources that are both informative and relevant to the numismatic community.
You will often read how various experts in the financial press will say that the gold price "should be" about $2000/oz., to $3000/oz., or slightly higher. But what they almost never say is how they arrived at their figures, and what assumptions they are making.
The reality is that the gold price, today, given today's conditions, should be about what it is right now.
But conditions are likely to change, and change dramatically, and can change very quickly. The conditions that are mostly like to change the most quickly are people's perceptions and understanding of the reality of the dangers of theft due to inflation.
The US Federal Government is spending about $1.6 trillion more than they take in from taxes, which is $1600 billion, which is $1,600,000 million, which is $1,600,000,000,000 dollars. The news on TV this morning said that the US national debt increased by $400 billion in the last 3 months, which confirms the numbers. They are not able to fix this problem anytime soon. This problem could not be fixed even if they taxed incomes at rates of 100% per year. And they are mostly just printing this money, which creates inflation, which means that prices will go up, for everything, including, and especially, for silver and gold.
Today, very few people in the USA understand that they need silver and gold, and that is likely to change, and historically, those kinds of attitude changes happen very quickly, which result in dramatic and very sudden increases in the prices of silver and gold.
Today, in the USA, only about $3.5 billion is being spent annually on silver, (estimated at 100 million oz. x about $35/oz.) and only about $3.4 billion is being spent annually on physical gold (estimated at 2 million oz. at about $1700/oz.), for a total of only about $7 billion spent on precious metals to protect itself from inflation.
But the USA has about $18 trillion of cash, savings, and short term bonds in the banking system, which can also be expressed as $18,000 billion, $18,000,000 million, or $18,000,000,000,000 dollars.
So, mathematically the reality is that new money creation is about $1600 billion, out of $18,000 billion, which is an annual increase of nearly 9%, and yet only $7 billion out of $1600 billion of new money creation is being spent on precious metals, which is only 0.4%, or expressed another way, is only $1 out of every $229 dollars of newly created money being spent on silver and gold, and only $1 out of $2,571 of money in the banks is being spent on silver and gold, which is only 4% of 1%.
So, currently, this is next to nothing compared to the avalanche of money that is going to be spent on silver and gold.
So, we could ask ourselves the following questions:
1. What is likely to happen to the gold price in the event that 1% of money in the USA were to be spent on gold and silver in a year.
2. What if 10% of the money in the USA were spent on gold and silver in a year?
3. "What if 10% of the money in the world were spent on gold and silver in a year?"
4. "What if 100% of all paper money had were to be spent on gold and silver in a year?"
5. "What if 100% of US paper money had to be backed by all the official US gold?"
6. "What if 100% of US paper money had to be backed by all the US gold that the US government is likely to have left?"
See, the gold price will be dramatically different, given the different assumptions, as follows.
First question. What if 1% of money in the USA were to be spent on gold and silver in a year? Money in US banks is about $18 trillion. 1% is $180 billion. This is 26 times what the USA currently spends on silver and gold, which is only $7 billion. The entire world annual gold market production is about 75 million oz.. The USA buys only about 2 million oz. of that. The USA spends about half on silver, and half on gold. What if that continues? Well, if the US spent $90 billion on gold, at $1700/oz., that would be 53 million ounces. Clearly that kind of new demand would push up the price, probably to triple the current price, taking the gold price to $5100/oz. For silver, $90 billion at $35/oz. would buy 2.6 billion ounces. But here we have a major problem. World silver production is only 0.7 billion ounces, or 700 million ounces. Furthermore, there is no large above ground stockpile of silver, as most has been consumed by industry, and furthermore, most of the silver market is already being consumed by industry, leaving very little left over for investors to bid over, which is only about 150 million oz. left over for investors. But let's assume that industry gets squeezed out, leaving 300 million oz. available for investors who wish to spend $90 billion on silver. This gives us an easy calculation for the price, which is $90 billion divided by 300 million, or .3 billion. So, 90 / .3 = $300/oz. for silver.
But those numbers are extremely unrealistic. Only 1% spending money on silver and gold? Really? Not likely, it's likely to be far more. Conditions of inflation are only likely to change when interest rates are as high as the annual increase in the silver and gold prices, which are above 20% per year. After all, why earn 1% in bonds if you can earn 20% in gold?
Second question. What if 10% of money in the USA were to be spent on gold and silver in a year? This would be $1800 billion. Half into gold would be $900 billion. With world annual production at 75 million oz. If the USA bought half of world production, that would be only 37.5 million oz. $900,000 million / 37.5 million oz. is $24,000/oz. for gold. If $900 billion were to be spent on half of world annual silver production, that would be only 350 million oz., which would lead to a price of $2,571/oz. for silver.
Third question. What if 10% of money in the world were to be spent on gold and silver in a year? World money is about $60 trillion. 10% would be $6 trillion. If half were to be spent on total world gold production, that would be $3 trillion spent on 75 million oz., which leads to a price of $40,000/oz. for gold. If $3 trillion were spent on 700 million oz. of world annual silver production, that leads to a price of $4,286/oz. for silver.
Now, the interesting thing about rising prices, is that they tend to attract more money, because everyone wants in on it. People today who think silver is expensive at $35, will be scrambling to buy silver as it just keeps relentlessly climbing. For two reasons. First, they will recognize that dollars are just used paper, like newsprint, and they will be fearful to hold them as their values just keep going down, and fast. Second, they will want to become wealthy, and they will see that they only way to do that is through owning real wealth of silver and gold. So, this leads us to the inevitable question, the 4th question, what happens when the entire US money supply is spent on silver and gold, over a nice, slow pace, of over an entire year. Now, think about that again. This is still well before hyperinflation really kicks in, well before people are spending their entire paychecks on silver and gold the instant that they get paid, and well before the government starts printing new money with several more zeroes at the end of it.
So, 4th question, what if 100% of US money is spent on silver and gold in a year? $18 trillion, or $18,000 billion. Half for gold is $9,000 billion, spent on, say 2/3rds of world gold production of 75 million oz., would be 50 million oz. $9,000,000 million spent on 50 million oz. leads to a price of $180,000/oz. for gold. And if $9,000 billion is spent on 2/3 of world annual silver production of 700 million oz., which is 467 million oz., that would be $19,272/oz. for silver.
But let's assume that the US government tried to prevent that from happening. Let's assume that the government would be smart enough to back all US currency with the official US gold, at a rate that would give the dollar a 100% gold backing. (I know, kind of a crazy assumption to assume that the government would be smart, but let's assume anyway.) The point of considering these numbers is that, in theory, the US government could stop runaway inflation with a 100% gold backing and a balanced budget, but given today's political climate, that's currently impossible. But let's say the Tea Party wins a full sweep of both houses of congress and we get Ron Paul as president, and let's assume that instead of trying to return to the gold standard, he tries to simply prevent runaway inflation with full 100% gold backing all dollars in all US bank accounts. It's a very simple calculation $18 trillion divided by 261 million oz. of official US gold = $68,966/oz. Given the previous calculations, silver could hit a 10 to 1 ratio to gold, which would be about $7,000/oz. This is what the gold and silver prices "should" be, given the givens of honesty, and living up to the basic pledge of FDIC "government" insurance on all bank accounts.
Ah, but finally, many people reasonably expect that the US has already sold off a lot of the official gold to protect and defend the dollar at current low gold prices, which is more consistent with government reality and stupidity and rising gold prices. In that event, the dollar is like burnt toast, and there will be no stopping the coming runaway gold price increases.
The reality is that we live in an age of deception, because the dollar is a deception. Over the entire last 12 years of the gold bull market,
Our prices for gold and silver have never been lower. Our current low prices are limited to about the next $300,000 worth of customer orders, so get your order in quickly, before prices move back up.
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.
New Chinese exchange will destroy gold and silver shorts whistleblower Maguire predicts
Submitted by cpowell on 05:46AM ET Wednesday, July 6, 2011. Section: Daily Dispatches
8:44a ET Wednesday, July 6, 2011
Dear Friend of GATA and Gold (and Silver):
Silver market manipulation whistleblower Andrew Maguire, whise complaint was brought by GATA to the U.S. Commodity Futures Trading Commission's hearing on the gold and silver markets a year ago March, tells King World News that the new Pan Asia Gold Exchange will create demand that will destroy the gold and silver shorts.
Maguire says: "By creating the first ever rolling spot contract, Chinese bank customers will for the first time have ease of access to 10 ounce gold contracts in Renminbi directly from their bank accounts and with the click of a mouse. To give a further idea of scale, if just 1% of their customers bought a single 10 ounce contract, that would equate to 1,000 tons of physical gold being drawn down.
An excerpt drom the interview can be found at the King World New blog here:
Macguire will make his first public appearance and speak at GATA's Gold Rush 2011 conference in London in August:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Sales of gold coins are on track for the best month in a year amid the worst commodities rout since 2008, a sign that bullion’s longest bull market in nine decades has further to run, if history is a guide.
The U.S. Mint sold 85,000 ounces of American Eagle coins since May 1 as the Standard & Poor’s GSCI Index of 24 raw materials fell 9.9 percent. The last time sales reached that level, bullion rose 21 percent in the next year. Gold will advance 17 percent to a record $1,750 an ounce by Dec. 31 and keep gaining in 2012, the median estimate in a Bloomberg survey of 31 analysts, traders and investors shows.
Read the rest of this article here.
Silver dipped below $36/oz. this morning, down about 8% from yesterday, and down about 27% from the high last week of about $49.50/ per troy ounce. (A Troy oz. is about 10% heavier than a the more common international avoirdupois ounce.)
Some people are saying "this is like 1980 all over again" and that silver will now crash. Nothing could be further than the truth.
The truth is that the amount of money they have printed up since 1980 is ten times higher, so if you adjust for inflation, the peak price from 1980 should be more like $500/oz. in today's dollars.
The next key difference is that in 1980, interest rates, the amount paid on bonds, rose to over 20% per year. Today, interest rates are close to zero. Interest rates make holding bonds more attractive.
The next thing is that the US government money printing driven inflation is just beginning, it's not remotely close to ending. The US annual budget is about $3.8 trillion, and the government collects about $2.2 trillion, leaving a gap of about $1.6 trillion that is met by money printing, which makes the value of the dollar go down. (http://tinyurl.com/3ozdljx (April 7th news item))
$1.6 trillion of new money can also expressed as $1600 billion, or $1,600,000 million.
For comparison's sake, new investment demand for physical silver last year was only 250 million ounces, at, let's say an average of $35/oz., was just under $9 billion, or only $9000 million.
Silver is not in a bubble in terms of prices.
The bubble in stocks in 1929 was caused by debt financing.
The bubble in housing in 2007 was caused by debt financing.
You cannot borrow money to buy silver. Thus, silver is NOT in a bubble.
Exceptions: Yes, you can borrow money to speculate in silver, but no silver is ever purchased at the time that you purchase futures, or options on silver. And the futures market is known for having an overall open interest of over 800 million oz. of silver, while less than 40 million oz. of silver are available for delivery!
Yes, also certain private firms, who have horrible reputations in my opinion, will let you borrow money "to buy silver", but you must keep the silver with them, and it's doubtful that they ever actually purchase the real silver either.
In silver's case, the availability of debt, and use of leverage is used to prevent you, distract you, dissuade you, from actually buying silver. This makes silver an "anti-bubble"; the opposite of a bubble.
This article claims that silver was worth about $1218/oz. in the Ancient Roman World!
One article last week noted that "8 years of global Silver supply changed hands last week". He could not calculate how much silver traded hands in the OTC or "over the counter" markets that are unreported and unregulated, which are typically 20 times larger than the visible markets like the COMEX and the ETFs.
That article shows that the amount of paper trading of silver has recently grown to perhaps 1000 times larger than the real silver market.
At last week's rate of about one year of global silver supply traded in a day, with 250 trading days in a year, suggests 250 times as much paper silver trading than real silver, but that's not counting the much larger OTC markets.
Again, with all the flurry of news articles on silver this last month, nobody has mentioned the BIS report that I've highlighted for the past 1-2 years that shows that world banks have liabilities (that's debts) in "other precious metals" (mostly silver) of anywhere from $100 to $200 billion, and that was way back when silver was $20/oz. That's about 15 years of annual world production, with swings into and out of the banking system of 8 years of annual production in less than 6 months.
Thus, mostly all of the silver in all major LBMA banks in the world is thus likely fake silver, all fraudulent paper silver, nothing is real there. I would love to know how much real silver they do have, as obviously, they have to have at least some silver to function with their "fractional reserve silver banking" that they do.
Thus if a bank holds your silver, I'm 99% certain that they don't physically hold YOUR silver for you, and that you know nothing about the real fundamentals of the silver market.
When you read that an commentator or analyst is "long SLV" you can know for certain that that commentator knows almost nothing about the silver market.
When debt is used to actually buy real silver, the extra buying would artificially push the price up.
When banks actually owe silver that they neglected to actually purchase, their lack of buying artificially pushes the price down.
Again, silver is the opposite of a bubble.
People have not yet learned that silver is payment in full. Silver is not a promise to be paid. Owning a promise to be paid in silver is about as bad as owning paper dollars -- the value of both of which has (primarily and fundamentally) only one way to go, which is down.
Government is in a bubble. US paper money is in a bubble. The US bond market remains in a bubble.
Somebody just posted to my facebook, "everybody is selling out", "Soros is selling his gold", etc.
No, the opposite is true. Nobody was ever in.
The real fundamentals of silver show that less than 6% of 1% of paper money in the USA even bought any real silver last year.
That means that silver buying would have to be 20 times more, just to get to about 1% of people buying silver!
Silver the opposite of a bubble. This dip will be brief. Silver at $200/oz. is still a "price dip" compared to where the silver price is headed.
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.
The price of gold crossed the $1500 level to a new record high of $1502.90 per ounce at 7:07 a.m. Pacific Time on the New York Spot Market. A drop in the value of the dollar, concerns about European and U.S. debt, faster inflation and Middle East tensions combined to increase demand for the precious metal as a safe haven. Silver also rose to $45 per ounce – a new 31 year high. "With interest rates remaining low in most countries, there is little reason not to own gold, as the metal currently offers the best returns around," said Gavin Wendt, founding director with MineLife Pty. Despite its new record high, gold remains below its inflation-adjusted high reached in 1980. "Gold is sometimes a currency, sometimes a commodity and sometimes a store of value," analysts at Merrill Lynch wrote recently. "As purchasing power of workers in emerging markets increases, we see demand for gold as a commodity increasing over the next few years," the Merrill Lynch report said. (Sources: "Gold Breaks $1,500 as Investors Seek Security," CNBC, April 20, 2011; "PRECIOUS-Spot gold breaches $1,500, silver at 31-year high," Reuters, April 20, 2011; "Gold Rises Above $1,500 to a Record on Slumping Dollar, Inflation Concern," Bloomberg, April 20, 2011; "Gold Tops $1,500 an Ounce in 'Flight to Quality'," New York Times, April 20, 2011)
Gold Breaks $1500; Silver Reaches New 31-Year High
The price of gold crossed the $1500 level to a new record high of $1502.90 per ounce at 7:07 a.m. Pacific Time on the New York Spot Market. A drop in the value of the dollar, concerns about European and U.S. debt, faster inflation and Middle East tensions combined to increase demand for the precious metal as a safe haven. Silver also rose to $45 per ounce – a new 31 year high.
"With interest rates remaining low in most countries, there is little reason not to own gold, as the metal currently offers the best returns around," said Gavin Wendt, founding director with MineLife Pty. Despite its new record high, gold remains below its inflation-adjusted high reached in 1980.
"Gold is sometimes a currency, sometimes a commodity and sometimes a store of value," analysts at Merrill Lynch wrote recently. "As purchasing power of workers in emerging markets increases, we see demand for gold as a commodity increasing over the next few years," the Merrill Lynch report said.
(Sources: "Gold Breaks $1,500 as Investors Seek Security," CNBC, April 20, 2011; "PRECIOUS-Spot gold breaches $1,500, silver at 31-year high," Reuters, April 20, 2011; "Gold Rises Above $1,500 to a Record on Slumping Dollar, Inflation Concern," Bloomberg, April 20, 2011; "Gold Tops $1,500 an Ounce in 'Flight to Quality'," New York Times, April 20, 2011)
Chris Weber: Where is America's Gold? The mystery of Fort Knox
Submitted by cpowell on 09:11AM ET Sunday, April 10, 2011. Section: Daily Dispatches
12:07p ET Sunday, April 10, 2011
Dear Friend of GATA and Gold:
Chris Weber, author of a new book inquiring into the status of U.S. gold reserves supposedly kept at Fort Knox in Kentucky, remarks in an essay published this week: "There has been the atmosphere of a sham -- even a fraud -- about the U.S. policy toward gold for generations." Weber's essay is headlined "Where Is America's Gold? The Mystery of Fort Knox" and you can find it at Lew Rockwell's Internet site here:
In this issue:
The week ahead, technical analyses and this week's focus: Silver out on a limb
Russian central bank ready to buy any gold from state depository
5 Keys to Investing
Bullion and Precious Metals
How To Read Jewelry Marks
What to Know Before You Buy Your First Ounce of Gold
Physical Gold IRA
Rising Gold and Coins
U.S. Bank Positioning
A History of the Gold Cartel
Do Homework Before Selling Gold
Is Gold in a Bubble?
Gold Krugerands Run Out
US Mint Suspends Sales of Gold and Silver Eagle Coins
Investing in Gold
Gold Coin Premiums Soar
Collecting U.S. Coins on a Budget
Origins of the Federal Reserve
Gold suppression is public policy and public record, not 'conspiracy theory'
Inside the global frenzy for gold
Peter Brimelow: Is India clearing way for gold 'moonshot'?
Fed statement may let gold continue upward course
US Mint 2010 Gold and Silver Eagle Bullion Coins on Sale Jan. 19
Breakdown of the Gold Market
The ABCs of Precious Metals IRAs
Gold is Decade's Best Performing Investment
What’s More Important: Price Per Ounce or Ounces Owned?
COMEX INVENTORY DATA REVEAL AN ALARMING TREND
Avoiding Costly Mistakes When Building a Coin Collection
Nine Bullish Arguments for Gold
Gold Moves From Currency To Performing Insurance
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