Tuesday, June 23, 2009

Silver Stock Report: Will people ever learn?!

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Will people ever learn?!

(It's always darkest before the dawn)

Silver Stock Report

by Jason Hommel, June 23rd, 2009

Hosea 4:6
"My people are destroyed from lack of knowledge. "Because you have rejected knowledge, I also reject you as my priests; because you have ignored the law of your God, I also will ignore your children."

When I first read that, over ten years ago, I ignorantly thought, "how unfair of God!  If God's so smart, why doesn't he inform his people then?"  But I did not have knowledge at the time, of course, which is why I misunderstood.  See, God did inform his people, repeatedly.  The problem is that the people didn't listen.   Even worse, when they do hear the truth, they actively rejected it.

Later, I learned that God often hides knowledge from people, which tends to glorify God in the long run.  It also gives us who have diligently sought out Godly knowledge, a chance to help explain things to people, which is quite an honor.

Here's just a bit of Godly knowledge that people are rejecting today:

God said to not trust false idols, and that unjust weights and measures are an abomination, he said to not steal, to not defraud widows and orphans, to not withhold from the worker his daily wages (in the form of pension plans), and to not lend and oppress people through usury (interest on loans), and to not borrow, and to not become surety for a friend (that's co-signing for loans), and to not reject the king of kings and set up an earthly king (such as governments who will only steal from the people).  But do people listen?  No, they actively reject such teaching as antiquated and unimportant.

After rejecting all of God's advice for how to become prosperous, people will become very, very poor, and even the prayers of their starving children may not be answered!  After the crash of false wealth in paper money, after people get tired of shooting each other to get basic supplies, and after most of the criminals who try that foolish approach get shot by people protecting their property, people are going to need something to use to trade, besides ammo, cigarettes, and alcohol, to use to trade for food.  Gold won't work either, since even the smallest piece of gold, a 1/10th oz. piece is over $100 today.  But what about after the crash, how much worse will gold be for small purchases?  A full ounce of gold could easily be worth a modest home after the crash, and is thus completely unsuitable for regular daily commerce.

Consider Silver.

Silver will be desperately needed for daily commerce, like buying food.  Without silver, you might as well starve, even if you have gold, because you will NEVER be able to buy any groceries with an ounce of gold.  You won't even be able to buy alcohol, cigarettes, or ammo with an ounce of gold; the gold will be far too valuable, and would buy an entire store full, assuming the stores are full, and they won't be.

Even gold owners will be forced to trade their gold for silver for daily commerce.  If I had $1000 bills today, I would not get very far in my town today; $1000 bills certainly exist, but many stores still have trouble breaking a hundred!

And they will trade gold for silver at a ratio of perhaps 1 gold coin for 10 silver ounces, or even 1 to 5, if they need to, which they will.

Thus, those people who own a controlling interest in silver, will become absolute masters of nearly all industry and commerce.

Here's the truth.  Most people will never be fortunate enough to buy silver under $100/oz.  They will pay far more.  Why?  Because the math won't let the majority of people buy silver for any less.

See, even if there were 300 million oz. of silver available annually to investors, out of the 600 million ounces produced annually, it's really only about 100 million oz. annually that investors are buying, then at $100/oz., that would only be up to $30 billion out of at least $100 trillion (which is $100,000 billion) of paper wealth that needs to be protected by buying real silver.  See, less than 3% of 1% of the world's wealth can buy any silver below $100/oz.  That's why the inflation storm will be unstoppable.

And that's why it's mathematically proven that the majority of the paper wealth of the world will be utterly destroyed before it has a chance to protect itself by buying silver.

Here's another way to put it, mathematically speaking.  Real wealth is measured by real money, which is real silver.  So, as silver goes up in value, the existing pile of silver will increase the wealth of all those who hold silver.  While at the same time, the pile of paper money loses value.  But it's not one to one.  See, if silver doubles in value, from $15 to $30/oz., the existing pile of paper money decreases in "silver purchasing power" by 50%, and the existing wealth of silver increases by 100%.  But the decrease in paper value is orders of magnitude greater than the increases in silver wealth, and so the process must continue.  So, as the world loses $50 trillion in wealth, as silver doubles, the existing silver in the world, which is maybe only 20 billion ounces, gains $15/oz on the way to $30, which is an increase of only $300 billion, which is $0.3 trillion.

I don't mean to insult my readers, because my readers are the smart ones, but people today are dumb -- so dumb it's scary. 

The Onion put out a great piece of satire, making the government that is selling gold look like fools, that is not far from the truth:

-

While the US is not selling gold through cash4gold.com, the real truth is that the US is selling gold!

WGC welcomes US' IMF gold sale approval
http://www.commodityonline.com/goldnews/WGC-welcomes-US-IMF-gold-sale-approval-2009-06-22-18868-3-1.html

"Last week, the US House of Representatives approved an agreement to allow US members of the IMF board to agree the proposed $13 billion sale of 400 tonnes of IMF gold to shore up its finances."

Since the news was released a few days ago, the gold market has not significantly changed, and the amount is less than the prior gold sales agreements of 500 tonnes.

Once again, China's Foreign Exchange Reserves are nearly $2 trillion now.
http://www.chinability.com/Reserves.htm

$13 billion worth of gold to sell is nothing for the gold market, and China has expressed interest in far more; as they would like to diversify at least 5% of their reserves into gold, which, for the knowledge rejecting people, is .05 x 2000 billion = $100 billion worth of gold China would like, if they could find that much to buy!

I'm going to go off on a tangent now, and simply lament the foolishness of my nation's politicians, and the people who elected them.

I hear they want to pass all sorts of unGodly legislation.  I hear they want to control every aspect of our lives, from guns, to water, to food, to sex.   I read that they want to register and steal our God-given rights to own guns.  I hear they want to ban private gardens and the keeping of small livestock like chickens and goats.  I hear they want to control all water rights, even well water.  I hear they want to protect pedophiles from hate crimes as they rejected language to exclude pedophiles from the latest hate crime bill.  Meanwhile, the government has nationalized or is nationalizing four entire industries; banking, investing, housing, and automobile manufacturing.   That's fascism if you recall.

http://en.wikipedia.org/wiki/Fascism
This was to be achieved by a form of government control over business and labour (called "the corporate state" by Mussolini).

Every time I get an email about these things the government wants to do to us, I read that I'm supposed to "rally to the cause" to defeat these bills in progress by writing our congressmen who show, by their actions, that they are actively rejecting all Godly knowledge.  It's so sad.

People don't seem to understand how much power they really have, and how it can be most effectively manifested.

When I was in college, one of my professors said that writing a letter to the editor of a newspaper is 1000 times more powerful than voting, since you may effect up to 1000 votes of other people.

Well, that may be true, and I'm certainly an advocate of writing to express one's views!

But if writing a letter is 1000 times more powerful than voting, I know of something 1000 times more valuable than writing a letter.

It's called "buying silver"!

See, for every 10% that silver rises, the paper money mob loses 10% of their power.  And it does not take much money to pour into silver to get it to rise by only 10%, or even 100%, as I've shown.  Silver could rise several hundred percent with less than 3% of 1% of the world's wealth moving into silver.  This is the potential power of truth, and silver, and a wise small minority today.

People often write to me, saying, "don't discuss politics, just talk silver".  Or "don't talk religion, just talk silver". 

But these are people who are rejecting knowledge.  It's all intertwined, it's all the same topic! 

Let me share with you my secret.

My goal for these past ten years of writing has not been merely to help you grow wealthy.  It's been to help you, and I, become responsible stewards of the wealth that will be ours to command and manage. 

Will we become wise stewards when we are put in charge, economically speaking, after the crash that is coming? 

Because so very much will end up belonging to us, if we invest in silver now.  We will become very important managers to the economy of the future, and I think it's important that we all know and understand how to apply Godly knowledge in our business lives when the time comes.

Here's a small guide on a few things:

Bible Verses on how to Manage Money November, 2005

But yes, yes, let's get back to silver.   Here are a few articles, excellent ones, that came out this week, describing the fantastic fundamentals of the silver market:

History of Silver, Part III: Inventories Are Gone
http://seekingalpha.com/article/143934-history-of-silver-part-iii-inventories-are-gone

Making The Case
By: Theodore Butler
http://news.silverseek.com/TedButler/1245173905.php

Will "silver bullet" finally kill the manipulators?
http://www.stockhouse.com/Community-News/2009/June/19/Will--silver-bullet--finally-kill-the-manipulators

Finally, let me quote the brilliant observation by Peter Schiff last week at the end of the commentary here:
http://mises.org/story/3493

"Wouldn't the world be better off investing their savings productively in their own countries, rather than just giving their savings to us? Wouldn't they be better off enjoying the fruits of their own labor, rather than laboring while we enjoy the fruits? It's obvious. And it's going to happen."


It's truly a scary time.   And it's scary to see what the very wise people are saying that they are scared of today.  Here are a few verses that I hope we will not need to take comfort in, as we Christians are still fortunate enough in the US to not be persecuted as much as elsewhere in the world.

Matthew 10:

16Behold, I send you forth as sheep in the midst of wolves: be ye therefore wise as serpents, and harmless as doves.

 17But beware of men: for they will deliver you up to the councils, and they will scourge you in their synagogues;

 18And ye shall be brought before governors and kings for my sake, for a testimony against them and the Gentiles.

 19But when they deliver you up, take no thought how or what ye shall speak: for it shall be given you in that same hour what ye shall speak.

 20For it is not ye that speak, but the Spirit of your Father which speaketh in you.

 21And the brother shall deliver up the brother to death, and the father the child: and the children shall rise up against their parents, and cause them to be put to death.

 22And ye shall be hated of all men for my name's sake: but he that endureth to the end shall be saved.

 23But when they persecute you in this city, flee ye into another: for verily I say unto you, Ye shall not have gone over the cities of Israel, till the Son of man be come.

 24The disciple is not above his master, nor the servant above his lord.

 25It is enough for the disciple that he be as his master, and the servant as his lord. If they have called the master of the house Beelzebub, how much more shall they call them of his household?

 26Fear them not therefore: for there is nothing covered, that shall not be revealed; and hid, that shall not be known.

 27What I tell you in darkness, that speak ye in light: and what ye hear in the ear, that preach ye upon the housetops.

 28And fear not them which kill the body, but are not able to kill the soul: but rather fear him which is able to destroy both soul and body in hell.

 29Are not two sparrows sold for a farthing? and one of them shall not fall on the ground without your Father.

 30But the very hairs of your head are all numbered.

 31Fear ye not therefore, ye are of more value than many sparrows.

 32Whosoever therefore shall confess me before men, him will I confess also before my Father which is in heaven.

 33But whosoever shall deny me before men, him will I also deny before my Father which is in heaven.

 34Think not that I am come to send peace on earth: I came not to send peace, but a sword.

 35For I am come to set a man at variance against his father, and the daughter against her mother, and the daughter in law against her mother in law.

 36And a man's foes shall be they of his own household.

 37He that loveth father or mother more than me is not worthy of me: and he that loveth son or daughter more than me is not worthy of me.

 38And he that taketh not his cross, and followeth after me, is not worthy of me.

 39He that findeth his life shall lose it: and he that loseth his life for my sake shall find it.

 40He that receiveth you receiveth me, and he that receiveth me receiveth him that sent me.

 41He that receiveth a prophet in the name of a prophet shall receive a prophet's reward; and he that receiveth a righteous man in the name of a righteous man shall receive a righteous man's reward.

 42And whosoever shall give to drink unto one of these little ones a cup of cold water only in the name of a disciple, verily I say unto you, he shall in no wise lose his reward.


It seems that fear, and irrational fears, are simply a part of the human condition.

Some write to me that "they'll never let silver move up, they have too much money".  But that's such a foolish and shortsighted fear that's not even true.  Silver is moving up, precisely because they have "too much money"; and because they are printing up too much money!

One group of men in Brazil recently realized that the people who are keeping the prices of gold and silver down are not Gods, that they are only men, who can fail.  Even more accurate to say that they are highly incompetent men, after all, they are in government. 

And it's even more important to realize that they did fail in 1933, and in 1971, to keep the gold price under control, and that they are failing now, and will continue to fail.



Sincerely,

    Jason Hommel

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