Initial Report on the Phoenix "Silver Summit" Show
(This Show was fantastic!)
Silver Stock Report
by Jason Hommel, February 24th, 2009
I spoke with many enthusiastic readers who said they were fans of my work, which was very encouraging. Everyone was very respectful, appreciative, friendly and supportive. I'm beginning to gain a bit more confidence now, for several reasons. One is that I hear so many of the same questions again and again, which helps to know what the common concerns and thoughts are of people who are buyers or holders of silver, which helps me help people even better.
I got a chance to sit down with my "posse" consisting of my brother Ted Terbolizard, my mom Joyce of www.momsilvershop.com, my business partner Greg Kyle of www.silveriswealth.com and Peter Spina of www.goldseek.com and www.silverseek.com so we could all talk with Thom Calandra about everything we've been up to, regarding minting silver into rounds to auction off at Peter's site at www.seekbullion.com. Thom Calandra said our story deserves to be told in USA Today, which was very encouraging. Thom was gracious to mention us already, here:
Thom's been making what he calls a "comeback" into
the precious metals industry, but is being wiser about many
things these days.
I answered: "Silver to gold production ratios in the past were 15 to 1, which mirrored the price ratio of 15 to 1 which lasted hundreds of years. But today's ratio of 70 to 80 to 1 does not imply that 80 times more silver is produced than gold. The opposite is true. Since silver is too cheap, too little silver is produced. About 550 million oz. of silver is produced each year, and about 80 million oz. of gold, so it's about a 7:1 ratio in terms of production, which might imply a future 7:1 price ratio.
But historic total production might be a better indicator. There are about 5 billion oz. of gold produced in human history, and about 43 billion oz. of silver, but perhaps only about 14-15 billion oz. of silver remain, the rest having been consumed and lost in many industrial applications and ended up in lanfills. So that implies a future 3:1 price ratio.
However, when you realize that if gold and silver ever become money again, and that gold is unsuitable to use as money when an oz. of gold is worth a year's salary, gold is unsuitable for the vast majority of monetary transactions. Therefore, silver has to do all the work. So that might imply an even higher value for silver in the long run, than even the 3:1 ratio."
Another question was asked, "What is the high price for silver that you can see?" I said something like, "Let me, the young man on the panel embarass himself with trying to answer. I've said in the past that silver could hit $10,000/oz., as that is the price suggested by all of the past inflation of money creation that has yet to show up as real inflation. The gold price, based on all of M3 being backed by US gold implies a price of $50,000 to $100,000/oz, which give us a conservative price of $10,000/oz. for silver based on a conservative 10:1 ratio.
But if it takes us 15 years to get there, to change societal attitudes about silver, then the amount that silver has to go up per year, to compound it's way to get there, seems rather tame, as it's only a mere 50% gain each year that would take us there.
But 50% gain each year is about 1 penny per day, starting at today's prices. Thus, since silver has been going up over 10 cents per day, over the last month, that means that silver is now currently rising 10 times faster than my wildest prediction!
The audience went into wild applause, showing they
understood the veracity of the argument. I think that was one of my
best arguments at the show.
In the evenings, we tried showing off, and even
"redeeming" our new "beer rounds".
Ted Butler already put his speech into writing,
The thing about giving a speech is that it forces a man to do his best work. That was an excellent presentation by Ted. So if you don't read Ted every week, at least read that one.
I wish I had more time to talk with Ted, but I only had a brief moment after our evening panel. I asked his opinion on the report by Bix Weir about the 400+ million oz. of silver used in the Calutrons used to enrich uranium. It seems that he didn't think it was a valid story. I found his answer disappointing, and last week, I ordered the History Chanel Report mentioned in this report, because I wanted to verify:
The Great Silver Mystery (...and the greatest
secret of all time!)
Wikipedia links to two reports that verify that
470 million oz. of silver were used in this way.
I know a man who is great at research, especially on silver, and he may give us more answers in the future. My apologies to Bix, for not reporting on this issue sooner. Bix broke this story on silver over a year ago, maybe two now.
Bill Murphy reports on gold daily, and I read him almost daily at www.lemetropolecafe.com. He offers a free two weeks subscription, and it's definitely worth it, as Bill is more plugged in than anyone. Bill Murphy asked me to ask my readers to see if anyone can help him get on CNBC. Any of you can make your own appeal directly to CNBC to try to get Bill on TV. Here is Bill's appeal:
Bill Murphy of www.GATA.org writes:
I am on the case again and am asking everyone who is not donating to GATA but still wants to advance the gold cause to contact CNBC.
Nothing would be more helpful to our fund raising than to get our story told. In turn that would help your own precious metals investments.
Few in the mainstream investment world can conceive of a gold price above $3,000. In fact, most in the mainstream investment world think gold is just going through its own bubble phase. The more that investors realize where the gold price is going and why, the more they are going to invest in gold and silver mining shares.
Yesterday I called CNBC and reached its Viewer Services desk. After declaring my intentions, I was told to send my pitch by facsimile machine to this number: 201-735-3200. Here is what I sent:
* * *
"To: the producers of 'Fast Money'
"From: Bill Murphy, chairman, Gold Anti-Trust Action Committee
"Subject: The gold market
"I am a big fan of your show and watch it daily.
As a former professional football player with the Boston Patriots, I find
it amusing to watch some of the
"Last night there was a great deal of discussion about gold. Most of the comments were clueless.
"I have chaired three international gold conferences over the past decade:
" -- The GATA African Gold Summit in Durban, South Africa, on May 10, 2001.
" -- Gold Rush 21 in Dawson City, Yukon Territory, Canada, on August 8 and 9, 2005. Among the participants was Andrey Bykov, an economics consultant to Russian President Vladimir Putin.
" -- GATA Goes to Washington in Arlington, Virginia, on April 18 and 19, 2008.
"My organization placed a full-page color ad in The Wall Street Journal on January 31, 2008, in which we warned of a coming 'catastrophe' and 'disaster' arising from the long manipulation of the price of gold. That ad may be viewed here:
"The press would not give us the time of day. No one asked what we were warning about and why, including CNBC. Ten years ago I was interviewed on CNBC by Ron Insana and have not been allowed back on the network since then, right as I was then. Dylan Ratigan and others are calling for 'transparency.' If transparency is to be achieved, it would be helpful for your viewers to understand what the gold market has been all about and why there is a bigger story here than the Madoff scandal.
"At the Gold Rush 21 conference, when the price of gold was $436) and in our Wall Street Journal ad GATA predicted the price of gold is going to $3,000 to $5,000. It would be helpful for your viewers to understand why. At any rate, we have been correct on the price of gold for nine years.
"Should you wish to check GATA's credentials, please visit www.GoldRush21.com and review our summary video of the conference.
"I look forward to telling the real gold story on your network. I can travel to New York or speak from Dallas, where I live.
"Thank you for your consideration."
* * *
So, friends, most of the work is already done for you. GATA would like you to make your own appeal along the lines of the above and fax it to CNBC in care of one of the following programs:
"Squawk on the Street"
"The Kudlow Report"
If our friends will take just a few minutes to contact CNBC, the network may realize what a big deal this is and how it also can be of value to the network's ratings. If you don't have a fax, please look up the e-mail addresses for these programs and contact them that way.
Our time is here. Let's go for it. Help GATA to help yourself.
Thanks to all of you who are willing to
participate in our campaign.