Las Vegas Money Show!

(Vegas, baby, Vegas !)

Silver Stock Report

by Jason Hommel, May 10th, 2009



I'll be in Las Vegas for the Money show from May 11th to the 14th. 

The Coin shop will remain open.

And our phone lines will be open during the trip, too.

Yes, I've been busy buying and opening up a coin shop, and traveling to shows on occasion again. 

I've also been buying and setting up a mint!  But I did not intend to release any information about that until after I set it up.  After all, until then, it's not even a futures contract, and also I don't want to deal with any inquiries about any minting projects until AFTER we get set up.  But Thom Calandra got the scoop!

Thom Calandra Reveals my plans to start up a Mint

Silver Mom sends eBay packing: ThomWatch

http://www.stockhouse.com/Columnists/2009/May/7/Silver-Mom-sends-eBay-packing--ThomWatch


I also discuss the nation's lack of minting capacity in a recent Stockhouse Interview:

Jason Hommel on why he prefers physical silver to silver stocks

http://www.stockhousefeatures.com/gold-and-silver/index.php/2009/05/jason-hommel-on-why-he-prefers-physical-silver-to-silver-stocks/


I believe the nation needs a few more mints to handle the transition from paper money back to silver and gold as money. 

It seems my silver mill is coming together just as premiums for one-ounce rounds are hitting new all-time lows.  So, this is very scary for me, and it might be a temporary failure.  We are spending about $500,000 to build our silver mill to turn silver into strip, and fortunately, we are partnering with a local Mint to reduce costs. 

To duplicate our efforts would require about $3 million today, and perhaps 6 months to a year in lead time.  But it may yet still be a few months before we will be set up and ready to go.

So, unless people start buying a lot more physical silver and gold, the business will be a very difficult start-up.

On a related note, many people who hate gold have desperately tried to "dismiss" the recent news that China has been buying gold, as they say how little gold that China has actually bought in the last 5 years.  But that's part of it.  Yes, China could buy a lot more.  If China diversified a mere 10% of their $1 trillion in reserves, or about 1 year's worth of reserve growth, it would be more than all the gold produced in a year, exceeding 100 million ounces, over 3100 tonnes.

But let's continue to put China's actual purchase of about 500 tonnes into perspective. 

China bought about 90 tonnes of gold per year over the last 5 years. 

That's nearly a quarter of the gold that is allowed under the Washington Agreement.
http://en.wikipedia.org/wiki/Washington_Agreement_on_Gold

And how much is that compared to Gold bought by the American Public?

One measure of the amount of gold bought by Americans is Gold Eagle Sales figures.

The US Mint, in 2008, sold 860,500 oz. of gold. 
860,500 oz. / 32,151 oz/tonne = 26.8 tonnes.
http://www.usmint.gov/mint_programs/american_eagles/index.cfm?action=sales&year=2008

The US Mint, in 2007, sold 198,500 oz. of gold. 
198,500 oz. / 32,151 oz/tonne 6.2 tonnes
http://www.usmint.gov/mint_programs/american_eagles/index.cfm?action=sales&year=2007

In other words, the American Public has been buying a lot less gold in American Eagles than China has been buying. 

But perhaps 90 tonnes vs. 6.2 to 26.8 tonnes is a bad comparison?  There is gold that Americans buy other than Eagles.

But I don't count ETF gold, or gold in "over the counter" contracts, because that is not gold, it's paper gold -- it's promises no better than paper money, and is proven to be a fraud by admission of banking participants who admit they charged clients storage fees for metals that did not exist as a "standard business practice" by the entire banking and brokerage industry, and it's also fraud as admitted by the BIS, the Bank of International Settlements, who revealed the oversized positions, which can only be fraudulent by nature.

BIS Admits $190 Billion Silver Fraud  April 6, 2009
http://silverstockreport.com/2009/OTC-silver-fraud.html

But the fraud of fake gold is not the only fraud out there.  There is an entire school of thought devoted to saying why such fraud is actually good!  That thinking is continually debunked by the Mises Institute at www.mises.org and www.lewrockwell.com .

This Video presentation explains why you never hear of the depression of 1920.  The reason is that it was very brief, and it was ended by a wise president who avoided government intervention, and who actually scaled back "government theft" which allowed the economy to grow rather rapidly.

Why You've Never Heard of the Great Depression of 1920
http://www.youtube.com/watch?v=czcUmnsprQI&eurl=http%3A%2F%2Frightwingnews.com%2Fmt331%2F2009%2F05%2Fwhy_youve_never_heard_of_the_g.php&feature=player_embedded

My main point, not made by the speaker in the video, is that when gold and silver become money again, it becomes extremely difficult to tax real wealth that cannot be found or tracked.  Thus, government gets very small, by nature, when silver and gold are used as money.  Thus, the real economy will rapidly grow and prosper by using real silver and gold coins as money.

I don't know why the concept that gold and silver lead to prosperity is so difficult to grasp by so many people. 

Even most silver and gold investors think that if silver and gold go up, it will be an economic calamity, but that's just the lies of the institutions that control our Universities and Mass Media talking.

The truth is that honesty leads to prosperity, while institutionalized fraud and theft lead to poverty.  I suppose people "don't get it" because they have often paid over $100,000 to attend a "prestigious" University, who taught them otherwise, that our economy has thrived because of modern finance.  No, our economy has thrived DESPITE the institutionalized fraud and theft.

People lose nearly $9 billion per year gambling in Vegas.  What a mis-allocation of wealth!  It didn't produce anything, except excessive conference space, and cheap, yet luxurious, accommodations, which I plan to take full advantage of.

I'll be giving people a chance to protect and convert their money into something real next week, by offering real silver and gold at the Money Show at Mandalay Bay.



Sincerely,

    Jason Hommel