Why Silver and Gold will go up, and by How Much

(And Emgold, a great $4 million stock; developing a $2 billion gold mine!)

Silver Stock Report

by Jason Hommel, Octoer 28, 2011

The government is spending $1500 billion more per year than they are getting in taxes.  They are not borrowing this money; they are printing it.  There is no political will to fix the problem.  The "Occupy Wall Street" protests are about a protest against the Wall Street bailouts, but also, it's about the 99% wanting more government handouts than they are already getting, and already 43 million Americans are on food stamps.  Government over spending, and especially the bank bailouts, will cause inflation, and may ultimately destroy the dollar.   The question is, by how much?
Let's do some math.  If only 1% of paper money in savings was spent on gold, that would be about $180 billion.
Yet the annual world gold market is only about 75 million ounces (oz.) of newly mined gold each year.    
How much gold are Americans currently buying?  About 1 million oz. of gold eagles per year, and I suppose Americans buy about twice that much gold, so only about 2 million oz. out of the 75 million oz. available.  
At $1666/oz., the world is spending about $125 billion on gold each year, with Americans spending only about $3 billion of that.
If Americans put only 1% of their cash into gold to protect themselves from inflation, which is 180 billion, I'd estimate that the gold price would at least triple, to $5000/oz.
But the dollar is no longer backed by gold.  In theory, every dollar in circulation could be spent on gold, and then, spent on gold again!  
If all US dollars were spent on official US gold, that would be about $18 trillion spent on 261 million oz. of gold.  That implies a price of $69,000 per oz.
What about silver?
If only 1% of money, $180 billion, were spent on silver, well, the annual production of silver is only about 700 million oz.  That implies a price of $257/oz, but that would leave no silver left over for industry, which vitally needs silver in at least 10,000 different applications, so we should conservatively double that number to $500/oz.
The historic ratio of silver to gold is 15:1.  But since silver has been so utterly consumed by industry, I'd expect prices to eventually exceed that ratio, and hit at least 10:1, if not 5:1.
If silver hits 10:1, and if gold hits $69,000, then silver can hit $6,900/oz.  I hope you understand why I'm comfortable holding silver and gold, keeping them available for inventory at the JH MINT, despite the wild price changes.  
To answer a common question, "If you like it, why sell it?"  Answer, "I sell it at prices that cover my costs, and there is a tiny profit in this business, and I use that to buy more."  
But also, I want my town to profit.  Already, the JH MINT has sold at least $20 million dollars of gold and silver into our community; which is ten times more than the most successful "barter dollar" program in the nation.  If the dollar fails, this part of the nation will do just fine.  Or at least, there are enough truly wealthy people here now, that this area might do ok because there is enough real wealth in town.
I highly recommend that you buy silver from the JH MINT today, or sometime soon to protect your hard earned money from inflation.  
Call us:  530 273 8175
JH MINT Supports Emgold Mining & Idaho-Maryland Mining Corp.
JH MINT recommends buying Emgold stock now!
Emgold is a stock with a market cap value of about $4 million.
Their assets, of the Idaho-Maryland Mine in my hometown of Grass Valley, CA, may well have gold in the ground worth between about $2 to $10 billion.
Their last feasibility study said the gold was economic to extract at about $420/oz.!
They plan to mine up to 200,000 oz. to 300,000 oz. of gold per year.
With profits of about $1200/oz., this is about $240 to $360 million dollars in profit per year.
The stock price will likely rise from about 10 cents to $1/share as they raise the money to start mining.
The stock price will then likely rise from about $1/share to $10/share after they begin mining. 
In other words, people who buy stock now, may well make 100 times their initial investment!
The company will have to raise about $125 million to get started mining.  With such a low market cap today, this means that only about 10% or less of the future ownership of Emgold is spoken for.  The real majority owners, the other 90%, have not yet stepped up and bought stock from the company to give Emgold the financing they need to start mining.
Here's how this might take place:
Emgold has 38 million shares outstanding now.
Emgold might raise $2 million at 14 cents/share, issuing another 14 million shares.
Emgold might raise $4 million at 21 cents/share, issuing another 19 million shares.
Emgold might raise $8 million at 31 cents/share, issuing another 26 million shares.
Emgold might raise $16 million at 45 cents/share, issuing another 36 million shares.
Emgold might raise $32 million at 67 cents/share, issuing another 48 million shares.
Emgold might raise $64 million at $1/share, issuing another 64 million shares.
That would raise all the money they need to start mining, $126 million, and anyone who buys the stock today at ten cents would make 10 times their money during fund raising period.  And how much stock would be issued total?
64 + 48 + 36 + 26 + 19 + 14 + 38 = 245
If Emgold does it right, they might have 245 million shares by the time they are done raising the money they need.
If they do it even better, they could put the money they raise into gold, and if the gold price doubles, they could eliminate the final fund raising, and self-finance the mine with much less stock issued!
But if they issue a total of 245 million shares, and if they earn between $240 to $360 million, that's earnings of over $1 per share.  That kind of a dividend would drive the stock price to $10/share, or more, if the gold price keeps going up. 
It's an axiom of life that if you don't buy it, you won't own it.  
The great thing about Emgold is that it's a public company, and shares trade daily, so ownership is always on sale.  Therefore, nobody has a legitimate right to complain that they don't own the profits of Emgold; because they can buy stock at any time if they wish.
With the dollar continuing to crash, I believe it is inevitable that many local mines will reopen at some point.  The only real decision is who will own the mine or mines? 
ANYONE CAN BUY STOCK IN EMGOLD!  To buy stock, you would need to open a stock broker account with a brokerage like tdameritrade.com (recommended) or etrade.com or morganstanley.com or ml.com.

The ticker symbols are:  
US Pink Sheets symbols: EGMCF.PK, EGMCF
Canadian Vancouver exchange: EMR.V, V.EMR
Will the mine create environmental damage?  Not likely.  Mines today are more environmentally friendly than ever.  And the profits will be more than enough to pay to prevent any environmental damage.  The town council and independent analysts will ensure that.
What about wells running dry?  Not likely.  It might only affect about 12 homes (or not), and the Mine can easily afford the $1 million estimate to put those homes on NID water, to compensate them for the change in a water source. 
If you want to help out yourself, I think you should buy stock in Emgold today.
Imagine if you or your corporation put a mere $100,000 into Emgold at the start of financing, and if that $100,000 investment grew into $10 million worth of stock, that was earning over $1 million per year in dividends. 
Finally, the stock is so cheap, it might be possible for a new buying group or company to buy a controlling interest in the company, rather cheaply.

I own Emgold stock, and nobody has paid me to write about Emgold.  I'll earn money only if the stock price goes 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.  Buy from us at www.jhmint.com

JH MINT & Coin Shop, Grass Valley, CA -- minimum order $5000 for free shipping, USA shipping only.
Open 10AM to 5PM Pacific Time, Monday to Friday, closed weekends and bank holidays.  (Also Closed from Dec. 25th to Jan 1st)
(530) 273-8175
Kerri handles internet phone orders:
(530) 273-8822

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You can also buy silver from my mom at www.momssilvershop.com
Mom will ship overseas, and also in lots of more or less than 100 ounces. 

3510 Auburn Blvd #12
Sacramento, CA 95821


    Jason Hommel