What's Pushing Gold to New Highs
(and comments from readers!)
Silver Stock Report
by Jason Hommel, August 18th, 2011
There are two major developments in the past two weeks that are pushing gold to new highs, with gold reaching $1825/oz. this afternoon.
First, GATA, the Gold Anti Trust Action Committee, knows more about the gold industry than any other organization on earth, in my opinion. The last time they hosted two other conferences, few attended, but enough did so that the gold price exploded both times. Their conference before the last one was a few years ago in Dawson City, when gold was about $438, and gold exploded up to about $750 without much of a pause, and only 100 people attended their show. But the quality of the people was very high! A billionaire gave a presentation, Hugo Salinas Price. And Adrey Bykov, the personal economic advisor to Putin, the president of Russia at the time was also there.
Last week, GATA hosted a London conference to 400 people!! These people are now educated far more about gold, and are likely influencing tens of billions of dollars to buy gold. This event alone could push gold prices to $3000 within 6 months, especially given that the gold market remains a tiny $136 billion annual industry.
To learn more about GATA, see GATA.org. I'm sure they will make the content of their conference available to purchase on DVD's sometime soon. Get on GATA's daily email dispatch list, at the top right of the page, here: http://gata.org/
Also, be sure to sign up for a free two week trial at www.lemetropolecafe.com and read the daily Midas report by Bill Murphy, the Chairman of GATA, to really learn what's going on in the gold world.
The major systemic story in the gold world is that gold is often leveraged 50 to 100 to one. This means that the major banks and brokerages will trade, or sell, up to 50 to 100 oz. of gold for every 1 oz. that they have in their possession. This is similar to fractional reserve banking, which they also do, where they will only have $1 of cash on deposit to back up, up to $100 worth of deposits at their bank. This fraud only works so long as people are too scared to take delivery, and guard their own cash or metals. Every now and then, people wake up, and demand their cash or metals. The difference with metal is that there is no "lender of last resort", like with the Federal reserve who can print money to bail out the banks. The new mine supply of metal is simply not enough to cover the amount of metal on deposits. But what's worse, is that nations have printed up hundreds of times as much paper money, more than the gold that ultimately backs up their currencies. Gold no longer backs up Federal Reserve notes, and even if it did, US gold has not been audited in the last 50 years, and even if it exists, it would provide only about a 1% backing to the currency. (Hence, the 100 to 1 leverage).
The second major development in the gold world is that this week, Venezuela is now trying to obtain their gold, from out of major western financial institutions that might not have the gold.
Venezuela is trying to obtain 99 tonnes of gold from the Bank of England. The Bank of England sold half their own gold, selling about 250 tonnes out of 500 tonnes, around 1999-2001 back at $250/oz. to suppress the gold price, and to "earn" an interest rate on foreign currencies. The Bank of England might not even have Venezuela's gold!
I wonder if Venezuela is considering a military response to institutions like JP Morgan if they are not paid back?
Remember, it was France who broke the back of the gold manipulation in 1971, by trying to convert gold certificates into real gold. Back then, the certificates were called US Dollars! That event started gold on it's bull market move from $35/oz. to $850/oz.
If history is any guide, gold might begin a major move up over 25 times, up to about $40,000/oz. over the next ten years now.
Here's another two authors who are predicting a similar move in the gold price, due to outstanding fundamentals such as supply and demand of both gold and all kinds of paper money:
TOO LATE TO JUMP ON THE GOLDWAGON?
As always, I think silver remains the better investment, better than gold, because so much silver has been utterly consumed and lost due to industrial demand as it is the best conductor of electricity, better even than gold.
Now is the perfect time to buy either silver or gold.
Here are a few comments from readers on my article from yesterday.
Masterpiece! Beautiful well thought out & written example of govt meddling and waste. Keep it up!!
Jason, RE: Keep Tahoe Blue!
Blue waters are a result of low concentrations of nitrates. The reflective visible spectrum of nearly all nitrates has a greenish tint to it.
If you look into a perfectly maintained white bottom swimming pool if it is BLUE get in it. If it is GREEN don't get in it.
Properly maintained swimming pools are accomplished via break point chlorination that first causes chlorine molecules (or any other halogen) to attach to a nitrate molecule (animal wastes, including fish wastes) and that forms a chloramine. However, that molecule is stable and has a green tint to it. Once the oxidation process is completed with more halogens then the hybrid amine molecules break down into gases and dissipate.
Blue Clean water also has a DRY feeling to it. Whereas Green water has a slimy or soapy feel to it.
My guess is that the natural run off waters that feed Lake Tahoe are depositing some form of halogen that detoxifies the waters by breaking down the nitrates. Most likely the best thing they could do is make sure dogs don't get in the water and that nobody up stream uses fertilizers.
If the lake is slowly changing from blue to green, maybe those pot growers from CA are migrating up behind lake Tahoe.
Jason replies: As I suspected, their move to prevent sediment runoff into the lake may be doing more harm than good to their own cause -- or at least the public justification of their cause, as their real cause might just be to stop any development, regardless of the "blue lake" excuse!
Jason, I appreciate your commentary on Tahoe.
I began visiting there with the family in the 1960s. Being a devotee of the lake oceanographer and naturalist Jacques Yves Cousteau, I made my first scuba dive of the lake as a teenager in 1972. I have hiked, camped, fished, snow skied, and scuba & skin dived Tahoe many times over the course of my life.
At one point I even owned a home about a half an hour drive from Tahoe.
For over forty years, Lake Tahoe has been a very special place to me.
In that time, I have witnessed more than a little government chicanery with regard to the area. And I've come to the conclusion that it has NEVER been about "keeping Tahoe blue." More precisely, it has been about raising campaign cash for politicians. And keeping the (perceived) riff-raff OUT.
And, based upon your report, it seems little has changed.
Take away the last step to turn us Communism -- taking away PRIVATE PROPERTY RIGHTS! That Lake is in a Buffer or Wildness zone and that's why we cant enjoy the lake anymore!!
Excellent Edition Jason. We need more material exposing the Narcissistic extremism percolating through the halls of Wash D.C, State Capitols and elsewhere throughout the nation. May God have mercy on us the tormented. I believe we deserve that much just for tolerating all these predators.
Just wondering after reading this, could there be some silver leaching into Lake Tahoe killing bacteria and keeping the water clear?
RE: When lake Tahoe waters are mixed up from the depths, from wind & waves, the water clarity increases.
There must be a lots of silver down there. Thousands of people use silver water to fight colds, flu or what ever. I use it for myself and my dog, it keeps his eyes clear. That maybe the silver in the water that's keeping lake Tahoe blue.
For the exact same reason the oceans are blue. It's the reflection of the atmosphere.
Oh, and by the way, the higher you go up in elevation the deeper (darker) the color of blue the sky is. Go way out and the sky is black. Start coming down towards Earth and it gets lighter in color. Go to Death Valley or the Dead Sea and it's a really light color of blue.. And what's the elevation of Lake Tahoe?
(Ed: about 6000 ft.)
Yah. I thought so.
(These crackpots must be stopped in our lifetime!)
Jason replied: You are the third person to suggest that it's silver. I wonder though, I don't think the concentrations are that high, and it could be many other metals with similar antibacterial effects.
B replied: Medical treatments have proven successful at 30 ppm.
btw---I started reading your material in 2003. I have been buying silver using a systematic monthly approach since 1999. I never sold an ounce of physical! I expect that my couple thousand ounces will buy my dream house in St. Lucia by 2015. God Bless you and your family and keep with the Lord's Work---it is inspirational to a great many of us!
Lol---that was a great way to start my Thursday! Thank you! Please also look into why the moon is sometimes a different shape. I believe it may have to do with pig farming in Brazil and the gasses created when pigs eat.
Have an awesome Day - k
Anyway, thanks and best wishes.
There is a very blue lake in Oregon called Crater Lake but, so far there has been no movement here to keep Crater Lake blue. Perhaps because it is a national park and that agency is expected to do the job despite the fact that it probably does not know what keeps the lake the blue and likely has no control over that natural condition.
I do note, however, that there is such a group in California regarding the blueness of Lake Tahoe: http://www.keeptahoeblue.org/facts/fun.php
I can understand your frustration with radical environmentalists, who are often very small in scientific training but very large in their concern and zeal for the things that they do not understand. I refer to this as the "concerned ignorance is not enough" effect.
As a retired scientist with 33 years of experience, I am well aware of the poor quality of the science behind many of the environmental movements today. Back in the 1970s, some of these same people and organizations were ranting about "global cooling". Then it was
Understanding patterns is one of the primary methods by which we can all understand what is happening on Earth. Anything that happens is likely to repeat, since any conditions that allow one event to occur will also allow it to recur. We see this over and over again. Every-thing from spring rains to summer drought to fall winds and winter snows is a repeating pattern.
About every 100,000 years, the Earth undergoes an ice age. This is a time when the Earth cools precipitously and vast areas become covered with ice and snow. Being a very bright white, these areas then reflect sunlight which cools the Earth further and perpetuates the
As to the lakes being blue... the primary reason for lakes being blue is that they are very pure cold water that does not support much in the way of microbial growth. These high mountain lakes do not have an algae bloom, as do lakes that are warmer and at lower elevations.
Run-off from human sewage can add the necessary nutrients to a lake that promotes microbial growth and perhaps even an algae bloom. When this happens, the water becomes cloudy and not as clear as it was before the bloom. A severe algae bloom can even discolor the
Development around such high mountain lakes should be done carefully with great attention paid to septic tanks and other sources of water pollution. It is possible to drain the wastes that leach from these septic tanks to a central treatment facility for additional purification and release into a stream or river that does not feed into the lake but this is considerably more expensive than is just letting them run into the soil that surrounds the lake and eventually into the lake itself.
I submit that if the money heretofore spent on "keeping Lake Tahoe Blue" had been spent on an adequate sewage collection and treatment facility, this would not be an issue today.
With best regards,
Jason replies: Thank you. I agree sewage is the main issue. I vacationed in Zihuatanejo, Mexico http://en.wikipedia.org/wiki/Zihuatanejo
I was a bit disgusted by the visible open canal sewage that ran into the bay. Perhaps it was only partly treated, but it really stank. Gross. Some environmental concerns are certainly justified, and I'm glad that there is nothing like that in Tahoe, so that I'm aware.
This is probably the stupidest article you ever wrote; you really do not know what you are talking about. Furthermore, I thought that you had a much better grasp on what the real problem with our economy is; that it is a dishonest charade of the central banksters who have replaced our stolen wealth with fiat currencies and debt. Clear-cut logging, mining, and real estate development is definitely not the cure!
I read your "Keep Tahoe Blue Fraud" expose.
It's amazing how you can wrap your mind around an entirely new topic, and expose so many frauds there.
I'm more impressed by the quality of responses from your readers, who are already supporting your hypothesis that the local sediment is probably at least partly responsible for killing off the algae and keeping the waters clear.
If true, this also calls attention to the likelihood that the government's response, which is to reduce sediment run-off, would likely be the wrong approach to keeping the waters clear.
The worst part of this "Keep Tahoe Blue" fraud, is that you can't really "opt out" of it, since this fraudulent religion is supported by mandatory taxes. And even if we didn't pay taxes, this kind of insane spending is supported by money printing which hurts the dollar's value, which is destroying the wealth of the majority of the nation who is not smart enough to buy silver to protect themselves.
I hope your readers understand that while you do have a self-interest now to sell them silver ever since you have been a precious metals dealer for the past 3 years at jhmint.com, that you have really been an advocate of silver and gold for over 10 years. And I also hope that your readers will understand that they will benefit from owning silver far more than you will benefit by selling it to them. As you may make (after costs) about 1% on a transaction, but they will likely make hundreds of percentage multiples in gains over the next few years.
Also, I hope your readers understand that when people act in their own self interest, in truthfulness and not in greed, in accordance with free market principles, and that when people engage in such mutually beneficial transactions, everyone will benefit the most!