Jason Hommel: silver going to US$500/oz

Here's an excerpt from Jason Hommel's newsletter, where he argues on why the metal is eventually going to hit US$500/oz...

"Recently, I've been hammering the point that there are two major reasons why silver is headed to $500/oz.

First, silver hit $50/oz. in 1980, and money creation has increased 10 times since then, so the true inflation adjusted price of silver will be $500.

Second, when 1% of money in US banks buys silver, it will be 1% of about $18 trillion, which is $180 billion. If you divide that by 700 million, you'd get $257/oz., which would leave no silver for industry or the rest of the world, which implies a silver price of at least about $500.

So, here then is the problem.

How will they prevent silver from going to $500/oz.? They can't. They can only slow down the rise, or let it rise fast. (while increasing volatility, and creating temporary price dips) And how will they prevent the implications of such a massive rise to $500?

See, the problem is twofold.

If they let silver run fast to $500, say over 6 months, the dollar will be perceived as collapsing, and could continue to collapse to zero.

But if they let silver continue to go up "slowly" at only 30% per year, for the next ten years to take us to $500, this would create a worse problem. See, after nearly 20 years of precious metals only going up, people will begin to notice -- more than notice. They will begin to say, "precious metals only go up, they never go down". And that's how price bubbles begin to form, making silver go from fair value to over valued.

And if silver were to become over valued, that would drive the price from $500 to $5000, and could continue and ultimately collapse the dollar to zero value.

So that is quite the problem for the people who are trying to prevent the silver price from rising.

The silver storm is coming. Prepare.

People ask some interesting questions when I point out that silver is headed to $500. They ask, "Gee, who will buy it when it's that expensive?" Did they not comprehend the argument? Only 1% of people will be buying silver when silver is $500/oz., (a hundred times more than today, when only 1% of 1% of people are buying silver) but yet, 99% of people won't have bought any silver in the recent year, at $500/oz.

Some analysts today say that silver is going to go down, because "everybody loves silver". Such analysts don't know anything about the fundamentals, which trump any kind of other analysis! Silver might hit the news due to new highs, but the facts are clear. Only about 1% of 1% of money is buying silver each year. That's one dollar out of 10,000!

Silver's not a popular investment. Not yet. But it will be. IT WILL BE! Prepare for it. Get it now. Anywhere below $50 to $100/oz is cheap..."

For more from Jason Hommel on silver you can visit his web site "Silver Stock report" and subscribe to the newsletter.

Jason Hommel: The World Needs a Free Market in Silver

The World Needs a Free Market in Silver

(Functioning Markets Solve the Problem and Free Markets Work Best)

Silver Stock Report by Jason Hommel,
September 7th, 2008

This may be the most important article that I will ever write in my lifetime, and it may be the most important you will ever read. I don't know if things will ever be as crucial on the world stage as they are today. The world has a choice to head towards increased freedom and prosperity, or towards shortages and misery.

Typically, stories of inflation and hyperinflation are accompanied by stories of food shortages, misery and pain. During some hyperinflations, people are reported to be so desperate to save their currency that they will buy bed pans or piles of horse manure to preserve the value of their wealth. Thank God we can still buy silver, instead!

The price of Rat Meat in Cambodia has increased 400% as investors flee from inflation!

http://news.yahoo.com/s/nm/20080827/od_uk_nm/oukoe_uk_cambodia_rats

Today, there is a world emergency, a world crisis that is being ignored, because silver is a neglected and forgotten metal and industry, and more eyes are on the banking crisis and on the election than on silver.

The silver markets are failing and breaking down. The COMEX fraud of allowing the sale of excessive and unbacked paper futures contracts is destroying the silver market. Too many silver dealers, refiners, and coin shops have relied on the COMEX price to set their own prices, although nothing was for sale and no silver came to market when those prices were set, and so they mostly all ran out of inventory.

If we do not solve the problem of the broken COMEX market, the world will continue to be plagued with shortages that will extend much further than the silver market, and into all other markets. We could end up with desperate food shortages, as investors who cannot find silver may end up purchasing food to protect their money, instead of silver, and if that happens, starvation on a world-wide scale could result. In fact, it has already begun with rising food prices worldwide as investors pour into grains as a result of inflation driving speculators into all commodities.

Price increases push US soy beyond reach of poor:
http://money.aol.com/news/articles/_a/bbdp/price-increases-push-us-soy-beyond-reach/163191

That is the danger of allowing COMEX fraud to continue unopposed. The best way to oppose COMEX fraud and end it, is not through letter writing campaigns to the CFTC, and not through police crackdowns from the SEC, nor from new regulation by Congress.

We don't need to use force to stop evil. We can overcome evil with good. Where the spirit of the Lord is, there is Liberty! We just need to understand, embrace, and create freedom.

And so, rather, the best way to oppose COMEX fraud and end it is to create an alternative free marketplace or free markets where silver can always be more and more freely bought and sold.

An alternative free market will end the fraud faster than you can imagine, much faster than any CFTC investigation, through the profit incentive to buy from one market to sell into another.

Have no fear. The profit incentive, and the ease of the use of the internet, will create the incentives to create that alternative market where our silver will be fairly valued, and freely traded.

Traders rightfully point out that if the COMEX price is fraudulently too low, then people would buy bars at COMEX, and sell into the free market, and make a killing.

After all, you can make much, much more on a 20% mark-up by quickly flipping silver and selling to investors than you can with a 100% mark up selling jewelry, because the jewelry market has slower turnover of product.

Example: If you can make 20% per transaction, and make 12 such transactions per year, only once a month, you can make 792% in a year!

See
http://www.smartmoney.com/compoundcalc/
for the math.

I might not be willing to risk my money to stand for delivery of a COMEX contract, but others will, if there is another market for them to easily sell into.

You could make even more money, 1200% per year, making a 5% profit spread if you bought in one liquid market and sold into another liquid high volume market once a week. Liquidity is key. Liquidity is crucial to the speed of trading, which aids turnover. Silver, by its nature, should always be extremely liquid.

At COMEX, liquidity in silver is thwarted by having a "delivery month" of an unreliable time frame, and not every month is a major delivery month. The Post Office, as dreaded as it is, is far more reliable than COMEX. COMEX also does not ship out silver, but makes you go there to get it.

Given that silver coins are selling at a $3-4 per ounce premium over the spot price, which is about a 30% premium or profit, then makers of silver coins and bars should be able to make huge profits, if they can find silver bars at COMEX prices to turn into coins!

This is how we know 1000 oz. silver bars are in short supply! Perhaps the recent shortage is at least partly a result of this month, September, being a delivery month.

But there's a bigger problem. A free market in silver with high volumes and low spreads does not exist. So, you can't go and buy silver from COMEX, to sell into a non-existent market.

Today, maybe neither market exists!

There are alternatives to COMEX, but none of them has the capacity to pick up the slack and carry the huge volumes of trade, and allow a trusted and reliable form of price discovery to take place.

For example, Fresnillo, the silver refinery in Mexico that refines about 90% of the silver in Mexico, which produces about 80 million ounces of silver per year, ships out 600,000 ounces of silver at a time, in 1000 oz. bars, 30,000 oz. per pallet at a time.

The world needs a market that can handle and service the needs of refiners such as Fresnillo, so they will ship to the free market or at free market prices; instead of to COMEX or to other places at COMEX prices.

Yes, there are the coin shops and online bullion dealers. But investors typically do not want 1000 oz. bars because they are ugly, not standard size, and too heavy at around 70 pounds. APMEX recently had more than 20 for sale for a few days, and they sold out, but that's not a very large volume, and they didn't sell at a much of a premium, only about 35 cents over spot.

Ebay is good because they only allow people to sell what they have, and there is a rating system in place to allow feedback on sellers reputations, and ebay allows competitive bidding to allow an odd form of price discovery to take place.

But ebay is not useful because we often do not see the final auction price at the last minute. And ebay is bad because fees are excessive with fees ranging from 10-15%! That's not a "free market", it's a rather costly market! Also, it is difficult to buy in volume, because there is limited product available. And fraud levels are still too high, and there are additional penalties on sellers. Another drawback to ebay is that there is no aggregation ability to place large orders over multiple auctions of standardized fungible products that are similar enough to be interchangeable. Nor can you use ebay to sell into anyone's standing bid for a standardized form of product. So ebay is mostly a one way market, not a two way market, like an exchange should be.

There is bulliondirect.com. But it, too, suffers from low volume, lack of product availability, product delivery delays, and difficulty of use.

There is craigslist.com. The advantage is that you can connect with people in your local area anonymously for cash to silver transactions, but there is no volume at all.

Goldmoney.com is another site where you can trade. But there is a restrictive trading limit of 1500 ounces of silver per day.
http://support.goldmoney.com/article.php?id=098

And there are other futures markets and exchanges in Tocom, Dubai, Shanghi, and elsewhere, but their volumes are much lower than at the COMEX, and like the COMEX, futures contracts can be created and sold to excess.

In any reasonable money exchange marketplace, gold should also be able to be traded for silver, and silver for gold, without having to move into fiat currencies. So, although my personal focus is on silver, I'm really talking about a new kind of silver and gold market exchange.

The world desperately needs a better silver market, in multiple locations around the world that cannot be shut down by desperate and dying governments that rely on paper money fraud, if the world is to survive the implosion and end of fraudulent futures contract trading.

I strongly believe that the most important features of a free market are to end fraudulent transactions of promises to deliver silver in the future that may not exist.

The fraud must end. That is the most important.

But also, perhaps next most important is to encourage high volumes by providing the best market structure at the lowest possible cost?

Readers, the world needs your help!

There are people who know how to make things happen, who can design specs, set up markets, hire programmers, set up verification systems, set up storage locations, and handle the logistics much better than I can. I'm merely a thinker, a theorist, and a writer. And I have a family, and I'm located in a small town, far away. I'm a horrible manager, and I don't like working with people as I have little patience for those who cannot understand right away, even though it sometimes takes me years to "get it". Anyone who has ever emailed me probably knows I'm "short tempered" that way.

Please give me feedback and share your thoughts, and I'll collect your emails and share your suggestions to inspire those people who are more people oriented and action oriented who can make this happen. What other features are important in the design of the most optimal and most free, free market for silver?

Topics for thought:

Ease of use? - OR - Verification of users?
Elimination of fraud? - OR - A Reliable and successful transaction history?
Standardization of bars? - OR - Verification of bars?
Bid/Ask trading at all hours? - OR - Once per day auction price setting?
Reduced speculation & Reduced leverage? - OR - Fully paid for trading?
Ability to handle small transaction sizes - OR - ability to handle large volumes through high minimum transaction sizes?
There is also the issue of cross border shipping logistics.

I'm doing my best to end world poverty by educating investors.

There may be limited silver, but there is unlimited wealth in silver. It just needs to be unlocked by a higher price that can be discovered by a functioning and honest free market in silver.


Sincerely,

Jason Hommel
www.find-your-local-coin-shop.com
www.silverstockreport.com
www.miningpedia.com
www.bibleprophesy.org

Jason Hommel: Where's the Abundance of Perth Mint Rounds?

Where's the Abundance of Perth Mint Rounds?

(No wonder you can't find any!)

Silver Stock Report
by Jason Hommel, September 6, 2008

If the Perth Mint has $880 million worth of silver and gold in inventory from their certificate program, to use as working inventory to make coins, then why aren't they producing many Australian coins that should be flooding the marketplace and available everywhere at close to spot prices?

Let me explain why I hammer Perth so mercilessly. The Perth Mint has issued silver certificates. Investors trust them. Perth has issued those silver certificates for a reason, a reason that silver investors should love.

As they are a mint, they need an "operating pool" of physical metal to use as inventory for operations, to be able to make silver coins to sell to the public in the form of one ounce rounds. This is a fantastic reason, and I would support that 100%, especially if they buy more silver as needed, buying one ounce for every ounce sold. In theory, that would mean that there could never be a silver shortage at the Perth Mint. There is especially no reason for a silver shortage to exist at Perth, given that Australia exports over 400 tonnes of silver each year! The Perth Mint could never run out of silver to sell if that program was run honestly, in stark contrast to the U.S. mint, which is suffering a shortage of blanks.

In fact, the current world-wide shortage of investment silver, such as one ounce coins, means that the world desperately needs a functional mint with plenty of silver for operations.

But Perth does not produce one ounce rounds for the public in bulk form at just above spot prices, as other mints do. Why not? Why can't they?

For example, the Canadian Mint produces silver Maples 3-5 million per year, and the U.S. Mint produces silver Eagles, about 10-20 million per year, and Austria is now producing silver Philharmonics, and France, I hear, may also start producing silver again, too.

http://www.monnaiedeparis.fr/actualite/eurosOrArgent.htm

And all of these are available at between $2-3 per ounce over the spot price, and sometimes now at over $4/oz., due to the shortages of silver.

In stark contrast, Perth produces much less, and they sell their 1 ounce coins at an average price of $61 per ounce!

ttp://www.perthmint.com.au/catalogue/discover-australia-landmarks-silver-coins.aspx

That's $48 over the spot price for Perth 1 oz. rounds! Isn't that a 369% premium over the spot price?!

What's the problem here? Shouldn't they be able to produce silver coins like the U.S., Canada, and Austria? Perhaps Perth doesn't have enough silver in their "working inventory" to produce more?

But they have issued $880 million worth of gold and silver certificates to the public, and therefore, should have plenty of working inventory. In fact, it is so much working inventory, that it amounts to an entire year's worth of investment demand for silver.

Net investment demand for silver is estimated at 60 million oz. by the CPM group, which, at $13/oz. is only $780 million!

Perth has is so much working inventory, that even if the Perth Mint had to wait for a 1 year hold time for delivery to replace their inventory, they would still be able to supply nearly 100% of the silver that the investment world needs, and they could supply it with no delays to the public whatsoever!

It is so much working inventory, that if the Perth Mint had to wait 1 month for supplies of all new silver, they could provide 12 times the world's annual silver demand, and all silver investors everywhere would be buying nothing but Perth Mint Australian one ounce coins, and no other forms of silver whatsoever.

If only 1/10th of the $880 million of gold and silver certificates is in silver (and they don't reveal what percentage it is), then that would be $88 million. Divide by $13 = 6.8 million ounces of silver. If that much were minted monthly, that would come out to 81 million one ounce rounds, which would be 4 times as many coins minted by the U.S. Mint.

Therefore, one would think that if the Perth Mint was honorable, that the Perth Mint should be producing far more silver ounces than the U.S. Mint each year, at a lower cost, and that we would see those in abundance in the marketplace.

But Perth does not issue coins like that. You cannot buy Australian bullion coins in bulk at APMEX, Tulving or any other major wholesaler. Why is that? I think the answer is obvious.

Where is the abundance of Perth Mint rounds? There is no abundance. They are scarce.

It appears to me that Perth's silver in their certificate program, "used for operations" was used to cover unprofitable operations, for years, and that in actual fact, they have no working inventory, or they have less than 1% of the $880 million worth of inventory, barely enough to meet some redemptions and orders on occasion.

Over 50 people have continually complained to me of shortages of silver from the Perth Mint, in my prior emails exposing them. Why are these people complaining to me? Do I have the words "Perth Mint Customer Service Rep" tattooed on my forehead, or in my disclaimer? No.

Sell or redeem your Perth Mint certificates, quickly

Nadler, Kitco, Perth, Matthey; Sold Out! September 3, 2008

Perth Mint Crisis Watch 5 June 6, 2008

Perth Mint Crisis Watch May 23, 2008

Perth Mint Crisis: Solutions and Ramifications May 23, 2008

To the largest newspapers in Australia May 22, 2008

To the government of Western Australia May 21, 2008

Poor Prospects for Kitco/Perth/Matthey May 19, 2008

Kitco / Perth Mint / AGR Matthey / Bullion Bank Connections May 17, 2008

Will Kitco Sue me?! May 16, 2008

Silver Shortage Drives Men Nuts March 31, 2008

Perth Mint and Kitco Scheme Exposed March 26, 2008

See what others are saying about the Nadler/Kitco/Perth/Matthey issues, here:

https://www.kitcomm.com/showpost.php?p=343129&postcount=33

https://www.kitcomm.com/showthread.php?t=22303&page=4

http://goldchat.blogspot.com/2008/09/reply-to-reply.html

http://www.ausbullion.com.au/

Sincerely,

Jason Hommel

www.find-your-local-coin-shop.com

www.silverstockreport.com

www.miningpedia.com

www.bibleprophesy.org

My offer:

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http://silverstockreport.com/customerservice.htm

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Jason Hommel: Silver has Run Out, Now!

Silver has Run Out, Now!

(Just try to find some!)

Silver Stock Report

by Jason Hommel, August 20th, 2008

For a long time, people have been asking me, "When will silver run out?". They know that the world uses up more silver each year (about 850 million ounces) than the world mines (about 600 million ounces), and that existing demand can only be met by selling existing inventory (such as recycling 200 million ounces, or goverments selling 50 million ounces), so it's a natural question to ask. The question is not implying that mankind will be unable to mine any more. Rumor is that there remains at least about 14-16 years of silver in the ground at "current" prices; while at much higher prices, silver mining becomes more economic, and more deposits can be added to that "in ground" reserve number.

So, the question is really just asking, "When will we run out of "excess" above ground silver that can meet the supply/demand gap, so that the price will begin to really take off upwards?" Clearly, the world has silver in supplies above ground, and such silver supplies are dwindling in order to meet the supply/demand gap. About two years ago, the world started adding to above ground silver supplies as silver investors started buying, (and the silver surveys label investor buying as a "surplus". However, silver recycling was still greater than new stockpiling, which continued to deplete overall silver supplies.

Such a question as "When will silver run out?" cannot really be answered in advance, since nobody really knows how much silver there is, and who owns it, and at what price they are willing to sell it. Again, that brings us back to the nature of silver; it's inherantly private wealth, held anonymously. Estimates on "above ground" silver, in refined, deliverable form have ranged from 300 million ounces to 1 billion ounces, to about a high of 4 billion ounces if you include jewelry and flatware, up to 20 billion ounces if you include all forms of silver that have not ended up in landfills, out of the total of 43 billion ounces of silver estimated to have been mined in all of human history. Furthermore, nobody is arguing that the last bit of silver that exists needs to be consumed before the price rises substantially. The question is really about when will all the unwanted silver, in so-called "weak" hands of holders who don't really want it, be sold, to allow the price to rise to meet the majority of the expectations of the remaining wise investors who have planned in advance to actually store up some of the rare stuff.

But finally, I think the answer has arrived. The answer is "NOW!" Silver has run out, now! Or, in other words, most of the cheap silver has run out.


There are two excellent articles on the shortage of Silver that I'd like to bring to your attention if you have not already seen them:

This one is by "seekingalpha", and is very excellent, and very comprehensive.

The Disconnect Between Supply and Demand in Gold & Silver Markets
(August 18th)
http://seekingalpha.com/article/91357-the-disconnect-between-supply-and-demand-in-gold-silver-markets

The article goes over how the silver shortage is also affecting India.
He also covers the paper silver fraud that is commonplace and "standard business practice" in Wall Street brokerage houses.

This next article is short and powerful, and written by a coin dealer:

The Disconnect Between The Physical Gold and 'Paper Contract' Markets
(August 19th)
http://www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=5093



What's amazing is that last year, net physical silver investment demand was estimated to be about 30-60 million ounces, or about $1 billion worth.

Today, with 90% of the people in the U.S. being concerned about inflation, and a growing awareness of the danger of banks going bankrupt, there ought to be about 90% of the $14,000 billion of money in the banks that should be seeking to buy either some silver, or gold.

So, where do you think silver prices are headed? How can most of $14,000 billion enter a market of $1 billion that is already suffering a shortage, and prices not go up, a lot?

And oh yes, what about that current low price?

There's a short story that goes something like this. A lady wants to buy sausage. There are two butcher shops next to each other, one advertises $1.99/lb., the other advertises $2.99/lb. She goes to the $1.99/lb. shop first. But there's no sausage, they are out. So, she goes across the street, and sees sausage for $2.99/lb., and promptely complains about the price. "Why don't you sell it for $1.99/lb like the other guy?" Butcher answers, "Lady, when I'm out, mine is $1.99/lb, too!"

Price means nothing if you can't get the product. Many people are still sending money to dealers who will take your money, but have no silver, and no idea when they can get it.

Be very, very careful about ordering silver right now. Demand to know exactly when they can deliver. If they can't guarantee delivery within a week or your full money back, then consider that they probably don't have it!

Here's what I suggest. FIND YOUR LOCAL COIN SHOP and go there, in person. Or visit the dealers who are recommended at:
www.find-your-local-coin-shop.com


In fact, now might be a good time to meet up other Silver Stock Report readers.

I suggest that everyone visit their favorite local coin shop on September 1, at 1PM. That's a Monday.



Sincerely,

Jason Hommel

Jason Hommel: Silver shortage causes price disconnect

In commentary posted this afternoon Silver Stock Report's Jason Hommel elaborates on the shortage of silver. He writes:

"If you have to wait 30, 60, or 90 days for silver from any seller, it means they are selling what they do not have, and hope to get it from someone else who does not have it today either. That means they are short -- they owe you silver they do not have. And if there is a 'regular' 60-day delay, where they have you pay for it all up front, instead of making a tiny 5-percent deposit as down payment, then they are 'floating' on your money, like you gave them an operating loan."

Hommel's commentary is headlined "Silver Shortage Causes Price Disconnect" and you can find it HERE

Jason Hommel: What the Silver Shortages Mean

Silver Stock Report's Jason Hommel has no doubts or second thoughts regarding the real causes behind the latest silver (and gold, mind you) shortages:

"Silver prices are dropping like a rock, down to $12.50/oz., and yet, none of my trusted, major, regular dealers have any silver to sell...
..So, why are prices crashing when no silver is available?
Manipulation. Lies. Paper games. I've covered this many times before in the last few years..."

Please click HERE to read J. Hommel's missive.

Silver FAQs galore!

• What's so special about silver, anyway?
• Why will silver go up in price?
• Where can I buy silver?
• What is a good price for silver, how much should I pay?
• What kind of silver should I buy?
• How much money do I need to buy silver?
• How do you know that the silver you buy is real?
• What about confiscation?....
  

You can find the answers to these and many more frequently asked questions (one of the most complete lists on the web!) about Silver investing at Jason Hommell's Silver Stock Report by clicking HERE

Jason Hommel: To the government of Western Australia

Jason Hommel's open letter to the Authorities of Western Australia is appended here:

Silver Stock Report
by Jason Hommel, May 21, 2008

To:

wa-government@dpc.wa.gov.au Complaints; Premier Alan Carpenter
eric-ripper@dpc.wa.gov.au Treasurer Eric S Ripper
consumer@docep.wa.gov.au Department of Consumer and Employment Protection
pubaff@justice.wa.gov.au Department of the Attorney General
Customer.Service@dtf.wa.gov.au Department of Treasury and Finance
enquiry@era.wa.gov.au Economic Regulation Authority
enquiries@govhouse.wa.gov.au Governor's Establishment
info@audit.wa.gov.au Office of the Auditor General
mail@ombudsman.wa.gov.au Ombudsman
watc@watc.wa.gov.au Western Australian Treasury Corporation
info@perthmint.com.au Gold Corporation / Perth Mint


To various agencies of the government of Western Australia,

You may have a growing precious metals liability of over $880 million Australian dollars at the Perth Mint, which is backed by you, the government of Western Australia.

I have received about 30-50 complaints about the Perth Mint over the last few months from investors who have tried to purchase silver bullion coins, kilo bars, and 100 ounce bars and 1000 ounce bars who have had their orders refused, or delayed.

I have received these complaints because I have an email list of about 80,000 investors who are interested in the merits of buying silver or silver stocks; and I have refered many investors in Asia to the Perth Mint over the years.

The Perth Mint has a certificate program, and they hold up to $880 million Australian dollars worth of these certificates as a precious metals liability which is used for an operating pool of metal.

I don't understand how a Mint can have that much metal at their disposal to be used as an operating pool, yet can run out of metal for walk-in customers, and also have difficulty in redeeming metal for existing customers. It seems to me that the entire purpose of having an operating pool would be to satisfy such orders, yet they are reportedly having difficulty doing so.

I'm further concerned for the government of Western Australia, because my readers have sent to me two copies of two different emails from Nigel Moffett, the Treasurer and manager of the Perth Mint, who has said that investors in the certificates do not need to worry about the solvency of the Perth Mint, but rather the solvency of the government of Western Australia, which has a surplus of $2 billion/year. This seems to be a particularly alarming statement of over-reliance on a government bailout, and I suggest to you that if there is a problem, the sooner you discover it and deal with it, the cheaper it will be to fix it and to bail them out, especially in a market of rising precious metals prices.

Many of us experts in precious metals expect the prices of silver and gold to double perhaps within a year, and if so, the Perth Mint's liability will double, too, which can be particularly alarming if they do not have the metal, but have consumed it in wasteful operations expenses.

I would suggest that you pay particularly close attention to the following statements by the Perth Mint and AGR Matthey:

"The $880 million of precious metals deposited by Perth Mint Depository clients (note 17) was used in operations by Gold Corporation as inventory ($381 million - Note 8b) with the balance in the refining operations of AGR Matthey (Note 8a).
http://www.perthmint.com.au//documents/Annual%20Report%202007.pdf
p. 81, bottom

"Treasury undertakes a leasing program to either lend or borrow precious metal within the terms of a lease agreement between AGR Matthey and approved counter parties."
http://www.agrmatthey.com.au/wps/wcm/connect/AGRInternet/agr/treasury/services/

As you investigate, I would warn you to not be swayed by slick excuses. Do not be swayed by statements that their precious metals liability is balanced by other liabilities of other entities who also may not have the silver or gold. Ask to see the precious metal that they are supposed to have in their vaults to be used in operations, and don't be deceived, as it can be very costly.

The size of the precious metals liability is particularly alarming to me, in light of the fact that total silver investment demand world wide for 2007 was estimated at 75 million ounces, or about $1.1 billion dollars by the CPM group.

Nobody has reported to me any problem in obtaining any gold, only silver.

But the real reason I'm writing is this:

Please let me know which government agency I should send any information to, and also, let me know so I can direct my readers to complain to the proper agency.

Sincerely,

Jason Hommel

www.silverstockreport.com

Jason Hommel: Will Kitco Sue Me?!

Jason Hommel is determined to put a stop to Precious Metals market manipulation whatever the source and wherever it rears its ugly head.
Now it seems he could be sued by Internet P.M. seller/dealer Kitco because the "...libelous public allegations you published on the Internet on March 26, 2008 and April 1, 2008 have compromised these efforts and have resulted in financial damages. It is my intention to hold you responsible for the damages and loss to our reputation that these false and injurious statements and accusations have resulted in." as Kitco's President Bart D. Kitner puts it in his ultimatum email to Hommel.

This is turning out into a very fascinating dispute and you may read about it HERE.

Jason Hommel: A Further Warning to the CFTC!

Silver Stock Report editor Jason Hommel has written an open letter to the acting chairman of the U.S. Commodities Futures Trading Commission in reply to the CFTC's latest report denying that the silver market is manipulated. Hommel's reply refutes two central assertions of the CFTC report and mentions GATA's work.

Hommel also notes that the acting chairman of the CFTC is a member of the President's Working Group on Financial Markets. You may recall that this agency meets only in private and keeps no minutes available to the public. Until such agencies conduct their business accountably in public, their denials of impropriety have little credibility; indeed, they are laughable...

A Further Warning to the CFTC!

(I'm so glad I'm not one of the guys in charge of keeping fraud alive today!)

Silver Stock Report

by Jason Hommel, May 16th, 2008

To CFTC Acting Chairman Walt Lukken,

I commend you for your essay/speech of November 27, 2007, titled, "The Keys to Smart Regulation".

In that speech, you argue persuasively about your need to be forward-looking, and to take future risks into account, as you quote Wayne Gretzky who said, "A good hocky player plays where the puck is. A great hockey player plays where the puck is going to be."

Thus, instead of reacting to a crisis, you ought to be able to anticipate industry trends, and prevent any crisis from taking place.

The job of the CFTC is to prevent market manipulation and above all, market default, since a default is usually the end result of a manipulation, since manipulations tend to fail.

A default is to be avoided at all costs, since a default will call into question the integrity of the exchange and perhaps all U.S. financial markets, and could halt trade, which could lead to disastrous consequences for civilization itself that is so dependant upon trade to survive.

Further, you argue that in our increasingly globally competitive world with many futures markets springing up in diverse places, and many market participants originating in locations that may be outside the jurisdiction of the United States, you have particularly difficult challenges in today's interconnected world.

I understand that you want the U.S. futures markets to remain competitive, yet free from manipulative influences from international global financial terrorists.

These can be conflicting goals, since if you raise margin requirements to reduce the risk of default, our markets might not be the most competitive in terms of leverage gained for a given trading amount, and traders may go elsewhere into less regulated markets.

In the silver market, I understand this is particularly troublesome, since I know of many unregulated dealers who offer leverage programs on terms much worse than in the major futures markets, firms such as Monex, and Goldline.

Beyond protecting the futures markets from default, your job is to keep traders honest, and to keep the markets fair.

Further increasing the risk of default, the recent 2002 public offerings of CME stock which has acquired the recent and new NYMEX public offering, creates an additional challenge, since a layer of protection against market default has been removed given that stock holders are granted the benefit of limited liability. In the past, since the exchanges were privately held, the exchanges themselves were ultimately liable, the last ones liable, in the event that a brokerage house could not make good on a trader's trade, and now this protection seems to have been removed.

Since the futures exchanges went public, starting with the CME in late 2002, and later the NYMEX in late 2006, you must have felt that the CFTC was more exposed than ever, and at a higher risk of failing your duty to prevent a market default. But perhaps you were not so worried as CME stock has continued to rise to a market cap of $33 billion, as you noted in your essay. However, I believe the large market cap only provides an illusion of safety, and not real security.

I note that the mighty Bear Stearns went belly up in one day.

So, in sum, I would say that your uniquely difficult challenge is to keep the overall market honest, by keeping market participants honest. And that would include preventing market players from taking on positions and obligations that they cannot keep, and I would imagine that to be a very, very, difficult task.

One would think your job to be the equivalent of making sure that all home mortgage borrowers always pays their mortgage, or that all credit card borrowers always makes their payments; a truly impossible task.

I would think that your challenges become exponentially complex when you discover that a division of the CFTC under you, is found to be lying.

Recently, the Division of Market Oversight lied multiple times in their recent "Report on Large Short Trader Activity in the Silver Futures Market":

It appears they wrote this report because of what I, and others, have been saying, since they note the occasion of their report here:

"Recently, silver commentators and a group of investors that rely upon them have reasserted their allegations that the silver futures market is being manipulated downward by a small group of traders on the short side of the market."

Here is their big lie. On page 3, they reference Michael Gorham's 2004 report, and write:

"In terms of plausibility, the analysis noted that there is unrestricted access to the silver cash and futures markets. If prices of silver were in fact artificially low, there would be nothing to prevent a well-capitalized trader, or even many small traders, from entering the markets to buy cash silver or futures contracts at what they believe to be bargain prices. This openness of the markets tends to render the claim that silver futures prices had been manipulated downward for more than 20 years implausible. In this regard, there is no logical explanation as to what, during those 20 years, has prevented traders from buying cash silver or silver futures and thereby driving prices up to what those making the manipulation argument would regard as a reasonable price."

In truth, there is no "unrestricted access" to the futures market because there are position limits on traders.

They also lied again on page 3, when they wrote:

"In addition to the implausibility of a long-term manipulation, advocates of the manipulation argument have also failed to explain how the alleged manipulators have profited, or will profit, from such a manipulation."

I and the Gold Anti-Trust Action Committee (GATA.ORG) and many others have repeatedly said that the manipulation to keep gold and silver prices low helps keep the value of the dollar higher. By keeping silver and gold low, the Fed is able to print up to $350 billion in one day. Yet the annual investment demand for silver remains a mere $1 billion.

If paper money collapsed, and had to spend silver or gold to prop up failing markets, the Fed would no longer have the kind of power it has today.

Since you are a member of the President's Working Group on Financial Markets, surely you know this, and I just wanted my readers to know it, too.

I also write this to show why I don't expect you to act.

The profit motive of keeping a lid on silver and gold is clear, it keeps the fraud of the dollar alive, and the dollar printing business is very, very profitable.

I could further refute the many lies in the latest CFTC report, but why should I bother refuting their fraudulent response?

Perhaps it would be more productive if you were to review the reasons why the price of silver is poised to skyrocket upwards, instead?

1. The world is no longer using silver and gold as money, and thus the primary demand could not be lower.
2. The world started consuming silver in electronics after World War II, and has continued the pace of silver consumption of about 7 tenths of an ounce of silver per year, per person, in industrialized nations ever since, consuming perhaps over 25 billion ounces of silver.
3. With the rise of inflation beyond 20% per year, many people in the financial world are turning their attention once again to buying gold and silver.
4. With $14 trillion in M3, according to private sources, and with annual silver investment demand at barely $1 billion, and with 60-90% of the U.S. population concerned about inflation and the devaluation of the dollar, we are on the edge of a tidal wave of investment demand for silver.

Given these fundamentals, how can there not be a crisis and default in the silver futures market, as there has been in the past when silver certificates were no longer redeemed for silver in 1968?

The market regulators of the past were very smart. They simply wrote a law providing for the death penalty for anyone who was caught debasing the coinage.

As I reminded the CFTC in 2003: http://www.silverstockreport.com/essays/CFTC_Response_to_Silver_Problem.html

According to the Coin Act of 1792, those who debased the currency, "or otherwise with a fraudulent intent" were to suffer the death penalty:

Penalty of Death for de-basing the coins. Section 19. And be it further enacted, That if any of the gold or silver coins which shall be struck or coined at the said mint shall be debased or made worse as to the proportion of the fine gold or fine silver therein contained, or shall be of less weight or value than the same out to be pursuant to the directions of this act, through the default or with the connivance of any of the officers or persons who shall be employed at the said mint, for the purpose of profit or gain, or otherwise with a fraudulent intent, and if any of the said officers or persons shall embezzle any of the metals which shall at any time be committed to their charge for the purpose of being coined, or any of the coins which shall be struck or coined at the said mint, every such officer or person who shall commit any or either of the said offenses, shall be deemed guilty of felony, and shall suffer death.

I don't think anyone at the U.S. Mint was ever put to death for making debased coinage in 1965, nor will they be likely suffer that for debasing the zinc penny to a steel one again.

But political winds could change to bring such a penalty back in fashion, especially if people are hurt severely by the CFTC's actions or lack of actions. I strongly suggest you do a little history research and see how the public treated officials in France after they debased the currency.

Consider that risk carefully. I'm making no threats. I believe in peaceful resolutions to all problems.

And if the pressures of doing your jobs is too overwhelming and you if you have trouble sleeping at night, perhaps you ought to resign, perhaps for "personal or health reasons" and let someone else take responsibility when the short positions blow up.

(And don't forget to buy silver with the cash if they offer you a severance package.)

May I remind you that Michael Gorham resigned 3 weeks after he penned his letter in May 14th, 2004, that the CFTC is continuing to quote today.

Perhaps he recognized his hypocrisy, that I pointed out just today, which I pointed out again above, that the only way there can be no manipulation is if the markets provide unrestricted access to all longs who could buy silver, but then again, there are many position limits in place that prevent just that.

Limits are evidence of shortages. Shortages are evidence of manipulations. Limits are thus proof of manipulation.

http://www.gold-eagle.com/editorials_08/hommel051408.html
http://news.silverseek.com/GoldIsMoney/1210798485.php

It took Michael Gorham just over a year to write that letter containing that hypocritical admission of manipulation by the existence of position limits, after I publicly rebuked the CFTC in my letters of January, 2003, before I began writing my Silver Stock Reports.

Many of my readers are wondering what they should do about the silver manipulation. All market manipulations are ultimately doomed to fail, and can only be temporary.

I offer three suggestions.

1. Buy silver, while you can, if you can find it. Buying silver is a peaceful action. Many dealers are still reporting delivery delays of over 1 month. Delivery delays are evidence of shortages. Many dealers are still short of silver, since they don't have any. Shortages are evidence of market manipulations, and price fixing of prices too low.

2. Do whatever you can to earn more money, so you can buy more silver. The manipulation of silver to below market prices is a gift. Take advantage of it while it lasts by buying the real thing. Don't be conned by the leverage offered by paper promises of silver that may not exist.

3. Tell other people about the gift of silver at below normal free market prices.

Personally, I have invested in physical silver, and mining stocks, because I do not trust the integrity of the futures markets, nor in the people who oversee them.

Walt Lukken, CFTC Acting Chairman, I expect nothing from you, and need nothing, and no response. Why? Because I have silver. Do you?

And I'm not complaining. I'm very happy with where silver has been.

Jason Hommel: Four proofs of silver manipulation

Jason Hommel of Silver Stock Report may be the first to respond to the Commodities Futures Trading Commission's report denying manipulation in the silver market. As a letter to a Dow Jones Newswires reporter, Hommel has written "Four Proofs of Silver Manipulation"...

(Silver is the Achilles heel of world finance!)

Silver Stock Report:

May 14, 2008
Mr. Hommel:

I’m looking for a silver expert to talk with about a story I’m working on.
Basically, the CFTC has been getting complaints that the silver futures market has been unfairly skewed to the downside. The commission says there’s no evidence for this, and I’m hoping you can help me with some insight into what the other side of this argument might be.
If you have a second to chat about your thoughts on this, please give me a call.
Thanks,

Matt Whittaker
Commodities reporter, metals
Dow Jones Newswires


Mr. Whittaker:

Thank you. I'm probably one of the few world experts on silver, including Ted Butler of butlerresearch.com, David Morgan of silver-investor.com, and Jeffrey Christian of CPM Group. Of all those men, I have a much larger market reach than they do, as my newsletter goes out to about 80,000 email readers now, and my readers keep me informed of many things. But the other experts are certain to know more than me in some areas. Jeff Christian is biased in favor of futures contracts, and I'm biased against.

So, the CFTC says that there is no evidence that the silver futures market has moved silver prices to the downside?

If you are willfully blind, or complicit in the manipulation, you won't see anything, or you will say that.

Here is my proof that there has been manipulation, especially recently.

1. First proof:

Over nineteen major coin shops around the world ran out of silver as the price fell from $21 to $16, as I documented here: http://silverstockreport.com/ssrarchive.htm from March 19th to April 2, and there are many reports even now that it will take a month or longer to get silver! Some of the big name shops included the Canadian Mint, the U.S. Mint, the Perth Mint, Kitco, Amark who is Johnson Matthey's number one silver distributor to the public, and Johnson Matthey is the largest silver refiner in the U.S. Other major online dealers popular with investors who ran out included Tulving, NWT Mint, CNI Numismatics, APMEX, bulliondirect.com and more.

How can the price go down, when there is no silver to buy?

2. Second proof:

On May 14, 2004, the CFTC wrote a report to deny allegations of manipulation in the futures market,

see: www.cftc.gov/files/opa/press04/opasilverletter.pdf

They continue to refer to this letter today. The author of the letter, Michael Gorham, director of the CFTC, resigned from the CFTC 3 weeks after writing the letter.

Shockingly, this letter admits the existence of fraud and manipulation in the silver futures market!

How so? They admit that no manipulation to the downside could exist as long as investors have "unrestricted access" to buy silver, but they admit that there are position limits that prevent that from taking place!

On p. 5, they write:

"Because there is unrestricted access to the market, many knowledgeable and well-capitalized traders would readily buy any silver offered at artificially low prices. The buying by these traders--buying that the alleged manipulators would have no way of preventing--would quickly cause the price to rise to its appropriate level."

However, on p. 8, they contradict that by stating:

"The Commission's guidance on speculative position limits focuses primarily on the spot month because, in our experience, physical delivery futures markets, such as silver, are most susceptible to threats of manipulation during the spot month."

In other words, they admit on page 8 that limits exist that prevent large investors from buying silver as they suggest they could do on page 5!

In other words, they are so twisted, that they believe it is a manipulation to buy physical silver!

3. Third proof:

The actual position limits are 1500 contracts per trader. However, these limits do not apply to the traders on the short side, only the long side. The positions on the short side are too large, and concentrated among too few traders. The 8 or less traders have controlled up to 83% of the market, as recently exposed by Ted Butler, in recent weeks; and this represents over 200 days of world silver production, or over about 50,000 contracts. Concentration is the ultimate evidence of manipulation, and it is ignored.

4. Fourth proof:

The very nature of silver itself is that it is not a promise, it is payment in full. All kinds of paper promises are by nature, a substitute for silver and gold, and hence a manipulation, because their very existence creates a substitute demand for something other than physical silver and gold. Thus, even paper money itself, and T-Bills, Bonds, CD's, savings accounts, are all manipulations that suppress the price of silver. Monetary demand, or investment demand for silver, is as low as it could ever be, since no nation on earth uses silver as money. This reduced demand suppresses the price of silver.

The size of the world paper money market and bond markets probably exceeds $100 trillion, which is $100,000 billion.

The size of the silver market is about 600 million ounces produced each year, and about 75 million ounces purchased by investors each year. At $20/oz., this suggests that the investment demand for silver is only $1.5 billion per year.

Thus, the size of the silver market is about 1 dollar out of 100,000.

In conclusion, I believe I, and now you, have stumbled onto the Achilles’ heel of the world's financial system. I'm somewhat skeptical that dow jones would let you expose this story to the world. I'd suspect that your story will get buried.

Sincerely,

Jason Hommel

www.silverstockreport.com
www.miningpedia.com

Jason Hommel: silver shorts must be desperate!

Silver's "poor fundamentals" refuted!

(Buy silver while it's on sale, now!)

Silver Stock Report

by Jason Hommel, April 29, 2008

The Guardian just wrote a hatchet job on silver, to try to kill the market. Somebody must be very desperate. I will refute this article point by point. My rebuttal will be in italics. If you cannot see the italics, then read this article at my website:
http://www.silverstockreport.com/2008/refutation.html


http://www.guardian.co.uk/feedarticle?id=7489377

Spotlight falls on silver's poor fundamentals

Reuters, Monday April 28 2008

By Pratima Desai

LONDON, April 28 (Reuters) - Investment money flooding into silver has overwhelmed poor fundamentals and helped it to outperform gold, but the tide could be turning for precious metals and the probability of large losses is rising.

Silver has outstanding fundamentals, and silver's downside is minimal, and, in fact, it probably just bottomed, as I will show.

Silver's price falls in percentage terms are likely to dwarf those seen in gold, which some fund managers say has stronger supply/demand fundamentals.

Again, the opposite is true, silver's supply/demand fundamentals are much better than for gold, as all the smart money knows, and as I will show.

"History shows that when you get a substantial correction in precious metals, silver falls more than gold ... It's a more volatile market and smaller in value terms," said Stephen Briggs, analyst at Societe Generale.

That's true, silver is more volatile, and in a bull market for silver, which we are in, silver will clearly outperform gold, as it has outperformed gold, as the silver to gold ratio is narrowing, from 80:1 to 50:1, and we have a long way to go to get to the historic 15:1 ratio, or we will likely exceed it, with silver moving even higher.

One big reason behind surging prices has been the tumbling dollar, making commodities priced in dollars cheaper for holders of other currencies. The weak dollar also prompts producers to raise prices to protect profit margins.

Silver producers do not have the luxury of raising prices. No commodity producer does. All commodities in the world are either sold at the spot price, or under long term contracts that have already been agreed upon, which, in this bull market, are usually at lower prices than today.

Last week the dollar fell to record lows against the Euro, to beyond $1.60, an event which has caused many to question whether further losses can be sustained and whether it has bottomed.

While the excess creation of paper money is one of the best factors for higher silver prices, the dollar's relation to the yen and Euro has almost nothing to do with it's relation to silver and gold prices. All paper money, the yen, Euro, and the dollar, are all falling against silver and gold, generally, since 2001 and that trend will continue.

"The dollar is not going to keep on depreciating forever," Briggs said. He expects gold prices to average around $900 an ounce next year from $1,025 this year and silver to average $15.50 compared with $19.20.

Well, actually, the dollar could keep on depreciating forever, as all paper currencies in all of human history have eventually done just that. It's silver and gold that cannot depreciate forever. Furthermore, these spokesmen from the large banks and brokers are always revising upwards their estimates of silver's future prices, and it's always behind where silver ends up going; I've seen this pattern for the last eight years now. Since when have the large banks or brokers called silver right? When did they advise you to ever get into this market to make several hundred percent since 2001? They never did. And now they want you to sell? They always want you to sell.

Financial uncertainty, which has underpinned precious metals since last August is to some extent becoming less important to investors seeking the higher returns stocks and bonds offer.

Stocks and bonds offering higher returns? Since when? Only if you go back 30 years, but not the last 8. The Dow/Gold ratio topped out in 2001 at about 56 and has narrowed down to about 14 now that gold has hit about $900.

With a weakened case for holding precious metals, prices have started to slip. Spot gold is now around $893 an ounce compared with a record high of $1,030.80 on March 17 and silver at $17 from a 27-year high of $21.24.

Weakened case for holding precious metals? What weakened case? They made no case. They didn't even get the facts right. The current dip in silver is probably the bottom, and now is probably the best time to buy!

Goldman Sachs recently said it expects to see gold prices at $835 an ounce in 12 months and silver at around $15.50.

Here's another investment bank revising their estimates upwards again, but making bearish calls. Hilarious. Pathetic. Bullish!

RECYCLING

From the end of last year to March 17, silver prices surged by more than 40 percent, while gold was up more than 20 percent. Silver's heftier gains were built on investor flows.

Absolutely. Investment demand for silver surged from 5% of annual mine supply to maybe about 8-10% of annual mine supply, we'll see soon.

Barclays iShares silver trust, the biggest silver exchange traded fund listed in the United States, now holds more than 5,770 tonnes of silver, a rise of about 10 percent since the end of last year.

Gold holdings by New York-listed StreetTracks Gold Shares, the world's biggest gold ETF, stand at 591 tonnes, down about 5 percent since end-December.

I agree with those stats, but look at what they mean. With gold trading at about 50 times the price of silver, and the gold ETF holding more than 1/10th of the tonnes of the silver ETF, it means that about 5 times as many investment dollars went into the gold ETF.

"Silver is probably going to fall more than gold in percentage terms," said Wolfgang Wrzesniok-Rossbach, head of sales at German metals trading group Heraeus.

"From an industrial and jewellery point of view, there has clearly been a decline in demand. There has been a lot of additional material coming to the market in the form of scrap."

This "German metals trading group Heraeus" is not said to be either long or short. They could very well have short positions, and just inventing things. They appear to be a silver user, at first glance here: http://en.wikipedia.org/wiki/Heraeus

More than 20,000 tonnes of silver were produced globally last year compared with around 2,500 tonnes of gold.

I agree with those stats. What is not said is that 160% of gold mine supply is purchased by investors each year or about 4000 tonnes of gold. In stark contrast, about .07% of silver mine supply is purchased by investors each year, about 1555 tonnes, or about 50 million ounces.

The surplus in the physical silver market is expected by some analysts to rise to around 2,500 tonnes from a surplus of around 900 tonnes in 2007. The physical gold market could see a surplus this year of 600 tonnes from 500 tonnes last year.

There is no such thing as a "surplus" of precious metal. This is an accounting term, used to designate demand by investors.

"Fundamentals come into play when prices are coming down," said John Reade, analyst at UBS. "Silver doesn't have gold's fundamentals."

Exactly. Silver does not have gold's fundamentals, silver's are much better. With industry consuming more silver than is mined each year, any slight increase in investor demand for silver will continue to drive silver's prices upwards, and make a mockery of all of wall street and all they do and all they have to offer. This is why they must band together, to write lying foolishness against silver as they do. This can only be an indication of them feeling pain in the silver market, not being able to coax out any supply from investors after having bombed the price in the last few weeks. The silver shortage is continuing with many coin shops still very low on silver supplies, as investor selling by the public, which was a large part of recycling supply, has changed since gold hit $1000/oz., and now must be putting the squeeze on all of wall street, who are probably carrying a collective short position in silver.

ONE SOURCE OF DEMAND

Silver is often a byproduct of other metals such as lead, zinc and copper, where miners are trying to ramp up production with some success.

Funny theory. True, about 70% of silver production is as a by-product of the base metals. I just read that Chile, who produces 40% of the world's copper, is ramping down copper production due to a power crisis. And several more trusted analysts in our industry have finally turned bullish on copper recently.

That means more silver on the market and together with scrap recycling, supplies are set to jump this year, while overall demand, including that from ETFs is expected to fall.

Why would they project demand from silver ETFs to fall? That would be quite a change. It's rather hard to predict such changes; it's usually more likely that things will stay the same, with ever increased demand from the silver ETFs.

"Silver is very dependent on one source of demand -- ETFs.

That's not true. Silver prices will go up even without new investor demand, due to the overwhelming fundamentals that there is so little investment demand at all.

You can't get excited about silver in the same way as gold. Silver doesn't really have the same cachet," Briggs said.

Now that's true. Silver has absolutely no cachet. As I wrote above: 160% of gold mine supply is purchased by investors each year or about 4000 tonnes of gold. In stark contrast, about .07% of silver mine supply is purchased by investors each year, about 1555 tonnes, or about 50 million ounces. So, how much money is spent on gold vs. silver each year?

Silver: 50 million oz. x $17/oz. = $850 million.

Gold: 4000 tonnes x 32,151oz/tonne = 128.6 million oz. x $900/oz. = $115,743 million, or $115 billion.

Thus, 136 times as much money is spent on gold, than silver, by investors each year. Silver has absolutely no cachet, true, so true. And yet, the fundamentals are so much better, precisely due to that lower investor demand. When investors get educated about silver, they buy hand over fist, and create shortages at major coin shops around the world.

"Demand from the photographic sector has been falling fast ... It's no longer an important source of demand." For gold, the picture is somewhat different. Mine production is expected to hold steady this year, but analysts expect output in South Africa, a major producer, to fall over coming years because the ore that remains is deep and expensive to access.

Wow. What a totally biased statement, telling half truths that are totally irrelevant to silver vs. gold. These guys must either know nothing, or be intentionally trying to hammer silver prices. Silver's declining photography demand is being offset by rising industrial demand and the tiny increase in the tiny investor demand.

Fabrication demand -- jewellery and coins -- is expected to continue unabated as rising incomes in emerging market countries such as China and India allow people to choose gold over silver.

More hatchet jobs against silver are expected, while they continue to say that silver prices will be expected to fall, while silver prices actually rise. The reason that the establishment will not tell you to buy silver is because they don't have any. The investment demand is so tiny, they hardly have any silver at all, and have never been able to enter the market in any size. How can wall street establishments, who receive bail outs by the Fed, to the tune of $20 billion dollars at a time, buy any silver when the silver market is swamped by less than $1 billion of investor demand annually?

Be fruitful and multiply and you can see through the lies. Buy silver. They lie.



Sincerely,

Jason Hommel