Some Intriguing Charts

Not much to add this morning but I wanted to pass along these charts. It's not much but it's a start!

On the previous post, I pointed out that both gold and silver were very close to breaking out of "pennant" formations on their daily charts. With today's action, they have! Now, again, take this for what it's worth:

  • These are simply formations at the base of the long-term pattern.
  • The primary ranges are still intact, namely 27-29 in silver and 1535-1635 in gold.
  • However, these initial breakouts are a positive development and may be the initial signal that he next move higher has begun. Watch closely to see if the breakouts can be maintained.

And I thought I would give you this chart of crude, as well. How many times have you read me stating that "what was resistance becomes support and vice versa"? Well, the crude oil chart shows this about as clearly as possible. Recall that for the past few weeks, I was telling you that $88 and then $90 would be critical levels for crude to pass IF it was going to sustain a rally. Well, take a look at the chart below. The next target for crude is to exceed last week's highs. IF it can do so, $100 will be clearly within its sights.

As I type, gold is 1616 and silver is 27.65. Not too shabby, especially considering that it's August gold option expiration day. Let's see if we can hold these gains for the rest of the day and then sit back and see what tomorrow brings.

Have a great day!

TF

196 Comments

gjervis's picture

First

First

treefrog's picture

duce

second

Gramp's picture

He's back for more!

Cool keep the info flow going here ! Thanks TF!

SRSrocco's picture

THIS IS A REPEAT POST......

FUTURE SILVER SUPPLY MORE AT RISK THAN GOLD

I am currently working on my next article. This is a sneak peak. I truly believe that future silver production is more at risk than gold. Thus, I believe silver will gain much more in percentage than gold.

We all know about the serious trouble coming down the pike when it comes to ALLOCATED GOLD & SILVER that has been sold into the market and replaced by paper certificates. The information that I will provide in this article will add insult to injury to a market that is about ready to explode.

A friend of mine and I recently took a drive around some old mining towns (now ghost towns) in Utah. We stopped at the old Frisco mining town and spent most of the day looking at the remains of the town as well as the mine itself. It was simply amazing to see that at one time, Frisco had a dozen saloons, businesses and several thousand people at its peak.

The Frisco mine later named the HORN SILVER MINE, was founded in 1875 and by 1881 was producing over a million ounces of silver a year. However, due to the rush to get the silver out and not bracing the mining tunnels correctly, the mine collapsed in Feb, 1885. The fortunate part about the major collapse is that it took place between shifts so no one was hurt.

The mine started to produce again at a decent rate in 1887, but never regained the level prior to the mine collapse. In the 30+ years the mine was open it produced over 14 million ounces of silver. This may not seem like a great deal today, but it was the largest silver mine in Utah at the time.

The most interesting part of researching the Horn Silver Mine in Frisco was finding out the tremendously high silver ore grades they were mining. When the mine first opened they were producing silver at a staggering 1,608 grams per ton (51.7 oz per ton). We must remember, at this time, the United States was figuring these ore grades by short tons or 2,000 pounds. The industry standard today is metric tonnes or 2,205 pounds. Thus, the earlier figures were 10% lower than the grades today. If we add that 10% to this figure we see that compared to present mining ore grades it would have been 56.8 ounces per metric tonne -- or 1,769 grams per tonne.

Visiting the mine in person, gave me the inspiration to write this article. I looked at several present silver mines and decided to compare the Horn Silver Mine with First Majestic. The chart below gives the STARK COMPARISON of how times have changed in 100 years.

Here we can see dramatic difference. During the entire 30 year lifespan of the Horn Silver Mine, they processed a grand total of 474,780 tons of ore and produced 14.21 million oz. However, if we look at just one quarter of silver production at First Majestic, they mined a total of 482,077 metric tonnes of ore in Q2 2011 and produced 1.78 million oz.

If you look at the difference in the ore grades between the two mining companies you will see it is about a 10 fold decrease. Again, we must remember, the Horn Silver Mine average ore grade is lower 10% than the present standard due to it was based on short tons.

WHAT A DIFFERENCE A 100 YEARS MAKES...

Basically, we have a 10 fold decrease in 100+ years. We also must remember that during the early days, most of the mines did not use oil as a source of energy. It was coal, wood or human and animal labor.

The remainder (BULK) of the article discusses the energy issue and how it will impact the mining industry going forward. Furthermore, due to the fact that 70% of silver is a by-product of base metal mining, it will suffer much greater than gold when the energy crunch hits hard in the next several years.

GOT PHYSICAL SILVER?????

--------------------------------

This is a repeat post.  I don't want to clutter the site with duplicate posts, but I thought this one was important to do so.  Furthermore, there were several good questions and replies to this post that were answered in TURDS.....HANGIN' WITH WINSTON blog entry that you may find interesting.

Again... the full article will be out Monday...

Turd Ferguson's picture

SRSrocco

MODERATOR

Pls send it to me when finished and we'll make a "guest post" out of it. Thanks!

tpbeta's picture

Interesting QE cheat sheet

Not buying it necessarily, but useful...

Patrancus's picture

JFK's executive order 11110

Though forgotten through time JFK's executive order has never been revoked, 

Paper notes back by silver bullion, now that's a novel idea, why don't we give it another go.

Executive Order 11110 AMENDMENT OF EXECUTIVE ORDER NO. 10289

AS AMENDED, RELATING TO THE PERFORMANCE OF CERTAIN FUNCTIONS AFFECTING THE DEPARTMENT OF THE TREASURY

By virtue of the authority vested in me by section 301 of title 3 of the United States Code, it is ordered as follows:

Section 1. Executive Order No. 10289 of September 19, 1951, as amended, is hereby further amended-

By adding at the end of paragraph 1 thereof the following subparagraph (j):

(j) The authority vested in the President by paragraph (b) of section 43 of the Act of May 12,1933, as amended (31 U.S.C.821(b)), to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury not then held for redemption of any outstanding silver certificates, to prescribe the denomination of such silver certificates, and to coin standard silver dollars and subsidiary silver currency for their redemption

and –

By revoking subparagraphs (b) and (c) of paragraph 2 thereof.

Sec. 2. The amendments made by this Order shall not affect any act done, or any right accruing or accrued or any suit or proceeding had or commenced in any civil or criminal cause prior to the date of this Order but all such liabilities shall continue and may be enforced as if said amendments had not been made.

John F. Kennedy The White House, June 4, 1963.

Urban Roman's picture

Executive order 11110?

Paper notes back by silver bullion, now that's a novel idea, why don't we give it another go.

Because numbnuts Robomney does not have a clue, thinks the "private sector" is doing just fine, and their "advisors" (sycophants?) do not want it to happen.

Other than that, mebbe not such a terrible idea...

[edit] Oh, and it's worth mentioning that merely waving a magic wand and making the $ "backed by silver" (at what rate? The silver ¢ of 150 years ago?), would accomplish nothing much at all. Our whole Potemkin Economy, based on fraud, fraud, and more fraud, would have to be prosecuted, incarcerated, and replaced before it can begin to heal.

Gramp's picture

The LCS

The Local Coin Shop here is just a small place. Not sure if due to lower Ag prices currently, his inventory is sparse. They never even advertise selling 90% pre- '64  silver dimes /quarters, but in conversation he says oh yeah I have a bunch, and put several coin rolls on the counter.

      Though he also sells jewelry, that  no doubt has picked up at a 'reasonable' price. Every time I 'm in there he tells me If I want to buy jewelry, he would hook me up.

While in there the other day, I wanted to get just a small something for the Mrs., not sure what.  Decided upon a nice hand made sterling whale necklace.  The owner was pumped , he said, " You always buy something, thank you!" And he said some people i had sent there did good business w/ him.

Better yet the wife  was surprised. She calls it her Good Luck Charm, as when she wears it they have seen many whales offshore! 

  Doesn't take the big $ every time to have people smiling!

SRSrocco's picture

REPLY @ TURD

Okay... great.  Maybe a weekend guest post might be good.

WOW... just saw the Q2 Financial Results for GOLDCORP & BARRICK:

As I mentioned before, I thought gold miners would suffer less than silver or base metal mining companies this quarter due to the fact that the price of gold topped in Q3 2011.  However, it seems like the SLAUGHTER CONTINUES even in the gold sector.  Barrick and Goldcorp are in the top 5 gold mining companies in the world... Barrick is number 1.

Here is the results from GOLDCORP:

Even though Goldcorp's revenues are down we have to consider they sold less gold this past quarter.  However, it wasn't much less than the previous quarter.  If we compare the two, we see that NET EARNINGS DECLINED 44% since the last quarter.  This is more than I would have thought.  Costs are increasing and the price paid for the metal declined.

Furthermore, if we look across all the different past quarters we can see that Goldcorp made a great deal more earnings even though the price of gold was much less than it is currently.  This proves that COSTS ARE INCREASING RAPIDLY.

I did not make a chart for Barrick as their report was not easy to reproduce here.  I can say this, their Q2 gold production is down and their earnings were as follows:

2011 Q2 Results

REVENUES = $3.4 BILLION

NET EARNINGS = $1.2 BILLION

2012 Q2 Results:

REVENUES = $3.3 BILLION

NET EARNINGS = $750 MILLION

--------------------------

Here we can see that even though revenues are about the same, net earnings have fallen 35% compared to the same time last year.  So... I am proven wrong.  The gold miners profit margins are getting hammered even though the price they are getting for gold is higher than it was in the same period last year.

PASCUA LAMA.... A THORN IN THE SIDE OF BARRICK???

I believe Barrick has huge problems with its Pascua Lama mine that is located in the Ande Mountains in a glacier field.  Here is their update on the mine:

Due to lower than expected productivity and persistent inflationary and other cost pressures, as previously disclosed, the company initiated a detailed review of the cost and schedule estimates for Pascua-Lama in the second quarter. Preliminary results currently indicate an approximate 50-60 percent increase in capital costs from the top end of the previously announced estimate of $4.7-$5.0 billion, with first production expected in mid-2014. The company will provide a further progress update with third quarter results.

Again... we see that there is COST INCREASES as well as problems with getting work done on schedule.  Barrick was supposed to produce gold by the first quarter of 2013, now it has moved to the middle of 2014.

IS BARRICK HIDING THE FACT THAT THEY REALLY HAVE BIG PROBLEMS??

tyberious's picture

More bad news for miners

Newcrest output sinks 15% in gold's record year

--Newcrest reports full-year gold production of 2.29 million ounces

--Output sagged on heavy rains, plant troubles as gold price hit record

--Investors reassured by recent lift in gold production

(Adds comments from shareholder in third and ninth-tenth paragraphs, analyst in eighth paragraph, CEO in eleventh-fifteenth paragraphs, and background throughout.)

SYDNEY--Heavy rain and operational difficulties pushed Newcrest Mining Ltd.'s annual gold output 15% lower, keeping Australia's largest gold producer by market value from capitalizing fully on a year in which the precious metal's value climbed to record highs.

Newcrest, which twice revised its production guidance lower during the year through June 30, grappled with bad weather at its Papua New Guinea mining operation as well as a prolonged plant shutdown. A deluge in Australia's New South Wales state late last year also triggered a landslip at its Cadia open pit, halting mining and temporarily restricting access for heavy vehicles.

"Operations have been put under stress, and there have been hiccups along the way, as miners have tried to capture the rising gold price," said Tim Schroeders, portfolio manager at Pengana Capital. "This is not a Newcrest-specific issue, though, and is more symptomatic of industry trends globally."

http://www.marketwatch.com/story/newcrest-output-sinks-15-in-golds-record-year-2012-07-26

Bongo Jim's picture

RE: JFK's executive order 11110

According to that well known source of absolute truth Wikipedia(take it for what you paid for it)...

"E.O. 11110 was not reversed by President Lyndon B. Johnson and the section added to E.O. 10289 remained on the books until President Ronald Reagan issued Executive Order 12608 on September 9, 1987 as part of a general clean-up of executive orders.[14] E.O. 12608 specifically revoked the section added by E.O. 11110 which effectively revoked the entire Order. By this time, however, the remaining legislative authority behind E.O. 11110 had been repealed by Congress when Pub.L. 97-258 was passed in 1982.

In March 1964, Secretary of the Treasury C. Douglas Dillon halted redemption of silver certificates for silver dollars. In the 1970s, large numbers of the remaining silver dollars in the mint vaults were sold to the collecting public for collector value. All redemption in silver ceased on June 24, 1968."

Patrancus's picture

Gramp local coin shop

Gramp local coin shop here much the same, he opened up the place about 2008, then his inventory was pretty good,  

many who had been sitting on small hoards of silver bars and coffee cans filled with 90% coin decided to sell off for the cash, we connected on several large transactions and I was able to fill my storehouses with shiny under 30. have been working my arse off in pre retirement, scrounging up cash when I am able and hanging on until the final bubble blows. Today his inventories are pretty slim, no big trades, just selective purchases for a few single ASE or maybe a tube or 2, I suppose when shtf he will be doing a fair amount of brokering between haves and have nots. 

Be Prepared's picture

Ex-Senator Gramm still spouting -Glass Steagall Repeal was great

Breaking Up Banks Won’t Make Them Safer, Ex-Senator Says

Phil Gramm, the former U.S. senator who helped write the 1999 law that enabled the creation of financial giants such as Citigroup Inc. (C) and Bank of America Corp., said his legislation didn’t make the system any riskier.

The Gramm-Leach-Bliley Act repealed the 1933 prohibition against federally insured depository institutions combining with securities firms and insurers. While his law allows deposit- taking banks to affiliate with securities firms through holding companies, depositors and taxpayers are protected because affiliates can’t take capital out of the banks, Gramm said in a telephone interview yesterday.

“I don’t see any evidence that allowing them to affiliate through holding companies had anything to do with the financial crisis nor has anybody ever presented any evidence to suggest that it did,” said Gramm, 70. Companies that failed such as Lehman Brothers Holdings Inc. “tended to be narrowly focused.”

Sanford “Sandy” Weill, who created Citigroup and pushed for the Gramm-Leach-Bliley Act, said yesterday on CNBC that he would now support dismantling financial holding companies.

“What we should probably do is go and split up investment banking from banking,” Weill, 79, said in the interview. “Have banks do something that’s not going to risk the taxpayer dollars, that’s not going to be too big to fail.”

John Reed, who helped found Citigroup with Weill, and former Merrill Lynch & Co. CEO David Komansky have said they regretted fighting to overturn the Depression-era Glass-Steagall Act. Richard Parsons, speaking two days after ending his 16-year tenure on the board of Citigroup and one of its predecessors, said the repeal contributed to the financial crisis.

Repeal’s Impact

“To some extent what we saw in the 2007-2008 crash was the result of the throwing off of Glass-Steagall,” Parsons said in April at a Rockefeller Foundation event in Washington. “Have we gotten our arms around it yet? I don’t think so because the financial-services sector moves so fast.”

Thomas J. Bliley Jr., a former Republican congressman from Virginia and another co-author of Gramm-Leach-Bliley, said that the financial industry had been lobbying ever since the 1930s to overturn Glass-Steagall.

“All of a sudden in the late ’90s they all came together and agreed that we should get rid of it and of course we did,” said Bliley, 80, who now lives in Richmond, Virginia, and is a senior government affairs adviser for Steptoe & Johnson LLP. “I don’t know enough to really give you an answer” on whether it was a mistake.  <Rest of the Article>

____________________________________________________

This buffoon of an Ex-Senator Gramm still has the audacity to spout just how great his Act was in making America great..... riggghttt....

Colonel Angus's picture

NovaGold

Anybody know who took NG out back and shot it? I can't find anything more than headlines. It looked so good some time ago, and I took the profits as it climbed up. Might it be worth something again, or is this one to avoid?

tyberious's picture

Rob Kirby: Horse-Whipping Rates to Zero

nterest Rate Swaps and the Long End of the Interest Rate Curve

The rest of the world has been a net seller of U.S. Treasuries for a number of years now.  It has been the U.S. Treasury – exercising / implementing Imperialist U.S. monetary policy through the trading desks of the magnificent five [J.P. M., BofA, Citi, Goldy and MS] – IN THE LONG END OF THE INTEREST RATE CURVE by selling tens upon tens of Trillions of Interest Rate Swaps [IRS] – deals between the banks [payers of fixed] with the Exchange Stabilization Fund [ESF] brokered by the N.Y. Fed trading desk.  This is what has kept things “appearing somewhat normal” in the long end of the interest rate curve.

Note how we barely see the hand of the ‘mystery’ rider [Geithner].  Note the conduit [crop] through which the force is applied.  Now note the animal that does the heavy lifting….

Forward Rate Agreements  [FRA’s] and the Short End of the Curve

Getting banks to purchase U.S. Government paper in the short end of the interest rate curve [< 1 yr.] – creating the cascades in T-Bill rates depicted in C and D below – is not solely the product of lowering the Fed Funds [over-night] rate – and requires a different tact:

Zeroing in on “C” above, we can see how Government T-Bill yields plunged down in Q3/07 EVEN AS BANKS initial reaction was to RAISE Libor rates:

So, the plunge in rates was CLEARLY NOT INTER-BANK TRADING INDUCED – higher Libor rates means that banks think rates are going higher.  So what, or who, caused the plunge in short term rates????

We find the answer to this question when we analyze the composition of J.P. Morgan’s derivatives book [particularly the OTC Swap component of their book] from a control period Q2/07 through Q3/07 and on to Q4/07:

Here we see the less than 1 year Swap component of Morgan’s book grow from 25.2 Trillion in Q2/07 to 32.8 Trillion in Q3/07 before reverting back to 24.7 Trillion in Q4/07.  Morgan’s < than 1 yr. OTC Swap component of their derivatives book BLOATED by 7.5 Trillion – an insidious disgrace – in Q3/07 before recoiling back in Q4/07.   Here’s how that happened:

The less than 1 yr. component of a derivatives book INCLUDES instruments known as FRA’s which “settle” against 3 and 6 month U.S. Dollar Libor.  OTC FRA contracts are all tailor made between counter-parties and like IRS – they require two-way credit lines between counter-parties.

Near term 3 month FRA’s would be described as: 

-          0 x 3 FRA over a specified date in the current month [basically a bet on what 3 month Libor will be on a specific date before the current month ends.

-          1 x 4 FRA would be a bet – between two counter-parties – on what 3 month Libor will be at a specific date in the next calendar month.

-          2 x 5 FRA would be a bet – between two counter-parties – on what 3 month Libor will be at a specific date two months from now

The same thing applies with six month FRA’s:

-          0 x 6 FRA over a specified date in the current month [basically a bet on what 6 month Libor will be on a specific date before the current month ends…

-          1 x 7 FRA would be a bet – between two counterparties – on what 6 month Libor will be at a specific date in the next calendar month.

-          Etc…

What happened in 2007 and 2008 is that the ESF acting through the N.Y. Fed trading desk – had Fed traders call J.P. Morgan’s trading desk and ask them where they “pay” for hundreds-upon-hundreds of billions [totalling Trillions] worth of these 0 x 3, 1 x 4, 2 x 5, 0 x 6, 1 x 7 etc…  When Morgan posted their prices their bids were “hit” NECESSITATING them to immediately “hedge” or purchase ungodly amounts of U.S. 3 and 6 month T-bills.

The beauty of this type of operation, from the Treasury/Fed point of view – is that these trades HORSE-WHIP short term rates LOWER in a hurry, make the U.S. Dollar look strong and they mature within 3 months [the FRA’s settle vs. Libor and the T-bills mature at par].  This is the only reason WHY J.P. Morgan’s derivatives book could “bloat” and then “recoil” to the tune of 7.5 Trillion in a 3 month time period.  The bad part – they leave a “paper trail” – which exposes what they did – in the Office of the Comptroller of the Currency quarterly derivatives reports.

One of the side-effects of this INTERVENTION on the part of the U.S. Treasury’s ESF – is that Libor “appeared” to BREAK DOWN.  The reason for the apparent break-down in Libor was that the U.S. Treasury was trying to fix a problem of “insolvency” [caused by too much debt] with massive additions of “liquidity” [more debt].

The same process occurred in 2008 when short term rates once again plunged from approximately 2.00 % to ZERO.  This time a roughly 8 Trillion “bloat” showed up in Morgan’s < 1 yr. swap book – but not until Q1/09 – and has, more-or-less, remained at this elevated level to this day.

Banks like Barclays initially recognized the problem in the financial system as being an issue of insolvency – and hence started raising rates to conserve/preserve capital.  This put them “at odds” with the ESF [via the Fed and J.P.M.] intervention making “Libor” appear broken – as expressed by the dramatic widening of the TED spread.

The problem[s] with Libor are not Barclays or Bank of England centric.  This is an American [U.S. Treasury], Fed and a J.P. Morgan centric issue.  This is why no one from officialdom will DARE speak about the size and composition of derivatives books like J.P. Morgan [70 Trillion] et al – regularly making “adds” in given quarters of 10+ Trillion in the “swap” components of their books.

Ladies and gentlemen, the ENTIRE interest rate curve has been horse-whipped to ZERO.  This has been done in the name of U.S. national security, preservation of the global U.S. Dollar Standard, bailing out insolvent banks and at the expense of savers, pensions, pensioners and the capital stock.

And in case any of you are left wondering how captive banks with MONSTER derivatives books REALLY make their dough – it’s mainly because they have privileged insider information they glean [can you say front-run?] from being the “go to” horses of the horse-whipping elite.  Trading treasury bonds and T-bills profitably isn’t really that difficult when you know in advance which way interest rates are going.

And we’ve all been horse-bleeped into thinking it was because they were the brightest and the best.

What a let-down [or trip-up, perhaps?].

Happy trails!

Got physical gold yet?

By Rob Kirby

http://www.kirbyanalytics.com/

Rob Kirby is proprietor of Kirbyanalytics.com and sales agent for Bullion Custodial Services.  Subscribers to the Kirbyanalytics newsletter can look forward to a weekend publication analyzing many recent global geo-political events and more.  Subscribe to Kirbyanalytics news letter here.

thesandbox's picture

$ 1.3 Trillion to be added to economy by.....

hahahah....social media!!!! I guess all those Zynga farms are ramping up production...steel mills and factories must be next on their list! ;) I guess they will be needing more paper silver as well.

http://www.cnbc.com/id/48336673

.... things like improved communication and collaboration from social media in four major business sectors could add $900 billion to $1.3 trillion in value to the economy.

The value is mostly through added productivity. Improved consumer focus as well as better-functioning teams are two other benefits.
MORE....

I Run Bartertown's picture

Eurozone

"I would venture that Brussels and Berlin et all must have by now clued in, but they make sure - in what seems to be their main objective in all this - that everyone's fed reality in bite-size chunks. Which is understandable, since if the Greeks and Spaniards on the one hand, and German and Dutch people on the other, would have been fed the whole thing in one go, they'd have gone apeshit. So would the markets.

Read more: http://theautomaticearth.org/Finance/project-europe-is-over.html#ixzz21kCxOaxy

The bailouts and austerity schemes don't work (that is: not for the people; bankers are elated). The Greeks get miserable without having anything to show for it, the Germans and Dutch pay and pay and pay and never see anything improve. End of exercise. Once everyone sees the blinding light, that is. So please let it sink in: we're in the process of passing a watershed moment, slowed down as we are by the mental sloths among us.

Project Europe is over. The best we can hope for is a peaceful withdrawal. I don't know if that hope is all that realistic. No promises here."

-----------

 

Groaner's picture

contract expirations at work

nothing to see here.. they are going to smack it down,, who cares what he usd is doing

Turd Ferguson's picture

From last year

MODERATOR
Slick's picture

Nova Gold & Barrick..

I believe I heard something about a joint mine project that was cancelled.

Harald's picture

SRSrocco

Terrific work as always.  

thesandbox's picture

edit to social media economic impact....

Twitter down....new estimate to only be $1.2 trillion

BillAuAg's picture

Urban Roman

Every statement in your post "Executive Order 11110" contains nothing but disinformation.

I label you an Obama Bot

NW VIEW's picture

Commodities

My 71 year old brother- in- law hay farmer just called.  He said that he just had a first.   A farmer from Utah called about driving from his area to Western Washington to purchase hay.  He said their area is dried up.   GOT HAY?????

ancientmoney's picture

@srsrocco

I agree with your opinion that there may be less mineable silver than gold in the world.  The U.S.G.S. also agrees, as they said current reserves of silver only amount to about 13-14 more years of production, or something close to that.

You may have read FOFOA's blogsite.  I have followed his blog for years now, and he presents a very reasonable and strong argument that gold is the wealth protector without parallel.  This is due to a few truisms:

1.  gold is not used up in industrial processes; nearly all the gold ever mined still exists and,

2.  Most gold is owned by  financial "giants" such as CBs, Arab sheiks, powerful bankers, and others at the top of thew world-wide wealth pyramid.  They have an interest in seeing physical gold revalued much higher.

3. The world's countries, banking systems and governments are largely bankrupt.  The fiat money system has failed, and adding more fiat/debt is exacerbating the problem.  There needs to be a debt equalizer; something that can be revalued so as to make the debt payable via some asset that has been, and can be money again.

FOFOA says that silver has no place as a wealth preserver on a par with gold--that nothing else does.  He may be right, and his argument sure holds water, in my view.  However, I have this nagging feeling . . . silver is almost gone, in terms of worldview, in geologic terms, etc.  Of the 40-some billion ounces mined since man started pulling it from the earth, only about 1 billion ounces, or less, is available in deliverable form.  Another 5 billion is estimated to exist in teapots, silverware, etc. but requires expensive reclamation to reuse elsewhere.  That means that 35 billion or so ounces are essentially gone!  In about 3-4 decades humans used up the bulk of all known, available silver.

Silver has myriad industrial applications, many of them indispensable for military use, so it is a strategic element as well.

My point is, I wonder if FOFOA is right about gold as the wealth preserver in general, but (maybe intentionally) wrong about silver.  The bullion banks are pulling out all the stops to contain silver's price rise.  They do not want people pouring into silver.  Silver seems to have every fundamental reason to be valued at several multiples of current price.  In fact, it may be that there is very little more useable silver left in the entire world than there is gold, even when including that still in the earth.  I could see silver being priced at 5:1 or 10:1 vs gold when markets are allowed to work again.

Bongo Jim's picture

Cancelled joint mine?

Dude, ya grow that stuff, you don't mine it.

Short Stack's picture

Turd's Thread

Although I do not presume to fully comprehend all that you post,  I will defend to the death your Right to post it.

(hmm, I know I've heard something along that line before.  Think, think, think.   Oh! great.  Now I gave myself a headache.)

Physical_only's picture

@Turd MUST READ........INDEED

From last year

How I missed that; I have no clue: Thanks for the relink......

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