Why are people buying silver and gold?(& Will the real Fear Mongers please stand up?)Silver Stock Reportby Jason Hommel, May 5th, 2010
Many people today are cashing out their CD's to buy silver and gold.
The CD's pay next to zero interest, and gold and silver continue to head up
by 20-30% per year.
Most of our gold and silver buying customers have completely lost faith in
the government's ability to "run" the economy, but more than that, there is a
real fear of the government today, that it will turn dramatically totalitarian
and that we will lose nearly all of our freedom.
The best time to own gold is when the government starts taking more of your
money. Silver and gold ownership prevents government from confiscating your
wealth through inflation, and more and more people see the inflationary threat
of massive $2+ trillion deficits, which are being met by printing more
A typical first time customer comes into our coin shop at the JH MINT, and
says, "Hey this place looks really nice!" We designed it to look a bit upscale,
with plenty of room to hang out, with nice couches to be able to sit down to
They typically say, I've been doing a bit of research online about silver and
gold, but I really know nothing about silver and gold, so what can you tell
To answer in person, I must get to the point quickly, as other customers will
soon come in next.
So I like to show them, and let them hold a gold coin, and let them compare
the heft and weight compared with a silver coin. Gold is twice as dense as
silver, and the difference is easily discerned when you hold them. A 1 oz. gold
coin is just a tad thicker than a half ounce silver coin, which is a bit
thinner, and much, much lighter. Since silver is 1/2 the weight, a similar
sized silver coin, gold plated, would be about 1/4 of the weight of a gold
Thus, the brass or copper core, gold plated, "authentic replicas" as old on
TV make a beautiful comparison to show how difficult it is to counterfeit
So when they hold gold, they know it's something real, and real special.
People continue to ask, "Which is better, silver, or gold?"
I tell people, we like silver best, because it's a much smaller market.
World annual silver mining is about $10 billion, but world annual gold mining
is about $80 billion.
But most of the silver market is consumed by industry, as silver is used in
all sorts of electrical contacts and devices. In fact, industry consumes more
silver than world annual mine supply, and the gap is being met by recycling.
So the amount of silver left over for investors is shockingly small, perhaps
only $2 billion.
The silver story is surprisingly simple. The entire world once used silver
as money, but today, no nation on earth has silver circulating as currency.
This reduced monetary demand has created a very low price.
But silver remains a better store of wealth than ever, due to the increased
scarcity, and the growing awareness of silver ownership as a way to make
Money is more than a currency or medium of exchange, it's also a store of
value. As demand for silver, as a store of value, increases, so will the price,
and this demand will continue as a positive feedback loop that will eventually
destroy paper money.
But the real shocking fact of the silver market is that 99% of silver
investors are getting scammed by paper silver, that is basically all fraud.
The proof of this is the BIS report, from the Bank of International
The proof is in the numbers. The BIS keeps track of the derivatives of the
banks worldwide. It shows that the notional value of "other precious metals"
over the counter derivatives, which are mostly all silver, increased from $100
billion to over $200 billion in six months.
When the entire annual physical silver investment market is only $2 billion,
and when the paper silver investment market increased by $100 billion in six
months, there is only one way that can happen. The paper must be all fraud.
I asked several bullion dealing managers why people are buying precious
Matt, at rocklincoinshop.com, says:
Now more than ever, it seems that people are becoming increasingly aware of
the growing instability of the dollar. With the national debt climbing, and the
future of our nation’s currency looking less bright every day, people are
looking for ways to protect their wealth against inflation and the
ever-crumbling banking system. After doing some research, most of them come to
realize that purchasing precious metals like silver and gold is the most
reliable method for storing their wealth in a way that will ensure that their
hard-earned capital will retain its spending power and viability despite an
economy with a future that is shoddy, at best.
Jim, at rocklincoinshop.com, says:
When most people think of precious metals, they think "gold." So when they
consider purchasing precious metals, gold is the first thing on their minds,
because they automatically associate it with something valuable. It's a
cultural phenomenon that is ingrained into our everyday lives. Gold Record for
recording artists. Gold Medals for Olympic champions. Everyday phrases like,
"That guy is as good as gold," or "this is a golden opportunity." It's human
K, here at the jhmint.com says:
Most of our customers are buying gold or silver because they all know the
government is going down the tidy bowl! Most of them choose to buy from us
because of our growing reputation, they read me online, or they hear about us
from family or friends, and they are hearing all of the horror stories about
other bullion dealers on the internet not being able to deliver, or just taking
Dave, here at the jhmint.com says:
People are just cashing in their CD's because they know they will get a
better return in silver and gold.
Call us to order silver or gold:
JH MINT: (530) 273-8175
So those are the basics, it's really simple.
I had an insight this week that I wanted to share with my readers, since you,
like me, try to convince others to own precious metals, and we usually are
ignored, scoffed at, or slandered. A common slander is that we are fear
mongers.Will the real fear mongers please stand up?
We live in an age dominated by banking. Bankers own the Fed, the Fed funds
the government, and the government funds the schools. So who ultimately writes
the schoolbooks? Bankers. A typical college textbook on economics is merely
apologetics for central banking fraud. Thus, there is no need to overtly
command propaganda to the media, when the media is trained correctly in college,
they think silver and gold investors are "backwards", "fear mongers", etc. It
is actually harder to convince a college educated investor to buy silver and
gold than a person who has not paid to be brainwashed in college, where the kids
are sleep deprived by final exam pressures and distracted by college
So, we are called fear mongers. A "monger" is simply a salesman. It is said
that we prey on people's fears, scaring them with visions of an economic
meltdown that supposedly never comes.
But in truth, bankers are the fear mongers. Bankers play on people's fears.
What does a banker do? He holds your money for you, primarily for two reasons.
First, it's because you are supposedly not responsible enough to invest it
wisely, that's the banker's job, so they just give you a small percentage in
interest. Second, your money might be stolen if you keep it at home, which is
supposedly not a very safe place, even though it's safe enough for you to sleep
there in peace at night.
In truth, I have to convince my customers to be brave. I have to convince
them that they are intelligent enough to wisely invest their money. I have to
convince them that the safest place for their money is at home, in a vault that
they can easily buy with a tiny portion of their own money.
The objection is always raised, "What if someone comes to my home and
threatens me like in the movies?" I have to reply, that usually happens only in
Today, 20% inflation rates would be as if thieves robbed 100% of all the
assets of every 5th home on the street, and got all their financial accounts,
too, every year. Nobody should put up with that. Common robbery is far less
common than that. Homes are mostly a safe place!
The most common robbery, therefore, is the inflation of the paper money in
I have to convince them that the silver and gold of 10,000 different
investors, in 10,000 different vaults in 10,000 different homes, all owned by
gun owners, who live in a nation that has 80 million gun owners, is far, far
safer than pooling 10,000 different investors money into one place, guarded by
just a handful of low-paid security guards. It's an easy sell, because the
point is irrefutable.
Furthermore, if the government ever does make silver and gold illegal to own,
it's those places that "hold" it for you, that will have to give it up to the
government, or who will be let out of their obligations to pay you anything,
because they don't have any silver or gold to pay you to begin with.
But note, I'm not the fear monger. I sell courage in the face of fear.
The bankers fear silver. The bankers fear their own bankruptcy. That's why
they created the Federal Reserve in the first place, to bail them out in case of
their own failures, so they would be able to continue their scams, even after
they failed, rather than be shut down and be out of business after a real
So, it's amazing that bankers and banker trained media slander precious
metals advocates as fear mongers, when the bankers are the real fear mongers.
Also, I'm amazed that it's taken me 10 years in this business to see this
insight. How dumb am I? But then again, the bankers have been at this business
for thousands of years. I've had to relearn and discover most of the timeless
truths about precious metals by reading the Bible, or by thinking deeply about
these things, or by reading what is available out there on the internet.
I treasure such insights, and I always appreciate hearing from my
readers, even if I don't always have time to respond to everyone.
to order silver or gold:
The JH MINT: (530) 273-8175