Silver Stocks Comparative Valuations

Silver Stocks--Comparative Valuations

Weekly Report # 52

by Jason Hommel
silverstockreport.com
goldismoney.com

Friday, October 1st, 2004

A day's wage used to be a silver dime, a silver quarter, or maybe a silver dollar. A silver dime today costs about 45 cents, at $6.20/oz. for silver. About 900 million oz. of silver are consumed annually, and just under 600 million ounces mined annually. Oddly, there is is seven times as much refined gold as silver... Buy real silver, it is scarce, real wealth, and cannot go to zero value. By the time paper money fails mankind once again, as it always does, any silver dime you can lay your hands on will probably be worth more than what $100 to $200 will buy you today.

This week's report lists the market capitalizations for 86 silver stocks. There are 31 silver stocks that list reserves, resources (and exploration potential) which I calculate by using my "ounce in the ground" formula. There are 54 explorers. There are about 30 additional "silver" stocks with incomplete information. This report goes out now to over 11,700 investors each week. Additions & Changes from last week are in bold.

Quick links to other areas in this report (Index of this report):
[Summary list of Silver stocks]
[My Methodology]
[Weekly Commentary]

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[Subscribe to this Weekly Silver Stock Report (FREE)]

[My Conference Schedule]
[General Commentary on Silver]
[WHERE and HOW to BUY SILVER BULLION]
[The money chart]
[Disclaimers, Warnings, and Advice]
[Company profiles]
[Company profiles with the most resources, and least cost]
[Profiles of Explorers]
[Links]
[19 Silver Stocks I own]
[Archive of about 40 of my past essays]
[Archive of past Silver Stock Reports]

Kitco reports silver at $6.90/oz. as of Friday, 3:13 PM West Coast US, which was used to calculate the following figures. The CAN $ / US $ conversion factor is .7928. I will use .79 for ease.

How to read the table below:
Stock Symbol that works at Yahoo! Finance (Company name) / The number that follows the company name, below, represents the company's resources, divided by the market cap as denominated in silver; thus, it is the number of silver oz. "in ground" that you gain title to when you trade away one ounce of silver to buy 1 oz. of silver's worth of stock. The number is the expression of leverage that silver stocks can give you, the higher the number, the better. / Next, I list the valuation price change since last week (and stock dilution, and resource changes, if any) as up/down or even. / Finally, there are additional comments (EXPT is "exploration potential")

Company names in bold have summaries below with updated information since last week. Click on the name to see the summary below.

This first list are the companies with information about reserves/resources/exploration potential. The list is ordered/ranked based on the resource picture. The most expensive (with the fewest silver resources given their market cap) are listed first.

ABX (BARRICK) 1.0 even --producer, hedger (15? mil oz. gold hedged, 3 yrs production)
IPOAF.PK (INDUSTL PENOLES) 1.5 up --producer, mostly family owned, hedged?
CDE (COEUR D'ALENE) 1.9 up --producer, (also gold) in debt, produces at a loss.
SIL (APEX SILVER) 3.1 even --zinc bonus, low grades, cash rich--$345 million! in debt
FSR.TO FSLVF.PK (FIRST SILVER) 4.5 up --producer, (not profitable '03 3rd q.) unhedged
WTZ WTC.TO (WESTERN SILVER) 4.7 up -- (16 EXPT) large mine development cost. copper & zinc bonus
MFN MFL.TO (MINEFINDERS) 4.9 up --significant gold bonus, $35 mil cash on hand.
PAAS (PAN AMERICAN SILVER) 5.0 up --producer, unhedged
GRS GAM.TO (GAMMON LAKE) 5.4 up --producer, owns 26% of Mexgold
KBR.TO KBRRF.PK (KIMBER RSCS) 6.0 down --one property, high grades, with exploration potential.
* CFTN.PK (CLIFTON MINING) 6.2 even -- (150 EXPT) (order their colloidal silver now online 10% off)
SSRI SSO.V (SILVER STANDARD) 7.1 up --large company, many properties, owns silver bullion
* TM.V TUMIF.OB (TUMI RSCS) 7.7 up -- (15 EXPT) recent bonanza grade silver discovery
* PLE.V (PLEXMAR RES INC) 8.5 down (up to 20 EXPT?)--just acquired options on 2 new projects
ORM.V OREXF.PK (OREMEX RES) 7.4 down (31 EXPT) --20 oz. of silver/T over 292 feet!
* CZN.TO CZICF.PK (CDN ZINC) 10.1 up --large zinc bonus, high grades, low start up costs, great EXPT
* IMR.V IMXPF.OB (IMA EXPL) 12.4 up --(49 EXPT) in Argentina 83 oz. of silver/T over 35 meters!
SHSH.PK (SHOSHONE SILVER) 12.8 down --leased properties; need payments; in Coeur d'Alene
FAN.TO FRLLF.PK (FARALLON RSCS) 13.2 up --(23 EXPT) low grades, silver 1/3; also gold & zinc bonus.
SRLM.PK (STERLING MINING) 14.0 down --(33 EXPT) acquired the Sunshine in Coeur d'Alene
* SVL.V STVZF.PK (SILVERCREST) 14 up --(Silver in Mexico, El Salvador, Guatemala, Coeur d'Alene)
GGC.V GGCRF.PK (GENCO RECS) 17.5 up --producer in Mex. Plans to expand and acquire
CHD.V CHDSF.PK (CHARIOT RSCS) 18.1 down --explorer, with inferred resources
* EXR.V EXPTF.PK (EXPATRIATE) 18.4 up --large zinc bonus 60% zinc, 25% silver (got out Atna)
HDA.V (HUSIF.PK) (HULDRA SILVER) 18.8 up --very tiny, zinc bonus, low start up costs.
RDV.TO RDFVF.PK (REDCORP VEN) 21.9 down --60% gold bonus
* MGN (MINES MGMT) 22.3 down --60% copper bonus (low grades), start up cost ~ $250 mil
* ABI.V ABMBF.PK (ABCOURT MINES) 25.5 up --large zinc & small gold bonus, + existing infrastructure
* CSG.TO CSGLF.PK (CAPSTONE GOLD) 32.0 up (118 EXPT) (In Mexico, resources are historical)
* ASM.V ASGMF.PK (AVINO SILVER) 36.3 up --to own 100% of the Avino mine +4 other silver props.

* = I own shares

Next list: Exploration companies or producers with limited information on resources. This list is in order (roughly) by market cap, the highest market cap companies are listed first.

HL (HECLA MINING CO) --A PRODUCER (gold bonus) cash rich.
MGR.V MGRSF.PK (MEXGOLD RSCS) -- bonanza grade discovery on Jan 13th, 2004
CDU.V CUEAF.PK (CARDERO RSCS) --silver and iron explorer
AOT.V ASOLF.PK (ASCOT RSCS) -- owns percentage of Cardero, CDU.V
* OTMN.PK (O.T. MINING) very large exploration potential
SPM.V SMNPF.PK (SCORPIO MINING)
* FCO.TO FCACF.PK (FORMATION CAPTL) Cobolt (and Sunshine silver refinery)
TVI.TO TVIPF.PK (TVI PACIFIC) --A PRODUCER of a dore silver bar 96% silver, 4% gold
* NPG.V NVPGF.PK (NEVADA PAC GOLD) Large "exploration potential" (owns 1 silver & 10 gold properties)
* MMGG.OB (METALLINE MINE) --zinc/silver (historic high grade silver) (low cost revolutionary oxide zinc process)
MCAJF.PK (MACMIN LTD)
* FR.V FMJRF.PK (FIRST MAJESTIC) --A PRODUCER Modernized a former producer. Acquiring properties.
ECU.V ECUXF.PK (ECU SILVER MINI) --A PRODUCER 50% gold bonus
BZA.V ABZGF.PK (AMER BONANZA)

This next list has silver exploration companies with market caps under about $30 million
(Market cap = total number of shares fully diluted, times the share price. It's what the company is "worth" in the market place, given the stock price, and is one of the important numbers I calculate each week in these lists.)

IAU.TO ITDXF.PK (INTREPID MINRLS) "exploration potential"
MAI.V MNEAF.OB (MINERA ANDES) (gold bonus)
* EDR.V EDRGF.PK (ENDEAVOUR SILVER) A PRODUCER
CAUCF.PK (CALEDON RES)
* CBE.V CBEFF.PK (CABO MINING) --Historic Silver and Cobalt district
SDR.V SDURF.PK (STROUD RSCS) (partners with Amerix) --in Mexico
* APM.V (Amerix Precious Metals Corp) (partners with Stroud) --in Mexico
QTA.V QURAF.PK (QUATERRA RES)
PXI.V PNXPF.PK (Planet Exploration Inc.)

This next list has silver exploration companies with market caps under about $15 million

NJMC.OB (NEW JERSEY MIN)
EPZ.V ESPZF.PK (ESPERANZA SILVR)
MAG.V MSLRF.PK (MAG SILVER)
EXN.V EXLLF.PK (EXCELLON RSCS)
SRY.V (STINGRAY RSCS)
* KG.V KDKGF.PK (KLONDIKE GOLD)
SML.V SMLZF.PK (STEALTH MNRLS)
DNI.V DMNKF.PK (DUMONT NICKEL) - exploring Clifton Mining's property
* KRE.V KREKF.PK (KENRICH ESKAY)
BCM.V BCEKF.PK (BEAR CRK MINING)
* CMA.V CRMXF.OB (CREAM MINERALS) Low grade, large "exploration potential"
CHMN.PK (CHESTER MINING)
MMG.V MMEEF.PK (MCMILLAN GOLD)
GPR.V GPRLF.PK (GREAT PANTHER)

This next list has silver exploration companies with market caps under about $7 million dollars:

ROK.V ROCAF.PK (ROCA MINES INC)
EGD.V EGDMF.PK (ENERGOLD MINING)
GNG.V GGTHF.PK (GOLDEN GOLIATH) --Historic silver district in Mexico
LEG.V LEGCF.PK (LATEEGRA RSCS)
TBLC.PK (TIMBERLINE RES)
TUO.V TEUTF.PK (TEUTON RES)

This next list has silver exploration companies with market caps under about $4 million dollars: (The real "penny stocks" are those with the smallest market caps, not the lowest share price!)

* PDO.V (PORTAL DE ORO RS)
* AUN.V AUNFF.PK (AURCANA CORP)
ASLM.PK (AMER SILVER MINI)
PCM.V PAOCF.PK (PAC COMOX RES)
BGS.V BLDGF.PK (BALLAD GLD SLVR)
* GRG.V (GOLDEN ARROW RESC) IMR.V spin-off. $3.6 mil MC, 35 properties
MTB.V (Mountain Boy Minerals Ltd)
BBR.V BBRRF.PK (BRETT RES)
CLZ.V (Canasil Resources Inc)
IPT.V IMPJF.PK (Impact Minerals) - NEW
LSM.V LASCF.PK (Langis Silver & Cobalt Mining Co Ltd)
CBP.V CPBMF.PK (CONS PAC BAY MIN)

* = I own shares.

There are expanded profiles on each company, way below. But before I get to that, let me discuss my methodology, and the problems with it.

See the number above, listed after each company in the first list? That number represents the number of silver ounces in the ground that you get when you buy an ounce of silver's worth of stock. The number treats all reported ounces in the ground as equal, however, they are NOT EQUAL. Some ounces in the ground are more certain and others are more speculative. Some are higher grades, some are lower grades. Some have been well drilled, others have less drill results. They range from most certain to least certain such as: "proven & probable reserves," and then, "measured, indicated, or inferred resources." A reserve has a feasibility study produced for it. A resource, does not.

Here's the math on how I calculate that one number. First, I get a market cap by multiplying the fully diluted shares (which bullishly assumes all options and warrants will be exercised and converted into outstanding shares) by the share price in U.S. dollars. Next, I divide that by the silver price, so the market cap is denominated in terms of silver ounces. Then, I divide the ounces in the ground by the market cap as denominated in silver. This produces the single number of how many ounces of silver in the ground you are buying when you give up one ounce of silver in your hand, for shares of stock, instead. This way, you can not only compare silver stocks to each other, you can compare them to silver directly. This also helps people in other nations, using other currencies, to value these companies.

This valuation does not include zinc, or copper, or lead, but it does include gold at a 1:10 ratio of gold:silver. At goldsheetlinks.com, they add 100% of proven & probable reserves, but only 70% of measured & indicated resources, and only 50% of inferred resources. I don't do that. I count them as all the same.

I believe that the two most important numbers that a silver mining company can report are the resources in the ground, and the number of their fully diluted shares. Of course, there is much more to a mining company than that, but without those numbers, it is extremely difficult to even start an evaluation. This report highlights those key numbers, where possible. If you think those numbers are also important, please email the executives of the mining companies you own, and ask them to make sure their numbers are clearly published at their websites.

Problems with my methodology: My methodology assumes that the more ounces in the ground, is, in theory, best, given that I expect much higher silver prices. However, unless the price of silver really moves much higher, my methodology may not be the best one. If silver does really move up very high in value as compared to today, then I expect my methodology to be one of the best predictors of rising stock values, because more ounces in the ground mean more leverage to rising silver prices. However, the companies with greater leverage to the upside usually also tend to have greater leverage to the downside, and thus, tend to be more volitile.

Other factors to consider that the single number produced by my methodology does not: A resource calculation number does not tell you the entire picture about a company. The resource calculation number is designed as a starting place for further research. Other very important considerations are as follows: How much existing mining infrastructure is in place? The more the better, so think of it as a "bonus". How much cash does the comapany have on hand, and what is their burn rate? What is the management's attitude towards money, silver, hedging, debt, and dilution? This is why I list "additional comments" in the company profiles, below.

I don't consider grade to be too important (although I list it when I can), because I consider the cost to mine to be the more important consideration. The "cost to mine" is determined in a feasibility study, which is the last thing produced before trying to raise money for final construction of a mine. And usually, they cannot even count silver as a resource unless it is at least somewhat feasable to mine at today's prices for silver. And this is why I count all the ounces as the same. If a low grade ore can be mined more cheaply, and if a higher grade ore costs more to extract, and if it has to be somewhat economically feasible even at these low silver prices to be counted, it balances out quite nicely.

My methodology is the natural result of my study of the silver market and my religious views. To read about my religious views, see my other web site, bibleprophesy.org There are two essays near the top of the page that explain why I believe the entire world will return to using gold and silver as money again before the end times. See Ezekiel 38. Also, see my essay: Biblical Guidelines for Managing your Money

See my June 18, 2004 article: I'm insanely bullish on silver.

To quickly "tab" down to the company you are interested in, note the symbol. Then hit "control-F" to "FIND" the symbol below.
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If I use a word you don't understand and is not listed in the dictionary at www.m-w.com you can look up the meaning at http://investorwords.com/

WEEKLY COMMENTARY (All new in this section):

My wife and I had a lovely wedding two Saturdays ago, and I love being married to my new wife, Shanna Hommel. We had a "honey-work" vacation to the Silver Summit in Idaho. We got married just in time! Due to the fact that I was travelling between Wednesday and Sunday, I did not produce a weekly report last week. I think this was the third time I've skipped one. Amazingly, since I've skipped a few, I've been doing this over a year now! Boy, does time fly by when making money!

Shanna video-taped me when I spoke, so my presentations will soon be available for purchase. I gave an hour-long presentation the day before the conference, which was followed by two and a half hours of questions and answers, for 3.5 hours total, but only the first two hours were taped. On the second day, I finished off the conference with a 15 minute talk on silver, and why it is money, and why the mining companies should use it as money.

The miners should not hold cash in the bank, they should hold silver bullion in hand. If the silver miners refuse to use silver, their own product, in the best and most useful way, as money, then who will? Miners need to be leaders, and promote their own product with their actions by holding their money in the form of silver!

The biggest development at the conference, in my opinion, was that many shareholders are now growing increasingly aware of this issue, as the major silver companies have just recently become cash rich due to financings and due to investor sentiment growing so bullish for silver bullion!

Attention Shareholders! The miners will not change, unless you demand change! I, alone, cannot continually badger the miners by myself effectively, especially if I'm not one of their shareholders. If you want this change, you have to contact management yourself! Ted Butler and I need more help.

If you are an owner of cash rich silver stocks, and if you are also a holder of silver bullion because you know it provides the necessary safety and liquidity for you, then you should demand that your mining companies also take advantage of the safety and liquidity that silver bullion offers its owners.

I think the top five silver miners have about a billion dollars in cash. With that money, if they bought silver, I think they could break the manipulation at COMEX. However, with the limits at the COMEX of 1500 contracts per person, and a possible total delivery limit of 1.5 million ounces in one month, would the miners even succeed in acquiring the silver they attempted to buy, or would they drive up the price with even less effort?

For more on this topic, see my previous essay:
Miners to Use Silver as Cash - 27 November 2003

Ted Butler has also written a few times advocating that the miners buy silver bullion. See
Time to Act--August 23, 2004
Miners Subsidize The Low Silver Price--July 27, 2004
A Modest Proposal--March 16, 2004

Let me state boldly that I have an agenda, a plan! Agenda--"2 : an underlying often ideological plan or program"

My ideological plan is to convince people to use silver as money, in preference over paper cash. This will help the silver price more than anything, as monetary demand is everything! My plan is to convince shareholders to demand their silver companies to use silver as cash. Then, after all the top 4 or 5 silver miners have substantial silver bullion holdings, we can more easily and effectively get other public companies to invest their surplus cash into silver bullion to protect their money from continued dollar devaluation. (This is why it is so important for the miners to act! To get the miners to lead other public companies by way of example! Shareholders who own bullion are the real leaders, and will direct the companies they own to act next.)

After all, the public action of silver companies buying silver will be such a clear action that it will make the rest of the investment world wake up and take notice of silver!

The next public companies to convince, I believe, are the gold companies. Ending hedging is one thing. Ending the participation in paper dollar holdings is the next logical step, since the dollar is really a failed derivative of gold!

Step two really consists of getting public companies, who are not involved in the metals sector, to buy gold, but especially silver. The two most likely companies, I believe, are Ford Motor Company and General Motors. The reason is that these companies are widely recognized, and are the backbone of American industry. Also, they are excellent candidates because of the heavy debt load that these companies carry. Ford owes $180 billion! GM owes $280 billion! But their market caps are only around $25 billion! They each have billions in cash! Ford has over $15 billion and GM has over $25 billion. That GM has about as much cash as their market cap means that the market is strongly considering the possibility that GM may go bankrupt! Since they may go bankrupt (unless massive inflation saves them), buying silver bullion may be the only way that GM can survive! Why should I offer advice to companies in debt? Well, I have a bias against bondholders, since I know that usury is wrong. Therefore I would rather that GM protect their shareholders and pay back their bondholders with devalued paper money.

Now, contrary to Richard Russell's idea that excessive debt will create a demand for cash to repay the debt, and thus, deflation and increased value of dollars, (and reducing the value of precious metals). I believe the opposite will take place. After all, it is simply inconceivable that GM can sell silver or gold at today's prices to raise the cash to pay back their bonds! First, it's impossible because GM does not have any silver or gold, and second, GM would have to sell more gold than the US gold hoard to do that, and that is just not reasonable at all. Richard, are you listening? You have 12,000 paying subscribers I hear? Help them out, and start talking some sense on this topic, ok?

I believe, from my personal research and a look at the statistics from the silver institute and the CPM Group, that even one billion dollars of demand for silver will drive the silver price much higher. I also believe that Ford and GM will only be able to avoid bankruptcy if there is a massive inflation. I also believe that either Ford or GM could cause the inflation to occur that will save them if they merely put some of their corporate paper money into real silver money.

Example: If GM puts $1 billion dollars into silver bullion, it could drive the price to $20-50?/oz. Their next billion dollars could drive the price to $30/oz. Their third billion dollars could drive the price to $40/oz. By the time GM invests $10-15 billion dollars, the price of silver could be $100/oz. By the time GM invests $25 billion dollars, the price could well be $200/oz. Such growth in the price would then attract many other investors, who could well push the price of silver to $1000/oz. By that time, GM's investment in silver bullion could grow, as follows:

$1 billion at $20/oz = 50 mil oz. silver
$1 billion at $30/oz. = 33 mil oz. silver
$1 billion at $40/oz. = 25 mil oz. silver
$15 billion at $100/oz. = 150 mil oz. silver
$7 billion at $200/oz. = 35 mil oz. silver
Total silver = 239 mil oz. silver --perhaps more silver than the world has, estimates of which range from 67 mil oz. to 600 mil oz.

Total value of that silver at $1000/oz.? $239 billion, which is slightly less than what GM needs to pay off their debt of $280 billion! Of course, if the silver and gold price "go to infinity" as the dollar fails completely, then their debt, and all debts, will be wiped out completely, and any and all silver bullion accumulated will be a substantial and necessary asset!

There is precedent that this can occur, since a few years ago, Ford stocked up on palladium when prices hit over $1000/oz., and delivery failures were happening.

It is ironic that government devalued and demonetized silver about 100 years ago by declaring that silver was not an acceptable form of payment for debts over $5! But as we know, nearly all such idiotic and false government decrees (such as "silver is not money" and "money (silver) cannot be used to repay debt") eventually cause the exact opposite to occur. Silver will soon be re-monetized as never before! The irony now is that the only way people will ever be able to pay off their debts is to start buying silver! The resulting price increase of silver, and inflation, will help the people, and large corporations, to get out of dollar-denominated debt.

Please note that I am not advocating going into debt to buy silver! Debt is dangerous! And debt is especially dangerous when at an interest rate! And this brings me to my next topic, that of interest rates!

UNDERSTANDING INTEREST RATES & COMPOUND INTEREST!

I have recently learned something staggering about interest rates that I must share. For few years, I have known that over a few generations, say 240 years, at 6% annual compounding interest, you can grow $1 into a million! (This is not common knowledge.) (More importantly, from this example, you can turn a million into a trillion!) This is an important concept, because it shows how those who lend money at set interest rates, 6%, with collateralized loans, can quickly gain world power over national governments. All you need is a religious code that teaches the next few generations of your children all about lending to strangers, and you have it. Interestingly enough, the Federal Reserve "earns" the "paltry" 6% per year on their dollars.

Now, this does not seem like such a tremendous insight, but wait. Over 2000 years, one dollar at 6% interest will grow to $385,855,472,630,337,000,000,000,000,000,000,000,000,000,000,000,000! (or one ounce of gold will grow to that many ounces at 6% in 2000 years!) See why usury is forbidden?

I think that's about 4 x 10 to the 49th power! Such staggering numbers can only be comprehended when contemplating all the atoms in the entire universe! The point is that you certainly cannot own that number of ounces of gold, it's just impossible! But what are the implications of this?

Therefore, I began to think, and think really hard! Should it be impossible to earn more than 6% per year consistently? Yes, that is exactly the implication! But wait! It's only impossible to do "consistently", and only impossible at the very top of the growth curve at the huge sizes! So, there's more to it than that! For a few days, I mistakenly thought it would be impossible to expect growth of more than 6% per year, no matter how much money you have, but that's just not true at all!

It is not wrong to earn or grow more than 6% per year! You should expect to grow far beyond that if you are a small business, or small investor! For example, a kid should be able to buy a can of soda pop at a discount store for 25 cents, and sell it later that same day to a classmate for 50 cents to a dollar and earn a whopping 100% to 300% return in a day! You can grow fast when you are small! It's much harder to grow when large! (Try convincing the kid to carry 12 soda cans, and to work to sell 12 cans a day, and it becomes a real chore to grow that 100%, and earn $3!)

Two more examples showing that rapid growth is good: First, a fertilized egg cell will grow at a fantastic exponential growth rate, as the cells continually divide into two, very rapidly at first. And second, God said to "be fruitful, and to multiply" in Genesis.

You just can't keep growing at 6% when you get to a monster size, there is an upper limit to growth!

Now, when I realized this concept, that fast growth can only occur when you are talking about small money, and that when talking about extremely large money, you can only grow at 2% per year or less, I realized that there are tremendous misunderstandings and lies being told about the kind of growth rates the average investor can expect! The professional money managers on TV will often say that you, the small investor, will be lucky to grow your wealth beyond 10% or 20% per year! Nothing could be further from the truth! The small investor is the most able to grow, and should be able to expect growth of perhaps more than 100% per year! I'm doing much better than that, and I'm a rather large investor! It is the supremely large investors who have a much harder time growing!

Now, to teach yourself how compounding interest rates work, open an Excel spreadsheet. Name a box, for example, the C2 box, "rate". Do that by clicking on "insert" at the top, then "name", then "define". Name it "rate". In that box, you will put 1.06 to reflect a 6% rate, or 1.1 to represent a 10% rate, or whatever you wish. In a new column, starting at A1 or B1, enter a 1, the number that will be compounded. Below that box, in A2 or B2, enter the following equation at the top in the blank space called "formula bar": =(A1)*(rate) You have to put in the equal sign to make it work. Next, highlight the second box. Next, put the cursor over the lower corner of the second box, until it turns into a small "plus" sign. Next, drag the cursor lower, perhaps 200 or 2000 boxes lower. It should create automatically a whole list of compounding numbers that grow ever larger. For example, box 3 should be =(A2)*(rate), box 4 should be =(A3)*(rate), and so on. To see the full numbers, you will need to expand the column wider by clicking and dragging the line between the A and B columns at the top.

If you set this up in an Excel spreadsheet, you will have a handy way of seeing how your own portfolio may grow over time if you earn a 50% annual return, or 200% annual return by investing in silver stocks, which I think is rather conservative, given how small the entire sector is right now, at only about $8 billion dollars total!

Now, here are some really startling facts about interest rates! Consider human growth rates, and the population of the earth! Do the math using the spreadsheet, as I've shown you. How low does the rate have to go in order to get about 6 billion people at the 6000 year mark? Change the rate until "year 6000" is about 6 billion people, and start with 2. What is the rate? The "rate" is 0.365, less than 1%. Creationists use this to show that humans have not been evolving over millions of years, and goes to show that modern man was created about 6000 years ago, as the Bible states. Now the evolutionists will point out that this means nothing, because human populations are sometimes wiped out (just like investment gains sometimes are lost). I will counter that human populations rarely decline, and they do so typically only when civilizations end, which tend to happen when people stop using gold as money, and when enslavement through usury runs to excess!

Now, why did I discuss human growth rates? Because they are strikingly similar to gold growth rates! There are about 4.8 billion ounces of gold in the world that have been mined in all of human history! The amount of gold in the world, per person in the world remains remarkably constant at about .75 ounces per person. This does not mean there is "not enough gold" it means there is not enough gold AT TODAY'S PRICES!

Also, therefore, it is next to impossible to grow real wealth, in real terms, (gold), more than .0365% if you owned, for example, over half of all the gold in the world. This goes to show how dangerous it is to allow at law, or guarantee with collateral, any interest rate whatsoever for those individuals who own nearly the entire world!

The point of all of these "growth rate" exercises is to show that tremendous portfolio growth happens greatest when much smaller amounts of money are involved! And therefore, it is extremely good that the size of the silver market is so small. In fact, these exercises help to prove that the massive exponential growth rates we've already seen, an average of 314% gain in the silver stocks for 2003, in a market that is now about $8 billion, and is real money, will likely continue for quite some time.

And speaking of big money, bonds and the housing market, both are set for a fall. Too bad they can't grow a tree to the moon!

So, these interest rate exercises show why the housing market, a $20-30 trillion market?, is supremely overvalued, and cannot continue to grow at recent growth rates.

And this finally brings me to the news on Freddie Mac and Fannie May. I think the "accounting irregularities" are only the tip of the iceberg. I believe the true scandal will prove to be worse than Enron. They have interest rate derivatives that are sensitive to changing rates and counter-party risk such as people walking away from their home mortgages? That's not a sound business plan!

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Looks like the dollar is headed for a big fall, as the bond market has no buyers, and Bill Gross, the most important bond manager in the world, has been bearish on bonds for a while now, but he is putting forth a greater warning now. Also, there is news that the bankers want to devalue the dollar another 20%, which would take the gold price to $500 to $550 quick.

Thu September 09, 2004 02:12 PM ET

By Wayne Cole

NEW YORK (Reuters) - Treasuries prices turned lower in choppy trade on Thursday as an auction of U.S. government debt drew almost no private demand, leaving the dealer community holding a pile of paper.

"It was an extremely ugly auction. And that's something nobody wants to see, not the Street and certainly not Treasury given the amount of borrowing they have to do," said Sadakichi Robbins, head of global fixed-income trading at Bank Julius Baer

The sale of $9 billion in reopened 10-year Treasury notes went at a high yield of 4.195 percent, well above expectations, and drew bids for only 2.12 times the amount on offer, down from August's 2.90 level.

Indirect bidders, including customers of primary dealers and foreign central banks, picked up only 2.8 percent of the issue. That compares to 54 percent in the original sale of the notes and 38 percent at the last reopening.

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Do you have any idea what that means? They tried to sell $9 billion worth of bonds, and only sold $250 million worth of them to "indirect bidders" which is the general public! I could raise $250 million for the silver stock mining world in a heartbeat if I had a large enough audience to tell the story to! Give me about an hour on CNBC, and I'll raise a billion!

But I predicted exactly this, that they would not be able to sell bonds, which will be a disaster since they have a $600 billion deficit to finance! I said, "How can they sell bonds, when they have been buying bonds to prop up the bond market, and keep interest rates low?" So, this is exactly why interest rates will be rising, and why the value of the dollar will be going down, and gold will be going up.

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Next, Bill Gross, who is probably the most important bond manager in the U.S., who has been bearish on bonds for a while now, is now very bearish on bonds! Warning to bondholders (usurers) that they will NOT get what they think is coming to them (a real return). Instead, they will be receiving much less, and the usurers will get what they deserve!

As reported by lemetropolecafe.com (which is why I'm a subscriber, and suggest you subscribe, too, or at least sign up for the two week trial) Bill Murphy wrote of Bill Gross:

Bond guru Bill Gross of Pimco came out with his October 2004 outlook and it created quite the stir. Titled "Haute Con Job" he sounds a bit like some of us in the GATA camp, except he just can’t bring himself to calling a "spade a spade":

"Deceptive hedonic/substitution adjustments also serve a government burdened not only with hundreds of billions of annual deficits as far as the eye can see, but ladened with a demographically aging U.S. workforce rapidly approaching Social Security time. By fudging on inflation, they pay less and the amount could cumulatively run into the hundreds of billions over the next few decades. They disserve, of course, all of those who receive social security, as well as other private pensioners dependent on an accurate accounting of prices paid. They disserve buyers and holders of TIPS – inflation protected securities – which adjust inadequately to a faulty and near fraudulently calculated CPI that one day could total billions of dollars per year for TIPS holders. And they disserve all owners of U.S. Treasury obligations – including foreign central banks and institutions – who mistakenly assume that they are earning a real return over and above inflation, and that the dollar upon which they are denominated is justifiably strong because of GDP growth and productivity numbers that are pumped by hedonic magic to resemble the Arnold Schwarzenegger of 1980 instead of his verbal “girlie man” analogy of today."

"No I cannot sit quietly on this one, nor as I’ve mentioned, have other notables in the past few years. The CPI as calculated may not be a conspiracy but it’s definitely a con job foisted on an unwitting public by government officials who choose to look the other way or who convince themselves that they are fostering some logical adjustment in a New Age Economy dependent on the markets and not the marketplace for its survival. If the CPI is so low and therefore real wages in the black, tell me why U.S. consumers are resorting to hundreds of billions in home equity takeouts to keep consumption above the line. If real GDP growth is so high, tell me why this economy hasn’t created any jobs over the past four years. High productivity? Nonsense, in part – statistical, hedonically created nonsense. My sense is that the CPI is really 1% higher than official figures and that real GDP is 1% less. You are witnessing a "haute con job" and one day those gorgeous statistics just like those gorgeous models, will lose their makeup, add a few pounds and wind up resembling a middle-aged Mom in a cotton skirt with better things to do than to chase the latest fad or ephemeral fashion. If those Moms are holders of government bonds based upon a benign outlook for inflation, they had better cash some of them in, especially at today’s 4.0% yield for 10-year Treasuries."

For the entire piece:

http://www.pimco.com/LeftNav/Late+Breaking+Commentary/IO/2004/IO_Oct_2004.htm

Now, Bill Gross's "sense" is that real inflation is 1% higher than they say. However, if you count in all the things they exclude, such as food, energy, medical, housing, education, and adjust based on the average of what people spend on these things, I strongly suspect that inflation is running along at about 8-10%! About 6 months ago, I read an article that calculated the price increases on everything that people spend their money on, and in the proportion that they spend it, and inflation was running at 7% or so.

COMING NEXT, the 20% dollar devaluation (planned inflation!)!

DJ Forex Focus: G7 Holds Downside Risks For Dollar

UK Paper Says Pressure Grows On G7 To Agree to U.S. Dollar Devaluation
By Neal Keane - Dow Jones Newswires - Sunday, September 26, 2004
LONDON -- U.S. President George Bush is being urged to signal a dollar devaluation of up to 20 percent to rebalance the global economy ahead of Friday's Group of Seven and International Monetary Fund meetings in Washington, the U.K.'s The Business newspaper reported.Senior U.S. administration officials in Washington have over the past few days tried to influence the White House and U.S. Treasury to put pressure on the G7 to agree to a dollar depreciation in its final statement, the newspaper said.Recent data have shown the U.S. current account and trade deficits running at record levels, and economists have said a dollar depreciation is needed to rein these in. The euro was quoted at $1.2260 in late New York trade Friday, compared with $1.2273 on Thursday.

The dollar was fetching 110.64 yen versus 110.63 yen, and 1.2624 Swiss francs versus 1.2598. The pound was trading at $1.8041, up from $1.7982. The G7 will also call on the world's oil producers to take further action to bring down prices, The Sunday Times reported. Crude oil reached almost $49 a barrel in New York Friday, amid continued concerns that high energy costs will sap global growth. Spurring economic growth will be high on the agenda at the meetings of G7 finance ministers and central bankers next week, U.S. Treasury Secretary John Snow said Friday. "The promotion of economic freedom, opportunity and growth throughout the world will be a key topic," he said in a statement in New York City. G7 officials meeting in Washington next week will be representing Canada, Italy, France, Germany, Japan, the U.K. and the U.S. Officials from China will also be present. By Neil Keane; Dow Jones Newswires; +44-20-7842-9495; neil.keane@dowjones.com

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At the Silver Summit I saw a movie presented by David Morgan on the failure of LTCM. The hope of the geniuses at LTCM was to "eliminate risk" through taking two opposite derivative positions, and learning how to put an accurate price on the said derivatives or options, that other traders might not know how to price as accurately, and thus, earn the difference! But they were thinking of eliminating the risk of volatility, or eliminating the risk of positions going down, and they forgot about eliminating or reducing the risk of counter-party default! The only thing that cannot "default" on you is real payment in full -- real gold and real silver bullion. To eliminate the risk of not getting paid, you have to have already received payment in full, in advance! And even that can "default" if it is destroyed through war or a natural disaster, or lost, or stolen!

This brings me once again an occasion to mention my essay, The Moral Failures of the Paper Longs - 22 January 2003. Those people who think they can win by betting on derivatives, futures contracts, or options, are forgetting completely about the dangers of counter-party risk! They also forget the two essential features of gold that make gold and silver so valuable. First, real gold and silver do not expire! They last over time! Second, gold and silver are payment in full! Paper promises are not!

Gold and silver are also so valuable because they are limited! You cannot grow piles of gold and silver to the sky at 6% forever! There is an upper limit to gold and silver accumulation--limited to no larger than the number of ounces that the human race has accumulated up to now, which is about 150,000 tonnes or about 5 billion ounces. (Plus the 1.6% per year of about 2500 ounces of gold that is mined each year.) And these days, the enormous piles of paper money that exist in the world will serve as a reminder that the rule "first come, first served" is true in a world of limited resources, and unlimited paper money.

Next, where do you get silver bullion? I have found only about 5 bullion dealers in the U.S. that may have over 100,000 ounces of silver bullion available, listed here. JM, the largest refinery, and perhaps a few others, and that's it. I researched this, and called about 10-15 bullion dealers to locate these "top 5", because of my own portfolio needs. My next bullion order may be about as large, and I wanted to know, in advance, where I could get that much silver. Therefore, I know the bullion market is very tight, and very small! I believe delivery defaults are coming. They are already here if you consider delays and limits as defaults!

There is one dealer that I'd like to discuss, NorthWest Territorial Mint. I believe they are the largest mint in the US that is making the 1-oz. silver "rounds", which are just a one ounce silver piece. They therefore also have the lowest price, about 45 cents over spot in large quantities.

Now, there are two discussion boards of people discussing delivery delays from their orders of bullion from NWTM.
http://www.goldismoney.info/forums/showthread.php?t=7894 -- from 2003 to 2004

http://goldismoney.info/forums/showthread.php?t=12590 --more recently

NWTM flew me out personally to view their mint. They are a large mint, and were in the process of expanding their bullion department, with ongoing construction for about 4 more desks for the bullion department. They employ about 50 people at the mint, and mostly make money from minting commemorative brass medallions. They had 4 people in the art department who paint and colorize coins. They have about 5-6 people in the marketing and PR departments. They have several people in the computer department. They have a huge industrial floor filled with refining and minting equipment. The day I visited and toured their mint, they were refining and minting about 50,000 ounces of silver bullion, melting down the silver, and minting silver rounds.

NWTM also this week just sent me a check for $1000 for estimated "commissions", since I have linked to them at my websites, and have been discussing them in this commentary.

At the Silver Summit, I mentioned my concerns about delivery delays, and I have been forwarding a few complaints directly to Ross Hansen, the owner and operator of the Mint. In the audience at my speech, a man I trust said he recently ordered 90% silver bullion, which arrived in about two weeks, which is just fine.

Now, I suspect that the longer delays are coming when people order silver rounds. I believe that NWTM is taking people's money, using it to place an order for silver from other dealers, which may take a while to arrive, and then they have to mint it into rounds. This is a process, since they probably do not have a huge inventory of silver rounds at the moment of high demand. Also, I suspect that many people are sending personal checks in the mail, which there is and additional 10 day hold time due to default risk from check fraud. And this adds about 2 weeks to the order in many cases, that several people may be forgetting to count.

To find bullion in large quantities often takes a while, even if you were to order from COMEX, which is the location of last resort and the highest price. Other dealers or refineries often will sell excess bullion to other dealers like the NWTM, because it's a better price than shipping silver to the COMEX, but probably only in limited quantities.

NWTM had about a million dollars worth of inventory in the form of palladium one-oz. bars. Ross indicated to me that inventory is often in different forms in the bullion business. You may have mostly 100 oz. bars, and the customer wants only rounds, or you may have mostly rounds, and the customer only wants 100 oz. bars. Or you may have only 15 bags of 90%, and the customer wants 25 bags!

NWTM appears to have a communication problem right now, and perhaps an inventory problem with 1 oz. silver rounds. They should be indicating to customers at the time of the order about how long it may take.

Now, if I were a bullion dealer, which I'm not, I would have two prices. The lower price, about 1-3% over the bullion price, would be if the customer would bear the default risk, and if I would use their money to buy silver bullion for them, and act as their broker. That kind of order, naturally, would take longer to fill, and default would depend on the reliability of a third party. The higher price, about 10% over the bullion price, would be if I, as a dealer were to bear the default risk, as I would sell bullion from out of my own existing inventory, and act as a dealer (not a broker). I would be bearing the default and price risk as I would have to order more bullion for myself, which I may or may not receive from the third party. A customer, when ordering, should make sure which way the dealer is going to act; whether as a dealer and selling out of existing inventory, or as a broker and buying from another dealer.

It sounds complex, but it's really rather simple, and this system is what keeps prices fairly even across many dealers in the nation, and is why even one large order can move prices up worldwide.
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Here is an outstanding guest commentary on silver:

Want a Time Machine?

I love the thought of beginning to build some family wealth that can be passed down through generations. Each generation should protect and build on their families wealth, unselfishly and in appreciation and respect for the efforts and sacrifices of those that have gone before them. I like the idea of passing down 10% of my life's earnings. And teach my children to build that wealth for future generations and purposes bigger than their own desires. Remember, income is stolen through taxation and inflation, wealth is not.

BUT I am so very blessed because I can do a lot BETTER than that. Not only can I leave 10% of my life's earning I can make up for several past generations that didn't get in on all the fun. I fully intend to leave many generations of wealth for my family. In fact I already have it for them, it was very easy to acquire and it is completely tax free.

You see there is a form of wealth that has been transported through time at such a huge discount that you can replace your Grandfathers life savings and his fathers before him and many fathers before that with just a few weeks of work. A time machine that gives 100 years wealth for 1 years work.

What makes it sweet justice, is the system that has destroyed honest money, and has put the working man between the twin grind wheels of taxation and inflation, is the system that gives us this opportunity.

Money as we know it today is nothing but a ponzi scheme, where an ever increasing amount of worthlessness is exchanged for goods and services. To make this possible it was necessary to "get rid of" honest money. After all, there is no such thing as an honest ponzi scheme. So, get rid of it they did, no longer is paper money kept honest with gold or silver backing.

For many, many generations honest men earned an honest days wage of from 1/4 to 1 ounce of silver. And in a free economy with an honest money, you would never have to make any more than that because the natural force of deflation, caused by ever increasing productivity would make products cheaper all the time, your quality of life would continually get better because your money would continually be more valuable.

BUT WAIT if honest money should continually be worth more, how much is that 1 ounce of silver your Grandfather earned worth today. I know that farmers are hundreds of times more productive than they were in days gone by. So are transporters. So are construction crews. So are manufacturers. I would think that a man today produces way more than twice what our grandfathers did. What this means is that if we worked for half (or less) of our grandfather's pay we should have an equal living standard. Prices would have been cut in half (or more) because of our increased performance. Therefore if our economy were free and our money honest a days wage today could be 1/8 TO 1/2 OUNCE OF SILVER (or less).

Oh yeah, the time machine. A man works about 40 years. To pass down 10% of his life's earning to his children he needs to save 4 years of income. Figuring 250 workdays a year, each generation should pass down 1000 days worth of work. Well, using the high end of the scale of 1/2 ounce of silver per work day, each generation should add 500 ounces of silver to the family wealth. I intend to leave my entire net worth in the form of silver to my children, this will be several tens of thousands of ounces representing at least a thousand years of savings.

So there you have it, a thousand years for one life time.

I'm already feeling old.

and safe

Tom (earl morris) outacontroler2000@yahoo.com

Tom's commentary to friends and family received one reply:

Hi dad - what is an ounce of silver worth today compared to what it was worth 20 years ago?

And Tom's reply:

Ahhh My young, sweet little lad, your time frame is soooo short. You see, 20 years ago civilization was still, for the first time in the history of mankind, living in a world where all the moneychangers (central banks) were undisciplined by the chains of gold and silver, just as we are today. Your question has several answers, I am assuming that your frame of reference is "Dollars". It is very difficult to divorce oneself from a dollar reference that is so pervasive yet so dishonest. When a person values an item in dollars just the fact that a time frame is necessary for the value to have meaning. proves. that in fact. it has no meaning at all. An item that cost $1 in 1910 was very expensive an item that cost $1 today is very cheap!! No one except the very very rich could have shopped at the 99 cent store in 1900. Yet it is not wealth and value that is changing it is the dollar!!

An ounce of Silver is "Worth" between one and two days labor. Nobody, not even money printers, can take the labor of generations and make it disappear. This world was built with men working for 1/2 ounce of silver a day. And because men are becoming more efficient all the time silver is becoming more valuable all the time. This is why there is no need to derive interest when holding silver or gold, it is its own reward.

Your entire life has been spent in an economic "time warp". Nature has a way of cleansing herself and righting the ship. It is this righting of the ship that I believe is beginning at this time. Part of the warp, is a depression of the gold and silver price to give the appearance that paper money has more value than it does, a sort of confidence game. This allows for the opportunity that I see.

OH by the way 600 years ago silver was worth 700 "DOLLARS". But of course at that time there was no such thing as a PAPER dollar.

By historical standards I am filthy rich, by today's standards mankind has filthy money.

LOVE LOVE LOVE

DADDY

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Apex announced today the appointment of a new President and CEO, a mining operator from Phelps Dodge. Apex Silver Appoints Jeffrey Clevenger as Chief Executive Officer and Terry Palmer as Director Friday October 1

In the press release, they write as if they expect to see silver prices higher than $8.25/oz. "The options [for outgoing president Leonard Kaplan] will vest on the earlier of the third-year anniversary of the requisite shareholder approval or the third consecutive day the silver closing price exceeds $8.25 per ounce."

They also boast that they have $400 million in cash and equities, and that they expect to produce 27 million ounces of silver per year once they put their Bolivian exploration property into production.

Wouldn't you think that they would take care to make sure silver prices rose, and stayed there, before initiating such a huge production decision? Especially in light of the fact that energy costs have risen faster than silver prices? Shouldn't they wait until after silver prices rise higher than energy costs? These seem to be rather basic questions. And since they will be waiting anyway, as they have stated that they plan to produce no sooner than 2007, it seems unbelievably ridiculous that they continue to hold cash instead of silver bullion in the meantime! They are going to wait more than 2 years, or even 3 years, and sit in cash all that time as they expect the silver price to rise! What are they thinking? More than likely, they not thinking! Apex alone has enough cash to clean out the COMEX! Here is proof:

http://www.nymex.com/jsp/markets/sil_fut_wareho.jsp

45.3 mil oz. of silver is in the registered category, available for delivery against futures contracts. x $6.90/oz. = $312 million dollars! Less than the cash of Apex silver! But no, Apex will probably watch the silver price continue to rise, while the value of their cash is continually destroyed. I spoke with Igor Leventhal (investor relations of Apex) about this at two gold shows now, and he is firmly opposed to buying silver bullion, with not a single rational explanation available. Apex mostly has institutional investors, who probably could care less about maximizing shareholder's dollars, the institutions probably just want to "park" a miniscule bit of their funds into what they think is a "leveraged silver play". But the cost of Apex's silver ounces in the ground, as astute readers of this silver stock report know, are among the highest available! Investors will get what they deserve, don't they? And this also goes to show why it is so difficult for those people with "tons of money" in the multiple billions of dollars to actually get 200% returns!

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Here are a few GREAT recent essays, in case you missed them:

Silver - Investment Opportunity of the Decade (Thunder Capital) August 26, 2004

GOLD WILL RISE, BUT SILVER MAY SKYROCKET

DECLINING GOLD RESERVES BENEFIT JUNIORS--Hommelburg (no relation, but he sure sounds a lot like me!)

The Hommelburg essay is OUTSTANDING! It presents exactly why the junior stocks are among the best investments right now. In sum, the majors have stopped exploring since about 1996 as the gold price dropped, threatening their continued solvency. Then on top of the bad news of the low gold prices, as gold prices recovered, the majors discovered the pain of hedging and locking in a price for gold that ends up being lower than the rising market price! So, as gold prices rose, the majors have continued to struggle for survival, and have continued their neglect of exploration, for nearly 8 years now! Their neglect is now our opportunity!

News Reports:

'Mogambo Guru' says country should return to using silver, gold

Even banks are recommending silver, but the mining companies like PAAS, APEX, HL, and CDE still just don't get it!

http://futures.fxstreet.com/Futures/content/100890/content.asp?banner=mizuho&menu=commodities&dia=2992004
Wednesday, September 29, 2004 10:59 GMT
Interim Report
by Mizuho Corporate Bank
http://www.mizuho-cb.co.uk

Comment: For the last twenty years silver has spent most of the time trading between $4.25 and $6.50 per ounce, well below the record $50.00 it hit when the Bunker-Hunts tried to corner the market in 1980. This March prices spiked dramatically higher on the break above $6.75, to $8.43, then retreating even more quickly from the most overbought situation since 1987. They based against $5.35 in May, the mean of the last twenty years, and are re-testing important long term resistance between $6.50 and $7.00. This time around silver is not as overbought, bullish momentum is strong, and there is a clear desire to build long positions. A monthly close above $6.80 or a weekly close above $7.00 could set off yet another very dramatic rally to the $8.50/$9.00 area. A weekly close below $5.25 would force us to review.

Strategy: Buy at $6.20/$6.00, adding to $5.75; stop below $5.20. Add to longs on a monthly close above $6.80 and on a weekly close above $7.00. Medium term target $8.00 and probably $9.00/$9.50 if enough momentum builds.

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By the way, base metal prices for zinc and copper have hit new highs in quite some time this week. Zinc is up to .49/lb from about .45 a few weeks before and Copper is at $1.41/lb. from about $1.20-$1.30 a few weeks earlier. This will drive interest and buying into many of the silver/zinc and silver/copper companies on this list--that may help to push up share prices next week. See http://www.metalprices.com/

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This month, I've done more trading than usual, and I've bought 6 silver stocks. Although you can note which stocks I've bought if you've been paying close attention to the free reports, you don't know how much of each I've been buying. But if you buy the look at my portfolio, you can see which stocks I've been accumulating the most of--in case you find that additional bit of information helpful.

People always want to know about my recent buys. And why? Because they represent the accumulation of knowledge of silver stocks that I possess, and it is thus a good summary of my trading experience, which has now proved to be quite good. If you have not bought the look at my portfolio, or if you bought it only once before, this is a good month to take another look, or begin an annual subscription.

I just updated the "look at my portfolio" last night, on Sept. 30th, so subscribers can log on, and see the changes.

Now, I just discovered something, that I realized that I should probably promote. My top three holdings have outperformed all my other holdings by far! The gains, as of Sept 30th, since I bought the stocks, are as follows:

My #1 holding: up 346% since January, 2004, is my second best pick!
My #2 holding: up 401% since December, 2003 is my best pick!
My #3 holding: up 221% since December, 2003 is my third best pick!

So, I realized... and wrote to my paying subscribers...

That's a wonderful track record, especially since I bought all three less than a year ago, around the start of the year! But it's even more spectacular when you consider 2004 was a "down year" for the precious metals and silver stocks so far. Prices since Jan., 2004, for silver stocks in general are down 5% for 2004, and there is not a single silver stock on my list of over 100 that has outperformed my top three... deals. It just now hit me how blessed I've been by God and by my readers who have helped me to find these opportunities. Only two other stocks came close, and that is Endeavour Silver and Portal Del Oro, each up about 130% since Jan 2004. I don't know if my picks today on the open market will match the performance of these top three private placement deals, but I expect that a few may do so, and just look at what I've been buying lately!

Furthermore, I've only written a "feature article" on one of the companies. I have not even written a special article on the other two! And I'm a promoter! How neglectful of me!

So, why haven't I promoted the other two companies harder, or even the performance, in the past year? I don't know. I make perhaps two orders of magnitude more money from the performance of the portfolio than I make from people signing up to look at it.   And I suppose I like a little privacy, after all, private property requires privacy. I primarily offer this thing you can buy because so many people hit me up for specific stock tips, and this is the most fair way to do it. Also, it helps to pay the webmaster teams, and it is a source of "sustainable organic growth" that helps pay for other promotions.

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To read about my religious views, see my other web site, bibleprophesy.org There are two essays near the top of the page that explain why I believe the entire world will return to using gold and silver as money again before the end times. See Ezekiel 38. Also, see my essay: Biblical Guidelines for Managing your Money
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Because I have a market reach, I also receive a lot of tips about silver stocks. And thus, I believe I may have invested in some of the best ones that came my way. If you believe I may have an edge based on my work and unique position... then the best way for me to share this with you is to is tell you more precisely where I put my money. It's not investment advice. I offer a monthly "look at my portfolio".   I do not issue recommendations, and I don't list number of shares or the size of my portfolio, but I will show the top investments in my portfolio, by rank, updated monthly. It includes which stocks are 9% and more of my portfolio, those between 9% and 6%, under 6%, under 3%, and under 1%.

I have two web sites, and two different customer support teams. If you have any questions about billing or order fulfillment, you need to contact the appropriate support staff team, and not me. I manage a large portfolio, create this weekly report, handle private placements, do radio interviews, web marketing, go to the gym, try to live a life, and I don't have time to process billing requests. I don't bill any cards anyway, and I can't check or fix your order status. My support staff handles all of that.

To order at: http://www.goldismoney.com/articles.php
Price: Various packages ranging from one month to one year, from $34 to $295 --most savings
Customer Service: support@goldismoney.com   The toll free telephone customer support line is: 877-895-6824.

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Price: Monthly rebilling at $39.95. --most convenient
Customer Service: http://www.silverstockreport.com/customerservice.htm
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Private Placement Opportunities for Sophisticated/Accredited investors: (This is not a solicitation for any stock, and I'm not brokering any securities) To be added to my PP email list, sign up here: http://www.goldismoney.com/subscription-pp.php

You can sign-up, or unsubscribe, to this report at http://www.goldismoney.com/subscription-ss.php or silverstockreport.com. Help your loved ones avoid the ongoing collapse of the dollar. Protect your inheritance. Please tell your friends and family about this silverstockreport.com

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I will be speaking in Idaho at the Silver Summit in September 23-24
Specifically: Thursday, Sept 23rd at 10:00AM, for one hour (maybe more) planned to be in the Idaho Room, North
(No extra cost, no pre-registration. I don't do futures contracts! So, it's first come, first served--like silver itself, and like private placements. Get there early if you think it will be busy. I can't tell what kind of crowd there will be. When I spoke in Vancouver in June, about 10-15 people had to stand.)
http://www.silverminers.org/summit/index.html

I will be speaking in Toronto at the Cambridge Gold Show on October 3-4.
http://www.goldshow.ca/

Toronto schedule:
SUNDAY, Oct. 3
10:30-11:00 Workshops - 1/Bishop2/Hommel 3/

MONDAY, Oct. 4
1:00 Panel - Stock Picks/E. Coffin, MCRoulston/Taylor/Hommel/Turk

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2 Silver Stock Funds

1. Richard Greene, thundercapital.com $100,000 minimum, 2 year hold, sophisticated/accredited investors only. Will use margin, and/or short sell.

2. Philip Judge or Simon Heapes, anglofareast.com Less than $5000 minimum? No margin or shortselling.

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General Commentary on Silver (slightly modified from last week):

Now, I think it's time that the silver community started a letter writing campaign to the editors of newspapers around the world, to tell them about silver.

Here is a sample letter:

May 21, 2004

Dear Editor,

I'm a silver investor. I believe paper money is fraudulent. There is over 30 trillion dollars, U.S., worth of bonds in the world, but less than 2 trillion dollars worth of gold, according to gold.org.

As of April, 2004, the size of M3, the money in U.S. banks, has reached 9.1 trillion dollars, yet due to fractional reserve banking, the total of U.S. currency and coin in circulation is only 724 billion dollars as reported by treas.gov.

At silverinstitute.org and cpmgroup.com, they each report that silver has been in a deficit for about 15 years, where world mine supply has been about 500 million ounces, scrap supply about 200 million ounces, and industrial and jewelry demand about 800 million ounces. The difference, about 100 million ounces, has come from investor and government selling, drawing down reserves of silver. Known supplies of refined silver are down to about 250 to 600 million ounces. At the COMEX, they are down to 48 million ounces of silver left that is registered for delivery, which you can see at nymex.com.

The governments of the world are printing up too much paper money, and the world is running out of real money, silver. I believe this will lead to the price of silver rising dramatically in value, around the world.

I urge your readers to verify the statistics I have provided, and to make their own decisions.

Sincerely,

Jason Hommel

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I wrote an article:
Miners to Use Silver as Cash - 27 November 2003
Apparantly, I was about 6 months too early in my predictions, but that's ok, I'm a very long term thinker and investor. I did not miss the mark by too much time, and if you think in terms of decades, I was right on the mark.

There are several companies that are increasingly deciding to hold their cash in the form of silver bullion. These companies are:

SSRI SSO.V (SILVER STANDARD RSC)
SRLM.PK (STERLING MINING)
NPG.V NVPGF.PK (NEVADA PACIFIC GOLD)
EDR.V EDRGF.PK (ENDEAVOUR SILVER)
And PAAS (Pan American) is now thinking about it.
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The Silver Valley in Idaho is bringing back the use of silver as money. A silver one-ounce coin, a "Sterling" to be used as a $10 piece.
http://shoshonenewspress.com/index.asp?Sec=News&str=2869
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For news on the New Hampshire Sound Money Bill, that proposes to use U.S. Treasury minted Silver Eagles and Gold Eagles as money see: http://www.goldmoneybill.org/

25 Reasons why the Sound Money Bill Must Be Supported
by Jason Hommel

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There are two excellent annual silver surveys that are sponsored by industry.

The survey by silverinstitute.org costs $195, 87 pages.
http://www.silverinstitute.org/wssum03.pdf -- 8 page free summary of last year's reeport.

The survey by cpmgroup.com costs $150, 162 pages.
http://www.cpmgroup.com/SSpress2004.pdf --3 page press release.

The two reports present the case that about 500 million oz. of silver are mined each year, about 200 million oz. of silver comes from scrap, and about 100 million oz. of silver comes from investor dis-hoarding, either by individuals or government sources, in order to meet the annual demand of about 800 million oz. of silver by industry & jewelry. This is wildly bullish, because investors are net selling more than buying, and I think the potential of investor demand is huge, and can be measured by seeing how much paper money there is in the world.
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Here are two U.S. Government produced reports on silver, containing data on years from 1900 to present, on U.S. & world production, and U.S. consumption, and U.S. industry & government stockpiles.

Report #1
http://www.goldismoney.com/ssr/USsilver.xls
Report #2
http://www.goldismoney.com/ssr/USsilver2.xls

I evaluated these government produced reports in my silver stock report #36.

In sum, we are running out of silver. The U.S. government had over 3 billion ounces of silver in 1940, and today, has very little left, or none.

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The Commodities Futures Trading Commission

The CFTC report on the allegations of manipulation in the silver market -- 9 page report
The CFTC report confirmes much of the research above, and almost outlines the bullish case for silver!
--My comments on the CFTC report are in silver stock report #34 & #35

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Silver consumption, per capita, in the U.S. is the same today, in 2004, as it was in 1945.

And what is the per capita consumption of silver in the U.S. today? 5500 tonnes x 32152 = 177 million ounces of silver used per 285 million people. 177 / 285 = .62 oz. silver consumed per year, per person, in the U.S., whether in 1945, or in 2004. Each person in the U.S. today, on average, uses 6 tenths of an ounce of silver.
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As the New York Times, January 11, 1859, page 2 said---
"It is well known that the most colossal fortunes the world ever saw have been based on silver mines..."
--quote found by Charles Savoie

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WHERE and HOW to BUY SILVER BULLION
http://www.goldismoney.com/buy-gold.php

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My 2004-2009 price predictions for gold and silver:
2004: $595/oz. gold, 50:1 ratio = $12/oz. silver
2005: $1011/oz. gold, 30:1 ratio = $34/oz. silver
2006: $1719/oz. gold, 10:1 ratio = $172/oz. silver
2007: $2923/oz. gold, 5:1 ratio = $ 585/oz. silver
2008: $4,969/oz. gold, 1:1 ratio = $4969/oz. silver
2009: $8448/oz. gold, 5:1 ratio = $1698/oz. silver
2010+: infinity dollars/oz. gold, infinity dollars/oz. silver.

I calculate the gold price rise by guessing that by 2009, M3 will have a "gold-value" like it did in 1980, which is to say, M3 was worth 2 Billion oz. of gold or less. It also assumes M3 will about triple in that time. These figures are conservative, because I see no reason that M3 should be valued more than the gold the U.S. actually holds, which is a mere 261 million oz., not billion. Today, the M3 value is $8870 billion / $425/oz. = 19 billion oz. of gold M3 could buy in theory. The silver:gold ratio is also a very, very vague guess, reflective of monetary demand chasing silver, which is more scarce than gold in above ground, refined form. I have no idea when the ratio of 15:1 will be exceeded, I'm just totally guessing. I suppose it could happen this year or next month for all I know. Of course my real price targets are infinity dollars per oz. for both gold and silver when all is said and done, I just don't know how long that will take, nor what year it will be. But my point in producing the price predictions is to show my bullishness for silver and gold.

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A great overview on silver: Douglas Kanarowski's 78 Approaching Forces For Higher Silver Prices

See also Douglas Kanarowski's article: What Impact Will Digital Photography Have on Silver?

Doug's third article is also excellent: Silver -- the next big thing in the global markets? Answering A Few Silver Questions

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See the 600 year silver chart to see how undervalued silver really is:
http://goldinfo.net/silver600.html

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Look at the summary of the world silver survey by GFMS Limited on behalf of The Silver Institute :
http://www.gfms.co.uk/Publications%20Samples/WSS03-summary.pdf

Note, there is virtually no monetary nor investment demand. Note, the 2002 mine production (585 mil oz.) is greatly exceeded by industrial, photo, and jewelry demand. (838 mil oz.). Note the chart on page five, "Supply from above-ground stocks".

The difference between mine supply and industrial demand was met by a combination of three factors: 1. Government selling, 2. Private selling, 3. Recycling

U.S. government selling is ending, as their stocks have run out, or will run out. This factor will reverse, because the U.S. government will need silver to continue their coin program, and/or need silver when they wake up and decide they need to replenish their strategic stockpile for domestic security. Silver is a war material. China's selling of silver will also likely turn into buying, as China will need silver for continued industrial development, or when they also lose faith in the U.S. dollar.

Private selling has been rapidly shrinking and is now almost ended, and should turn into buying, and become monetary demand. Monetary demand is everything in the silver supply / demand situation. It's not now. Now, it's nothing. But it will become something incredible, because the dollar is dying.

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The following is a "must read": Ted Butler's best ever explanation of how silver is manipulated lower than it should be.
http://www.investmentrarities.com/11-04-03.html

Over 3400 people have signed the silver petition to stop the manipulation at the COMEX:
http://www.PetitionOnline.com/comex/

Ted correctly points out that a lower price creates excessive demand from consumers. However, Ted Butler does not point out, and neglects to mention, that a perpetually low price also creates lack of demand from investors who are "trend investors".

I think most silver experts over-analyze all the supply and demand factors of the silver market. No factor is more important than monetary demand. The force of photographic demand is like a light breeze compared to the hurricane or tornado of monetary demand. Monetary demand is everything.
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Consider the gold market for a moment: Even short selling at the COMEX is nothing compared to monetary demand. The short position most certainly helps to depress the price of gold as the short position is growing larger. However, it adds fuel to the fire if there is short covering, and thus, it can boost the gold price later. But the commercial short position on the COMEX is next to nothing compared to the non-reported "over the counter" trading that is done that does not appear on the COMEX.

(Numbers in metric tonnes, 32,152 oz. per tonne.)

870 tonnes -- the paper position at the COMEX, 280,000 contracts for 100 oz. each.
5,000 tonnes -- the official number admitted that the central banks have sold.
15,000 tonnes -- the number GATA research shows that central banks have sold / or leased.
30,000 tonnes -- the number of official central bank gold, minus either the 5000 or 15,000 tonnes.
145,000 tonnes -- all the gold mined in the history of the world.
2,600 tonnes -- annual mine supply
4,000 tonnes -- annual demand

And all of that is nothing compared to the amount of dollars out there that exist that could buy gold. $20 trillion bonds, $9 trillion M3 = $29 Trillion. A mere 1% is $290 Billion, which, at $500 /oz. is a massive demand of 18,039 tonnes. Do you understand what that means? That means that far, far less than 1% of dollars, in either bonds or M3 can buy gold, because there simply is not that much gold available.

Long before 1% of U.S. paper dollars tries to buy gold, gold will be going up well over $1000/oz., and silver will be headed up over $50/oz.

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To scare away investors--that is the entire reason gold and silver are manipulated in the first place. Only the trend investors can be deceived. The problem is that nearly everyone is a trend investor. Very few investors understand value. If people knew the facts and used their brains, the available above-ground refined silver would be gone by tomorrow, and the price would be well over $20-50/oz. But don't trust me, check the numbers and follow the links:

"The money chart"

   1,000,000,000,000: 1 Trillion dollars
     1,000,000,000: 1 Billion dollars
                1,000,000: 1 Million dollars
$200,000,000,000,000: Estimated total derivative exposure of all banks in the entire world. (20 x U.S. GDP)
$75,000,000,000,000: U.S. Govt. unfunded liabilities; social security, etc.
$45,153,000,000,000: U.S. Household wealth, as of first quarter, 2004. (Includes Real Estate, and investments)
$33,000,000,000,000: World bond market, yr end, '01: http://tinyurl.com/vr7u

$26,400,000,000,000: World stock market, June 2002: http://www.nyse.com/press/1044027443845.html
$20,200,000,000,000: U.S. bond market, yr end, '02: http://tinyurl.com/vr7g
$11,447,800,000,000: U.S. GDP, 2004 q1 http://www.bea.doc.gov/bea/dn/home/gdp.htm
$11,300,000,000,000: NYSE U.S. stock market, April, '04 (363 bill/s x $31.14/s ave.) http://nyse.com (See: Market info: quick facts)
$9,274,000,000,000: M3 (money in U.S. banks) July, '04 http://tinyurl.com/vra0
$7,337,786,947,237: US debt, Aug. 20-04 http://www.publicdebt.treas.gov/opd/opdpenny.htm
$2,360,000,000,000: U.S. annual budget 2005 http://tinyurl.com/3xbd2
$1,860,000,000,000: World "official" gold mined in all of history, 145,000 T (4.6 bil oz.) @ $400/oz. http://tinyurl.com/vrcc
     $400,000,000,000: Estimated silver mined in all of history: 40 billion oz? @ $10/oz. http://snipurl.com/93j1
     $724,174,342,365: Total U.S. paper currency & coin in circulation, Dec. 31, '03 http://www.fms.treas.gov/bulletin/index.html
     $700,000,000,000: U.S. annual budget deficit (current).
   $272,000,000,000: Market Cap of Microsoft (03-2004) http://tinyurl.com/vrcn
     $222,000,000,000: M3 increase (money in U.S. banks) from Jan 2004 to April 2004 (in three months).
   $180,000,000,000: Debt of Ford Motor Co. (03-2004) http://tinyurl.com/vrd1
     $166,200,000,000: U.S. current account deficit (trade deficit) for 2Q 2004.
   $104,400,000,000: US gold, 261 mil oz., @ $400/oz. http://tinyurl.com/vsr9
   $100,000,000,000: all the world's gold stocks/equities (estimated?)
       $75,000,000,000: Money flowed into Equity funds in the first quarter, 2004
       $8,226,000,000: all the world's "primary" silver stocks (80 of them on this list, as of June 25, 2004)
         $6,710,000,000: 671 mil oz. of "identifiable" silver bullion left in the entire world, according to GFMS @ $10/oz.
          $358,000,000: 51.1 mil oz. of "registered" COMEX silver bullion @ $7/oz. http://tinyurl.com/vrcw

So, what do all those stastistics mean?

For a while I was using M3 and dividing that by the US gold (261 million ounces), which implies the us dollar is 84 times more valuable than it should be, and that gold should hit $34,000/oz. after the fraud is destroyed. Today, I realize I need to add in the Bond market, because bonds are an asset class designed to siphon away and replace real money, which is to say, gold. This gives a price of about $111,111/oz. for gold. At $ 430/oz, this implies that US bonds and paper currency are 258 times more overvalued than gold.

Gold is overvalued relative to silver, because at current prices, it takes 60 ounces of silver to buy 1 ounce of gold. Historically, this ratio was 15 or 16. Given the silver shortage, this ratio will hit 10:1 or 5:1, or even 1:1. Thus, gold is perhaps 60 times more overvalued than silver.

Silver is overvalued relative to certain select silver stocks, perhaps by a factor of 3 or 10 or 20 to one.

Thus, if you multiply all those numbers, 258 x 60 x 10, You will see that bonds and currency are overvalued relative to select silver stocks by a factor of 154,800 to one. In other words, if silver stocks reach their true value, and paper currency disappears as it always does, then you might expect certain silver stocks to go up in relative value by a factor of 154,800 times more than they are worth today. By that time, you should definitely sell the silver stocks, and buy gold.

Can silver stocks really appreciate so much? Is there historical evidence for such a crazy thing? Yes.

See http://www.sterlingmining.com/old.html
Excerpt:
"CDE rose from penny stock status (.02 in 1967) to an NYSE-listed, $60 per share stock in 1980. In fact, the average share on the Spokane Stock Exchange rose in value nearly 16000% (yes, sixteen THOUSAND percent), as America could not get enough of silver and silver stocks."

CDE rose by a factor of 3000, or 300,000%, and by 1980, the metals boom was stopped short, and paper money's death was postponed. If paper money dies a death that lasts a generation world-wide, then even greater gains should have been expected.

For this reason, a wise silver stock investor should NEVER sell silver stocks for paper cash. A wise silver stock investor who looks for value would never sell a fairly valued silver stock for an overvalued silver stock that traded for hundreds of thousands of times more value than it should be. Likewise, there is no excuse for a silver stock investor to have any cash or money market or bonds in his portfolio for any reasonable length of time, except for when selling one silver stock to raise the cash for another silver stock, or for when you need to raise the cash to buy silver, or a private placement in another silver stock.

So, if you want some fairly liquid alternatives to cash, in case you don't know what other silver stocks to buy at the time, here they are:
1. Buy silver. You can hold silver in an IRA.
2. Buy CEF. Central Fund of Canada, ticker symbol CEF. It's gold/silver bullion fund. It has 50 oz. of silver for every 1 oz. of gold. The fund is fairly liquid, you can buy it as easily as any other stock, and is a good cash substitute. Unfortunately, given the current ratio, about 55% or more of the value is in gold.
3. Buy a fairly large cap silver stock, with fairly large volume, that is stilll fairly cheap on the list. Canadian Zinc, Sterling Mining, IMA Resources, and perhaps Mines Management and Cardero are probably the best five candidates. These all have market caps ranging close to $50-$100 million dollars or more, and are more liquid than many others. (I used to recommend PAAS and SSRI for this kind of "liquid alternative", but they are no longer relatively cheap, and the others have now increased in liquidity, and are now much more suitable for this kind of trading.)

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The sheer stupidity of big money not recognizing the value of the world's remaining silver is utterly shocking to the rational mind. Clearly, bond holders are utterly deceived, and totally unaware of the situation. All my readers should understand and know that bonds were originally invented to suck the capital and money (gold and silver) away from the people. Bonds today are a paper promise to repay paper. What a con game! Are bond holders conservative and safe? No, they are fools! There is nothing safe about holding a paper promise to receive more paper when we have been experiencing hyperinflation for the past two and a half years!

See my prior essay, " Inflation & Deflation During Hyperinflation "

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And the fund investors who buy paper silver futures contracts instead of real silver are a very odd bunch of fools, for they should realize that nobody can deliver 800+ million ounces of silver promised in the paper contracts and options that does not exist. It's like the paper longs are betting on the bank run happening, but they all are making sure they get at the end of the long line. Instead, they could go front and center, where there is an open window available where you can go and get physical silver, and nobody is there. Idiots! If you know a bank run is going to happen, and you are actually willing to bet on it, then go and withdraw your money before it is too late! Don't bet on it happening, which, if it does happen, your contracts will be defaulted on! Amazingly blind idiots. Wake up!

See also my prior essay, "The Moral Failures of the Paper Longs"

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How bullish am I on silver? Here's an interesting way to put it: "60 times infinity" dollars per ounce.

I believe the dollar will eventually be destroyed, likely within my lifetime, hence the "infinity" part. I believe the ratio of silver to gold may be equal during a spike, when the market realizes that above-ground refined silver is more rare than gold. Thus, silver may outperform gold by a factor of 60 times better. Currently, the ratio is 60 ounces of silver can buy one ounce of gold or 60:1.

I may end up selling silver for gold, some at the 10:1 silver to gold ratio, some more at 5:1, and I would sell any silver remaining at a 1:1 ratio, that we may hit during a supply/demand crunch during a paper money collapse.

How we can tell if silver is leading gold, or if gold is leading silver? IE, which is going up more, faster than the other? The way you can tell is by looking at the ratio. If the silver:gold ratio is going up (say, from 60:1 to 80:1), then gold is moving up faster (because it takes 5 more silver oz. to buy an oz. of gold. If the ratio is going down (from 60:1 to 40:1), then silver is moving up faster. So, keep an eye on the ratio.

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For a list of bullion dealers:
http://www.goldismoney.com/buy-gold.php

For a list of Brokers that handle Canadian issues and/or pink sheets:
http://www.bibleprophesy.org/SilverStockExtra.html

To track the 163 ticker symbols of the 100+ stocks on this list at yahoo: (Updated on April 2)
http://www.bibleprophesy.org/SilverStockExtra.html

To learn All about Canadian law, 43-101, about reserves and resources:
http://www.bcsc.bc.ca/Publications/mineral_projects_sept03.pdf

A good web site that hosts posting boards for many of the smaller canadian stocks (that Yahoo! finance does not have boards for) is stockhouse.com
Click on "Bullboards".
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This is a list of primary silver stocks.

I count a company's ounces of gold as 10 oz of silver. Why? Because I have a very strong positive bias in favor of silver over gold.

Given my bias in favor of much, much higher silver prices, then, to me, the grades of silver are far less important than buying more oz. in the ground. More oz. in the ground at a lower cost is the most important consideration for me.

My method is simple. Cost per ounce in the ground. How much do you get (silver reserve totals), and how much does it cost (market cap)? The cost is the market cap divided by the silver reserve totals. Cheaper is better. Buy low, sell high.

Disclaimers, Warnings, and Advice: I have gathered the information below over the course of several months. I believe it is accurate to the best of my ability. I have made mistakes in the data from time to time. I'm human. I have collected the information from public sources such as company web sites and public information found at yahoo.com to get the stock prices. This report in no way guarantees the accuracy of the information below, since the information may change at any time. The number of outstanding shares can change as a company engages in new share issues to raise more capital through private placements, or if outstanding warrants (and options) are exercised and converted into shares, or if shares are bought back. Shares can be consolidated, or split. The number of ounces of silver in the ground can also change, as these are often only estimates. The number can also change up or down, depending on drilling results.

This report is not investment advice. This report contains information that may or may not be up to date, and may be inaccurate. I urge you to contact the company and do your own research to verify the information contained in this report.

This report is not an offer to buy or sell any securities. I am not a broker. Only your broker can buy or sell securities for you.

I urge you to consult with your investment advisor to determine whether these kinds of investments are right for you.

I also caution you to be aware of your investment advisor's advice, they are sometimes paid to push things like mutual funds, bonds and other securities that may not be in your best interest to buy. Some investment houses are short physical metal, and thus, they may attempt to strongly discourage you from buying precious metal or precious metals investments. I believe that the propaganda machine in support of frauds such as bonds and the dollar is so strong, that they may even believe what they say when they give bad advice to avoid the safety and protection of precious metals. It is most likely that they simply do not understand the precious metals market as well as you do.

All total estimates of "ounces in the ground" can vary widely. There are "proven and probable reserves" which are the highest category of certainty which is obtained through many drill holes, and then at the least accurate, there are "inferred resources" which are hardest to estimate. Additionally, every miner always has "more silver properties that need to be explored, which probably contain more silver". For the purposes of this report, I have added all those numbers together. It is believed that all these "ounce in the ground" estimates can be profitably mined at $5-6 per ounce silver, or lower. Thus, I believe that when silver trades for $15/oz. or above, that all of these ounces can be mined at a substantial profit.

I may be wrong. (I probably make mistakes in every article, and there have been updates and corrections made each week, especially as prices change.)

Mining is a risky business. You need to be willing to sustain a total loss of your investment for various unforeseen accidents. Silver stock companies can do stupid things to shareholders such as take on debt, or issue more stock at too low prices which reduces the percentage of the company you may own (dilution). Yet, they need to issue shares to raise capital for drilling, and then an even bigger dilution to build a working mine. They may sell YOUR silver too cheaply, or worse, hedge the price of YOUR silver just as it begins to go up if they lock in a price which then proves to be too low if the dollar is destroyed. Mining is a risky business as estimates of assets in the ground can change. There is political risk and environmental risk. They can't franchise the business, are stuck in one location, are subject to government confiscation, or taxes, or union wage negotiations, and corporate looting.

Do your own research. Be responsible for your own investment decisions. Again, please, before investing in a mining company, call up the company, and speak either with the CEO or the Investor Relations contact person.

Contact the company. Check the company web site, read the annual reports, check my numbers, check my math, and email the company. That's what they are there for, to answer your questions, and to speak about the opportunity of the company. Don't trust everything you read over the internet. I am a biased source. I own silver mining stocks. And I'm not a broker, nor an investment advisor. I'm just a private investor trying to make sense of this crazy world, and sharing my information and thou