Thursday, December 29, 2005

Numbers Supporting Future High Prices for Gold and Silver

A year or two ago Jason Hommel put together a list of numbers that indicate the extent of future demand for gold and silver. They are quite striking. They put the worlds of

1.) money (something that is nobody's liability)
2.) currency (a note, financial contract, financial instrument)
3.) government fiat tokens (paper and digital bits temporarily used as money
and currency) (in the history of the world, there has never been a token that did not become worthless)

in perspective relative to each other and more specifically to gold and silver, and gold and silver shares (stocks).

Here is a sampling of 35 numbers that Jason has put together:

1.) $200,000,000,000,000: Estimated total derivative exposure of all banks in the entire world. (20 x U.S. GDP)
Warren Buffett, founder of Berkshire Hathaway, has refered to otc derivatives as "financial weapons of mass destruction". James Sinclair ( has referred to them as the "greatest criminal activity in the history of mankind".

2.) $118,000,000,000,000: World Global Capital Markets (Stocks, Bonds, &?) Feb 2005 McKinsey Global Inst.


14.) $1,860,000,000,000: World "official" gold mined in all of history, 145,000 T (4.6 bil oz.) @ $400/oz.


27.) $288,000,000: 40 mil oz. of "registered" COMEX silver bullion (1-05-05) @ $7.5/oz.


At Jason has a link to his "FREE Silver Stock Report Archive" where you can get the rest of the numbers. The "Silver Stock Report" is a very long .html page/file and is well worth the read. There is also a long list of silver producers and explorers if you are looking for candidates.

There is a money manager, Monty Guild (Guild Investment Management), out there who is starting to think publically in his unscheduled news letter about the over all demand and supply picture of gold and silver. This is what he is figuring so far. He is still working on
estimating the current market capitalization of the gold producing industry.

"A recent survey of institutional money managers by Barclays Capital confirms the subjective ad hoc research that my contacts in the institutional investment world have provided me.

In conversations over recent weeks, my contacts have said that they plan to put 5% of their massive pension fund, mutual fund and hedge fund assets into gold. Independently, it came to my attention today that Barclays Capital did a survey of their institutional clients and 70% of them said they would have 5% of their assets in gold in three years time.

This is extraordinary, and would require a huge price rise of existing gold mining shares to accommodate all of that money. For example, Newmont Mining has a market capitalization today of about $23 billion dollars, Barrick Gold about $15 billion, and these are the big companies in the public gold mining sector. I am researching the total market capitalization of all public gold mining companies but it cannot be very high. Certainly, it is a great deal smaller than $460 billion dollars.

The total investment capital in the world is rumored to be about $46-$50 trillion. Now 5% of $46 trillion is $2.3 trillion and 1% of $46 trillion is $460 billion. If the amount of gold shares purchased over the next three years equals even $460 billion it will cause the total value of all listed gold shares to skyrocket."

[It sounds to me that these institutional "money" managers, as they are called, are late already and are going to be even later getting their customers fiat tokens properly positioned for the current gold and silver bull markets] [But, what do you expect from the herd of "money" managers in the world? They are, after all, part of "the crowd". And "the crowd" is always wrong or very late.]

There are more numbers / statistics / graphs at this digital gold currency exchanger's site:

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