Why Silver and Gold will go up, and by How Much
(And Emgold, a great $4 million stock; developing a $2 billion gold mine!)
Silver Stock Report
by Jason Hommel, Octoer 28, 2011
The government is spending $1500 billion more per year than they are getting in taxes. They are not borrowing this money; they are printing it. There is no political will to fix the problem. The "Occupy Wall Street" protests are about a protest against the Wall Street bailouts, but also, it's about the 99% wanting more government handouts than they are already getting, and already 43 million Americans are on food stamps. Government over spending, and especially the bank bailouts, will cause inflation, and may ultimately destroy the dollar. The question is, by how much?
Let's do some math. If only 1% of paper money in savings was spent on gold, that would be about $180 billion.
Yet the annual world gold market is only about 75 million ounces (oz.) of newly mined gold each year.
How much gold are Americans currently buying? About 1 million oz. of gold eagles per year, and I suppose Americans buy about twice that much gold, so only about 2 million oz. out of the 75 million oz. available.
At $1666/oz., the world is spending about $125 billion on gold each year, with Americans spending only about $3 billion of that.
If Americans put only 1% of their cash into gold to protect themselves from inflation, which is 180 billion, I'd estimate that the gold price would at least triple, to $5000/oz.
But the dollar is no longer backed by gold. In theory, every dollar in circulation could be spent on gold, and then, spent on gold again!
If all US dollars were spent on official US gold, that would be about $18 trillion spent on 261 million oz. of gold. That implies a price of $69,000 per oz.
What about silver? ............
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