Why Silver is better than Oil |
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| By: Jonny Halsman | ||||
Silver Stock Report 1. There is a 40-year supply of oil in the ground. There is a 14-year supply of silver in the earth. Therefore, silver is the superior investment. If "peak oil" is true, then every peak oil nutcase out there ought to be several times more apprehensive regarding "peak silver", since silver reserves will run out sooner. If oil is used in more kinds of products than any other commodity on earth, in that case silver is the second most used commodity, used in electronics of every types. As a consequence if silver is used up firstly, it follows that we won't have all the electronic machines needed to go and get the oil! But the "peak oilers" are not so anxious about silver. Why not? I can only speculate, nevertheless it is an educated guess founded on extensive reading of their works over the years. I have a sneaking suspicion that it is for the reason that they are ignorant of silver, ignorant of economics, irrationally fearful, and worship government and "mother earth" instead of God. 2. In 1970, there was a 10-year supply of oil in the ground. We did not run out in 1980. We explored, as a consequence found oil. Mankind has explored for oil and produced oil only for one hundred fifty years or so, which creates extra fear of uncertainty (unlike silver and gold's 5000 year history). Given that we did not run out in 1980, so therefore we will not run out in 2050, over 40 years from now. 3. If it is not just about "running out" but more exactly, running out of the "cheap stuff", very well, I agree! If we run out of "cheap oil", we will run out of "cheap silver" far, far more rapidly, thus silver is the better investment, and will outperform oil. 4. The silver to oil ratio: In 1980, at the former peak prices for oil and silver, oil cost $43/barrel and silver was $50/oz. An oz. of silver was worth more than a barrel! At the bottom of the market around 2000, oil was $10/barrel and silver was around $5/oz. This implies a price for silver of somewhere between $55-110/oz., with oil prices remaining stable. If oil doubles from here, in that case silver will go up ten times, to $220. Hence, silver is the better investment. 5. The public will never buy 100 barrels of oil to pile up on their front lawn, at $110 apiece, to save $10,900 worth of wealth. The public will purchase a $15,000 bag of silver to store in the closet, or home safe. 6. The silver market is orders of magnitude smaller than the oil market, and will shift a great deal higher with a less significant sum of money moving into silver. World oil supply is 85 million barrels of oil per day x $109 = $9.2 billion/day, or 31 billion barrels/year, which is $3.4 trillion per year. World silver mine supply is 650 million ounces per year x $21 = $13.6 billion/year. In the long run, if paper money fails, the world might have to pay for oil with silver. (Gold would be used for everything else). In that case, that implies that an ounce of silver would buy forty seven barrels of oil (31,000 / 650 = 47), which implies a price for silver of $109 x 47 = $5200/oz. Interestingly, even gold is a much, much superior investment than oil, since all the gold ever mined in all of human history is just about five billion ounces, which, at $1000/oz., is $5 trillion, which would barely pay for the world's annual oil consumption of $3.4 trillion. But as you all see by now, silver is much better than gold. 7. About 70% of the world's oil is supplied via national governments that have confiscated private oil discoveries. Thus, oil is a risky investment. National governments normally do not spend money on exploration or development; they spend nationalized oil profits on wasteful social programs to preserve the control of the government thieves. Of the other 30% of the world's oil, the "free world's" oil, about 9 cents per gallon of gas goes toward the oil companies as profit, and approximately fifty one cents per gallon goes to governments in taxes. Thus, fifty one out of 60 cents, or 85% of the "free world's" oil has been nationalized, too. For that reason, oil is an tremendously dangerous investment. Not only is the cost of oil too high, but governments steal most profits that exist in the industry, world-wide. Investors ought to worry far more in relation to governments stealing an oil discovery, than a silver discovery. While oil prices moved up over ten times from $10/barrel to $110/barrel since 2000, Exxon Mobile stock barely doubled from $40 to $85. This reveals that the "big oil" companies are not "getting rich" off of soaring oil prices, due to excessive government taxation. (Chevron has also gone from $40 to $85 since 2000, and BP has done much poorer, going from $60 to $64 since 2000!) If only 1% of gross world oil profits were spent on silver, instead of being stolen by governments, that would be: 31,000 million barrels x $110 x .01 = $34 billion. In view of the fact that total annual investment demand for silver is approximately $1 billion, then I estimate that much money would move the silver price up to well over $200/oz. Yes, 1% of gross world oil costs would most likely drive up silver prices over ten times! 8. I believe "Peak Oil" is a fraud. If the world does hit a "Peak Oil" temporary mini trend sometime in the next 50 years, it will be due to worsening government theft, nationalizations, confiscations, taxes, and wars, not lack of oil in the ground in the world, and all of those things would be awfully bad for investors in oil. 9. I have never seen a peak oil proponent advocate free market solutions; nor do they invest their personal money into alternatives (some of them are broke!); they constantly call for more government power, and additional government controls, and more government "solutions". So, their entire line of reasoning is as fraudulent as government itself. 10. I believe "Manmade Global Warming" is a fraud, calculated to intensify government control, or even "justify" the "global solution" of world government. We may be in a mini warming cycle, however thirty years before the world was in a cooling cycle and the fear of the time was of an impending Ice Age. If "manmade global warming" is genuine (and it is not), there ought to be more of it; we would save on heating bills; and be able to plant more crops, and benefit from a wider array of good wines from all the vineyards that could be planted farther north, like several 100 years ago. 11. Silver is not a fraud, and is the antidote to the fraud of the dollar, and the antidote to excess government power, and government theft, which is the actual problem in the world, not "peak oil" or "global warming". 12. Silver is not confiscable. This is why silver is money; it is private ownership of wealth, it is true wealth, it is owned anonymously, and is the antidote to theft through inflation or confiscation. There is not enough silver to confiscate, because the silver market is too small. All the silver in the world is worth conceivably $20 billion, which is infinitesimally slight compared to the budget of the U.S. government. If the government confiscated silver, because it was "worth it" for them, it would imply that silver was worth just about $10,000 per ounce. 13. There is no "oil problem". It is an energy problem. If oil prices become too high, the free market will make available energy through other means; wind, or solar, or nuclear, or coal liquefaction, or geothermal, or further oil exploration. I imagine the U.S. hit peak oil in 1970 because we abandoned silver coinage in 1964, and abandoned gold in 1971, driving up all domestic prices and severely distorting world economics. And with paper currency, it became cheaper to purchase foreign oil with fraudulent paper, rather than explore and produce it at home. 14. There is a 300+ year supply of coal. Coal liquefaction technology can make liquid fuel from coal. This is old, reliable technology, and dates since before World War II, both in Japan and Germany. 15. Most solar energy that comes to the earth is wasted. Look at the amount of solar space available in the deserts of the world. The Sahara is a very big location. All of the world's energy requirements could probably be satisfied with a solar panel that covered 1/4 of the Sahara. 16. Yes, I know about the Hunt brothers. Do you know the full story? They tried to protect their oil profits in silver. Their oil was stolen by Libya. I believe that the error of Nelson Bunker Hunt, who is alive today, is that he tried to borrow money to purchase more silver than they could afford, so they lost money when it went down from $50/oz. Don't make the same mistake. Don't buy silver on leverage, and don't let other people hold your silver for you. * * * Thanks for reading, Jonny Halsman Silver Eagles - Get 'em while you can :-) (our slogan has never been more true) Take advantage today of a way to get lots of silver and earn silver coins free every single month, by checking out http://buysilver-earnsilver.com |
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| Article Source: http://yourfinance.co.za | ||||
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