Silver: From $30/oz to over $500 by 2020

[JNG]

One can dream..........

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Silver Stock Report

by Jason Hommel, January 12th, 2011


Silver: From $30/oz. to over $500 by 2020. In under a minute, I can tell you why that price must happen, and likely when. It seems to me that the public will one day wake up and start buying silver to protect from inflation. Thus, long before, say 10-20% of people buy silver, at least 1% of the American public will buy silver. We can calculate what might happen to the silver price when that happens.

The amount of money in US Banks is about $18 trillion. 1% of that is $180 billion.

Very little silver is left; it's mostly all been consumed, so most of what is available to buy is the annual new mine supply which is 700 million ounces.
$180 billion is $180,000 million. Divide that by 700 million, and we get an implied price of $257 per ounce. Do the math yourself. I'll wait.

But that price would mean that there is no newly mined silver left over for any industrial use, and that nobody else outside of the USA could buy any of the world's newly mined silver. Clearly that can't happen; those two groups would continue to buy silver, competing to buy, and driving up the price even more.

Thus, silver is very likely to be about $500/oz., by about the time that 1% of the American public wakes up and starts to buy silver. That will be the very beginning of the bull market in silver, when measured by "popular demand" -- and at that price, silver would still be very unpopular.

Just remember these key facts, and don't let anyone, or even yourself, trick you out of this developing bull market in silver. Don't try to time the peaks, don't wait for dips, just buy and hold real silver, not any kind of paper silver promise.

http://www.jhmint.com/
http://silverstockreport.com/2011/500-by-2020.html

[lumpOgold]

James West agrees in his Midas newsletter that PM's are very undervalued.
"I’m increasingly convinced that $30,000 to $50,000 per ounce for gold will be seen in this lifetime, especially as fiat currencies based on nothing are abandoned for mediums that more directly represent a real monetary asset, like gold and silver bullion."

Read the whole article, "When Will Gold and Silver Go Down?"
http://www.24hgold.com/english/contr...ames+West&mk=1

[KGMe]

And a gallon of gas is going to cost $500.

[ccjoe]

I don't care much for Jason now, but I think he's actually low ballin it for a change.

[southfork]

Hommels a pimp, nothing more.

[phideaux]

I have met and spoken with Hommel a couple of times at conferences. IMHO he is a world-class dork. So is his brother, who legally changed his name to "Ted Turbolizard."


Jaons Hommel

The first time I met him, he was wearing a bright blue blazer, a lime-green shirt and a pink and orange tie. He looked like a bowl of fruit salad.

When he can put down the bible and stick to supply and demand fundamentals, he makes a lot of sense.

[Cornelius]

And a gallon of gas is going to cost $500.

or to put it another way... 2 bits

[AgAuGal]

He brought nothing original to the table. When he first came on the scene he was parroting others who had already been talking silver for some time (Morgan, Butler, others). Then he started writing and researching and somehow w/ the internet has made himself into some 'expert'. He is not IMO an expert on silver, there are people here at GIM that already knew info he tried to put out there massaged. People who were new thought he was something special. He just had/has a lot of ego coupled with getting lucky to get in somewhat early ( I think I first saw him showing up w/ wrtings and going to every conference that would let him in around 2004, I could be off bit but not by much). Every angle he tried smelled of self centeredness covered in fake concern for others. No matter what he has written over the years, I still remember when he started and it rinded me of having a little brother tag along with anoying behaviors. Sorry have never developed any credibility IMO.

[Shortstack]

I don't care much for Jason now, but I think he's actually low ballin it for a change.

Jason and his math problems... You can't assume that 1% of cash in the banks will be withdrawn and used to purchase silver. And you can't use simple division either, as the first group will purchase all the "cheap" silver, the rest will pay much more. But really, people will reallocate their investment portfolio's, not take new money out of the bank to invest. Most people don't even have money in the bank anyways.

It's the reallocation of existing assets in their portfolios (from paper to physical) that will put silver over $250 an Oz

[wallywest]

Jason and his math problems... You can't assume that 1% of cash in the banks will be withdrawn and used to purchase silver. And you can't use simple division either, as the first group will purchase all the "cheap" silver, the rest will pay much more. But really, people will reallocate their investment portfolio's, not take new money out of the bank to invest. Most people don't even have money in the bank anyways.

It's the reallocation of existing assets in their portfolios (from paper to physical) that will put silver over $250 an Oz

Agreed. I think his math is jacked. He assumes 1% of people will buy silver, and that represents 1% of the money in banks. Does he mean that 1% of people will spend every last dime acquiring silver? Further, as Shortstack suggests, everything changes as the price starts to move. I think most everyone here agrees that Ag is destined to rise in FRNs, but it's math like this that makes the mainstream folks just disregard out of hand.

[spathatos]

Correct me if I am wrong but I believe only 5% of the worlds population even holds PM's to start with. He assumes a whole 1% more will just wake up and start a parabolic buying spree thus raising prices. The price moves most on inflation/deflation. Yes people buying absolutely helps but it won’t move prices 100's of dollars higher.

[Sheepdog]

2020? I hope to have a new home with streets of gold waaay before then! If so one of you can have my silver and gold if you can find it!

[curmudgeonista]

I'm all for silver going up, but this sort of wild speculation using psuedo-logic as "proof" does no good for that supposed self-same cause.

Look, the general public is afraid of being scammed, and this sort of article just reinforces that fear.

Show them how the fundamentals indicate reasonable growth potential, or at least wealth preservation in this very tough investing environment and they might consider PM's a serious outlet. But when you try to feed them too much BS it just sends up warning flags.

That's a shame too, because there is every reason to believe, in the current state of world economics, that PM's should once again be building a solid and lasting foundation as a commonplace and respected financial vehicle. Unfortunately, it's still a fringe endeavor and, thus, susceptible to demonization in the average investors' eyes.

Frankly, the honest dialog should be aimed at determining just how much of PM's growth potential has already been priced-in over the last few years. You look at silver and see 200% gains in a matter of 24-months, you have to ask yourself if you already missed the boat. As luck would have it, a lot of GIM-ers already booked a berth, so adding a little more ballast isn't going to sink us.

If I were just now starting from scratch, I might not know enough to realize that it's not an all-or-nothing proposition... and Hommel's BS would definitely scare me away, making me assume PM's were just another pump-n-dump.

[smilershouse]

Jaons Hommel

The first time I met him, he was wearing a bright blue blazer, a lime-green shirt and a pink and orange tie. He looked like a bowl of fruit salad.

But that smile is one , and perhaps one of the rarest smiles, of an actual Christian with a positive attitude for life.

Ya don't meet many.

Hurrah for Hommel.

He and his Momma can knock at my door any day of the week,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,As so long as my family is out at that time.

SH