Now more than ever, I more firmly believe my prior predictions that gold will significantly outperform oil in the decades to come.
Deflation (seen by lower prices) is the natural birthright of the advancement of mankind. If men are more productive, more efficient, more economic, and advancing, then the prices for the things they produce and trade will naturally decline over time. The primary factor that thwarts this major free market process is the interference by oppressive governments that create excess regulations, restrictive trade barriers, excessive taxes, theft through confiscations, and artificial scarcity, which changes this natural birthright of mankind, the lower prices and deflation.
Deflation is not a "risk". It is a benefit. Deflation rewards savers. Deflation rewards those who can save money through restraint and self control. Self Control is one of the fruits of the Holy Spirit.
Lower commodity prices are seen to be the overall trend of mankind of the last 100 years. (Present commodity boom during the currency inflation, when measured in that currency is the exception.) Price is determined by money. The trouble is that money is being debased faster than the deflation, which is creating price inflation, instead of the proper deflation that we should expect, which distorts the picture if you measure prices in dollars, as the dollar is an unreliable measure.
As the gold price has risen over the last 12 years, we have seen deflation when things are measured by gold, but only a reversion to the mean, so far. We have not yet seen the full manifestation of deflation, a full deflation that should reflect the real increased productivity of all the advancements of mankind of the last 100 years.
As I now see things more clearly, oil prices are artificially inflated by wrong-headed government policy. There were 4 speakers at freedom fest that made this point. The Federal Government owns most of the land west of the Mississippi. Fully 90% of this land is off limits to oil exploration. Why? North Dakota is open. North Dakota is booming, with unemployment down to 3-4%, and many men are earning 6 figures working in the oil fields.
The USA could fully produce all the oil it needs, if only government got out of the way and let men produce it.
Oil prices must, and will, go down, because oppressive government, and market distortions, especially in the age of the internet, cannot continue forever.
Gold prices must, and will, continue to go up, if only to fully reveal the natural deflation due to the increased productivity of mankind.
The biggest reason for the coming gold/oil price ratio change is that the current historic price ratio over the last 150 years is "too recent" to be effective in long term "reversion to the mean" forecasting. The problem is that the world's bankers began the long process of abandoning gold as money within this recent time frame in human history, so there is no historical guide as to what oil prices should be when gold is being used as the predominant form of money.
Instead, we have to use our intuition and rational thoughts to help figure it out.
World annual oil production is about 90 million barrels per day.
x 365 days/year x $100/barrel =
That's about $3.3 trillion per year in dollar value, of oil production.
World annual gold production is about 80 million ounce per year.
x $1600/oz =
That's about $129 billion per year in dollar value, of gold production.
Using rational thought, I can only assume that if gold were money, and nothing else, no paper, that the world would spend less than world annual gold production on world annual oil production, because some of world annual gold production would be spent on other things, because gold is money, and oil is not.
That means that if we assume that gold production does not increase, and if value increases so that gold production is at least valued at twice oil production, (so that the world could use some gold to spend on something else other than oil) and if the value of oil does not go up, then the value of gold production could be:
$6.6 trillion / 80 million oz. = $82,500/oz.
Interestingly, this is shockingly close to the value if all US money were backed by US gold, as follows:
$18 trillion / 261 million oz. = $69,000.
What's more likely is that oil values will fall a bit, too, reducing the high of the first number, $82,500, which is excessive.
But there are other long term fundamental reasons to expect oil prices to go down, as follows.
First, I'll list my bias, right away. Daniel in the Bible says that in the time of the end, people will go to and fro, and knowledge will increase. This means that travel and knowledge will increase.
Daniel 12:4 “But you, Daniel, shut up the words, and seal the book until the time of the end; many shall run to and fro, and knowledge shall increase.”
This trend of increased travel has actually been happening exponentially in the last 100 years.
Occasionally, I'll read of another writer who will predict that travel will greatly decrease. To this I'll say, don't predict the change in the trend until the change in the trend has at least started to change! It's safer to predict that the current trends that are in place will continue, unless they are unsustainable for some fundamental reason.
The second reason oil prices will go down, in terms of gold, is that it's not just the USA that has restricted oil production. Fully 90% of the world's oil production has been confiscated by the national governments around the world. This is a tremendous disincentive to the capitalists of the world, literally threatening them to not explore for oil, otherwise it will be stolen 90% of the time. Higher oil prices are thus helping to prop up the thieving dictators of the world. For this reason alone, the USA should vastly increase its own oil production. Not only to become "energy independent", but to break the backs of so many of the thieving and oppressive governments the world over.
Producing more of our own oil will not only increase our own national wealth, it will increase our own freedom, and it will increase freedom around the world.
To bring peace to the world, the USA should stop all military spending, and simply remove the domestic restrictions on oil exploration and production.
For beauty queens who would pray for "world peace", they only need to pray that our own government get out of the way of domestic oil production.
But more importantly, oil profits need to be invested into silver, since the oil market is way too big at $3 trillion, and the physical silver investment market is way too small at $3 billion, which is 1000 times smaller. In this way, excessive government money printing will be revealed to be another layer of oppressive fraud that will come to an end once it is revealed through higher silver prices.
I strongly advise you to take possession of real gold and silver, at anywhere near today's prices, while you still can. The fundamentals indicate rising prices for decades to come, and a major price spike can happen at any time.
JH MINT & Coin Shop
13241 Grass Valley Ave
Grass Valley, CA 95945
(530) 273-8175GRATUIT (530) 273-8175
www.jhmint.com
Minimum telephone order $5000 for free shipping, USA shipping only.
Open 10AM to 5PM Pacific Time, Monday to Friday, closed weekends and bank holidays. (Also Closed from Dec. 25th to Jan 1st)
Kerri handles internet phone orders:
kerri@jhmint.com
(530) 273-8822GRATUIT (530) 273-8822
NEW Location in Auburn, CA!
JH MINT Silver & Gold
1760 Highway 49 A140
Auburn, CA 95603
(530) 889-1086GRATUIT (530) 889-1086
www.jhmint.com
You can also buy silver from my mom at www.momssilvershop.com
Mom will ship overseas, even large orders up to $300,000 or larger, and also in lots of more or less than 100 ounces.
3510 Auburn Blvd #12
Sacramento, CA 95821
Sincerely,
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Replies
"Pitchfork-Wielding Virginia Farmers Rally Against Birthday Party F... (Fox News)
Pitchfork-wielding Virginia farmers rallied to support a woman who claims local officials came down on her for, among other things, hosting a children's birthday party on her spread.
Martha Boneta, owner of Liberty Farms in the northern village of Paris, was threatened with nearly $5,000 in fines for selling produce and crafts and throwing unlicensed events, including a birthday party for her best friend's child. She told FoxNews.com she wasn't doing anything farmers haven't done for generations, and at a recent zoning board meeting, her agrarian friends literally showed up with pitchforks to express their support.
“It’s rather odd that I’m the only farmer in the county having these issues,” Boneta said. “It’s customary to do these things. It’s done through on farms throughout Virginia to help farming and agriculture.” Boneta was told that she did not have the proper event permits for the party and other events, including wine tastings, craft workshops, and pumpkin carving.
“Why I would need a permit for a pumpkin carving?” she said. Boneta was also threatened with fines for selling produce and products not grown or made on the 70-acre farm in a small store she operated on the property. But she said she already had a special license issued to her in 2011 that allowed her to run a “retail farm shop” where at the time, she made it clear that she intended to sell handspun yarns and craft items like birdhouses in addition to fresh vegetables, eggs, and herbs.
I wonder how long it will be before we start seeing the torches -- and whatever else -- come out?
Michael J. Panzner
MineWeb's Shivom Seth today reports on the Indian government's renewed efforts to discourage investment in gold by spreading a "financial literacy" intended to move the population's savings into more socially productive assets. Of course the problem is that the Indian people already have enough "financial literacy" to know better than to depend on their government's ever-depreciating currency -- more "financial literacy" than as yet has been obtained in much of the West. Quantum Gold fund manager Chirag Mehta replies politely: "Given the current economic backdrop, where governments are struggling with problems like rising deficits and unsustainable debts, it is indeed logical for gold prices to increase. With policy makers continuously debasing currencies, gold will be viewed as a preferred investment, lending some solace to investors."
The MineWeb report is headlined "Gold Rush in India? Government Steps in Again" and it's posted here:
http://www.mineweb.com/mineweb/view/mineweb/en/page72068?oid=156649&sn=D...
Warning: Get Your Money Out: “All Legal Bank Deposit Protections Ar...
Mac Slavo
SHTFPlan
August 13, 2012
Former money manager Ann Barnhardt, who in November of 2011 made the decision to cease operations of her brokerage firm and ret... to her customers citing “systemic” problems within the entire financial industry, has issued a new warning about the stability of US banks and the safety of individual deposit accounts.
The warning, stemming from a recent federal appeals court ruling surrounding customer funds lost during the 2007 collapse of Chicago futures broker Sentinel, indicates that individuals who lose deposited funds because a financial institution improperly manages that money, even if those funds are supposed to be “segregated” from other operations of the firm, are essentially left with no recourse if the firm goes belly-up. According to the court, a misallocation of those customer funds, “is not, on its own, sufficient to rule as a matter of law that Sentinel acted ‘with actual intent to hinder, delay, or defraud’ its customers.”
The implications of the ruling, according to Barnhardt, will affect the monies of all private individuals who have seen their deposit accounts wiped out in the collapse of firms like John Corzine’s MF Global and put all deposit account holders in the country at risk should their bank be faced with a financial windstorm:
The ruling is specifically designed to protect large financial institutions that have (purposefully) mismanaged customer funds and used the hard-earned life savings of Americans to gamble on equities, commodities and bond markets. If those firms happen to make the wrong bet, as MF Global, Sentinel and a handful of others have recently done, depositors who have placed funds with the banks under the belief that their bank account is securely protected from trading liabilities are now completely exposed and liable for the incompetence and negligence of those who engage in market trading.
This latest ruling combined with recent actions by the Federal Reserve and other government regulators suggests a massive fraud has taken place and the financial system itself is under extreme strain with the potential to make the financial collapse of 2007/2008 look like just a training exercise.
In recent days, for example, it’s come to light that the government has secretly called on the country’s five major banks to prepare themselves for collapse by creating stress recovery plans to be used in the event of worst case scenarios.
A few weeks ago, the Federal Reserve also implemented a new policy for money market funds held by financial institutions. Per the new policy, money market funds, which account for some $2.7 trillion in deposits across the United States, can be frozen in the event of an emergency or financial panic. This means that if and when the system does go into a tailspin, at exactly the time people will want to pull their money out of their bank account, they will be restricted from doing so.
These latest actions by government regulators, judges and financial institutions point to one thing: that we have an unprecedented financial collapse in the making. If such a financial crisis comes to pass it is clear that the policies and procedures now in place will transfer the legally owned deposits and money market savings of individual Americans into the hands of the banks at which those funds are kept.
Get Your Money Out.
Consider alternate, collapse-centric investment strategies and what is money when the system as we know it falls apart.
"Gentlemen! I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country.
When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin!
Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out."
From the original minutes of the Philadelphia bankers sent to meet with President Jackson February 1834,
from Andrew Jackson and the Bank of the United States (1928) by Stan V. Henkels