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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) 273-8175
begin_of_the_skype_highlighting GRATUIT (530)
273-8175 end_of_the_skype_highlighting
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) 273-8822
begin_of_the_skype_highlighting GRATUIT (530)
273-8822 end_of_the_skype_highlighting
NEW Location in Auburn,
CA!
JH MINT Silver & Gold
1760 Highway 49 A140
Auburn, CA 95603
(530) 889-1086
begin_of_the_skype_highlighting GRATUIT (530) 889-1086 end_of_the_skype_highlighting
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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