STOCKS OF SILVER

[SILVERISTHENEWGOLD]

*MUST READ* ARTICLE FROM CNBC... THIS IS THE FIRST TIME I HAVE EVER SEEN THIS MENTIONED IN MAINSTREAM NEWS.... I WAS MAKING POSTS ABOUT THIS ON IHUB OVER 2 YEARS AGO ON THE HULDRA SILVER BOARD.... WHICH BTW IS NOW TREMENDOUSLY UNDERVALUED....

THE ARTICLE...
http://www.cnbc.com/id/101062461


MY ORIGINAL WRITE UP:

SILVER explains gold...

You would be doing yourself an incredible favor by reading this entire post.

When everyone says the inflation adjusted high of gold was $2300 in 1980. They are misleading you, that is the government adjusted inflation numbers.
The government does not include items in their inflation index that are actually frequently bought or things you actually buy like food and energy because the inflation measurement would go through the roof
The real inflation adjusted high of gold was $7500, and that price($850 in 1980), multiplied by the gold we hold, only backed the M1 currency supply which is only a small portion of the total dollars.

So you ask… that's how high gold CAN GO but what makes you so sure gold IS going higher?

Read on…

A quick crash on our debt…
http://www.cbn.com/cbnnews/finance/2010/June/US-Debt-Could-Reach-196-Trillion-by-2015/
http://www.examiner.com/finance-examiner-in-national/us-national-debt-to-hit-24-5-trillion-by-2015-and-144-trillion-liabilities

Everytime they borrow more money, no matter who it's from, they have to pay back the lender with interest. There are many different bills, bonds and notes, not to important, but what is important is they all have different rates of interest attached to them.
The average being 3% right now.
Everytime one of those bills, bonds, or notes comes due, not only do they have to pay back the lender but they also have to roll over the debt as they still need to borrow the money… they cannot yet pay it back. So the sucker, same one or new, who is lending us money gets his choice of paper and we have to pay the interest again.
http://www.usdebtclock.org/
Our current debt is $13.6 Trillion. At an average interest rate of 3%. This is an annual interest payment of $408 Billion. You can see using this very simple math I am very close to the actual number… http://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm …
for 2010 it was $410 Billion.
So what happens when you get a debt of $20 Trillion? $600 Billion dollars of your tax money goes to just paying off the interest on the debt($20Tx3%).
They only collect $1.7 Trillion in taxes in the first place, each year. They spend nearly $4 Trillion, either borrowing or simply printing the difference…. they call it "buying bonds."
All of this is at the current average interest rate.
You know what happened the last time there was a bull run on gold, which was in the 70's?
So many people were slowly fleeing fiat currency and moving into hard assets like gold/silver(because of all the money they were printing, inflation) that they had to raise the interest rates, in order to attract people back to the banking system/fiat monetary system. The market was choosing gold as money.
It is a very simple equation… When you print enough money to cause the rate of inflation to exceed the rate of interest the bank pays you… people exit the fiat system into hard assets. Why?... because you now are losing money by having your savings/wealth in the banking system.(5% inflation - 2% interest= LOSS)
This inflation driver, combined with the fact that the people who purchased before you are already driving the price up(your never first in line), a self-perpetuating cycle occurs, as you know what is logical for yourself is logical for others, and the values of hard assets like gold/silver rise rapidly.
In the end, by 1980 when gold made it's $7500 high, they had to raise the interest rate to an incredible 19%. So attractive, this rate, people couldn't help but sell hard assets, like gold, and move back into the fiat monetary system with their wealth. It simply made logical sense as the rate of interest far exceeded the rate of inflation.
Now…The important part…
They obviously cannot raise interest rates at all when they have a $20 Trillion debt. An average interest rate of just half of what it was in 1980, 9.5%, would cause financial armageddon for the government. All of the money you pay in taxes would go only to paying interest on debt. This is mind blowing. ($20T x 9.5%= $1.9T in interest)
So you see, the last thing they can have happen is for the interest rate to go up. It would be the end for them financially, so how do they keep it low? By issuing bonds quickly, cheaply, and easily… they keep the interest rate low, which really means… printing more money.
What I am telling you right now is that they are "STUCK" PRINTING MONEY. It is fairly easy to understand, I hope I could make it clear enough.
I hope you can see from this very simply math that you are also "stuck" in a permanent gold bull. The only way to end a gold bull run is to raise interest rates to the point, where after you minus the rate of inflation, you are still gaining on your wealth/savings.
They no longer have that tool at their disposal because of the enormous debt.
In fact we are likely to see gold break above it's old inflation adjusted high of $7500 and go much higher.