Saturday, October 22, 2011

Peak Oil or Peak Silver?

(Neither; just rising prices!)

Silver Stock Report

by Jason Hommel, Octoer 21, 2011

There is a 50 year supply of oil in the ground, but only a 13 year supply of silver. 

This means that if peak oil is true, then peak silver is more true, that we will run out of silver, first.  If that happens, you can forget about peak oil, because without silver, we won't have any computers or electronics to be able to go out and explore for, or pump, or deliver, any oil.
But wait, see, 10 years ago, when I first got into silver, the world had a 15-16 year supply of silver in the ground.  Why isn't it down to 6?  Because we explore for, and find, more silver all the time.  We always have.  Also, with rising prices, previously explored and uneconomic silver deposits suddenly can become economic and add to supply, especially as silver prices have risen from $5 to $30/oz.
See, mankind has been exploring for, finding and mining silver, for maybe up to 6000 years.  In contrast, oil has a shorter history, only going back 160 years to the mid 1800's.  And the oil market today is so large, that we feel we are dependent on it, and in many ways, we are, and this kind of dependency tends to bring out irrational fears.
The general trend has been that the number of years of oil in the ground always goes up.  In 1975, we had only a 25 year supply of oil, and the world was supposed to run out by the time I was 30.  I'm 41, and now the world has a 50 year supply.  (See HSBC article:
See, the trend is that in the next 50 years, the world will have a 100 year supply of oil.
But going back even further, about 100 years ago, there was only a 2-3 year supply of oil in the ground.
People predicting shortages have been around forever.  Lot said to Abraham, there is not enough water for both of our flocks, so you go one way, and I'll go another.  Malthus predicted we would soon run out of food, way back in 1798.  O-kay! 
So let's agree that we will run out of "cheap oil".  Agreed.  But we will run out of "cheap silver" far sooner, and thus, silver is the better investment!  The world should try to squeeze $2.7 trillion in oil revenues into the tiny $30 billion silver market and watch silver prices explode upwards due to the economic realities of scale, size, and price!
Some people are saying that we are not exploring for oil fast enough, despite the rising reserves.  OK.  There might be another rational explanation, other than "the world is running out". 
See commodities run in cycles, with low prices, and high prices.  High prices lead to exploration booms, which tend to stop during cycles of low prices.  These cycles can last 30-60 years.
Oil was $10/barrel in the year 2000--the low price time.  Oil was $43/barrel back in 1980--the last price peak.  That's a 20 year cycle, for just a one way price movement, a drop.  The monetary base has increased ten times since 1980, so the prior peak price was really $430/barrel.  That's a big swing in prices for a 20 year commodity cycle, the equivalent of going from $430 to $10. 
Basic economics explains a lot.  The economic incentives to go out and explore for more oil are a lot less when oil is $10, as it was in recent history, and oil at $85 is still "low", down 80% from the peak!
Another factor vastly reducing oil exploration incentives in our modern world is that 80-90 percent of world oil production has been confiscated by the dictators running the world's nations.  A perfect example is the oil found by the Hunt brothers in Lybia.  Lybia stole fields worth $5 billion from the Hunts.  Now, after that happens, where is the economic incentive for anyone to explore for oil in Lybia?  And a few months ago, Venezuela nationalized oil, again.
See, 80 to 90 percent of the best places to explore for oil in the world are off limits to free market exploration.  And yet, the world is still managing to find an ever increasing annual number of years of oil left.  Amazing!
Imagine how much oil the world would explore for, and find, if there were no dictators stealing oil, and if oil prices were at $430/barrel!  Hint, most "peak oiler" guys cannot imagine such circumstances.  (OK, yes, but we still have dictators!)  I know.  I understand.  I agree with the reality of today.  But how many revolts would there be against such dictators when people can no longer afford oil or food?  Conditions of scarcity caused by dictators tend to help remove such dictators from power.  Witness Egypt.
And let's also consider the remaining 10-20 percent of the oil in the "free" world?  Well, about 9 cents per gallon of gas goes to "oil profits" and about 50 cents goes to state and federal taxes.  So, about 80% of the world's "free" oil is being confiscated at the pump in taxes.
Yet with all that theft of oil, the world's oil reserves are still growing!  Do you see any reason to be optimistic yet?
See, in my view, the world does not have an "oil shortage" problem.  Instead, the world has a "freedom shortage" problem.  The best way to increase freedom is to buy silver, as this takes away the power of governments to steal by using the printing press to print paper money.
Yes, my view is supported by my ideals.  There is also the issue of prophecy, which matches exactly with the history of the last 100 years.  The Bible says that in the last days, travel and knowledge will increase.  "Daniel 12:4 But you, Daniel, roll up and seal the words of the scroll until the time of the end. Many will go here and there to increase knowledge.”
Is anyone worried about the impending world wide banana shortage?  No?  Why not?  After all, there is only a 20 day supply in the whole world.  After that, all the green bananas turn brown and are rotten.  Nobody worried?  Why?  Because more bananas are always growing.
As far as we know, oil comes up from the earth and re-fills old oil fields, over time.  This is the abiotic theory of oil, that oil bubbles up from the earth's magma.  If that's the case, we essentially have an unlimited supply of oil.
I would tend to be more likely to believe peak oil proponants if they understood basic economic laws.
As oil prices go up, people will naturally use less gas, if the economic pain is high enough.  As far as I can see, the rise in oil from $10 to $100 has hardly caused a reduction in gas use, and gas prices only rose from about $1.50 to $4.50, only 3 times.
But this just goes to show that oil, at $10, was ridiculously cheap, and thus, recently extremely abundant!  (Hint, not scarce, not running out.)
Again, with oil now at $85, oil is still down more than 80% from it's inflation adjusted high of $430/barrel from 1980.
As oil prices rise, not only are there are higher economic incentives to explore for more oil, but also, vastly larger oil fields with lower grade oils suddenly become more economic to produce from.  There's that word again, "economic", which trips up the peak oil crowd.
The peak oilers warn about this lower grade oil, warning about the lower "energy returned on energy invested" (EREI), warning that if the energy return heads to zero, we run out.  I get that.
But lower grade deposits have two interesting points about them.  First, today, many are economic even with oil 80% lower than prices that the world can tolerate!  Second, the good point about lower grade oil deposits, is that like almost all lower grade mining projects, the size of the deposit tends to grow exponentially larger, thus aiding exponential growth rates of oil usage.
The other factor not often considered about "energy returned on energy invested" (EREI) arguments is that the proponants count all costs in terms of energy, and this is not true.  Energy is only about 4% of the world economy, only about $2 trillion out of about $50 trillion or so.  Costs are usually in dollars, and could also be counted in terms of gold.
The EREI proponants say that when energy is spent, it is destroyed.  And they also correctly warn that dollars could be destroyed.  True, and true.  And thus, they worry, and warn that we could "run out of money" to spend on oil.  NOT TRUE.  Why?
They forgot about gold.  Gold is not destroyed when it is spent, but rather, it just changes hands.  In fact, when gold goes into the hands of people who have successfully explored for, and managed, and produced oil for the world to solve our oil needs, it goes into the best possible hands in the world, because those people will likely continue to try to produce oil for the world!  Furthermore, as gold goes up in price, there is MORE MONEY for all the holders of all the gold in the world.
Here's a comparison to show why there will be a lot more money if paper money goes away completely.  If we could not spent paper money on oil, we would have to spend gold and/or silver.  What would that look like? 
Let's start by looking at how much paper money is out there, and the annual value of the oil and gold production.
Currently, there is always seemly a dire shortage of money, and yet, there is only about $50-60 trillion worth of paper currency.  Despite the fact that they are always printing it, the problem is that the value keeps going down, resulting in a weirdly stable $50-60 billion for the world economy over the last ten years.
The world produces about $3 trillion of oil per year.  The math is 88 million barrels per day, x 365 days, x $85/barrel = $2.7 trillion.
The world mines about $130 billion, or $0.13 trillion, of gold per year.
2.7/.13 = 21  Thus, the world's oil production is worth about 21 times as much as the world's gold production.
But what if the entire world used gold for money?  And what if the world still spent only 5% of the world's gold production on oil production, because the world has other things to buy with the gold, too.
Well, what if the world's gold production was worth 20 times as much as the world's oil production?  It could happen.  After all, the detractors of gold say that "you can't eat gold".  But that's a benefit.  See, if gold prices go up, nobody starves, and mining simply increases!
So, to measure value in terms of "stable dollars", because that's how our minds value things today, what would gold values be if gold production were worth 20 times oil production, and if there were no paper money on earth, and if only 5% of gold production were spent on all world oil production?
Math:  $2.7 trillion worth of annual oil production x 20 = $54 trillion, divided by 75 million oz. of gold annual production, = $720,000 dollars per ounce.  wow.  It could happen!  And there would be no shortage of money to spend to go out and explore for oil!  Again, that implies a value for gold, if there is no paper money, and if 5% of gold production were able to buy 100% of world oil production, because the rest of gold production would be spent on other things, just like in today's world.
If gold were worth so much, then the world's 5 billion oz. of gold would be worth $3,600,000 billion.  See, that's a lot more money than $50,000 billion in world cash.  So, the world does not ever have to worry about running out of money (poking a major hole in the Energy Returned on Energy Invested argument), as long as it simply values gold higher.  This also means that gold does not cause a restriction on economic activity, like the bashers of the gold standard falsely claim.  Gold causes a restriction on govenrment intervention, and helps to create an explosion of freedom that the world so desperatly needs, to solve world problems like shortages of oil!
Also, as the dollar continues to fail, very very few people will try to buy 100 barrels of oil to put on their front lawns to store the equivalent of $8500 worth of wealth.  But millions of people will try to buy $10,000 worth of silver and gold, or far more, and put that in their vaults at home! 
And that information might just be better than silver!
You can buy silver from us at

We have much lower prices, or premiums over spot, right now.  Everyone wants to buy on a dip.  Now's your chance!

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Thursday, October 20, 2011

Get the information Police have on you

The Freedom of Information Act (FOIA), guarantees citizens of the Commonwealth and representatives of the media access to public records held by public bodies, public officials, and public employees.

A public record is any writing or recording regardless of whether it is a paper record, an electronic file, an audio or video recording, or any other format that is prepared or owned by, or in the possession of a public body or its officers, employees or agents in the transaction of public business. All public records are presumed to be open, and may only be withheld if a specific, statutory exemption or other law applies to those records.

The policy of FOIA states that the purpose of FOIA is to promote an increased awareness by all persons of governmental activities. In furthering this policy, FOIA requires that the law be interpreted liberally, in favor of access, and that any exemption allowing public records to be withheld must be interpreted narrowly.

Your FOIA Rights 

You have the right to request to inspect or receive copies of public records, or both.
You have the right to request that any charges for the requested records be estimated in advance.
If you believe that your FOIA rights have been violated, you may file a petition in district or circuit court to compel compliance with FOIA.

Making a Request for Records from the Police Department

You may request records by U.S. Mail, fax, e-mail, in person, or over the phone. FOIA does not require that your request be in writing, nor do you need to specifically state that you are requesting records under FOIA.
From a practical perspective, it may be helpful to both you and the person receiving your request to put your request in writing. This allows you to create a record of your request. It also gives the Department a clear statement of what records you are requesting, so that there is no misunderstanding over a verbal request. However, the Department cannot refuse to respond to your FOIA request if you elect not to put it in writing.

You must provide your name and legal address.

Your request must identify the records you are seeking with "reasonable specificity." It does not refer to or limit the volume or number of records that you are requesting. It requires that you be specific enough so that the Department can identify and locate the records you are seeking.
Your request must ask for records or documents. FOIA gives you a right to inspect or copy records; it does not apply to a situation where you are asking general questions about the work of the Department.
You may choose to receive electronic records in any format used by the Department in the regular course of business.
For example, if you are requesting records maintained in an Excel database, you may elect to receive those records electronically, via e-mail or on a computer disk, or to receive a printed copy of those records
If the Department has questions about your request, please cooperate with the staff's efforts to clarify the type of records you are seeking, or to attempt to reach a reasonable agreement about a response to a large request. Making a FOIA request is not an adversarial process, but the Department may need to discuss your request with you to ensure that it understands what records you are seeking.

Where to Send A FOIA Request or Questions Regarding FOIA:

Your Local Police Department.

The Department's Responsibilities in Responding to Your Request 

The Department must respond to your request within five working days of receiving it. "Day One" is considered the day after your request is received. The five-day period does not include weekends or holidays.
The reason behind your request for public records is irrelevant, and the Department cannot ask you why you want the records before responding to your request. FOIA does, however, allow the Department to ask you to provide your name and legal address.

FOIA requires that the Department make one of the following responses to your request within the five-day time period:

Provide you with the records that you have requested in their entirety.
Withhold all of the records that you have requested, because all of the records are subject to a specific statutory exemption. If all of the records are being withheld, the Department must send you a response in writing. That writing must identify the volume and subject matter of the records being withheld, and state the specific section of the Code of Virginia or other law that allows or requires the withholding of the records.

Provide some of the records that you have requested, but withhold other records. The Department cannot withhold an entire record if only a portion of it is subject to an exemption. In that instance, the Department may redact the portion of the record that may be withheld, and must provide you with the remainder of the record. The Department must provide you with a written response stating the specific section of the Code of Virginia or other law that allows or requires portions of the requested records to be withheld.

If it is practically impossible for the Department to respond to your request within the five-day period, the Department must state this in writing, explaining the conditions that make the response impossible. This provision will allow the Department seven additional working days to respond to your request, giving the Department a total of 12 working days to respond to your request.

If you make a request for a very large number of records, and the Department feels that it cannot provide the records to you within 12 days without disrupting other organizational responsibilities, the Department may petition the court for additional time to respond to your request. However, FOIA requires that the Department make a reasonable effort to reach an agreement with you concerning the production or the records before it goes to court to ask for more time.


You may have to pay for the records that you request from the Department. FOIA allows the Department to charge for the actual costs of responding to FOIA requests. These costs may include items like staff time spent searching for the requested records, copying costs or any other costs directly related to supplying the requested records. It cannot include general overhead costs.

If the Department estimates that it will cost more than 0 to respond to your request, the Department may require you to pay a deposit before proceeding with your request.

You may request that the Department estimate in advance the charges for supplying the records that you have requested. This estimate will allow you to know about any costs upfront, or give you the opportunity to modify your request in an attempt to lower the estimated costs.

Common Exemptions to FOIA Requests

The Departments commonly withhold records subject to the following exemptions:

Requests by persons incarcerated in a state, local or federal correctional facility.

Records subject to attorney-client privilege or attorney work product.
Tests or examinations used, administered or prepared for purposes of evaluation of any employee or employment seeker’s qualifications or aptitude for employment, retention, or promotion, or qualifications for any license or certificate.
Vendor proprietary information .
Records relating to the negotiation and award of a contract, prior to a contract being awarded.
Plans and information to prevent or respond to terrorist activity, the disclosure of which would jeopardize the safety of any person.
Complaints, memoranda, correspondence and evidence relating to a criminal investigation or prosecution, other than criminal incident information.
The Federal Freedom of Information Act only applies to federal agencies and not to the Department or other state agencies.

The following frequently requested records are governed by the following statutes:

Active criminal investigations are governed by the restrictions set forth under § 52-8.3.
Criminal history records are governed by the restrictions set forth under § 19.2-389.
Accident reports and information regarding accidents are governed by § 46.2-379 and § 46.2-380.
Sex Offender Registry information is governed by §§ 9.1-900 et seq.
Criminal intelligence files, Title 28 Code of Federal Regulations, Part 23.