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Jim Cook

 

RUNAWAY SOCIAL SYMPATHY

Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

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The Best of Jim Cook Archive

 
Best of William Histed
February 17, 2011
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THE INFLATED AMOUNT OF PAPER
INVESTMENTS OUT THERE

  There is another kind of dangerous inflation that has taken our economy by the throat.  I am not just talking about the "funny money" created by the Federal Reserve Bank, but the paper mill being run by our huge corporations and the stock exchanges.

  Of course,as with the "FED," most of the ballooning of figures is done with computers these days.

  It is said that investments compete against each other for attention from investors. As I compare the availability of different types of investments, I think silver still stands out in a special way.  Even at prices much higher over the past few years.

  I purchase my first New York Stock Exchange stocks when I was 15 years old.  In those days before internet discount brokers, Mom drove me to a nearby town to a stock broker whose office was in a huge downtown bank building.

  I studied the Standard and Poors little book the broker gave me, looking up how many shares various corporations had outstanding.  Back in the late 1960s, many household name U.S. corporations had only maybe 9 million shares total, 13 millions shares, or a high number might be 29 million shares outstanding.

  In recent times, I have done some research to find out how many outstanding shares companies in the same ball league have today.  I a flabbergasted at the number of shares corporations have out there.There are some U.S. corporations, despite heavy debt, tremendous competition, and that even currently lack a profit that have TENS OF BILLIONS OF SHARES floating around out there.
                       
  THINK OF AN OUNCE OF PHYSICAL SILVER AS A SHARE OF STOCK

  If you think of an ounce of silver as a share of stock, you will understand how undervalued it is.  By the way, I agree 100 percent with Jim Cook and not letting dealers or sellers "hold" your silver for you. Even if you buy "right," if you do not "store" right, you may fail.  Storage is as important as the actual buying.

  According to even the highest figures cited, there might be $1-1.5 billion ounces (shares) of silver in the world above ground supply that could be available to purchase, in theory. It depends on whose figures you use, but 1.5 billion ounces would be a higher figure.  So, let's take the high number and say there are 1.5 billion "shares" (ounces) of silver outstanding in the entire world.
  Now, do you have any idea how many paper shares of corporate "stock" are out there, just on U.S. exchanges?

This is sobering, so pay attention.

  One day alone, in February, 2011, there were 1.5 billion shares traded on just the New York Stock Exchange. That same day, the other exchanges in the U.S. traded more than another 600 million shares.  In just ONE DAY!  We are talking about just one country in the world with a small fraction of the world's population and a declining share of the world's economy.  This does not take into account all of the other stock exchange trades that same day around the world.

  You can check this figure out for yourself. In just one day in February, an average day, there were more shares traded on just one stock exchange than there are probably ounces of silver in the world.

  Here are some other facts most people don't know, but with a little time, you may easily verify my figures.

  Below are the number of shares outstanding of just a few of the thousands of publicly traded U.S. corporations.  I can't believe it, based on the small number of shares outstanding when I first got interested in investing.
----Citigroup, 29.1 billion shares.
----Wal-Green drug stores, nearly 1 billion shares.
----McDonald's Corporation, 1.1 billion shares.
----General Electric, 10.7 billion shares.
----Wal-Mart Stores, 3.6 billion shares.
----Bank of America, 10.1 billion shares.
----Ford Motor Co., 3.5 billion shares.
----Starbucks, 741 million shares.
----Yum Brands, 500 million shares.

   You can see now why 1.5 billion ounces of silver around the world, even a high figure cited, is a paltry number when you look at Citibank with 29.1 billion shares out there.
  What I am saying is, just one of thousands of U.S. corporations has many more times shares of stock than ounces of silver exist in the world.

   Also, remember, corporations may increase the number of shares in existence by fiat, the way governments increase their perceived wealth.  Silver can only be increased with real work,real investment and some luck.  Real silver can't be increased by signing some papers or putting some keystrokes in a computer.

  Bear in mind ALL of the above companies carry debt, tremendous amounts of it in some cases.  Real, physical silver by itself has no debt, and has never gone bankrupt.  Another problem is most publicly trade U.S. corporations have two sets of figures for the number of shares they have.  There is a higher number for shares outstanding that takes into account stock options for directors and executives, restricted letter stock and stock promised to someone into the future.

  Even with recent spikes in the price of silver, it still appears to be in very short supply.  Especially when you look at some of the investment alternatives.