EXCLUSIVE INTERVIEW (TICKER TALK) with David Morgan, Jay Taylor, Ted Ohashi

Ted Ohashi, host of Ticker Talk interviews David Morgan, editor of Silver-Investor.com and Jay Taylor, president of Taylor Hard Money Advisors. Discussion on Gold and Silver markets.

The Great Sharing

Richard (Rick) Mills
Ahead of the Herd

As a general rule, the most successful man in life is the man who has the best information

The most investable trend over the next 20 years is going to be the rising price of commodities, rising prices will be caused by two factors;

• Increasing consumption
• Inflation

Consumption

Two factors are involved in increasing consumption. One is the growth in population:

2011 7 billion

2020 7.6 billion

2027 8 billion

2030 8.2 billion

2040 8.8 billion

2046 9 billion

2050 9.2 billion

The second factor is the growth in wealth in the major developing countries – China, India, and Indonesia have enormous numbers of people who are already middle class and hundreds of millions still to become middle class.

Africans, on a per capita basis, are richer than Indians and a full dozen African states have higher gross national income per capita than China. Today Africa has 14% of the world’s population and by 2050 one in every four people on the planet will be African. Development expert Vijay Majahan, author of Africa Rising, said the rapidly emerging African middle class could today number almost 300 million people – that’s out of a total population of one billion.

The Organization for Economic Co-operation and Development says the global middle class numbers 1.8 billon, or 28% of the world’s population.

According to the UN report RESILIENT PEOPLE RESILIENT PLANET A Future Worth Choosing, the number of middle-class consumers will increase by three billion people over the next 20 years.

The president of the Center for Global Development, Nancy Birdsall, calculates that India has no middle class. The McKinsey Global Institute projects that India’s middle class of 50 million, less than 5% of the country’s population, will explode to 583 million by 2030.

McKinsey Global puts China’s middle class at 43% of its population today, on its way to 76% in 2025.

Chasing The American Dream

Middle class has come to mean having what Americans have: large houses or apartments, more than one car, all the latest appliances, flat screen TVs with cable or satellite, laptops and i-pads – “development” for these people has come to mean more than just the basics – electricity, telephones and running water. Indonesia is a good example.

Indonesia – the missing BRIC?

“Indonesia is one of the world’s economic success stories.” Nielsen, Consumer and media research company

With a population of 238m (In 2015, Indonesia’s Population is expected to be 250m) Indonesia is Southeast Asia’s fastest-growing major economy clocking growth at six percent in 2011.

The country has a rapidly expanding middle class that accounts for 44 percent of all fast moving consumer goods (FMCG) spending in the country.

Indonesians love to watch TV and nearly 95% of middle class homes owns one.

Internet usage and mobile phone ownership is surging.

Consumption accounts for almost half of GDP growth.

The country’s middle class, 1.6m in 2004, now numbers about 50m – more than India and bigger than elsewhere in the region. The number could reach 150m by 2014. It would seem newly affluent Indonesians are certainly…

Movin’ on Up

Well we’re movin on up,
To the east side.
To a deluxe apartment in the sky.
Movin on up,
To the east side.
We finally got a piece of the pie.

Fish don’t fry in the kitchen;
Beans don’t burn on the grill.
Took a whole lotta tryin’,
Just to get up that hill.
Now we’re up in the big leagues,
Gettin’ our turn at bat.
As long as we live, it’s you and me baby,
There ain’t nothin wrong with that.

Well we’re movin on up,
To the east side.
To a deluxe apartment in the sky.
Movin on up,
To the east side.
We finally got a piece of the pie.

Theme from the TV show the Jeffersons

“Given high economic growth rates in many parts of the world, as well as the rapid spread of electronic media, advertising, and consumer goods, we must ask what kind of consuming future we can expect in areas that are now constrained by poverty and isolation. If everyone develops a desire for the Western high-consumption lifestyle, the relentless growth in consumption, energy use, waste, and emissions may be disastrous.”  National Academy of Sciences, Environmentally Significant Consumption (1997)

Inflation

“The seasonally-adjusted St. Louis Fed Adjusted Monetary Base just jumped to an historic high level in the two-week period ended February 22nd, as shown in the (above graph)… Adding liquidity to the system usually is contrary to the action that would be taken if the Fed were trying to reduce inflation. Indeed, the Fed is not trying to reduce inflation – despite inflation running significantly above its 2.0% inflation target – instead, the U.S. central bank continues its efforts to provide liquidity to a still severely-impaired U.S. banking system.” John Williams, ShadowStats.com

Consumption Facts

The human enterprise now consumes nearly 60 billion metric tons of the world’s four key resources – minerals, ores, fossil fuels and biomass (plant materials) – per year.

Developed countries citizens consume an average of 16 tons of those four key resources per capita (ranging up to 40 or more tons per person in some developed countries).

Projected Population Growth:

2020 7.6 billion

2027 8 billion

2030 8.2 billion

2040 8.8 billion

2046 9 billion

2050 9.2 billion

According to a report from the U.N., by 2050, humanity could devour an estimated 140 billion tons of minerals, ores, fossil fuels and biomass per year.

Total global resource use soared from six billion tonnes in 1900 (1.6 billion people) to 49 billion tonnes in 2000 (just over 6 billion people)  and is now running at close to 60 billion tonnes (just over 7 billion people).

Consider:

• The average person in India today consumes just four metric tons of the world’s four key resources in a year
• An average American uses 88 kilograms of stuff per day
• The average American consumes about fifty-three times more goods and services than someone from China
• A child born in the United States will drain as many resources as thirty-five natives of India
• The UNEP-hosted International Resource Panel report entitled Decoupling: Natural Resource Use and Environmental Impacts from Economic Growth shows that on average the annual per capita consumption of natural resources – known as the ‘metabolic rate’ – in Europe is around 13 tons per person

How Long Will It Last?

Robert Gordon, Tom Graedel and colleagues at Yale University used data from the US Geological Survey’s annual reports and UN statistics on global population to answer the following:

If every human on the planet consumed minerals at just half the rate of an average US resident how many years would the minerals last?

Their calculations do not take into account new technologies or new discoveries and assume current production equals consumption.

HOW MANY YEARS LEFT?

Q & A

Commodities expert Jim Rogers said there are three questions you need to ask (and answer) to determine if a commodity is headed higher in price.

Lets answer based from a metals perspective:

Q1 – How much production is there worldwide?

A – Not enough, most older existing mines, the foundation of our supply, have increasing costs with production rates stagnating or even declining because of lower grade ore

Q2 – Are there new sources of supply?

A – Yes, but the rate of depletion is much greater than the rate of discovery.

We also face complicated more expensive extraction of metals from increasingly harder to find, lower grade ore bodies in almost inaccessible and hostile parts of the world

Q3 – Are there new potential supplies?

A – Yes, if energy was cheap and unlimited then recoverable resources would be unlimited

The U.S. Energy Information Administration (EIA) said that world oil consumption grew by an estimated one million barrels a day (bbl/d) in 2011 to 88.1 million bbl/d. The EIA also said world oil consumption is expected to grow by an average 1.3 million barrels per day (bbl/d) in 2012 and 1.5 million bbl/d in 2013.

Conclusion

People in the developed nations have had the luxury of taking a great many things for granted, one of them is our lifestyle involving unfettered consumerism. We need to stop taking things for granted.

When we were kids our parents taught us the value of sharing, a lesson that’s going to come in very handy over the next few decades.

The Great Sharing should be on everyone’s radar screen. Is it on yours?

If not, maybe it should be.

Richard (Rick) Mills

rick@aheadoftheherd.com

www.aheadoftheherd.com

If you’re interested in learning more about the junior resource sector please come and visit us at www.aheadoftheherd.com

Site membership is free. No credit card or personal information is asked for.

***

Richard is host of Aheadoftheherd.com and invests in the junior resource sector. His articles have been published on over 300 websites, including: Wall Street Journal, SafeHaven, Market Oracle, USAToday, National Post, Stockhouse, Lewrockwell, Uranium Miner, Casey Research, 24hgold, Vancouver Sun, SilverBearCafe, Infomine, Huffington Post, Mineweb, 321Gold, Kitco, Gold-Eagle, The Gold/Energy Reports, Calgary Herald, Resource Investor, Mining.com, Forbes, FNArena, Uraniumseek, and Financial Sense.

***

Legal Notice / Disclaimer

This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment.

Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified; Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission.

Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.

Ellis Martin Report with David Morgan’s Apology to Chinese People for Verbal Gaffe

Mr. Morgan continues to stand by his prediction of $60 silver before the end of the year and a proverbial leg up in a bull market for silver as well as gold. Is it all speculative or is industrial demand factored in? Nevertheless, he alludes to a market like none we’ve never seen for precious metals as fund managers plow resources of their middle class constituents into the bullion in numbers not seen previously….and…. Is IS is? We still don’t know. We may never know. Finally Mr. Morgan whips out Old Glory, quotes Patrick Henry and stumps nearly tearfully for freedom. He’s clearly got “nothing left to lose” to quote Janis Joplin, or at least the US doesn’t. ” Give me liberty” and while you’re at it, “Give me all the gold and silver bullion and all the gold and silver stocks that I can afford.
 
http://www.youtube.com/watch?v=3-SCZhkq_VI

David Morgan: More Bullish on SILVER NOW Than Ever Before

Will there be a rush to commodities?

David Morgan takes a look at the price of gold

You can view the video here…

http://video.foxnews.com/v/1442503994001/

David Morgan & Chris Duane Talk Silver and Why You Should Buy Now

David Morgan, Morgan Report “Beyond Silver: The Advantages of Thorium” Video Interview Vancouver Resource Invest Conf 2012

David Morgan is a precious metals aficionado with degrees in finance and economics as well as engineering, and created the Silver-Investor.com website. He founded The Morgan Report, a monthly that covers economic news, overall financial health of the global economy, currency problems ahead and reasons for investing in precious metals. SNNLive met up with David Morgan at the Vancouver Resource Investment Conference 2012.

Although Mr. Morgan is known for his love of silver, in this Wall Street View, he discusses a different resource: Thorium. He begins by giving his 2012 outlook on Silver, where he states, “I’m looking for silver to take out the nominal high, which is around $48, which was established around May 1st, 2011. And, once that base moves up into that level, I think we can see $60 by the end of this year. I’m pretty bullish. I think you get a double out of silver, but I think it will take at least a year to do that.”

In the January issue of The Morgan Report, David wrote an article about the Rare Earth Element, Thorium. He claims that Thorium is, “a huge energy solution, it doesn’t cost that much money, and you can build a plant in a cookie cutter fashion so you can actually make the manufacturing of a nuclear power plant using thorium, and take a cut out and do it again and again…and gets things started a lot faster.”

Mr. Morgan advises that what you want to look at for Thorium is the Energy Flux Density, or the rate of return on investment energy-wise, “where you want to get as efficient as possible, and the only way to get over the hump, as far as I’m concerned, is to get a lot more electricity cleanly and efficiently, thorium is part of the answer for that.” He concludes by saying, “Thorium will actually be able to eat up bad nuclear waste that already exists.” For more information about or to subscribe to The Morgan Report and Silver-Investor.com, check out his website., and you can follow David Morgan on Twitter @SilverGuru22. Enjoy this SNNLive Wall Street View with David Morgan.

Click the link below to view the video…

http://stocknewsnow.com/?p=2929

This Week in Money

This week in money talks with David Morgan about Silver

David Morgan: Silver Will Knock Repeatedly on $50/oz. This Year Before Breaking On Through

The Morgan Report publisher says a tightly held silver supply putting pressure on prices as the macroeconomic climate fails to improve.

David Morgan, publisher of The Morgan Report, a monthly newsletter that covers economic news, currency and precious metals, believes that silver will be persistent this year in trying to break through its resistance of $50 an ounce. A tightly held silver supply, continued sovereign debt concerns in Europe and a strong appetite for the white metal at the start of the year are factors that he says will make silver a leader in the commodity sector in 2012. HAI Managing Editor Drew Voros recently caught up with Morgan to discuss what’s in store for the silver market this year.

Hard Assets Investor: Silver is starting out 2012 strongly. Is it following gold or is it blazing its own path?

David Morgan: Silver is following gold, but if you study silver carefully, there are times when silver leads and gold lags.

A quick example was last year. We saw silver basically double from around the $25level to $48, in a matter of months. That ended about May 1. Gold did a similar parabolic move, but not quite the percentage gain that silver outlined, but it did it later in the year. So who went parabolic first, silver or gold? Well, in this case, silver did.

HAI: Why do you think silver’s volatility was more intense last year than gold? Was it the drop-off in industrial demand?

Morgan: No it wasn’t. It was purely the momentum players, the guys that sit in front of computer screens all day who see a momentum move. They know it’s a small market. They know they can get extreme leverage in the market and they can use derivatives. And that, of course, causes the price to continue further down.

HAI: Yesterday [Jan. 11, 2012] we saw a large spike in silver sales and price attributed to Sprott Asset Management making a big purchase for its physical silver exchange-traded fund. Are some of these ETFs driving the metals markets?

Morgan: They do, absolutely. But relative to what’s mined in the silver sector, which is about 750 million ounces on an annual basis, the 9 million ounces purchased were not really that large. But what that indicates strongly is that the flow is tight. In other words, there are not all these warehouses full of silver. Supply is in tightly held hands. It’s all held either for investors longer term and/or by industrial users that don’t really stockpile very much. What yesterday’s purchase shows is that whatever comes out of the pipeline has got a lot of people waiting at the end of that pipeline.

HAI: Do you see more silver funds coming to the market, or is there a risk here that we’re going to get saturated?

Morgan: At some point all markets get overdone. And, as bullish as I am, silver probably will at some point. I do see more silver funds coming in. In fact, I’m actually aware of a couple that are being formed as we speak. There will be more demand. But I think the big question implied is, when will it stop? The answer to that is the global financial system is in such dire straits right now, that more and more people are gravitating to the precious metals. And that trend will continue, which implies more ETFs, more hedge funds, more silver mutual funds, more holding companies and everything else throughout the sector.

HAI: Where do you see the strongest industrial demand for silver coming from?

Morgan: Solar is No. 1 right now and is growing rapidly, almost exponentially. It will level off probably by 2014.

HAI: Where do you think silver is headed in terms of price this year?

Morgan: I’m on record saying $60 by the end of the year. And it will probably take all year to get there. The key is to get through that $50 psychological barrier. It’s probably going to take a couple of tries. And I do believe at some point it will. Once it does that, you could see silver go up from $50 to $60 in a matter of two weeks. That’s the kind of move silver is capable of making.

HAI: Let’s talk a little bit about miners. Have the silver miners been as undervalued as some of the gold miners?

Morgan: It depends on a case-by-case basis, but you’re right. The silver mining industry has got the biggest premium in the sector. A good silver miner producing silver at the top of the market in the last bull market sold at 50-to-1 P/E [price-earnings ratio], whereas gold miners were selling about at 35-to-1 P/E. So silver carries a premium. And you see that throughout the sector. There are some very undervalued mining stocks, including some silver stocks in this juncture.

HAI: What is some advice you would offer someone who’s thinking about getting into silver for the first time? What kind of entry point would you suggest?

Morgan: I would say get both gold and silver. There is a program I’m associated with: www.SilverSaver.[LLB1] com. That program is a dollar-cost-averaging program. Just put in the same amount every month and don’t worry about it. If the market goes down, you’re buying more silver. If the market goes up, you’re buying less silver. It’s a great professional way to handle any market, especially a volatile market like the silver market.

HAI: Do you prefer bullion or coins?

Morgan: I prefer coins. I think you want small denominations. That would serve you best in exiting the market, because you have a small unit, you can sell just part of your holdings. Once you get to the bullion, then you’re making bigger decisions. Is it 100 ounces at a time? Is it 1,000 ounces at a time? I try to get everyone to start with coins. But it depends on the individual. If you’re a well-heeled investor and committed to the silver market, you should have a mix of both.

HAI: What coins would you recommend specifically?

Morgan: One rule is to buy as much silver as you can per dollar invested, which implies getting silver rounds, which are privately minted silver coins, not government minted. The government-minted coins are exactly the same in weight and content, which is 0.999 silver. But they have the government stamps on them, which puts a big premium on those.

If you get one any of these private mints, it’s the same exact thing, except it’s not a government mint that’s stamping it out. Nonetheless, it’s just as pure, just as fine, the same weight. But again, it comes down to the individual. Someone says, “No, no, I’ve got to have a government stamp on my coin.” Well then, do that. You’re just going to pay more.

HAI: The U.S. Mint said there was a record amount of silver coins purchased in the first two weeks of the year. What was behind that?

Morgan: Silver is becoming a more popular investment, so a lot of these dealers will buy huge amounts of freshly minted 2012s. They’ll slab them, which means put them in a plastic holder, and get them graded, and then put a huge price tag on them. As far as I’m concerned, it’s a big rip-off. They then sell them for $100 each, when there’s $30 worth of silver in the coin. So that’s part of it right there

HAI: Let’s talk a little bit about asset allocation. What do you recommend when it comes to precious metals?

Morgan: I recommend 20 percent into metals, but it also depends on your age. Because the younger you are, the more risk you can take. If you’re age 60 years or older, half of that would be in physical metal. The 10 percent remaining is done like this: About 70 to 80 percent of that goes into top-tier, cash-rich unhedged mining companies; about 20 percent goes into midtiers; and the remaining 10 percent is spread out among junior miners.

HAI: Do you, at times, recommend selling silver?

Morgan: Absolutely. I got out of silver at $48/oz. on that move up last year, but not all of my position. But it’s very nice to capture $19 on the move to $48, which is basically what I did.

So I do trade, and I do invest. And they’re different topics. One is to make money and go back into cash. The other is just to buy and hold for the long term. Not everybody can do both. But I’ve been doing it for years and years, and I’m comfortable with that methodology.

(Follow David Morgan at www.silver-investor.com)

Provisions Shortage Sparked Arab Spring

Richard (Rick) Mills

Ahead of the Herd

As a general rule, the most successful man in life is the man who has the best information

In 1798 32 year-old British economist Malthus anonymously published “An Essay on the Principle of Population” and in it he argued that human population’s increase geometrically (1, 2, 4, 16 etc.) while their food supply can only increase arithmetically (1, 2, 3, 4 etc.).

“The power of population is indefinitely greater than the power in the earth to produce subsistence for man”. Thomas Robert Malthus

It is estimated that the population of the world reached:

• One billion in 1804
• Two billion in 1927
• Three billion in 1960
• Four billion in 1974
• Five billion in 1987
• Six billion in 1999

The second half of the 20th century saw the biggest increase in the world’s population in human history. Our population surged because:

• Medical advances lessened the mortality rate in many countries 
• Massive increases in agricultural productivity because of the “Green Revolution”

The global death rate has dropped almost continuously since the start of the industrial revolution – personal hygiene, improved methods of sanitation and the development of antibiotics have all played a major role.

You can view the rest of the article here…

http://www.silver-investor.com/pdf/ProvisionsShortageSparkedArabSpring.pdf

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