’Twas The Day After Christmas."
"’Twas the day after Christmas, and all through the house, every creature was hurting, even the mouse.
The toys were all broken, their batteries dead. Santa passed out, with some ice on his head.
Wrappings and ribbons just covered the floor, while upstairs the family continued to snore.
And I in my T-shirt, new Reeboks and jeans, went into the kitchen and started to clean.
When out on the lawn, there arose such a clatter, I sprang from the sink to see what was the matter.
Away to the window, I flew like a flash, tore open the curtains, and threw up the sash.
When what to my wondering eyes should appear, but a little white truck, with a cute little man.
The driver was smiling, so lively and grand: the patch on his jacket said "U.S. Post man."
With a handful of bills, he grinned like a fox, then quickly, he stuffed them into our mailbox.
Bill after bill after bill after bill they still came. Whistling and shouting, he called them by name.
"Now Enstrom’s, now Walmart, now Penny’s and Sears, here’s Home Depot and Target, and Pier One, all here.
To the tip of your limit, every store, every mall, now chargeaway, chargeaway, chargeaway all."
He whooped and he whistled, as he finished his work. He filled up the box then he turned with a jerk.
He sprang to his truck and he drove down the road, driving much faster with just half a load.
Then I heard him exclaim with great holiday cheer, "Enjoy what you got, you’ll be paying all year."
Supply, Demand, Cost to Produce
It is an economic stupidity to sell something for less than it costs to obtain or produce. The old story of the man with a hot dog stand is a classic. He was selling his hot dogs for ten cents, and doing a rousing business. A friend came by, was admiring his huge sales, and asked him how much it cost him to sell a hot dog for ten cents. The vendor replied that he could sell hot dogs and it cost twelve cents to put them out. His friend asked him how could he make a living doing this?. He replied, "Oh! I will make it up in volume." Naturally that makes no sense, but many rookie business people go broke with a similar brain power.
I honestly believe that the current price of oil, gasoline, gold, silver, and perhaps other consumables, has reached the point of actual cost to produce. When that point is reached in any field, I think that prices to purchase will not go below. Department stores often have 70% off sales of clothes which no one wants to buy because of poor style or color. Department stores selling something at 70% off, may be selling at their cost, and be glad to get rid of it, or perhaps even a bit below cost to get cash to pay year end bills or avoid inventory taxes. I’m not in the department store business, and am only theorizing. I do believe that oil at $55, approaches the cost of production for frackers. When they can’t make a profit, they cease to produce, and this generates a supply and demand situation. The price goes up and they begin to produce, and vice versa. I believe we will have oil in the $55 area for quite a while, and I bought gas Friday for $1.85. Nice!
Gold and silver, I believe, are going through the same thing as oil. The cost to mine, mill, smelt, transport, manufacture, and distribute are in the neighborhood of $1200 for gold and $15 for silver, or thereabouts anyway. When demand goes up, due to deficits, printing press currencies, war, pestilence, hyper inflation, or a host of other happenings, people will turn to real money, which for thousands of years, even back to Biblical times, have been gold and silver. The demand will be huge, and the supply limited. Inflation will make cost of production increase, and even with no huge demand, all costs will rise, and be reflected in purchase prices. Even if there is ample gold and silver in the ground, and I am not sure there is, increased demand will cause knots in the system. Right now, there is such a demand for our A-Mark silver rounds, that the earliest shipping date is January 23rd. The Sunshine Mint is working 24/7 to produce these desirable silver rounds. (As a matter of interest, the Sunshine Mint makes the blanks for Silver Eagles.) Hindsight is always 20/20. When the inevitable happens and prices of commodities go up and keep going up, millions will curse themselves for not taking advantage of low prices which now exist.