January 31, 2012
Important NIA Economic Update
Gold prices have been breaking out big over the past couple of weeks. Gold prices ended 2011 at $1,565.80 per ounce with the Dow Jones finishing 2011 at 12,217.5, equaling a Dow/Gold ratio of 7.8. While the Dow Jones has surged so far in 2012 by 3% to 12,592.57, the price of gold has surged by 11% to $1,735.7 per ounce. The Dow/Gold ratio is now down to 7.26. This means stock prices have actually declined 7% this year in terms of real money. We believe this ratio will decline to below 1 sometime this decade. This will mean another 86% decline in Dow Jones stocks in terms of real money.
It was just reported this morning that the Standard & Poor’s Case-Shiller home price index of the 20 largest U.S. cities declined 3.4% in November from one year prior. The biggest declines were seen in Atlanta -11.8%, Las Vegas -9.1%, and Seattle -6.3%. The only price increases were seen in Detroit +3.8% and Washington DC +0.5%.
We are beginning to once again see a large decline in the median U.S. home price/silver ratio. The U.S. median home price is now $164,500 and silver is currently $33.20 per ounce. That is a median U.S. home price/silver ratio of 4,955. In September when the price of silver dipped to $26.15 per ounce, we had a median U.S. home price of $165,400, which equaled a median U.S. home price/silver ratio of 6,325. That is a 22% decline in housing prices in terms of silver over the past four months. We believe this ratio will decline to below 1,000 sometime this decade. This will mean another 80% decline in Real Estate prices in terms of silver.
While the price of gold is up 11% this year so far, the price of silver is beginning to once again outperform gold. Silver prices are up 19% so far in 2012. Over the past 30 days, the gold/silver ratio was declined from 56 down to 52. We believe this ratio will decline to below 16 sometime this decade. This means silver could rise 3.25 times more than gold this decade.
NIA purchased back 10,000 shares of BVSN this morning increasing its position to 145,000 shares of BVSN. NIA believes there is a very good chance that BVSN has seen its bottom and is getting ready to make a major bounce to the upside. We will not be announcing any new stock suggestions until after Facebook goes public in May because we expect BVSN to become one of the biggest plays in the entire market in the upcoming months.
We have reason to believe that when BVSN fell from its peak of $44.75 down to a low of $20 during the past week, its share price was manipulated downward by naked short sellers. Bloomberg just reported this morning that BVSN has been on the “threshold securities" list for the past 8 trading days: click here.
This means people have been short selling BVSN shares without borrowing the shares and they will likely be forced to cover soon by buying these BVSN shares back in the open market. This could cause a large short-term squeeze and a huge surge in BVSN's share price.
Take a look at some of the other stocks on the “threshold securities" list. AXPW has been on it for 26 days now. Between AXPW's 8th day on the list and its 26th day on the list, AXPW's share price has more than doubled. EGDFF has been on it for 35 days now. Between EGDFF's 8th day on the list and its 35th day on the list, EGDFF's share price has increased by 22%. STEV has been on it for 15 days now. Between STEV's 8th day on the list and its 15th day on the list, STEV's share price has increased by 31%.
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Disclaimer: NIA currently owns 145,000 shares of BVSN. NIA agreed to a 60 day holding period on its initial position of 122,000 shares starting from the date that NIA first suggested the company, but NIA intends to sell these 122,000 shares at some point in the future after the date of February 12th, 2012. NIA intends to sell its additional 23,000 shares of BVSN and can sell them at any time. NIA reserves the right to accumulate more shares of BVSN at any time. NIA's co-founders have also been referred business in the past from somebody who has filed as a large BVSN shareholder. Past performance is not an indicator of future returns.
NIA is not an investment advisor. This email is not a solicitation or recommendation to buy, sell, or hold securities. Never make investment decisions based on anything NIA says. This email is meant for informational and educational purposes only and does not provide investment advice. NIA's co-founders have previously disseminated information about BVSN in other media outlets.
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