View Full Version : Silver and Gold ARE Money by Jake Towne

12-16-2009, 08:22 AM
Jake is a RPF member. Support him in his race for Congress in Penn.


Do you know how much gold is exchanged daily in dollars? If not, prepare to be shocked.

silverWhile gold trades as a currency (or "medium of exchange") and also is a "store of value," and even a "unit of account" for some, very little is actually consumed. Economically speaking, gold trades as money, even in our modern world. Gold is a luxury good with many industrial applications, but insignificant industrial consumption due to its high price per gram (about $36/gram right now). Its major market as a luxury good is Indian women's jewelry, but to these women the gold is their money, or insurance, if their mate leaves, dies, or is disabled so the metal is not consumed – it can be easily recovered. ( Photo) (2)

YouTube - Jake Towne for U.S. Congress - As Good as Gold (http://www.youtube.com/watch?v=ppB82rFyiQU&feature=player_embedded)

To make my case that gold is money, what seems to be little known is that the gold market is also quite large - the LBMA in 2008 traded about $80 billion USD per trading DAY per the data collected by the IFSL 2009 Bullion Markets Report p3/8 - which I took the time to verify to be correct from its original sources - or $20.3 Trillion in turnover in 2008 and 254 LBMA trading days. However, the IFSL makes a significant note that this volume is quite likely three-to-five times larger since much of the transactions are increasingly netted out and cleared without appearing in the statistics. Please compare this to the 2008 GDP of the United States at $15 Trillion and understand the rough estimate that 75% of the world's trade in gold (and half of the world's silver) is traded via the LBMA.

Silver, on the other hand, serves as both an industrial metal and a "store of value" for silver investors. As we learned here, both silver and gold are precious metals since there is very little aboveground stock. All of the gold stock in the world would fit into a cube 20.5 meters to a side. Due to high amounts of industrial usage, the silver stock is even smaller, around 14 to 18 meters to a side, depending on various silver aboveground stock estimates.

However, as seen below, the silver market size in 2007 at $10 billion is minuscule – just a tiny fraction of a percent - compared to the gold market. What is really mind-blowing is that the LBMA traded the entire annual mine production of silver every 6 days, while the annual mine production of gold was traded every 4-5 days, despite the fact that silver is priced as if it were a commodity similar to wheat, corn, or copper. You see, the aboveground stock of gold valued at about $4100 billion is equivalent to roughly 5.2 billion troy ounces of gold, but the annual mine production is only 0.087 billion. The aboveground stock of silver valued at $10 billion (in 2007) is estimated at roughly 1.0 billion troy ounces of silver and the annual mine production of silver is about 0.671 billion. (IFSL report,pages 5-8/8)


12-16-2009, 08:40 AM
Jake rules!

Jake Towne
12-16-2009, 09:10 AM
Feel free to let me know if you have any comments, questions, or suggestions. I am fully committed to restoring the money power to the people. - Jake

12-16-2009, 01:42 PM
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