I would like to see that delivered , what would delivery fee be ??Originally Posted by DFF
I would like to see that delivered , what would delivery fee be ??
The following is a good piece from an article on fofoa(my bold). The entire article is good, but to get to the silver portion search for the "Easy money" heading and start there.
http://fofoa.blogspot.com/2010/12/focal-point-gold.html
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"To be honest, I really don't know if silver is overvalued or undervalued today at $30/ounce. But if you are counting on the industrial fundamentals of silver for your moonshot like the Zero Hedge article is, or on a busted paper market like the "vigilantes," you may be in for an unpleasant surprise. The same fundamental arguments that are used today were also used back in 1982. [3] In gold, at least, we know that jewelry demand rises and falls opposite the price of gold. [4] But then again, gold is money, right? So, is silver still money?
Easy Money
Silver was certainly used as money in the past. So why not again today? Maybe the people will rise up and demand silver money! Maybe China, or somebody else, will remonetize silver and start a new silver standard, right? After all, China was the last to use a silver standard.
I don't mean to pick a fight with silver. In fact, I write this post with a heavy heart. But there is so much silver hype right now that I feel I owe it to my readers to at least try to spell out Another perspective. And China is certainly on the minds of the silverbugs these days. How often have we heard about China encouraging its citizens to buy gold and silver lately? (There's that "gold and silver" again.)
But did you know that China was practically dumping its silver a decade ago? And to this day it is still a large exporter of silver. Not gold. Just silver.(China = super producer!) In 2009 China exported 3,500 tonnes of silver. That amount will probably be cut in half for 2010. The drop is due to increases in both industrial and investor demand, but also due to China's recent move to stem the shipment of all natural resources leaving its shores.
I'm sure many of you know that China was the last country on Earth to end its silver standard back in 1935, in the middle of the Great Depression. But do you know why? And would China ever want to start a new silver standard? Does it make any sense now that they've sold most of their silver? And what has changed since 1935 that would make them want to go back?
Something very interesting happened after Jan. 30, 1934 when Roosevelt devalued the dollar against gold. The price of gold went up 70%. What do you think happened to silver? Did it go up more than gold? Did it shoot the moon? Was it leveraged to gold? No, it dropped like an unwanted rock.
In response to the falling price of silver, on June 19, 1934 (four and a half months later) the U.S. Congress approved the Silver Purchase Act of 1934 which authorized President Roosevelt to nationalize silver holdings (to buy silver). This decision resulted in an increase in the world price of silver, which forced China to abandon the silver standard in November 1935.
The US Silver Purchase Act created an intolerable demand on China's silver coins, and so in the end the silver standard was officially abandoned in 1935 in favor of the four Chinese national banks "legal note" issues.
Remember what Mundell wrote (See Mundell in The Value of Gold). The use of a commodity as money is the overvaluing of that commodity for profit by the monetary authority. When the US started buying commodity silver on the open market (to prop up the price artificially) the Chinese people found it was better to sell their silver coins for melt value than to use them in commerce for face value (which was lower than melt).(value of "money" moved to being exclusively due to its "industrial" use, in this case coinage)
This effect to China's base money (silver) in 1934 was similar to what the US felt in 1933 and 1971 with gold. The main difference being that the demand for silver in 1934 was artificial (from one single entity, the US govt.) while the demand for gold has always been real, global and market-driven. This price supporting move (not unlike the Agriculture Adjustment Act and other destructive price control measures) by the US caused the "Shanghai Financial Crisis" which lasted from June 1934 until November 1935, finally ending in Currency Reform on Nov. 4, 1935.
So, in 1934, the US govt. wanted to devalue (set the price of) the dollar against gold and silver. In order to do so, it had to influence the market of each. For gold, it had to inflict capital controls internally and sell gold externally at the new higher price. For silver, it had to BUY silver at the new higher price. Sell gold, buy silver. The same exact thing that happened 45 years earlier with the Sherman Silver Purchase act of 1890.
......
Remember what Another wrote? "Any nation/state can put its economy/currency on a gold standard. They only have two requirements. Own a stockpile of gold and raise the price very high!"
Why do you think you need a stockpile of gold to start a gold standard? In the case of France in 1870 above, they realized they would have to buy all the excess silver in the world to keep a silver monetary standard. You don't need a stockpile to do that! Yet you don't need to worry about buying all the gold to have a gold standard. You need to be prepared to SELL! That's why you need a stockpile. So what's the difference?
Could it be that silver is only a commodity today (and for the last 150 years at least) and because of this, any monetary use is not backed by the free market? Any silver standard is an unnatural levitation requiring BUYING of silver by the monetary authority. While a gold standard gives the free market what it really wants, gold, requiring SELLING of gold by the monetary authority.
Can you find an example where the opposite occurred? Can you show me where a government ever had to buy gold and sell silver (at whatever price or ratio) in order to maintain its system?"
To me, silver has posed as money(so has paper, sea shells etc), but it always ultimately leads back to gold.
Last edited by cubical; 11-04-2012 at 11:26 AM.
The same can be said for ANYTHING. If you buy enough of it, there will be "shortages", but there will certainly be higher prices.
I'm going to pick off quotes from that article and take them on one at a time.
Yes, and did you know that a Russian Czar practically DUMPED Alaska? ::: GASP!!! ::: Enough said there, right? What does that tell us about Alaska?
So frustrating answering morons like the author of that article who are impaired in terms logical weighting or rational thought.
The fallacy here is the implication that "China", or anyone else, for that matter, is wise, and fully understands the ramifications of what it is doing, past or present--and even if it does understand the ramifications, there is an implicit assumption that there is an underlying objective 'truth' buried under it all.
Note the emphasis on demand, and the specific classes identified. Note also that 'monetary demand' by consumers in the economy is not named at all, nor are any of the ARTIFICIAL REASONS why the NATURAL DEMAND for silver as current money does not even come into play. NOW, at least.And to this day [China] is still a large exporter of silver. Not gold. Just silver.(China = super producer!) In 2009 China exported 3,500 tonnes of silver. That amount will probably be cut in half for 2010. The drop is due to increases in both industrial and investor demand, but also due to China's recent move to stem the shipment of all natural resources leaving its shores.
Consider Hemp. There has always been demand for certain types of hemp in smokable form. Big giant global market for it (black market et al) to the tune of about $150 Billion per year. There would be NATURAL DEMAND for hemp in other forms, including forms that have no narcotic effects, were it not for ARTIFICIAL suppression.
Gold AND Silver were artificially suppressed for use as current money by the Congress; first, via the Coinage Act that artificially tied their GOVERNMENT DICTATED (FIAT) "value" to one another. Demand for both metals--as money--were later suppressed in other ways (demonetizing and remonetizing silver along the way). All of this meddling and outright suppression had global ramifications, which had NOTHING to do with either metal's potential NATURAL DEMAND VALUE as money--IF NOT FUCKED WITH.
I sure in the hell do. Let's talk about that little nasty global gambit, and put it into some bitch-slapping perspective, for those who think that it somehow equated to a lack of demand for silver as money.I'm sure many of you know that China was the last country on Earth to end its silver standard back in 1935, in the middle of the Great Depression. But do you know why?
The global GOVERNMENT market was on a de facto gold standard, courtesy of Franklin Piece Of Shit Delano WHO PROHIBITED GOLD FROM BEING OWNED AND CIRCULATED BY HIS FELLOW CITIZENS. From that time forward, gold was the plaything of the Government Gods Alone. Note that during this same time US Citizens were forced onto a de facto SILVER STANDARD.
This is wrong on so many levels that I want to wring necks just reading this shit. "The price of gold went up 70%"? THE FUCK IT DID. Gold was a price already, denominated in its own weight. It's so-called "price", as thought of by those who utterly lack critical thinking skills, was already distorted and suppressed by more demand notes in existence than the gold those notes represented. Once FDR facilitated legal cover for the THEFT/DEFAULT/FRAUD perpetrated by banks, we no longer even had to pretend that the quantity of stored gold was equal to the paper that grossly misrepresented it. Hence, the "price" of gold only changed in that the quantity of misrepresenting notes finally began to reflect what was already the reality, once FDR caused the paper to FLOAT, as it decoupled from the specie it never accurately represented.Something very interesting happened after Jan. 30, 1934 when Roosevelt devalued the dollar against gold. The price of gold went up 70%. What do you think happened to silver? Did it go up more than gold? Did it shoot the moon? Was it leveraged to gold? No, it dropped like an unwanted rock.
The price of silver did not drop "like an unwanted rock" (what a specious, piece of shit way of phrasing it). The "price" of just about everything dropped as a direct result of a DEFLATIONARY DEPRESSION. Economic Demand for silver was not low for want of desire or desperate need for silver as current money, but only for want of the ability to obtain any. And that was all because SILVER HAD ALREADY BEEN DRIVEN OUT OF CIRCULATION BY CONGRESS. And that can be laid right at the doorstep of the de facto gold standard that was later corrupted, debased, debauched, and fraudulently defaulted on. Silver was not undervalued. Quite the opposite. We needed currency--ANY currency. And whatever currency was circulating was only increasing in value due it's catastrophically increasing scarcity as it disappeared from circulation.
So here we are, in a Great Depression, with morons in charge who are figuring out ways to get banks off the hook for their fraud, their crimes. FDR had just pulled the rug out from under Citizens in terms of using gold as current money, which left A VOID for hard specie, and a need for silver as current money.
NOTE: It was not possible for Roosevelt to move the American Public straight to a strictly fiat currency at that time, because the public was FAR MORE AWARE (although certainly not enough), thanks mainly to the so-called "Hard Money" Democrats, such that Roosevelt had to go through great lengths to assure the American public in his 'Bank Holiday' Fireside Address, that what he was proposing was NOT, he stated emphatically, fiat currency.
And there's where utter ignorance sets in. "In response to the falling price of silver" MY ASS. That purchase act was not intended as a subsidy, to prop up the price of silver. What kind of oatmeal does this guy have for a brain? The purpose was to NATIONALIZE and REMONETIZE silver, to fill the void left by FDR when he DEMONETIZED gold (internally). The price of silver went up as an wholly incidental result of all the massive buying by the Treasury. We would have been just as happy if the price had remained constant, or even dropped further.In response to the falling price of silver, on June 19, 1934 (four and a half months later) the U.S. Congress approved the Silver Purchase Act of 1934 which authorized President Roosevelt to nationalize silver holdings (to buy silver). This decision resulted in an increase in the world price of silver, which forced China to abandon the silver standard in November 1935.
China abandoned its silver standard ONLY because the US was going onto one INTERNALLY. We needed silver, and much of it was sucked out of China, not from normal market forces, but from an ARTIFICIAL DECREE. Meanwhile, China abandoned its silver standard INTERNALLY ONLY, but they did NOT adopt a gold standard INTERNALLY. Chinese people were not running around exchanging gold on the streets.
The US silver purchase act of 1934 forced China off its silver standard, not because silver was not in natural demand by ordinary people (on either side of the pond). The act that placed ARTIFICIAL DEMAND on China's silver coins, which in turn forced them off their silver standard in 1935, was in favor of FIAT CURRENCY -- from the four Chinese national banks that were authorized to issue "legal notes". And if we know anything about the issuers of FIAT CURRENCY, it is that they loathe competition. So by all means, their own elitist protectionists would want to export the shit out of silver--all of it, if possible, because it is a direct threat to their own Ponzi currency.
[QUOTE]And would China ever want to start a new silver standard? Does it make any sense now that they've sold most of their silver? And what has changed since 1935 that would make them want to go back?/QUOTE]
That's the other part that makes me want to wring an idiot's neck, and that is the aggregate anthropomorphizing of an entire country. "China" wants/does not want this or that. What the fuck is that supposed to mean? Who is this "China" being referenced, which "wants" something? Who ever said that China (the citizens, not the banks, not the government) EVER WANTED TO GO OFF OF IT IN THE FIRST PLACE?
As long as we're going to play fast and loose with aggregate collectivist and intellectually dishonest blob terms, could it be the fact that even the powers that be in China may now be recognizing that the entire globally inflated fiat currency Ponzi scheme ride is no longer sustainable, and coming to its catastrophic inevitable end? Could it be THAT is reason enough for some VERY SCARED Chinese officials, not wanting to be holding the bag when the new revolution comes after their own fiat currency fails?
The Chinese powers that be replaced silver with a fiat currency, just as the US powers that be replaced gold with silver, followed by silver being replaced with a fiat currency. There was NOTHING that prevented China from selling goods and services at a discount for the same silver they had sold. But that decision--that choice--was preempted, destroyed, suppressed, by LEGAL TENDER.
More to follow later, on this guy's logically twisted, intellectually exhausting fantasy house of cards, and his perception of gold and silver and how the market behaves with each in terms of demand under a given utility or function...
Last edited by Steven Douglas; 11-04-2012 at 03:39 PM.
Google Blythe Masters and then also what Steven Douglas posted above.
edit: I was refering to Steven's post WAY up the thread, although I don't see anything to disagree with in his last post either. As always, he has done a great job of analysis.
Last edited by Original_Intent; 11-04-2012 at 04:13 PM.
"The journalist is one who separates the wheat from the chaff, and then prints the chaff." - Adlai Stevenson
“I tell you that virtue does not come from money: but from virtue comes money and all other good things to man, both to the individual and to the state.” - Socrates
Let's apply that to personal computers and cell phones, and their beginnings. We first had to stockpile them by the tens of millions, and then we had to raise their price very high? Somebody is 'very high', that's for sure. Was "Another" confusing money with health care, education, or something else just as artificially manipulated and controlled?
To "keep a monetary standard"? What unadulterated bullshit. Precisely how much milk did the U.S. government have to buy up and stockpile to keep us on the Gallon of Milk Standard? To "keep" a monetary standard, you just declare the standard (e.g., 1 UNIT = N Mass of whatever element). THERE IS NOT A DAMNED THING FOR A GOVERNMENT TO "BUY", LET ALONE "STOCKPILE".Why do you think you need a stockpile of gold to start a gold standard? In the case of France in 1870 above, they realized they would have to buy all the excess silver in the world to keep a silver monetary standard.
France made the same idiotic mistake as the US by adopting a "Bimetallic" standard. It was a FIAT declaration of exchange value ratio between gold and silver (15.5:1), thus ABSOLUTELY ASSURING that France would be on a de facto gold standard with silver DRIVEN out of circulation (see Gresham's Law).
It was 1871 when the German Empire stopped minting silver thaler coins. Why do you suppose that happened? CAN YOU SAY CENTRAL BANK CONSOLIDATION? Before unification in 1871, Germany had 31 central banks – the Notenbanken (note banks). They were all in competition with one another, with each independent state issuing their own money. In 1870, a law was passed that forbade the formation of further central banks. All of this paved the way for the formation of the Reichsbank in 1876. Ever heard of it? Its legal tender, the Goldmark, was inflated to finance World War I. I assume you are familiar with the rest of the history.
The abandonment of the silver thaler resulted in downward pressure in value for silver in the US. The Coinage Act of 1873 worsened EVERYTHING. Instead of eliminating the statutory value ratio, and simply allowing silver to circulate on its own strength, floating against other currencies, Congress instead came to the RUINOUS decision to demonetize silver altogether, and put all the monetary eggs into one de facto Gold Basket. It would no longer "buy" silver at a statutory price or convert silver from the public into silver coins.
The Coinage Act of 1873, which was referred to commonly as "The Crime of '73", artificially depressed silver prices even further. So now you can't mint your own coins, and the government will no longer do it for you either, regardless of demand. The government would, ironically enough, continue to mint silver dollars for export in the form of "trade dollars". Sound familiar? The stupid meddling bastards.
The Coinage Act of 1873 reduced domestic money supply, which raised interest rates, and hurt farmers and anyone else who normally carried heavy debt. Investors shied away from long-term obligations, and particularly long-term bonds.
There was already Post-Civil War over-expansion from the railroad boom, the Black Friday panic of 1869, the Chicago fire of 1871, the outbreak of equine influenza in 1872, and demonetization of silver in 1873 which DECIMATED the money supply, such that by September 1873 the American economy was in a full-blown crisis. And it was not because silver or its value simply "dropped like an unwanted rock", unless you are referring to our absolute half-wits in Congress at the time, and their perceptions of what was wanted or unwanted.
All completely ass-backwards. You don't have to be prepared to "SELL" to have a monetary standard. You only need remove barriers to entry for people who want to buy. That's the demand side. Don't fuck with it, leave it alone, and the supply side will naturally follow and reach its own levels, without a single statist or monetarist to thank--or even be necessary for any of it to happen.You don't need a stockpile to do that! Yet you don't need to worry about buying all the gold to have a gold standard. You need to be prepared to SELL! That's why you need a stockpile. So what's the difference?
Free market? What free market? Too many examples to cite, the Coinage Act of 1873 and ALL LEGAL TENDER LAWS prove conclusively that there is NO FREE MARKET WITH REGARD TO MONETARY SILVER OR GOLD.[B]Could it be that silver is only a commodity today (and for the last 150 years at least) and because of this, any monetary use is not backed by the free market?
The sentence began, "Could it be that silver is only a commodity today...and because of this..."
Bad form, extremely badly written. The more salient question would start out as, "Could it be that silver is only a commodity today because..." and then actually address and answer that glossed over question?
BULLSHIT! WHAT MONETARY AUTHORITY? When the Coinage Act of 1792 was drafted, the only "monetary authority" was Congress, and not for the purpose of BUYING anything at all. Even the mints were only established so that people would have a place to take their precious metals and have them assayed and COINED into a predetermined shape and size for fungible convenience.Any silver standard is an unnatural levitation requiring BUYING of silver by the monetary authority.
WRONG. See above. You have government fixated in your mind as a SOURCE, a SELLER, an ISSUER and ORIGINATOR of money. In a free market, it doesn't work that way. The government doesn't have shit, and it is not a PROVIDER. I don't care what the government has in Fort Knox or anywhere else, or who it stole from to get that stockpile. The gold and silver I own is not part of that. I don't care what tangled, distorted, mutations or messes have been created that give people the illusion that government is a SOURCE, PROVIDER, BUYER or SELLER, as if it really was a "market participant". That is not how it was in the beginning, and is not necessary now. When a mint (ANY MINT, public or private) ISSUES a coin, it is from MY SILVER, MY GOLD.While a gold standard gives the free market what it really wants, gold, requiring SELLING of gold by the monetary authority.
Had to, or did? And what do you mean by "its system"? What "system of its" are your referring to? Either way, I don't care, because it was never necessary, for the reasons stated above.Can you find an example where the opposite occurred? Can you show me where a government ever had to buy gold and sell silver (at whatever price or ratio) in order to maintain its system?
There is no such thing as "posed as" unless you are referring to something "poses as" something else, or pretends to be something that it is not. So paper would qualify as a "poser", because it is a) posing as a promise of whatever it represents, or b) it represents--poses as--evidence of the force of law that declares it as having value. Silver and shells, then, would not "pose" as money. To the extent that they are freely accepted and used, they ARE money.To me, silver has posed as money(so has paper, sea shells etc)...
Likewise, if we have a shortage of rice in my neck of the woods, and everyone starts to value and use rice as a common medium of exchange, that rice is not "POSING" as money. It IS money.
What always leads back to gold? Expound on this "it" that presumably always leads back to gold?..., but it always ultimately leads back to gold.
Last edited by Steven Douglas; 11-04-2012 at 07:41 PM.
I haven’t read all the posts in this thread so I apologize if someone has posted something similar. Just thinking out loud. Right now silver or any PM is viewed as a store of wealth against the devaluation of the RFN. I’m thinking the tipping point when silver sky rockets is when silver gets into enough people’s hands that they actually start to use it as money on a regular basis. At that point the governments only recourse is to confiscate or ban it’s use outright. Isn’t that why FDR confiscated gold? Maybe I have it backwards?
Yes, but Alaska has something that can be valued, similar to a stock or a commodity. They will not dump sea shells or paper and then all of a sudden realize they had some sort of value they were missing.Yes, and did you know that a Russian Czar practically DUMPED Alaska? ::: GASP!!! ::: Enough said there, right? What does that tell us about Alaska?
There is a truth to it. Those who produce set the standard for what they will accept in return for their goods.The fallacy here is the implication that "China", or anyone else, for that matter, is wise, and fully understands the ramifications of what it is doing, past or present--and even if it does understand the ramifications, there is an implicit assumption that there is an underlying objective 'truth' buried under it all.
Gold and silver price was suppressed when it was officially money, yes. But it is no longer suppressed in the same way. In fact it is not suppressed at all. Gold is simply waiting to reclaim it's global monetary status and silver is being used as a commodity.Note the emphasis on demand, and the specific classes identified. Note also that 'monetary demand' by consumers in the economy is not named at all, nor are any of the ARTIFICIAL REASONS why the NATURAL DEMAND for silver as current money does not even come into play. NOW, at least.
Consider Hemp. There has always been demand for certain types of hemp in smokable form. Big giant global market for it (black market et al) to the tune of about $150 Billion per year. There would be NATURAL DEMAND for hemp in other forms, including forms that have no narcotic effects, were it not for ARTIFICIAL suppression.
Gold AND Silver were artificially suppressed for use as current money by the Congress; first, via the Coinage Act that artificially tied their GOVERNMENT DICTATED (FIAT) "value" to one another. Demand for both metals--as money--were later suppressed in other ways (demonetizing and remonetizing silver along the way). All of this meddling and outright suppression had global ramifications, which had NOTHING to do with either metal's potential NATURAL DEMAND VALUE as money--IF NOT FUCKED WITH.
Prices were not set in ounces of gold, but dollars. Obviously it was corrupt. The point is the value of gold rose and the value of silver dropped, just like all other commodities.This is wrong on so many levels that I want to wring necks just reading this shit. "The price of gold went up 70%"? THE FUCK IT DID. Gold was a price already, denominated in its own weight. It's so-called "price", as thought of by those who utterly lack critical thinking skills, was already distorted and suppressed by more demand notes in existence than the gold those notes represented. Once FDR facilitated legal cover for the THEFT/DEFAULT/FRAUD perpetrated by banks, we no longer even had to pretend that the quantity of stored gold was equal to the paper that grossly misrepresented it. Hence, the "price" of gold only changed in that the quantity of misrepresenting notes finally began to reflect what was already the reality, once FDR caused the paper to FLOAT, as it decoupled from the specie it never accurately represented.
The price of silver did not drop "like an unwanted rock" (what a specious, piece of shit way of phrasing it). The "price" of just about everything dropped as a direct result of a DEFLATIONARY DEPRESSION. Economic Demand for silver was not low for want of desire or desperate need for silver as current money, but only for want of the ability to obtain any. And that was all because SILVER HAD ALREADY BEEN DRIVEN OUT OF CIRCULATION BY CONGRESS. And that can be laid right at the doorstep of the de facto gold standard that was later corrupted, debased, debauched, and fraudulently defaulted on. Silver was not undervalued. Quite the opposite. We needed currency--ANY currency. And whatever currency was circulating was only increasing in value due it's catastrophically increasing scarcity as it disappeared from circulation.
The citizens who held the coins wanted to get off obviously, because they "industrial" use surpassed its monetary value. That is a bad quality for money. Gold's value is not derived from its usefulness, just like dollars are not currently valued because of its usefulness.That's the other part that makes me want to wring an idiot's neck, and that is the aggregate anthropomorphizing of an entire country. "China" wants/does not want this or that. What the fuck is that supposed to mean? Who is this "China" being referenced, which "wants" something? Who ever said that China (the citizens, not the banks, not the government) EVER WANTED TO GO OFF OF IT IN THE FIRST PLACE?
I am thinking the tipping point for the new high , may be, somewhere in the first few months of next year , as I expect zero growth in the economy, stock market to slide ,that is only my guess.
You can't raise the price on cell phones or computer because their value is derived from its usefulness and is not arbitrary like in gold.Let's apply that to personal computers and cell phones, and their beginnings. We first had to stockpile them by the tens of millions, and then we had to raise their price very high? Somebody is 'very high', that's for sure. Was "Another" confusing money with health care, education, or something else just as artificially manipulated and controlled?
You write too long of posts for me to respond to it all. You should post in the comments section of the blog. There are many people who like yourself like to write out very long and detailed responses and who are much better at explaining gold and only gold as money than myself.
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