What is wrong with silver?

[Henry Rogue]

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.

I'm sure you are right. You have contemplated/studied this a lot longer than I. Maybe the question of when silver is no longer undervalue isn't the right question for my answer. Maybe the right question is; when does our saved silver become the common medium of exchange? Scarcity gives PM its credible value, but we need enough of it in enough hands to hit that critical point to make a useful medium of exchange and not just a store of value. I think it would be hard for me to part with it if I didn't think I will eventually receive silver or some other appropriately valued PM in exchange for a good or sevice I provided. Unless I am in a desperate situation. I understand that RFNs are a mandated currency, but if only a few thousand single RFNs were in existence. No mandate could make it the primary medium of exchange. I do understand that once a sound money is in use it need not be expanded, but i'm talking about the amount and amount of people needed to reach wide spread use as money.

[oyarde]

I , again , can only guess that at some point the FRN's are not going to be accepted by everyone or for everything , I suppose , hopefully if some , are like me, they are not going to need to exchange much , for anything, then there will be those that have a special skill ( think , medical ) , or good , say , part for a machine ( that you need ). At that point , depending on your locality , currency, could be , silver , copper coinage , barter , ammunition, food, work in trade for a service etc. Gold for only , very major things .Do not think FRN's will be in the local picture.

[Henry Rogue]

I , again , can only guess that at some point the FRN's are not going to be accepted by everyone or for everything , I suppose , hopefully if some , are like me, they are not going to need to exchange much , for anything, then there will be those that have a special skill ( think , medical ) , or good , say , part for a machine ( that you need ). At that point , depending on your locality , currency, could be , silver , copper coinage , barter , ammunition, food, work in trade for a service etc. Gold for only , very major things .Do not think FRN's will be in the local picture.

I think I see your point, instead of one big economy. There will be a bunch of small local economies at first. Using what's available to them.

[jclay2]

quit focusing on the manipulation and start focusing on the low prices to accumulate. Any talk about precious metals manipulation should be celebrated by any stacker. I think most of us know the end game, so how is it bad if we have more time to plan and prepare for the eventual collapse?

[oyarde]

I view time , as good, unless you are in prison, time, is good .

[oyarde]

I think I see your point, instead of one big economy. There will be a bunch of small local economies at first. Using what's available to them.

I suspect so , pretty sure that would be the way where I reside most of the time. I will have heat , water , food, means of protection , ability to grow , harvest , lamplight , If something is needed I was unable to forsee to plan for , then I will be able to trade, purchase it, etc

[Kregisen]

Silver has 2 types of demand: industrial demand and spectulative demand.

Industrial demand has been increasing due to production of items such as solar panels, which use a LOT of silver. Silver consumption by solar panel manufacturers has climbed about 50% annually the last few years, and is expected to continue.

Spectulative demand, on the other hand, is much more volatile. There was the huge 2011 bubble, when silver more than doubled in price in a 6-month period, before crashing again.


Silver mine production rose considerably in 2011, and is expected to grow at 6% in 2012. Commodities are generally safe havens for investors during economic downturns such as the recent recession. However, that means the opposite is also true. During large economic growth, investors will generally leave commodities and get back into stocks. I think we will continue to see economic growth coming out of the recession, but who knows....we really will have to see, since the trillion dollar deficits really pile up.

I think given the demand and supply outlook, I think silver will steadily increase in price over this next decade.

This is just my opinion, focused from an economic and finance perspective. Personally it might be smart to add silver to a portfolio, but I would never only invest in silver....I think a few of the posters who suggest to only invest in commodities over the long term might be a little deranged on this issue. Commodities over the long term is a very low yield investment. For example, from 1981 to 2010 gold made about 5.3% per year, while the Dow Jones returned 19.1% per year. If you invested $1 in gold in 1981, in 2010 you would have $4.71. If you invested $1 in the Dow Jones in 1981, in 2010 you would have $189.39.

[Steven Douglas]

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?

As long as our government has legal tender laws, outright prohibitions, taxes and other barriers to entry for competing currencies, there is no way that silver will circulate as a normal competing currency. FDR confiscated gold because banks were facing bank runs, and were in default. No matter what, everyone was taking a haircut. Rather than label the banks frauds and oversee bankruptcies, FDR chose to treat the victims of fraud as "bad investors".

A bully on a playground punches you in the nose, pushes you down and takes your shit. FDR, the playground police, comes up, hears both sides, and says, "Alright, that's it. If you're going to fight over it, then nobody gets anything". And FDR promptly takes your shit. Which he leaves with the playground bully for safe keeping.

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.

Ah, but we weren't talking about sea shells or paper.

"But did you know that China was practically dumping its silver a decade ago?"

You were specifically talking about silver.

Those who produce set the standard for what they will accept in return for their goods.

In a free market only. With legal tender laws, fiat declarations of exchange value, and barriers to entry for competing currencies, it is the government that sets the standard for what others will be forced to accept in payment of private debts, as well as what people will be forced to acquire for payment of public debts.

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.

I didn't say anything about price. I said that "Gold AND Silver were artificially suppressed for use as current money by the Congress" - that had nothing to do with price, and everything to do with whatever Congress did that caused either or both hard specie to disappear completely from circulation. Legal tender laws, the value ratio decreed by fiat in the Coinage Act of 1792, the refusal to even coin silver any more for the public in the Coinage Act of 1873, and the list goes on, as anything that served to artificially drive any specie out of circulation served as a "suppression", not of price, but of general usage.

Gold is simply waiting to reclaim it's global monetary status and silver is being used as a commodity.

Lots wrong with that.

Both gold and silver are being used as commodities.
Both gold and silver have enjoyed "global monetary status".

To "reclaim its global monetary status" is a circular argument, with some baseless assumptions. Neither can be said to be "waiting" for anything. As inanimate elements, they are what they are, and both elements are ready and 'waiting' for anything at all. It could be accurate to say that some goldbugs are waiting for gold to reclaim global monetary status.

Prices were not set in ounces of gold, but dollars.

The other way around. Dollars were "set" in ounces of silver, and gold Eagles, the UNITS that were established in ounces of gold (which is all the "gold standard" means) were given a government-declared exchange value that tied gold Eagles to silver Dollars by fiat.

Obviously it was corrupt. The point is the value of gold rose and the value of silver dropped, just like all other commodities.

You are implying that gold is not "just like all other commodities", when in fact it very much is. In your mind, I think there is something magical about gold that makes it "global money", above all other commodities, even though you haven't identified what that quality or property is, and even though history doesn't bear that out.

Anything that circulates as money automatically takes on greater value because of greater demand for its use as money, aside from its other uses. ANYTHING AT ALL. Gold, silver, fiat currency, you name it. If it is used as money, whether in a free market or by government force, increased demand will result in increased exchange value. And the reverse is also true. If something that is circulating as current money is removed from circulation, even if by government act or by force, the added value will be removed.

The Coinage Act of 1873 had precisely that effect. With a single act, government effectively removed silver from circulation, which is the all-important reason that gold rose in value, while the value of silver dropped. It was not because gold was so much more wonderful and special. It was due to a market fundamental as a vast portion of the overall money supply was removed, which left greater ARTIFICIALLY STIMULATED demand for gold.

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.

What the hell? Where did you come up with that?

We already established that the value of silver dropped due to demonetization. The same thing could have happened to gold had it been completely demonetized. AS IT HAS BEEN IN THE PAST.

The industrial value of silver surpassed its monetary value? That is like saying that the scrap metal value of a Sherman tank "surpassed" its functional, working military value after its demolition by a bomb dropped from a B-52. It didn't "surpass" it. There was no race once the tank was rendered useless by force. Likewise, there was no "wanted to get off obviously" about it silver specie, because the "industrial" value did not "surpass" its monetary value until AFTER the monetary value rug was yanked out from under the holders, completely DEMOLISHED by the government B-52 called the Coinage Act of 1873.

Gold's value is not derived from its usefulness, just like dollars are not currently valued because of its usefulness.

That's another head-shaker and a half. Holy crap! How are you defining "usefulness"? Because jewelry is a "use". The fact that it may have no function or utility other than artistic and aesthetic in that particular "use" is absolutely irrelevant. It is a "use" for which it is most definitely valued, and always has been, for thousands of years. UNLIKE FIAT DOLLARS.

Gold derives value for a plethora of reasons, monetization being A BIG ONE, but all of which contribute to demand for gold, including its MANY USEFUL PROPERTIES as a commodity. You won't get me into a comparison war on the virtues of gold versus silver, because they are BOTH amazing metals, with unique, and highly useful properties, EACH SUI GENERIS. But to say that it is not "currently valued" because of its usefulness is to be completely blind to its MILLIONS of different NON-MONETARY uses!

If gold was completely demonetized, it would lose some of its value in the process, but would still have great value, based on its desirability, usefulness and suitability to many other purposes, all of which are CURRENT.

And are you really trying to imply that FIAT DOLLARS AND GOLD have a lack of non-monetary usefulness in common? Do you honestly believe that gold and fiat currency, if not monetized, would somehow be comparable in usefulness and at par with one another in terms of exchange value?

[cubical]

nm

[cubical]

Ah, but we weren't talking about sea shells or paper.

"But did you know that China was practically dumping its silver a decade ago?"

You were specifically talking about silver.

No I was talking about things that used to be viewed at money, but faded.

In a free market only. With legal tender laws, fiat declarations of exchange value, and barriers to entry for competing currencies, it is the government that sets the standard for what others will be forced to accept in payment of private debts, as well as what people will be forced to acquire for payment of public debts.

In the short run, yes, but the government can not overtake the market forever. Which is why we have things pop up at money here and there, but gold remains.

Both gold and silver are being used as commodities.
Both gold and silver have enjoyed "global monetary status".

You really think gold get's its value as a commodity?

You really think silver gets(most) its value as money?

To "reclaim its global monetary status" is a circular argument, with some baseless assumptions. Neither can be said to be "waiting" for anything. As inanimate elements, they are what they are, and both elements are ready and 'waiting' for anything at all. It could be accurate to say that some goldbugs are waiting for gold to reclaim global monetary status.

Central banks, governments, "giants" like the Rothchilds, Saudi Princes etc all accumulate and/or hold gold. They do not accumulate silver.



You are getting very emotional about the topic, which is common among silverbugs. Just answer me these questions. I am curious to know your reasoning.

First, are you "for bimetallism"? If yes, why not trimetallism? Also, why do we need more than 1 money to value things against?

If not, I assume you are for some sort of competing currency system. If yes, why will silver win out?

Do you believe TPTB will actually lose out in the next financial system?