Silver Price

Discussion in 'Financial Cents' started by SLugomist, Nov 4, 2010.


  1. TnAndy

    TnAndy Senior Member Founding Member

    I wouldn't bet the farm on that......people world wide are getting really leery of paper fiat. The Chinese are opening encouraging their folks to save in gold and silver. Some central banks are now buying gold, reversing a trend of many years. Some bigwigs in the world banking scene are talking a world currency, based on gold....which I believe will come to just to restore some confidence in paper. And Bernanke & Co seem to be on a mission to destroy the dollar.....lot of factors at play here.

    The reason money was invented is due to the limited shelf life of some many other things that could be used as money. Money is a useful tool, as long as it has retains a store of value....which the FRN has most miserably failed to do.


    That presumes one must choose.

    What about those of us that already have cows in the pasture, pigs in the pen, chickens in the ChickChalet, and catfish in the pond, and a well developed garden and orchard, plenty of beans and bullets and no debt ?

    Should we save our long term savings in FRNs or gold/silver ?

    In my lifetime, I've seen silver quarters go from a quarter in purchasing power ( 1965 ) to 5 FRNs today. I'm inclined to think the FED isn't going to ( or isn't ABLE to ) reverse course at this point, based on my lifetime's experience.
     
  2. TnAndy

    TnAndy Senior Member Founding Member

    True....but also factor in during that time, there was a huge surplus of the metal....the US Govt was sitting on 4 billion ounces at the end of WW2, that is now gone....consumed...scattered to the landfills of the world, economically unrecoverable.

    For the last 15-20 years, the world has consumed more silver than has been mined, partly DUE TO those low prices....prices which have been manipulated by a couple of banks as the behest of the Silver Users Association (Dupont, Kodak, etc).

    45 billion ounces of silver have been mined in the course of human history, and by many reports, we are probably down to a billion or so ounces that are still around in bullion form. The rise of the western world was built, in part, due to cheap silver....the industrial uses number in the thousands. Now with China, and India and other 3rd world countries wanting to go to at least 2nd world status, they need a LOT of silver. Huge need + short supply = long term price appreciation.

    This latest spike I think has more to do with the bank manipulators being called on what they were doing, and the price of silver seeking it's true level in the market....a price that would silver would already be at IF NOT for massive short selling of paper silver....A price "I" think is probably north of 50 bucks.

    The historical ratio of gold/silver is 16-1 or so......that would indicate a silver price close to 80 right now. AND if you factor in the amount of gold around versus the amount of silver, that ratio COULD go lower....maybe a LOT lower.



    No....you overpaid for the Morgans 2 years ago. They have 3/4oz of silver in them, and 2 years ago, they were worth about 10-12 bucks in silver, and maybe a buck or two premium because silver dollars typically bring that.

    Or you bought "numismatic" coins, and the market for them is like a game of musical chairs....or what I call "the greater fool theory"......any collectible is only worth what the fool greater than you will pay.

    I say that having been the SAME fool.

    In the eighties ( and not at the height of silver prices ) I bought my first silver from a local coin shop....Morgans. They were "graded" coins and sealed in individual coin holders. Couple years ago, I took the same coins back to the SAME shop and got a price from the SAME guy I bought them from 25 years earlier. Price was like you....about 30% less. Some investment, huh ? Guy mealy mouths around about "well, you bought when silver was so high"....yeah...it wasn't THAT high.

    Fortunately, it was a small number of coins, and it confirmed what I already suspected....collecting is fine as long as it pleases you....I have a Spanish silver piece of eight recovered from the galleon Attocha, and a small silver coin from 2,000BC Greece, both of which "please" me as a reminder of the history of REAL money ( and both are mounted in a jewelery form for my wife )...but "investing" in coins is a fool's game, IMHO, and I will never do it again.

    Disclosure: I am not buying silver right now.....but I did buy a literally a wheelbarrow load at 5-6 bucks...cashed in my IRA, paid tax/penalty, and put it all in physical silver. And have added to it up until silver hit about 15 bucks. At this point in time, I have enough of it.

    But IF I had all my other preps in place ( and pretty much did before the PM move ), and found myself asking what to save long term money in, I would still be buying silver today.....hoping for dips, but buying with the understanding this bull has a LONG way to run even yet.
     
  3. Suerto

    Suerto Monkey+

     
  4. Pax Mentis

    Pax Mentis Philosopher King |RIP 11-4-2017

    In '08 the oz price of silver was around $12, making the melt value of a Morgan <$10. I was buying silver then (as now) and the only Morgans that were going at $21 were graded collectibles. Melt value of a Morgan today (with silver at $28+) is just over $22.

    Somehow, I think you have gotten either time or price confused.
     
  5. Witch Doctor 01

    Witch Doctor 01 Mojo Maker

    I don't deal much in Gold and silver other than purchase nice things for the wife... yep gold and silver prices have risen... but so have the $69.00 sks's and the 100 dollar M1 carbines that i have... i've never lost a dime on any of the guns that i've purchased and always made money...

    just my [2c]
     
  6. TnAndy

    TnAndy Senior Member Founding Member

    Give me the date your purchased your Morgans and your quarters and I'll tell you.

    Two years ago, 2008, silver ranged from a high of about 21 bucks in March to a low of about 9.20 in November.

    Also, as I said, silver dollars have always commanded a bit of premium even for 'junk' dollars ( no collector value ). You most likely paid that as well.

    Excluding that premium ( usually a buck or so ), the melt value of the silver should be very close to the same....if anything, higher for silver dollars since they had more silver content to begin with ( .7736oz ) vs. ( .7234oz /dollar face ) for dimes/quarters/halves.
     
  7. TnAndy

    TnAndy Senior Member Founding Member

    Quite true.....and you probably always will.

    Gold is a whole nuther ball game....it's about concentrated wealth in a small, very portable package.

    For example....I can slip 20 US gold eagles in my pocket and have 30,000 bucks....and barely notice the weight.

    To do that in silver, right now ( hold on...may change ) it takes over 50lbs.

    What does it take in SKS's ?

    Pickup truck load, including the passenger's seat ? :D

    That ratio will also stay about the same.
     
  8. Pax Mentis

    Pax Mentis Philosopher King |RIP 11-4-2017

    I had forgotten early '08...I stand corrected after looking back.
     
  9. Suerto

    Suerto Monkey+

    You and Pax are prolly correct, and I got my numbers screwed up somewhere.. ADD kicked in with the coffee this morning.. I'm not home at the moment to get all the correct numbers, but when I get back I'll post up..
     
  10. Witch Doctor 01

    Witch Doctor 01 Mojo Maker

    Gold or silver prices are inflated... in a SHTF scenario do you really think that our gold pieces will trade for more than an sks? probably in the initial stages when folks arn't thinking too clearly but as time goes by i'd lay odds (obviously i have...) that the Sks and ammo will have a higher bartering usefulness... as to portability... when you use your gold coins to purchase $30k worth of items how are you going to carrry the goods? Gold is inedible, and is only worth what you can get for it....if you are hungry enough your golden eagle may be worth a few eggs... Pegging your hope on a PM in a SHTF situation is not a sure thing....
     
  11. UGRev

    UGRev Get on with it!

    This is why you don't peg your hope on them IN a SHTF. You peg your hope on them AFTER the **** storm is over and some stability has returned. If your paper cash was wiped out due to hyper inflation, then you have a relative store in your PM repo to transfer that wealth into the new monetary system.

    Hey, did you know that Silver has antibacterial properties? Silvasorb anyone? just sayin..
     
  12. TnAndy

    TnAndy Senior Member Founding Member

    Uh...no, they aren't.....the dollar is just getting THAT crappy.

    You can use almost anything you want ( such as guns ) to compare, and guess what you find: Since the FED started, the value of the dollar has dropped 95%......THAT is why your SKS is no longer 69 bucks....the value of it didn't change, the money simply got crappier.



    And yet, you are "pegging your hope" on a SHTF situation that makes gold nearly worthless.....when thousands of years of human history says just the opposite. Guess what....there ain't no "sure things" in life.

    Can you say for 100% assurance the world will get in such bad shape that gold will be worthless and only an SKS will save me ?

    OR is there the SLIGHTEST possibility that things will just continue to keep on slowly sliding down hill like I've seen them do for my 50+ years....which is exactly what gold and silver are telling us AT THIS TIME.

    Do you REALLY think I'm not prepped out the WaZoo ??

    Brother, I've been living a self reliant lifestyle for 25-30 years. We raise ALL our beef, pork, eggs, fish, veggies and most fruits ( I've got greenhouse tomatoes going RIGHT NOW in 20 degree weather...wife has a dadgum ORANGE tree going in there :D ), have supplies it would take a fleet of Mayflower trucks to move, 100ac woodlot, pickup loads of guns/ammo/reloading components, stored fuels, and so on....heck, it would take a legal pad to list it all.......you simply can not believe how prepped we are.

    So what, then, would you advise ? Continue to save my money in a crappy, declining piece of fiat paper....or choose REAL money ?
     
  13. enough

    enough Monkey++

    No posts on today's volatility?

    Holy Wah! (Michigan saying)

    I've loved silver forever. It goes back to the first piece of silver that I ever owned. It was a canadian maple leaf that my dad gave me in the 80's.

    I've played around with it for years, buying low, selling for more. These past several weeks have been something else though. They are a strong signal to me, that the markets are sick and about to have a heart attack. When I say markets, I mean stocks, currencies, and commodities. When I see a two dollar swing in one day, there is no denying it. I'll be buttoning up my open affairs and "shuttering the windows."

    BTW, I like the financial discussions. Thanks for providing me with some pleasure. :)
     
  14. Witch Doctor 01

    Witch Doctor 01 Mojo Maker

    .

    The same can be said of your gold... the value it currently has is pegged to the dollar...


    Actually i have more money in land and other things than gold... i'm not sure than PM is the best choice... but then again we all prep in different ways... you count on gold continuing to go up... i don't... we won't know who is right until it's too late for some of us... either you will be richer or will have lost money.... i just figure that god isn't making too much more land... What i have is paid for...

    TnAndy Best of luck in your gold endevors...

    I'm not trying to be difficult but just pointing out some facts that some folks may not agree with...
     
  15. SLugomist

    SLugomist Monkey++

    I heard that, In the Old west they'd drop an oz of silver in the water prior to drinking it, to help clean it.
     
  16. Hispeedal2

    Hispeedal2 Nay Sayer


    These two quotes are saying one in the same. PMs, just like cash, is only worth what you can get for it. You can't "do" anything with PMs (aside from shiny stuff). The gamble you take with gold is that retention means wealth. Well, if food is the scarcity- gold is worthless. Everyone says that PMs have been currency for thousands of years.... kind of true, but not really. The vast majority of transactions in history were actually barters.... not transactions with gold. Gold is what the gov't and wealthy elite used.... but not the common classes. Everyone has a trade. You create items with your trade and barter them for other things you need.

    The real question that is being asked is "how bad?" If it's so bad that we are dark aging it again..... bet on other "hard" investments. Or if PMs are out of reach- as they are at the moment for most Americans. If you are banking on a recovery *sometime, PMs are a good investment when buying prices lower than today's prices.

    Most Americans are banking on recovery soon.

    Since yesterday, gold and silver have come down from the all time high. I see a downward trend already starting. I think the extreme climb we have seen is starting to downturn. Regardless, this is an interesting topic and I will enjoy watching what comes of it. I wish I had bough more back in 2004... ;)
     
  17. SLugomist

    SLugomist Monkey++

    The question is.

    What is the true Silver to gold ratio?

    Is it 50:1 or 16:1???? Historically ~16:1 for the longer term. In the recent past 50 ish to 1 or About $28. Gold was much lower so if it's 16:1 then silver should be ~$85
     
  18. UGRev

    UGRev Get on with it!

    we'll find out after the shorts.
     
  19. ghrit

    ghrit Bad company Administrator Founding Member

    Take this for what it's worth from a guy that admits to knowing not a lot about PMs.

    The ratio of Au to Ag looks to me to be a meaningless number. Remember also that both (along with other metals) are commodities, not money. Money is a medium of exchange that is supposed to have recognized value in the marketplace and does away with the need to drive your herd to market to trade for lettuce.

    Now, consider that the demand for commodities are market driven. If gold is needed more than silver, then the ratio will change accordingly. And the reverse as well if silver is needed for (say) electronic devices. That ratio cannot and will not be useful as a guide to buy/sell decisions UNLESS the underlying demand can be sussed out. Good luck with that.

    If we then look at the price (not value) of the metals, we see this huge rise of late. Why? Demand has been fairly constant in the manufacturing processes. Granted most of the demand is overseas, since we don't do a lot of electronics manufacturing here, nor of jewelry. (Yes, I know overseas demand is up, the rest of the world is getting around to being able to afford toys, but I believe that is minor compared to the dollar's failing.) For both of those demands, go to Asia, and it matters little which country; for our discussion it makes no difference. So, with (let's say) a roughly constant demand, the PRICE should be constant as well, if that is the only factor. Price should reflect value. The value is as a commodity. So, says me, if the price is going up and the demand is (relatively) constant, something else is acting on the market. 'Pon a bit of thinking, there are two factors running the price up (but not the value.) First is a perceived value in the metal as a medium of exchange; that is, as a substitute for what has served in that capacity for quite a while. I think that is minor; few can afford the luxury of socking metal away against the need for lettuce. That leaves what I believe to be the real reason for these idiotic prices, and that is the dilution of the dollar.

    I have to take exception to the earlier statement that gold is pegged to the dollar, it most definitely is not. Were it so, the price would be constant. The dollar was, at one time, set as (IIRC) 35 dollars per ounce (can't remember if they were silver certificates or some other bit of paper) but that was cut loose quite a few years ago. Otherwise, the price today would still be 35 pieces of paper.

    So the dollar, what we refer to as an "frn" somewhat derogatorily is the problem. And we can see how that has been manipulated for the last long while to make us think it has an intrinsic value. Nope, it don't. It's simply an expensive piece of paper that has a recognized (and variable, if manipulated) market value. Any study you care to choose will show that printing the damn things makes them less valuable. That's where we are.

    So, to survive, we have to have what we'll need to get thru the low spots. If you can afford it, put as much into metals as you can AFTER you have enough in place to get thru the lows and having it will serve you well AFTER things turn up. But during the lows, it will not do you a lot of good. Bear in mind that as soon as you try to use PMs as a medium of exchange during the downturn, you may find yourself trading an ounce for a roll of TP. Better to swap some labor or pies.
     
  20. melbo

    melbo Hunter Gatherer Administrator Founding Member

    A lot of folks get into PMs as a get rich scheme. It may be for some but that's still a gamblers mindset.

    Others get in because they read somewhere that you need 90% silver for survival. That's also a faulty mindset as I think you could should put your FRNs into things that are readily available now but might not be in the future.

    I'm still looking at my PMs as a place to park wealth (while I'm still accumulating it) that will survive into the future. What would have happened if you put all your Confederate Notes in a trunk to be opened by your children 20 years after the civil war?

    Paper is paper and can become worth 0. Gold and silver will never be worth zero.

    If the SHTF and we go to a barter economy, and I don't need your chickens but you need the shoes I make, you'd better have something I want as a token of delayed barter. I think that's where the need for 'money' was born. It's a labor battery until someone can make more of that unit without any labor, then it's fiat.
     
survivalmonkey SSL seal        survivalmonkey.com warrant canary
17282WuJHksJ9798f34razfKbPATqTq9E7