# Lifestyles & Discussion > Personal Prosperity >  What is wrong with silver?

## W_BRANDON

I have continued to buy physical silver for the past year or so. It just makes so much sense to my understanding of monetary theory and our current precarious financial state. However, every day I look at the price of silver, while I know the economy is being flooded with new "high-powered money" (credit), and....nothing. The price seems flat between $30-40 per oz. I understand naked short selling is partly responsible for keeping the price of silver artificially down but what else? Are people still buying claims on silver and not the real thing? I'm thinking about keeping what silver I have and just putting my savings henceforth into low risk (low-yield) investments like t-bills and CDs. I would appreciate anyone's thoughts on the subject.

Also, buying gold right now if just not in my budget.

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## Seraphim

Calm before the storm. That is all.

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## torchbearer

nothing wrong with silver. i'd fix your electronics for silver.

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## Seraphim

I think we are fast approaching the time where many transactions will be paid in specie: copper/silver bullion. Gold for estate swaps.

If only due to currency crisis.




> nothing wrong with silver. i'd fix your electronics for silver.

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## torchbearer

> I think we are fast approaching the time where many transactions will be paid in specie: copper/silver bullion. Gold for estate swaps.
> 
> If only due to currency crisis.


i think of hard money like this-
Your laser printer breaks and you need help getting it back online. i agree to fix it for you. You could then say, 'hey, i owe you one. i grow vegetables, come back in spring and i'll give you some" or we could create a token for that rain check, let's say an ounce of silver.
You give me an ounce of silver for the job and when i come back in spring i give you an ounce for your your veggies.
now, that is a simple economy of two people... but add in the whole human tribe, and that hard money represents production and human effort... your contributions to society.
Federal reserve notes represent debt... servitude for future production.

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## Seraphim

Furthermore, Brandon - please be advised that the market in silver is becoming extremely costly to manipulate downward. These huge price drops are taking ASTRONOMICAL amounts of paper contracts to drop the price. It has gotten to the point now where for every 1 ounce of physical bought up, it is taking nearly 100 ounces (well north of 50) in paper contracts to have a counteracting effect.

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## NoOneButPaul

It's being manipulated to the extreme. 

I posted here on Wednesday that I made significant purchases on Monday because I didn't feel the price would ever go below 30$ again unless tptb try to crash it prior to, and right after, the presidential election. 

They crashed it today hard. 

As long as you are in this for the long term you need not worry about these volatile drops... it's merely manipulations from the banks. In the long term silver will win out and those that are buying physical now will be happy 5-10 years from today. 

If you're trying to make a quick buck you're in the wrong place. But with silver closing just under 31$ this weekend it is time to buy buy buy... I've had a lot of friends, whose opinions I trust dearly, tell me that they think it will crash further to the 26-27 range. I'm still not willing to wait. I think just under 31 is good enough for me. 

Don't worry, stay positive, and keep stacking. Silver's time will come. 

As David Morgan always says... 90% of this run will come in the last 10% of the time. 

Stay patient and keep stacking. Worst case scenario is it crashes to 1$ and we get to keep stacking more and more and more until it goes back up. The amount of silver left on the planet is very telling... the $ value is clearly incorrect or lagging. 

My only advice would be to Dollar Cost Average when you buy... set an amount in dollars you're willing to spend on a monthly or weekly basis and just stick to it. The theory, which I believe in, is you'll average out at the end. The only time I buy larger quantities than my set price per month is when I see a tremendous opportunity. 

I think this weekend, and perhaps the next couple of weeks, are those opportunities. 

But don't listen to me, i'm just some guy on the internet. Make up your own mind and do what's right to YOU. The only thing I need to stress is staying positive, I truly believe faith and persistence always pay off.... together if we stay positive and persist nothing will stop this silver train or the stackers that are aboard it.

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## Steven Douglas

A lot of changes have been occurring in the silver market over the past couple years, the biggest arguably being the dramatic increases by CME for COMEX margin requirements.  One reason that this is significant is that smaller buyers and retailers are most prone to buy long and demand physical delivery against all the naked shorts. That is especially true of foreigners who are not looking for dollar profits, but are using Comex simply to dump their Federal Reserve Notes in exchange for any physical they can get their hands on.  The increased margin requirements serve as barriers to entry that flushes out many of these smaller buyers and retail traders. 

Here's a pretty decent piece that talks about this:




> *CME Group Raises Comex Gold Margins By 21.5%, Silver Margins By 15.6%*  
> 
> *TAKING  DELIVERY OF COMMODITIES CONTRACTS*
> It is possible to take delivery of a contract.  There is a delivery month when a contract expires, and the buyer pays for the contract in full.  Since they have come to doubt the U. S. will ever curb its spending, Asians have been using the COMEX to gradually unload dollars.  Instead of taking their profits in dollars, big buyers have been paying off gold and silver contracts and actually taking delivery.
> 
> *THE MONOPOLY GAME TUGOFWAR IS CAUSING EXTREME VOLATILITY* 
> The on-going tug-of-war between the shorts and the big players who are unloading billions of fiat dollars for gold and silver is causing tremendous volatility in the COMEX.  The rules of this giant monopoly game are changing as the global monetary crisis deepens.  For example, exchanges raised margin requirements aggressively in 2011.
> 
> *THE GAME RULES FOR SILVER TRADING HAVE BEEN CHANGING* 
> ...


And here's the part, further down in the same article, worth paying attention to:




> *CASH SETTLEMENTS*
> The default mechanism for failure to deliver on commodities is cash settlement.  The COMEX can limit delivery of silver to 1.5 million ounces to any individual.  However, *when demand overwhelms supply, the exchange has a clause that allows for a cash settlement* or payment for gold or silver.
> 
>     J P Morgan has unlimited access to cash.
>     J P Morgan is a stock holder of the Federal Reserve banking cartel.
> 
> *In 2011, delivery contracts have been settled in dollars rather than in precious metals.  Industry watchdogs say cash settlements are getting larger and more frequent.*  There are rumors buyers who were legally contracted to take physical silver delivery were, instead, paid dollar premiums as high as 20-30% as an incentive to settle.
> 
> *There will come a time buyers will not accept dollar cash settlements*.  All it would take to trigger a default event is one large investor who refuses the cash settlement and demands the actual silver (or gold).  When that happens, the silent default will become a public default.  The run on physical silver will cause a major naked short squeeze.



Is a naked short squeeze on the horizon? Yes. Eventually, but how soon is anyone's guess. I hope its later rather than sooner, but that's only because I am STRICTLY LONG, and on physical only. So I want more time to buy, and I'm grateful for the price suppression along the way.  

Either way it all really ties into confidence in FRN's.  My ear to the railroad tracks are further and more rapid escalation of margin requirements.  That's the equivalent of the Comex pushing more and more of the smaller, more opportunistic zombies out of the room, and boarding it up.  That won't last forever; it won't be long, I think, until the larger players wise up, tire of the dollar, and demand physical themselves, as they wash their hands of the entire Comex scam.  That's when there will be nothing but defaults, with smaller "farmer/rancher"-sized investors, like those who were punked up the ass by MFGlobal, will find themselves on the losing end, and forced to settle in devalued FRN's rather than PM's.  And that is also when the gold and silver doors slam shut, with major shortages, even as paper derivatives disintegrate.  And all that cash is going to have to be spent on something...fueling shortages and inflation in that 'something' as well.

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## Brian4Liberty

> ...The default mechanism for failure to deliver on commodities is cash settlement....


And such a convenient mechanism that is...

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## Carson

> I have continued to buy physical silver for the past year or so. It just makes so much sense to my understanding of monetary theory and our current precarious financial state. However, every day I look at the price of silver, while I know the economy is being flooded with new "high-powered money" (credit), and....nothing. The price seems flat between $30-40 per oz. I understand naked short selling is partly responsible for keeping the price of silver artificially down but what else? Are people still buying claims on silver and not the real thing? I'm thinking about keeping what silver I have and just putting my savings henceforth into low risk (low-yield) investments like t-bills and CDs. I would appreciate anyone's thoughts on the subject.
> 
> Also, buying gold right now if just not in my budget.


If you've been buying for the last year I'm thinking nothing is wrong. Your going to be all right.

I hear you though. I think the economy stabilized somewhat starting about a year ago.  Silver was at $40.00 an ounce. The traffic on the road going to work showed hardly anyone could afford to hire anyone or if anyone did find a job earn a living wage. Things were at an all time low for earning a living. I noticed the price of silver back then really took a hit. All of the commodities and stocks were dropping. During the year the more prices dropped the more traffic increased. 

I think the counterfeiting has the economy stretched just that tight. Like a drum.

Drum??? 

~~~Time for a commercial break! and a little thread music!

I've been remembering one of the first concerts I went to. I can't remember who all was there. I do remember *Lee Michaels* and *Buddy Miles*. *Lee Michaels* played the organ great. The part of them playing that really stuck in my mind was the drum solo of *Buddy Miles*. Drum solos were kind of our onions in our belts at the time. *Buddy Miles* was like no other. You can sort of get a taste of the heavy beat he could resonate the audience with. It would just consume the whole auditorium. The beat grew and grew to a fevering crescendo and then at the peak his drum sticks flew high up into the sky and tumbled away but the thundering beat went on. He was beating the hell out of the drums with his fist. I couldn't believe what I was seeing and hearing.

Anyway I couldn't find anything near what we saw. I suppose you had to be there anyway. This sort of has the feel of his beat.




The unforgettable* Buddy Miles* (died February 26, 2008)


~~~

I think the reason the value of the dollar didn't keep falling and actually gained some value for the year was that some of the currency had to be written off because of *defaults on loans*. It looks like inflation is back with a vengeance now. I suspect your going to do fine. Then again maybe we would be better suffering a little loss on our silver and having a healthy economy with people working again.

http://www.silverandgoldaremoney.com/

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## matt0611

I count it lucky that silver and gold are staying this low. It gives me more time to save up to buy more while the price is low. I hope it stays low for a long time actually. Or at least a very slow rise.

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## KCIndy

> I'm thinking about keeping what silver I have and just putting my savings henceforth into low risk (low-yield) investments like t-bills and CDs. I would appreciate anyone's thoughts on the subject.


Well, call me a pessimist, but T-Bills and CDs are damned hard to swap for bullets or beans if TSHTF, especially if said CDs and T-Bills are locked in a safe deposit box in a locked up bank somewhere.  

Also, even if you had them on hand, if things go totally to hell the T-Bills won't be worth ANYTHING as trade unless someone forgot to stock up on toilet paper.

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## oyarde

Silver ? why, nothing is wrong, I bought some today , about five months  from now, it should be, much higher, just my guess...

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## Dr.3D

> Silver ? why, nothing is wrong, I bought some today , about five months  from now, it should be, much higher, just my guess...


LOL, the dollar will just be lower.

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## Carson

Really when you get down to it the important thing is the silver you have will still be the silver you have, up or down. You should be able to trade it for what ever the dollar happens to be worth up, down, or sideways. 

Down you pay no capital gains taxes...

so really it seems there is no down side to having it...but I could be sadly mistaken‽

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## oyarde

Capital Gains ? that is blasphemy , you are supposed to gain, paying taxes on again ? Now, that, is offensive

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## Tpoints

> I have continued to buy physical silver for the past year or so. It just makes so much sense to my understanding of monetary theory and our current precarious financial state. However, every day I look at the price of silver, while I know the economy is being flooded with new "high-powered money" (credit), and....nothing. The price seems flat between $30-40 per oz. I understand naked short selling is partly responsible for keeping the price of silver artificially down but what else? Are people still buying claims on silver and not the real thing? I'm thinking about keeping what silver I have and just putting my savings henceforth into low risk (low-yield) investments like t-bills and CDs. I would appreciate anyone's thoughts on the subject.
> 
> Also, buying gold right now if just not in my budget.


did you expect it to be $100 per oz?

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## thoughtomator

The point of buying silver is to protect against currency debasement. Currency debasement has been ongoing for quite some time and since the first QE has accelerated. Based on Fed actions we have every reason to expect continued and more aggressive debasement to continue until they are no longer able to do so - which may well be at the point where printing a dollar is pointless because it won't be worth anything, in any amount.

Silver in this context is a way to preserve wealth in spite of these overt, massive currency manipulations. Silver investors see every price drop as an opportunity to buy more. It's a long term (10+ yrs) investment. The timeline you're looking at when buying silver is MINIMUM five years from now, after Print & Pray policy has run its natural course (destroying the currency). Then you'll be holding something that still represents real wealth while all holders of dollars will be looking at something that can't buy a loaf of bread with less than a wheelbarrow full.

On the question of silver vs. gold, the reasons to choose silver are:

1) Silver has a far easier entry price point which makes it good for people who aren't wealthy, and also allows acquisition in smaller increments.

2) Gold has been confiscated by the government in the past and has a far greater chance of being confiscated in the future. Silver is HARD to confiscate due to weight and the amount you need to have to be worth the effort of confiscation.

3) The historical ratio of silver value to gold value (due to ratio of their relative presence in the Earth's crust) is 1:16. The current ratio is closer to 1:50, meaning silver has a lot of relative ground that it can potentially make up vs. gold.

4) Gold has a premium associated with it due to visibility and its other desirable properties (doesn't tarnish, can store wealth in a more compact manner than silver). Silver does not have this premium.

5) Current silver prices are artificially low due to JPM shenanigans which you can search the net for all the gory details. But basically they are offering it to you now at a far lower price than it would be in a free market, so why the heck not take the massive discount being offered to you?

6) Tungsten fakes. Worth it for gold; the equivalent substitution for silver can't be done cost-effectively.

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## S.Shorland

'E lost 'is leg to a French cannon ball aaarrr Jim Lad.

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## S.Shorland

Serious answer: The dollar index long term looks like a double bottom to me.So how can that possibly occur?I would NEVER put all my eggs in one basket because I think inflation or deflation are both possible.You can open a treasury account and buy short term us treasuries and also hold silver too.I own Robert Prechter's book as well as Peter Schiffs'.In a longer term scale,read Revelation 6:6.

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## NoOneButPaul

http://www.silverdoctors.com/192-mil...n-nfp-release/



> According to NetDania’s volume (which approximates volume from 5 separate sources and is not an exact indicator of volume data)  38,400 contracts, or 191.99 million ounces of paper silver *(nearly a quarter of annual global silver production!)* were dumped on the market in only 10 minutes between 8:30 and 8:40am EST upon the release of the NFP data.
> Screen shot of the paper dump (with 3rd wave of attack in progress) below:
> 
> $31 has just been penetrated in the 3rd wave of the cartel attack, but price has quickly rebounded from $30.91 to $31.25.
> 
> *Update: Paper dumping has commenced again, with silver smashed back under $31 with a last of $30.77.  Expect support to emerge near $30-$30.50.


The graphs are telling... this is classic market manipulation in the run up to election day... and they did what they always do- they used the FUDGED jobs report as cover.

If Romney wins it could crash even further because the dollar's strength will temporarily boost. On the other hand if Obama wins we could be back to 33$ on Wednesday. 

Also remember that Taxmageddon and the fiscal cliff are coming in 2013... I still think this weekend is an AMAZING buying opportunity. I'm sure it could crash to 26-27 if they keep smashing it, and Romney wins, but 12 months from now I absolutely believe we will be in the low 40s in silver.  

I'm on my way to go buy some more today... don't fret about the price folks it's a complete lie. 

And if that's not enough reason for you to stack just remember that you're holding something that has been, and always will be, money. It's not gold-money, but it's the people's money. 

If you buy in today at 30.91 and it gets smashed to 10$ in a month you're purchasing power will remain intact. It's very difficult to lose with gold and silver even if the price plummets to crazy low levels... in a situation like that it will mean that the price of everything else fell with it and confidence is being restored in the market. You won't lose your purchasing power, *and the odds of gaining more purchasing power are still greater than you losing it at these low 30s levels.* 

Again... i'm just some guy on the internet. Don't take my word for it. All I ask out of the stackers who are with me is keep faith and persistence... faith and persistence... the more people that wake up to silver the harder it is for them to control the market. Keep stacking and keep preaching. 

These price controls in the now will eventually lead to silver waaay over performing at some point in the next 10 years and that will be the point at which you should sell. 

My magic number is 200$... I believe it will hit 200$ at some point before 2020 and that's when it will be time to sell your silver, or better yet, trade it for undervalued assets. It's all about trying to play the business cycle bubbles Ron has talked all about... and that Mises so brilliantly pointed out almost 100 years ago.

We are all in a very unique position because we understand these bubbles better than almost all the so called experts because we're the ones following the correct economic school of thought. Guys like Ron are able to predict what's coming so easily not because they're geniuses but because they've read Rothbard, Mises, Sennholz, Hazlitt, and all the other economic geniuses that were ignored for decades and are still largely ignored by the mainstream. 

Follow the Austrian school of thought and play the bubbles we know the central banks create... right now silver and gold are still undervalued and manipulated... when people wake up to the fact paper is not money and the game of musical chairs ends with the Federal Reserve Notes then the PMs will start to overshoot- that will be the time to switch from PMs to land or other under valued assets that tank tremendously because the central banks have propped them up. 

My goal is to wait until PMs overshoot and then try to purchase property (which I believe will crash VERY hard at some point because it's still being massively inflated by the Federal Reserve and as it's crashing that will probably be the exact same time period that the PMs are booming). 

Worst case scenario is the boom never comes, it slowly drops back down to 2000 levels, and you maintain your purchasing power. 

Best case scenario is the world wakes up at once to the realization paper is not money and the price skyrockets to levels no one can even fathom right now (kind of like how people in 1971 could have never dreamed of a world with 1900$ gold... also remember Gold went from 35$ to 850$ from 1971-1980... such a drastic PM rise can happen and has happened). 

And before someone tries to chime in about how PMs are in a bubble I would merely point out that only 1% of the country holds PMs... there's absolutely no way this stuff is in a bubble with so few people holding it. 

Look at what the super wealthy are driving to, look at what China is driving to, look at rising cost of EVERYTHING. We are still at the ground floor for PMs. 

Don't fret about your silver and do not worry about the price, Silver's day will come... just keep faith and keep stacking.

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## Carson

> I think the reason the value of the dollar didn't keep falling and actually gained some value for the year was that some of the currency had to be written off because of *defaults on loans*. It looks like inflation is back with a vengeance now. I suspect your going to do fine. Then again maybe we would be better suffering a little loss on our silver and having a healthy economy with people working again.
> 
> http://www.silverandgoldaremoney.com/


I've been thinking that defaulting on loans and the housing prices falling may have had something to do with the way stocks, commodities and silver had fallen in the last year. I could be sadly mistaken about that. That would make our pile of stuff shrink in relationship to the pile of fiat money and should create inflation.

Perhaps what has really taken place is with our concern for the future and many of us focused on trying to find a way to save a little we've retired some of the fiat out of the system making the dollar a little stronger.

It's a puzzler. I'm tired. They've worn me down.

When you use real money the money is part of the pile of stuff. I'm thinking that in itself takes out a lot of the confusion and ability to manipulate. I think we are all on that page.

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## Bossobass

If short term gain is your goal, I see no better opportunity than silver.

If you can buy it at $29.50 (August) and sell it 30 days later for >$35, how the hell does anyone not see tremendous short term gains in that? What short term investments are you guys into, because every time I read that silver sucks short term, I wonder vs WHAT??? Let me in, please!

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## Dr.3D

> If short term gain is your goal, I see no better opportunity than silver.
> 
> If you can buy it at $29.50 (August) and sell it 30 days later for >$35, how the hell does anyone not see tremendous short term gains in that? What short term investments are you guys into, because every time I read that silver sucks short term, I wonder vs WHAT??? Let me in, please!


And the way silver fluctuates, you can do that over and over again.  Just buy when it's low and sell when it's high.

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## oyarde

I feel pretty good about everything I bought around $26 - 27 this year.

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## NoOneButPaul

> If short term gain is your goal, I see no better opportunity than silver.
> 
> If you can buy it at $29.50 (August) and sell it 30 days later for >$35, how the hell does anyone not see tremendous short term gains in that? What short term investments are you guys into, because every time I read that silver sucks short term, I wonder vs WHAT??? Let me in, please!


I dont think it's a BAD short term buy but I just think it's a VERY RISKY short term buy because it's very up and down. I also feel like the only real way to play that short term game is with the SLV or other paper certificates that I have no desire to be in. 

If someone bought in at 40$ because it was down from 50$ and expected it to rise back up to 45$ they're still waiting for that day now... 2 years later... and they're down 25%

You can make a lot of money in the short term if you play your cards right, I just don't have the desire to give myself the heart attack. Money can be made in the short term but I think you'll find much more stability in the long term. 

This is why I typically like to set myself a price in dollars per month and stick to that dollar price. The only time I stray is when I see a great opportunity.

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## cubical

I am starting to lean towards the FOFOA stance on silver. It will end up being priced like all other commodities, while gold will end up being true money. Central banks and the elite don't hoard silver, they hoard gold. I am not selling the silver I own, but I will no longer be buying anymore. I will treat silver like a trade and exchange it for gold because in the shorter run I believe it will move up faster than gold. It's only the king's money for me going forward.

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## NoOneButPaul

> I am starting to lean towards the FOFOA stance on silver. It will end up being priced like all other commodities, while gold will end up being true money. Central banks and the elite don't hoard silver, they hoard gold. I am not selling the silver I own, but I will no longer be buying anymore. I will treat silver like a trade and exchange it for gold because in the shorter run I believe it will move up faster than gold. It's only the king's money for me going forward.


Of course I could argue that the fact the Central Banks hold NO Silver (EDIT- Some central banks hold little amounts but it was long ago dismissed by the elite as real money- that's an advantage that we little people have) actually makes it a better buy because it's much more difficult for them to manipulate it. They have to go through banks like JP Morgan to do so and even JPM can only manipulate it with their paper and not their actual silver reserves because they don't have as much as they claim. It's much harder for the central banks to manipulate silver than it is gold because they can just dump their own gold reserves on the market.

Furthermore... as people start to try to protect themselves against inflation the first thing they'll run to is gold... and immediately they'll make the realization that Gold is too expensive for them (it's already much to expensive for the common man) and they will naturally run to the poor man's gold... Silver. 

And... if Gold does become money again then it's price will skyrocket and Silver's price will eventually go right along with it. At the historic 16-1 ratio Silver should be about 107$ today... if Gold goes up to say 4000$ then Silver should hit 250$ 

What i'm getting at is the gains on Silver will end up being much greater because the flocking to gold has already begun with the Billionaires... the common people have yet to flock to gold to protect themselves and by the time they realize they have to it will be too late and they'll be forced to go after silver. 

This also doesn't get into all the industrial uses Silver has over Gold... or the fact Silver conducts heat and electricity better than any other known element in the universe. Silver is essential to the production of solar panels which all the governments in the world are driving towards. It even has medical uses and there's actually less of it to invest in today than Gold because silver has been discarded for so many decades as a cheap industrial metal in electronics.

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## NoOneButPaul

Someone just PMed me asking about the best way to buy silver... I'm posting this here because I think it could help some people on the fence who are weary about buying and because i'm sure there are people out there who can offer better advice on the matter than I can...





> I also prefer NOT to leave a paper trail. I've got thousands in silver and the gov't doesn't know about a single dime of it. I need to preface all this by saying though A LOT OF PEOPLE buy Silver online and even buy the SLV stocks and don't pay any mind to the whole government not knowing about it thing. Trying to keep your silver out of the Government's eyes will end up COSTING YOU MORE MONEY. I however, believe it's a cost worth paying... but just remember there are a ton of people out there that don't worry about it at all. 
> 
> Anyway, consider the premium the price you're paying for the gov't to not know about your purchase... 
> 
> Silver Eagles ARE GREAT to buy... they are the most popular coin in the world and they are guaranteed by the US Treasury as 1 fine OZ of silver. When you get an Eagle you KNOW it's not a fake and people are much more comfortable buying them off of you because of the security. 
> 
> *HOWEVER, Silver Eagles come with the HIGHEST premiums* because they are much easier to sell and because the confidence in authenticity is very high. Typically a SE premium will be between 3-5$... if you can find 3$ that's pretty good, 5$ is a bit too steep for me but it really depends on your budget. I will occasionally pay 4$ but i'm never happy about that either. A lot of places will sell you a stack of 20 Eagles and only charge you 2-3$ per OZ if you buy ALL 20. You can also try to haggle with people if that's your thing but consider 3$ on Eagles very good. If you find anything under that it's an automatic buy imo. 
> 
> Just remember... if you buy a Silver Eagle at 30.91 plus 5$ premium then you'll need silver to hit 36$ before you're out of the red. This is why premiums can be killer and why finding the lowest ones is key. 
> ...

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## W_BRANDON

> If short term gain is your goal, I see no better opportunity than silver.
> 
> If you can buy it at $29.50 (August) and sell it 30 days later for >$35, how the hell does anyone not see tremendous short term gains in that? What short term investments are you guys into, because every time I read that silver sucks short term, I wonder vs WHAT??? Let me in, please!


I have never considered investments in commodities in terms of short term ROI. I rather consider it as a hedge against inflation...something that will maintain value versus the dollar. If the price (in $) doesn't keep up with the rate of inflation, your losing money.

The scenario you gave for buying 8/1/12 and selling 9/1/12 was cherry picked. I could provide you just as many 30 day windows where you lose on the silver investment. I started buying silver in March 2011. Even on a two year line, this investment is having a hard time breaking even. I expect silver to have trends similar to gold, hell better than gold because of it's industrial demand and applications. Buying for 30 days isn't what I'm looking for neither is astronomical yields, just some instrument that protects against inflation.

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## cubical

> Of course I could argue that the fact the Central Banks hold NO Silver actually makes it a better buy because it's much more difficult for them to manipulate it. They have to go through banks like JP Morgan to do so and even JPM can only manipulate it with their paper and not their actual silver reserves because they don't have as much as they claim. It's much harder for the central banks to manipulate silver than it is gold because they can just dump their own gold reserves on the market.
> 
> Furthermore... as people start to try to protect themselves against inflation the first thing they'll run to is gold... and immediately they'll make the realization that Gold is too expensive for them (it's already much to expensive for the common man) and they will naturally run to the poor man's gold... Silver. 
> 
> And... if Gold does become money again then it's price will skyrocket and Silver's price will eventually go right along with it. At the historic 16-1 ratio Silver should be about 107$ today... if Gold goes up to say 4000$ then Silver should hit 250$ 
> 
> What i'm getting at is the gains on Silver will end up being much greater because the flocking to gold has already begun with the Billionaires... the people have yet to flock to silver to protect themselves.


The central banks and the "giants" as FOFOA calls them, which is the generationally super wealthy or the "super producers", are who establish what money is. It has always been gold. The fact they do not hold silver is not a plus, but a minus.

There is no manipulation on the physical silver market. Just like we are seeing gas shortages because of price controls, we would be seeing physical silver shortages if in fact there was physical silver manipulation. There isn't and to keep saying there is makes the hard-money movement looks tin foil hatish.

To say an item that is infinitely divisible is to expensive to buy in any quantity is just wrong. You can buy gold in grams or if need in 1/10ths of grams.

On what time frame are you using to get your 16-1 ratio and why must it hold true today?

Relatively to gold, silver's price largely set by industrial demand. Gold's price is arbitrary. It is arbitrary because it is real money. Also, it is not practical to have money based in a metal that will be consumed.

So as a commodity silver may go higher(because of demand and/or inflation), but I do not believe it will go higher because it will turn into money again. If/when gold retains its status as the only real money, means its price must rise to replace the purchasing power of all currency today. FOFOA estimates 1oz will be worth about $55k in purchasing power of today's dollars. I do not see a similar move in silver.

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## oyarde

I am a coin collector , I also collect other things, I will just keep collecting and see what happens

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## W_BRANDON

> I am a coin collector , I also collect other things, I will just keep collecting and see what happens


That's cool. What's your most prized silver piece?

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## Danke

> The central banks and the "giants" as FOFOA calls them, which is the generationally super wealthy or the "super producers", are who establish what money is. It has always been gold. The fact they do not hold silver is not a plus, but a minus.
> 
> There is no manipulation on the physical silver market. Just like we are seeing gas shortages because of price controls, we would be seeing physical silver shortages if in fact there was physical silver manipulation. There isn't and to keep saying there is makes the hard-money movement looks tin foil hatish.
> 
> To say an item that is infinitely divisible is to expensive to buy in any quantity is just wrong. You can buy gold in grams or if need in 1/10ths of grams.
> 
> On what time frame are you using to get your 16-1 ratio and why must it hold true today?
> 
> Relatively to gold, silver's price largely set by industrial demand. Gold's price is arbitrary. It is arbitrary because it is real money. Also, it is not practical to have money based in a metal that will be consumed.
> ...


Interesting.

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## Seraphim

I think many smaller Central Banks will monetize and stock up on silver.

Much like the poor man buying silver because gold is too costly to purchase in practical amounts for him, the same can (and will likely) be said of smaller Central Banks.

South American/latin coutries come to mind. Mexico as well.

I'm not saying that will happen, I just view it as likely.




> The central banks and the "giants" as FOFOA calls them, which is the generationally super wealthy or the "super producers", are who establish what money is. It has always been gold. The fact they do not hold silver is not a plus, but a minus.
> 
> There is no manipulation on the physical silver market. Just like we are seeing gas shortages because of price controls, we would be seeing physical silver shortages if in fact there was physical silver manipulation. There isn't and to keep saying there is makes the hard-money movement looks tin foil hatish.
> 
> To say an item that is infinitely divisible is to expensive to buy in any quantity is just wrong. You can buy gold in grams or if need in 1/10ths of grams.
> 
> On what time frame are you using to get your 16-1 ratio and why must it hold true today?
> 
> Relatively to gold, silver's price largely set by industrial demand. Gold's price is arbitrary. It is arbitrary because it is real money. Also, it is not practical to have money based in a metal that will be consumed.
> ...

----------


## W_BRANDON

> I think many smaller Central Banks will monetize and stock up on silver.
> 
> Much like the poor man buying silver because gold is too costly to purchase in practical amounts for him, the same can (and will likely) be said of smaller Central Banks.
> 
> South American/latin coutries come to mind. Mexico as well.
> 
> I'm not saying that will happen, I just view it as likely.


Being a smaller central bank in possession of large amounts of gold is also a liability. Just look at Libya

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## cubical

> I think many smaller Central Banks will monetize and stock up on silver.
> 
> Much like the poor man buying silver because gold is too costly to purchase in practical amounts for him, the same can (and will likely) be said of smaller Central Banks.
> 
> South American/latin coutries come to mind. Mexico as well.
> 
> I'm not saying that will happen, I just view it as likely.


There COULD be some sort of bi-metallic monetary system in the future, but I doubt it. There is no need. 

And remember, the money of the "poor" both on an individual and country level, is not where you want to be. The poor is who will be "selling" their money for basic needs. More sellers, less value. And people won't want silver because those who have/respect it are poor(minimal producers) and holding an IOU with them as a counterparty is not worth much. You want to be on the side of the super producers.

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## NoOneButPaul

> The central banks and the "giants" as FOFOA calls them, which is the generationally super wealthy or the "super producers", are who establish what money is. It has always been gold. The fact they do not hold silver is not a plus, but a minus.
> 
> There is no manipulation on the physical silver market. Just like we are seeing gas shortages because of price controls, we would be seeing physical silver shortages if in fact there was physical silver manipulation. There isn't and to keep saying there is makes the hard-money movement looks tin foil hatish.
> 
> To say an item that is infinitely divisible is to expensive to buy in any quantity is just wrong. You can buy gold in grams or if need in 1/10ths of grams.
> 
> On what time frame are you using to get your 16-1 ratio and why must it hold true today?
> 
> Relatively to gold, silver's price largely set by industrial demand. Gold's price is arbitrary. It is arbitrary because it is real money. Also, it is not practical to have money based in a metal that will be consumed.
> ...


1st- No one establishes what money is at the top. Ron Paul talked about this when he flashed his silver ounce in front of Bernanke 9 months ago... money comes in a natural way not by edict or government force. People at the top can claim Gold is money but if the entire globe bought into silver and tipped the scales so that silver was actually worth more than gold (I never expect this to happen this is just a hypothetical argument) then Silver would be money and Gold would be the poor man's silver- no one and no one thing are greater than the Free Market. No one determines what money is, people determine what money is, and 5000 years of economics tells us that BOTH gold and silver are money.

2nd- Silver Manipulation is long past the point of conspiracy, it happens, it's been happening CLEARLY for the last 2 years. If you dismiss this you dismiss it at your own peril. There's an amazing amount of information out there about it, JP Morgan is being investigated for it as we type back and forth, whistleblowers have come out and admitted it. It is going on and it's not a tinfoil hatish position to take. There is also a physical shortage on silver and has been for quite some time now... we now consume silver faster than we can mine it and even the USGS said only a couple of years ago it would be the first element to disappear from the periodic table. 

3rd- Silver's price is currently being driven by industrial demand which points to it's gain being even greater. Right now silver is already going up because of the fact its use in industry is increasing AND common people are driving towards it as an inflation hedge. You do not get that double edged sword with gold. 

4th- Right now Silver is at about a 55-1 ratio to gold. As little as ten years ago that ratio was 75-1... the ratio continues to get smaller and smaller and will continue to get smaller and smaller. I contend it will hit 16-1 for a number of reasons... 1st... that was the centuries old average prior to the 20th century, 2nd consumers trying to protect themselves against inflation WILL BE FORCED to go to Silver because they cannot afford gold. (As for the smaller amounts... why would you buy 1/10 of OZ of gold for 170$ when you could get 5 OZs of Silver for roughly the same price?) 

Furthermore... if Gold hits 55k in purchasing power in the future and the ratio stays exactly the same at 55-1 that means silver should hit 1k in purchasing power.

Which means your silver would go up about 33X what it is today while your gold only goes up at around 31-32X... the gains are still greater in Silver (understandably it's not by much but we're also assuming here that it stays at 55-1- If it went to even 40-1 we're talking 1250$ and much greater gains in Silver overall... if it hits the historic 16-1 ratio at 55k were talking about 3400$ silver and at that point we'd be talking gains of 100X what it is today)

There's much much more potential in silver still.... if the Ratio goes to 16-1 the gains won't even be close with gold... with the ratio staying exactly the same (which I think is a hard assumption to make) then you're still getting a slightly better return with silver overall. 

And while i'm certainly not here to make the case AGAINST GOLD (I Love gold, i'll be asking for some for Christmas) i'm trying to say that to dismiss Silver's potential to the point where you're going to start selling it off for ONLY gold is foolish because there's a lot of gains to be made in silver. It's smart to hold both because Gold is much more stable than Silver but the gains in Silver are potentially MUCH greater than gold.

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## Seraphim

^^

Cubical did mention he is holding silver in the near term because he sees more short term upside and will convert to gold.

In fact, I am inclined to do the same.

I will sell my silver for RE/gold/service/goods.

Also note, Cubical...that on the side of silver, there are a lot of poor and middle class folk. When it comes time to value their labor in specie, it will be done so in silver, not gold. This is a function of demand. Sell side = using it to buy stuff. Demand side = labor pricing.

2 cents.

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## oyarde

> That's cool. What's your most prized silver piece?


 Tough call , probably more than several , but my personal favorites, for various reasons ( condition , how long I looked for , price etc) , 1921 dime, 1921 S Walker half, 1904 Morgan ,1884 O Morgan , 1876 CC quarter , 1876 & 77 CC dimes, 1927 Peace Dollar , 1850 O Half Dime, 1902 O Barber half.... I probably,have,less than $250 in them, total. My favorite  coppers, are two 1909 S's and my 1914 D ( exceptional price on all three and very happy with the condition of two of them ).

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## NoOneButPaul

> ^^
> 
> *Cubical did mention he is holding silver in the near term because he sees more short term upside and will convert to gold.*
> 
> In fact, I am inclined to do the same.
> 
> I will sell my silver for RE/gold/service/goods.
> 
> Also note, Cubical...that on the side of silver, there are a lot of poor and middle class folk. When it comes time to value their labor in specie, it will be done so in silver, not gold. This is a function of demand. Sell side = using it to buy stuff. Demand side = labor pricing.
> ...


When the time comes i'll do the same but the ratio is going to have to close in considerably from 55-1 before I think about doing it. I also think you should ALWAYS hold both.

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## Seraphim

Below 20-1. Agreed.

Quite frankly, I am of the belief it will go below 12-1.




> When the time comes i'll do the same but the ratio is going to have to close in considerably from 55-1 before I think about doing it.

----------


## cubical

> 1st- No one establishes what money is at the top. Ron Paul talked about this when he flashed his silver ounce in front of Bernanke 9 months ago... money comes in a natural way not by edict or government force. People at the top can claim Gold is money but if the entire globe bought into silver and tipped the scales so that silver was actually worth more than gold (I never expect this to happen this is just a hypothetical argument) then Silver would be money and Gold would be the poor man's silver- no one and no one thing are greater than the Free Market. No one determines what money is, people determine what money is, and 5000 years of economics tells us that BOTH gold and silver are money.
> 
> 2nd- Silver Manipulation is long past the point of conspiracy, it happens, it's been happening CLEARLY for the last 2 years. If you dismiss this you dismiss it at your own peril. There's an amazing amount of information out there about it, JP Morgan is being investigated for it as we type back and forth, whistleblowers have come out and admitted it. It is going on and it's not a tinfoil hatish position to take. There is also a physical shortage on silver and has been for quite some time now... we now consume silver faster than we can mine it and even the USGS said only a couple of years ago it would be the first element to disappear from the periodic table. 
> 
> 3rd- Silver's price is currently being driven by industrial demand which points to it's gain being even greater. Right now silver is already going up because of the fact its use in industry is increasing AND common people are driving towards it as an inflation hedge. You do not get that double edged sword with gold. 
> 
> 4th- Right now Silver is at about a 55-1 ratio to gold. As little as ten years ago that ratio was 75-1... the ratio continues to get smaller and smaller and will continue to get smaller and smaller. I contend it will hit 16-1 for a number of reasons... 1st... that was the centuries old average prior to the 20th century, 2nd consumers trying to protect themselves against inflation WILL BE FORCED to go to Silver because they cannot afford gold. (As for the smaller amounts... why would you buy 1/10 of OZ of gold for 170$ when you could get 5 OZs of Silver for roughly the same price?) 
> 
> Furthermore... if Gold hits 55k in purchasing power in the future and the ratio stays exactly the same at 55-1 that means silver should hit 1k in purchasing power.
> ...


1. Yes, people at the top do establish what money is. The super producers are the ones at the top. If Canda/Russia/Brazil/Saudi Arabia said gold is money(super producer is relative and can be countries or individuals/families with large wealth), but Africa disagreed and only used silver, who's "money" would you desire to have? Africa is poor and minimal producers, which is the opposite of Canada, China etc

2. If physical silver was manipulated, why can I go to gainesville coins right now and buy as much physical silver as my heart desires? Actual "shortages" in anything is rare, rather only higher prices. btw there is never a universale shortage of money(ie medium of exchange/store of value)

3. What gives silver most of it's value is the exact opposite of what gives gold it's value. Why would you want your money as a commodity that will be consumed in the future? You believe copper, nickel, wood, oil are money as well?

4. Yes, I know the GSR hs been all over the place in the past, but why do you pick 16-1? Why is that correct? I will answer your question with another question. Why buy 5oz of silver, when you can buy 200oz of nickel? Point being, volume is meaningless and in fact it would be easier to have to use as little as possible.

Again, why does the 55-1 ratio have to stay? You have too many preconceived assumptions about the future that is misguiding you today. And if the ratio stayed the same, the gains would be EXACTLY the same. That is math.

As I said, I do own silver, but I will not be buying silver in the future. Silver currently moves in the same direction as gold, but at an exponential rate. I will probably start to trade the silver for gold around the $50 level, when I guess gold will be about 1900 or 2000. If I think things are really about to blow, I plan on being almost entirely in gold.

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## Steven Douglas

> 3. What gives silver most of it's value is the exact opposite of what gives gold it's value. Why would you want your money as a commodity that will be consumed in the future? You believe copper, nickel, wood, oil are money as well?


I don't know if I would phrase it that way.  At the most fundamental level, _absolutely everything that has value in exchange_ is, technically speaking, a form of money.  It may not be a _common 'medium' of exchange_, but if it has value in exchange for anything, it is money.  That includes anything that cannot be stored or reused, but only consumed, including labor--the only currency that some have to trade in.  

Anyone who doubts whether oil is money doesn't understand the first thing about what has kept FRN's the global reserve currency since 1973.  Most of the world's oil is priced only in fiat dollars, making oil a fiat currency by proxy. Oil has an exponentially increasing exchange value derived from the facts that:

a) oil is always in demand;
b) the supply of fiat currency that everyone must acquire to buy most oil from its sources is being exponentially inflated, and
c) constant consumption and ever-limited "current" capacity assures constant, continual scarcity

Because demand for oil is not going away, and because the supply of oil on any given day is truly finite, its value "as money"--even by proxy--only increases as more of it is consumed.  

What gives silver its value is an _amplification_ of what gives gold its value for similar reasons. Like gold and silver, copper has been used as money since BCE, and that has everything to do with history, and nothing to do with belief. 




> Why would you want your money as a commodity that will be consumed in the future?


Aside from whatever amounts have been lost along the way, _MOST_ of the 'junk' coins--gold, silver, nickel and copper--that were minted but are not in circulation, are still above ground and in existence in coin form.  Junk coins are constantly traded and stacked, but most are not being smelted into bullion or sold for consumption elsewhere.  The ONLY reason these are not circulating as coinage, and therefore in greater demand _as current money_, is 100% due to government force, and government meddling.  

If gold was as plentiful as sand on the earth it would be in use everywhere, of course, and I'm sure highly prized nonetheless.  But it would also be valueless as money, owing to its lack of scarcity.  The fact that a commodity that is used as money may also be 'consumed' as a commodity (not recycled and kept above ground, like gold), *amplifies* its value as money for that very same reason, as continual consumption is a sure-fire mechanism for _continually assured scarcity_.  

The less of anything that is in demand there is, and the more expensive it becomes to produce, the more valuable it becomes, _regardless of its usage_ (coinage or destructive consumption).

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## thoughtomator

> 2. If physical silver was manipulated, why can I go to gainesville coins right now and buy as much physical silver as my heart desires? Actual "shortages" in anything is rare, rather only higher prices. btw there is never a universale shortage of money(ie medium of exchange/store of value)


Quick answer on this one - because you're not buying any serious volume. Watch what's happening with Germany and their gold reserves unfold before our eyes to see what happens if a major paper silver investor decides to take physical delivery. Panic (and hilarity, if you're inclined to humor) ensues...

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## acptulsa

> I'm thinking about keeping what silver I have and just putting my savings henceforth into low risk (low-yield) investments like t-bills and CDs.


Diversification is well and good.  But T bills and CDs right now?  With bazillions in 'liquidity' in the banks and inflation already rampant, you really consider something tied to the value of the FRN to be low risk?  Seriously?

Negative yield is certainly low yield.  It also costs you.  I would suggest you rethink that one.  If you're in treasuries and cds, when (not if) the value of the dollar drops there's not much to do but bend over.

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## oyarde

Bronze arrow heads were once used as money, now that is function there . Dating , Archaic , from around the Black  Sea.

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## DFF

I own some 2014 AGQ calls...bought 'em when spot silver was 31.60...position declined by 25% after yesterdays cartel hit...$#@!ing bastards....JPM and company need to be indicted...shorting 180 million ounces is _beyond_ criminal.

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## Steven Douglas

> JPM and company need to be indicted...shorting 180 million ounces is _beyond_ criminal.


They can't do it alone. They get by with a little help from their friends.

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## DFF

Y'know, it would be funny as hell if some well-heeled individual, company, or sovereign government *bought* 180 million ounces on Monday and requested physical delivery...watching these bastards run for cover would be one of the greatest spectacles ever. LOL

----------


## oyarde

> Y'know, it would be funny as hell if some well-heeled individual, company, or sovereign government *bought* 180 million ounces on Monday and requested physical delivered...watching these bastards run for cover would be one of the greatest spectacles ever. LOL


I would like to see that delivered , what would delivery fee be ??

----------


## cubical

> I don't know if I would phrase it that way.  At the most fundamental level, _absolutely everything that has value in exchange_ is, technically speaking, a form of money.  It may not be a _common 'medium' of exchange_, but if it has value in exchange for anything, it is money.  That includes anything that cannot be stored or reused, but only consumed, including labor--the only currency that some have to trade in.  
> 
> Anyone who doubts whether oil is money doesn't understand the first thing about what has kept FRN's the global reserve currency since 1973.  Most of the world's oil is priced only in fiat dollars, making oil a fiat currency by proxy. Oil has an exponentially increasing exchange value derived from the facts that:
> 
> a) oil is always in demand;
> b) the supply of fiat currency that everyone must acquire to buy most oil from its sources is being exponentially inflated, and
> c) constant consumption and ever-limited "current" capacity assures constant, continual scarcity
> 
> Because demand for oil is not going away, and because the supply of oil on any given day is truly finite, its value "as money"--even by proxy--only increases as more of it is consumed.  
> ...



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

---------------------------------------------------------------------------------

"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.

----------


## cubical

> Quick answer on this one - because you're not buying any serious volume. Watch what's happening with Germany and their gold reserves unfold before our eyes to see what happens if a major paper silver investor decides to take physical delivery. Panic (and hilarity, if you're inclined to humor) ensues...


The same can be said for ANYTHING. If you buy enough of it, there will be "shortages", but there will certainly be higher prices.

----------


## Steven Douglas

I'm going to pick off quotes from that article and take them on one at a time.




> 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*.
> 
> 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?


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. 




> *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.


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 $#@!ED WITH. 




> 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?


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.

The global GOVERNMENT market was on a de facto gold standard, courtesy of Franklin Piece Of $#@! 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.  




> *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.*


This is wrong on so many levels that I want to wring necks just reading this $#@!.  "The _price_ of gold went up 70%"?  THE $#@! 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 $#@! 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. 




> 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.


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.  

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 $#@! 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 _$#@!_ 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...

----------


## Original_Intent

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.

----------


## Steven Douglas

> 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!"


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? 




> 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.


To "_keep a monetary standard_"?  What unadulterated bull$#@!. 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".   

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.  




> 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?


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 $#@! 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. 




> [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?


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.

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?




> Any silver standard is an unnatural levitation requiring BUYING of silver by the monetary authority.


BULL$#@!!  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.




> While a gold standard gives the free market what it really wants, gold, requiring SELLING of gold 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 $#@!, 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.




> 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?


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. 




> To me, silver has posed as money(so has paper, sea shells etc)...


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. 

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. 




> ..., but it always ultimately leads back to gold.


What always leads back to gold? Expound on this "it" that presumably always leads back to gold?

----------


## Henry Rogue

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?

----------


## cubical

> Yes, and did you know that a Russian Czar practically DUMPED Alaska? ::: GASP!!! :::  Enough said there, right? What does that tell us about Alaska?


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.





> 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.


There is a truth to it. Those who produce set the standard for what they will accept in return for their goods.




> 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 $#@!ED WITH.


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.




> This is wrong on so many levels that I want to wring necks just reading this $#@!.  "The _price_ of gold went up 70%"?  THE $#@! 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 $#@! 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.


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.





> 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 _$#@!_ 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?


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.

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## oyarde

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.

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## cubical

> 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 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. 


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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## 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.

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## 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.

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## 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?

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## oyarde

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

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## 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

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## 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.

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## 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 $#@!.  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 $#@!. 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?

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## Pericles

> Interesting.


Look at it in terms of the 1979 to 1980 run up in price. Silver tended to have an upper limit at which jewelry, dining ware, and scrap silver became so valuable as ingots or coin, it went to the smelter.

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## Steven Douglas

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


...or was legislated out of circulation, more to the point. 




> 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.


"pop up as money here and there" -- whatever that means.  You make it sound as if gold indeed has "remained", while other forms of money besides FRN's have only popped up and back down again.  Are you or anyone you know trading using gold as a medium of exchange? As money? Governments are, but that's not a free market.  When's the last time you made a routine exchange for something using gold that involved something other than a medium of exchange? Where does gold, let alone anything else, "pop up", let alone "remain" as money in a regime like the one we have now?  




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


The foundational part of gold's value, of course, and always. As a commodity.  Did you think that if gold was artificially demonetized everywhere in the world that jewelers and their buyers would suddenly find themselves with a lot of cheap or free gold on their hands?  Gold (AS ANYTHING) only gets _an additional exchange value boost, based on additional demand_ whenever one [of its many] uses is money. 




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


Is silver being used as money now? Did you miss the part where the Coinage Act of 1873 crashed the value of silver?

Like gold, _when silver is used as money_ it _also_ gets an _additional exchange value boost_, based on additional demand for that purpose.  If you are trading with someone in a free market (free market in both currency and goods and services) and the seller will only accept silver, or the seller is offering a better deal if you pay in silver, _yer gonna hafta getcha some silver_, or go without, or pay the difference.  That '_hafta getya some_' spells greater demand, and increased exchange value.  

When gold and silver freely circulate as money, the monetary version of the metal will always track with the commodity version (like now), albeit at a slightly higher exchange value. It is next to impossible, however to give an actual value breakdown that accurately attributes an exchange value component due to a specific use.     

The important thing to note here is that gold, unlike silver, is CURRENTLY used as money, albeit by governments, and not the general population. 




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


Yeah? I've also heard that when Saudi Princes go to Monte Carlo, they don't bother with chips worth less than $25,000, and even those are treated like so many pennies and nickels.  And did you know that when I play Monopoly, I don't even bother with Baltic and Mediterranean, and will trade them almost immediately?

SO?  

You will never get me to attack gold's value in terms of its *very important role as one form of money*. My only attack is on the either/or argument, as if gold was something so special that it was the only form of money that truly mattered.  We really wouldn't know that unless gold and silver actually circulated freely, without any government distortion or interference.  So even debates about this are meaningless to me, unless you are actually advocating artificial barriers to entry for anything other than gold, or any kind of "legal tender" status for anything at all. If that was the case that would be the chink in your armor.  Because if there really is something wonderful, magical, mysterious and special about gold as money that no other commodity has (ONLY in a free market, and absent ALL government interference), then the existence of any other competing coined hard specie should produce absolutely no objections, and should not bother you in the slightest. If, however, you think gold needs any government protection whatsoever against any competition, then you've already lost. 




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


Firstly, I assume that you understand what "bimetallism" is. For those who do not, it does NOT mean the coinage or circulation of two different metals as hard specie. Specifically, bimetallism is the FIAT DECLARATION of their "market" exchange values one to another.  

So the answer is an emphatic NO. I am not "for bimetallism".  As for trimetalism, we have that already, under our so-called bimetallic "standard" (a misnomer, as it is no standard at all).  Gold EAGLES, Silver DOLLARS, and Copper CENTS ALL have a government declared exchange value, one to another.    




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


That's just it. You are the ONLY one making a declaration that one would "win out".  Not me.  What does that mean, exactly, to "win out"? 

If gold, silver, copper, nickel, platinum, iridium, and any other hard specie that joined to compete in the free currency market party, and they all floated against one another as competing specie, with no artificial barriers to entry, each would finds its own exchange value. Neither Thiers NOR Gresham's Laws would be in effect -- even against former fiat currencies (FRN's, YUAN, EUROS).  Not even they would necessarily be driven out of circulation.  They would just find their market values along with the rest.     

Each hard specie's exchange value would be different from the others, and would always fluctuate, but NONE OF THEM would "win out" in terms of one being so preferred that the rest are driven completely out of circulation. For that bull$#@! to happen you need some form of government interference. Otherwise, that would be like saying that among MasterCard, Visa, Diners, American Express, travelers checks, etc., (or name a list of different country currencies) one of them would "win out".   And yet...there they all are.  

Of course, one specie may become _more popular_, or _more commonly used_ than the rest.  Is that what you mean?  If so, then I would argue that both silver and copper are slam dunks--with plenty of historical evidence to back it up.  More *people* have always bought more silver than gold, only because it is more affordable and convenient in its divisible forms.  It's not called the "poor man's gold" for nothing. 

The GOLD DOLLAR, minted from 1849–1854, was the smallest gold coin ever minted by the US. It was 13 millimeters in diameter (about 2/3 of a dime), and weighed a mere 1.672 grams. It was 90% gold, 10% copper, with 1.504 grams gold content.  At today's gold price of $1684, one of those little freshly minted coins would be the equivalent of carrying an $89 dollar bill around, in a very tiny little coin.  A silver dime, on the other hand, is like carrying a couple of bucks. Much more convenient.  Silver "wins out" every time. Jesus wasn't betrayed for thirty pieces of gold, and to my knowledge, no casino ever created a slot machine for gold coins, even under a _de facto_ gold standard.  

That's what gold is like under a hard specie regime. The average person does not walk around even a hundred dollar bill in his pockets, nor do they even have hundreds of dollars at their usual disposal.  And even if they did, there is always the issue of change.   




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


No. Not in my lifetime.  Given the average person's ongoing ignorance of money, banking and finance, and since the powers that be have yet to lose out in all of recorded human history, I have no reason to believe that this will change substantially.   But I am not concerned about them.  I believe that there are enough people who are becoming educated and aware, who are communicating as never before now with the advent of the internet, that a new NICHE TBTB is emerging.  And once that niche gets a toehold, it/we won't lose out either.  

I don't care if more Titanics are built. I fully expect that will continue to happen. What I do care about, and am willing to trade bullets and blood for, are those who have the gall and audacity to explicitly prevent others from building life rafts of their own.  Real ones, not force-tethered to any ship, and not prone to obligatory, legally mandated leaks, and not forced to go down with any ship.

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## cubical

> That's just it. You are the ONLY one making a declaration that one would "win out".  Not me.  What does that mean, exactly, to "win out"? 
> 
> If gold, silver, copper, nickel, platinum, iridium, and any other hard specie that joined to compete in the free currency market party, and they all floated against one another as competing specie, with no artificial barriers to entry, each would finds its own exchange value. Neither Thiers NOR Gresham's Laws would be in effect -- even against former fiat currencies (FRN's, YUAN, EUROS).  Not even they would necessarily be driven out of circulation.  They would just find their market values along with the rest.     
> 
> Each hard specie's exchange value would be different from the others, and would always fluctuate, but NONE OF THEM would "win out" in terms of one being so preferred that the rest are driven completely out of circulation. For that bull$#@! to happen you need some form of government interference. Otherwise, that would be like saying that among MasterCard, Visa, Diners, American Express, travelers checks, etc., (or name a list of different country currencies) one of them would "win out".   And yet...there they all are.  
> 
> Of course, one specie may become _more popular_, or _more commonly used_ than the rest.  Is that what you mean?  If so, then I would argue that both silver and copper are slam dunks--with plenty of historical evidence to back it up.  More *people* have always bought more silver than gold, only because it is more affordable and convenient in its divisible forms.  It's not called the "poor man's gold" for nothing.


Yes all those things listed will have exchange value with one another, but if the industrial need for all of those, except for gold, dropped, the value would drop as well. This is NOT the case for gold. Sure silver could be priced at $10,000 per ounce right now and be used solely as money, but it is not. That place is and has been reserved for gold. If you want to gamble that this will change in the future, then that is fine.

I don't want what the "poor" hold. The poor have to "sell" what they have for the everyday things. A large group selling means the value of what they are selling will remain suppressed. You will not see the Saudi Princes selling their gold to buy their next meal.

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## Steven Douglas

> Yes all those things listed will have exchange value with one another, but if the industrial need for all of those, except for gold, dropped, the value would drop as well. This is NOT the case for gold.


That is an assertion only, without any argument or line of reasoning whatsoever offered. 

If the industrial need for ANY of them dropped--_gold included_ (why did you exclude it?) -- some of its value would drop as well.  Gold is not immune to the laws of supply and demand, regardless of any source of that usage/demand or supply. 

Let's say that I am a semiconductor chip-maker, and I have a large cache of gold used for packaging integrated circuits. I develop an inexpensive process that ELIMINATES the need for gold altogether.  I patent that process, and use it myself. I also license that technology very cheaply to all my competitors (who also have a cache of gold for the same processes).   What happens to all that gold that is no longer needed?  We don't store it or throw it away.  It gets sold on the open market. Furthermore, no new orders for gold are placed. It is a pretty well known fact that selling things on the open market places downward pressure on prices down.  

*Ergo, if the industrial need for gold dropped its exchange value would drop as well, and by that much.*   There is no immunity or market principle exception for gold -- as a commodity or as money.  If you think there is, don't assert it, _articulate it_.     




> Sure silver could be priced at $10,000 per ounce right now and be used solely as money, but it is not. That place is and has been reserved for gold.


Reserved? By whom? And do you have a crystal ball in your possession? Because the last time I checked, both gold and silver have been used globally as money _many times_ throughout recorded history. That includes _very recent history_.  As a child, _in my lifetime_, as late as 1964, I HAVE USED SILVER, NOT GOLD (no "place" was reserved for it for my use then), _as money_.  

Thus, I think it is extremely safe to assume that both gold and silver will continue to be used as money, together or separately, at various times and places, in the future.   




> I don't want what the "poor" hold.


So what? What you personally want is irrelevant to the argument you failed to address: that silver, not gold, is more convenient for average persons, who are in the decided majority, and whose income and purchasing drives whole economies. That is a reality that has nothing to do with whether or not a Saudi Prince can be bothered with silver, or will not sell gold for food, or whatever irrelevant point you want to make about the exceptions, who are not the rule. 

Another fact you failed to address:  Whereas the Coinage Act of 1873 demonetized silver and effectively drove it out of circulation, the US silver purchase act of 1934, which drained China's silver, was for the express purpose of _getting silver coinage BACK into American circulation_, now that their precious gold was stolen from them.  That had nothing to do with rich or poor where the American public was concerned.  Gold's "reserved place" was REMOVED. And in its place, we got nothing but SILVER--which worked just fine coming out of the depression, throughout WWII, the Industrial Revolution, and on up to 1964, once the banking system's Ponzi scheme, ONCE AGAIN, finally began to unravel.  




> If you want to gamble that this will change in the future, then that is fine.


You're the only one who is fixated on an either/or scenario, and the only one who is "gambling" between us.  I hold both gold and silver, and consider them both extremely valuable.  I don't care which one (if it's only one) circulates in the future. I'll be fine.  The only difference is that I want both to circulate, and then some.  

I don't want a ONE-TO-MANY relationship between money and goods and services. That has been one of our FATAL mistakes all along.  That is myopic, prone to distortion, and dangerous to any economy, as it is all prone to manipulation.  I want a MANY-TO-MANY relationship between money and goods and services, because that is the ONLY way for natural market checks and balances to kick in, as exchange values are revealed much more efficiently, such that no one currency manipulation will be met with anything but a swift market correction. 

With only one currency allowed in a basket, _gold or silver_, all bets are off, because the entire market, and all value of all goods and services are now filtered through a single lens, one that is prone to manipulation, as that single element becomes the tail that wags the entire market dog.  With multiple currencies that is not possible. You can have a silver boom, and gold and copper will correct it; a gold rush and silver and copper will step in to correct that, with minimal distortion of goods and services along the way, _which are priced in each of them_.  Furthermore, the currency market itself cannot be hoarded, because it is impossible to corner the market on currency when there are so many in open competition.  A shortage of one is an opportunity for another, as it naturally fills the void and becomes that more valuable in the process.

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## cubical

> That is an assertion only, without any argument or line of reasoning whatsoever offered. 
> 
> If the industrial need for ANY of them dropped--_gold included_ (why did you exclude it?) -- some of its value would drop as well.  Gold is not immune to the laws of supply and demand, regardless of any source of that demand. 
> 
> Let's say that I am a semiconductor chip-maker, and I have a large cache of gold used for packaging integrated circuits. I develop an inexpensive process that ELIMINATES the need for gold altogether.  I patent that process, and use it myself. I also license that technology very cheaply to all my competitors (who also have a cache of gold for the same processes).   What happens to all that gold that is no longer needed?  We don't store it or throw it away.  It gets sold on the open market. Furthermore, no new orders for gold are placed. It is a pretty well known fact that selling things on the open market places downward pressure on prices down.  
> 
> *Ergo, if the industrial need for gold dropped its exchange value would drop as well, and by that much.*   There is no exception to gold.  If you think there is, articulate it.


Sure it does have some industrial uses. But compare this to silver, copper, rhodium and the loss of value wouldn't be close.





> Reserved? By whom? And do you have a crystal ball in your possession? Because the last time I checked, both gold and silver have been used globally as money _many times_ throughout recorded history. That includes _very recent history_.  As a child, _in my lifetime_, as late as 1964, I HAVE USED SILVER, NOT GOLD (no "place" was reserved for it for my use then), _as money_.  
> 
> Thus, I think it is extremely safe to assume that both gold and silver will continue to be used as money, together or separately, at various times and places, in the future.


Reserved by gold. I am not saying I think gold will be the new focal point of the next financial system just because I think gold is better. I am simply looking around at who holds what and what are the characteristics of things that have been money. Gold has always been money or a storage of wealth, its value is arbitrary, and TPTB hold and accumulate it. This is not true of silver(or wood or paper or steel)





> So what? What you personally want is irrelevant to the argument you failed to address: that silver, not gold, is more convenient for average persons, who are in the decided majority, and whose income and purchasing drives whole economies.


Says you.

Do you really think we are going to go back to a physical coin currency system again? Historically there was a role for silver because physical coins were in circulation. If you think those days are coming back, then silver might make sense. But I do not think circulating gold or silver coins will ever come back. So there is NO NEED for silver to be a monetary instrument, and on top of the head winds why would it. Maybe in poor countries where physical might circulate, but again I don't want what they poor have, I want what the giants have.





> Another fact you failed to address: *Whereas the Coinage Act of 1873 demonetized silver and effectively drove it out of circulation, the US silver purchase act of 1934, which drained China's silver, was for the express purpose of _getting silver coinage BACK into American circulation_, now that their precious gold was stolen from them. *That had nothing to do with rich or poor where the American public was concerned. *Gold's "reserved place" was REMOVED. And in its place, we got nothing but SILVER--which worked just fine coming out of the depression, throughout WWII, the Industrial Revolution, and on up to 1964, once the banking system's Ponzi scheme, ONCE AGAIN, finally began to unravel. *



I didn't fail to mention it because it is not relevant. Many things have been used as money in the past and most have come and gone at the whim of a government entity. Just because your metal is silver, doesn't mean the world goes along with it. You have baggage, like all siverbugs. it's not just the CBs that have a preference for gold. It is the oil states. And the Chinese. And every international monetary system going back hundreds of years. It is the way it has always been and always will be. I assure you that when the dollar collapses, there will be no election for people to vote whether they want the system to be based on gold, silver, or a combination, or some other metal.




Now I have certainly butchered FOFOA's arguments here, so I will stop. I am still learning their entire "freehold" position, but at least on the surface it makes a lot of sense. Join the blog and start posting. There are plenty of anti-silverbug things said and I am sure you will find someone willing to fully(and more correctly) explain their stance.

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## Steven Douglas

> Sure it does have some industrial uses. But compare this to silver, copper, rhodium and the loss of value wouldn't be close.


And you think that is all because it is used as money? Do you think that the fact that _78% of the gold consumed each year_ is used in the manufacture of jewelry might have just a teensy bit to do with its value?  

Above-Ground Stock of Gold On Earth (in thousands of tonnes)

*Central bank vaults:* ~30,000 tonnes 
*Coin and privately held bullion:* ~20,000 tonnes
*Gold jewelrey held by individuals:* ~70,000 - 80,000 tonnes   

And there is no argument from me that while gold is not the rarest or the most valuable metal on Earth, it is, and always has been, the undisputed king of publicly valued metals--primarily because of its use as jewelry--not industrial uses, and not money. 




> Reserved by gold.


That's meaningless.  Gold doesn't reserve anything except the time and space required to exist. Once again, you're ascribing something magical to gold that you're not articulating.  




> I am not saying I think gold will be the new focal point of the next financial system just because I think gold is better. I am simply looking around at who holds what and what are the characteristics of things that have been money.


Let's parse that better. You are arguing that gold will be the focal point of the next financial system on the basis of:  

1) Who holds what (TPTB hold and accumulate it), and
2) What are the characteristics of things that have been money a) has always been money or a storage of wealth
b) its value is arbitrary
You go on to conclude that "_This is not true of silver (or wood or paper or steel)_" -- and by "_This_" you mean the entire compound statement. 

Basically, you see governments and the very wealthy accumulating (and even starting to fight over) gold, and not silver.  You key in on this, concluding that gold will be the "focal point" of the next financial system.  What you fail to see, or perhaps aren't paying attention to:

You know all that above ground bullion that is sitting around in central bank vaults? It may not (or may) be  going anywhere physically, but it is VERY MUCH bought, sold, traded,  leased, used as collateral, hypothecated, re-hypothecated, represented  by derivatives, you name it.  I have no idea what the tangled, morbid, messy web of  claims are on all that gold, or how it will all shake out as nations rattle sabers over multiple contradictory claims, but one thing is absolutely certain: ALL of that gold is ALREADY the focal point of THIS EXISTING financial system.  

And here is another thing:  If history teaches us anything, it is that *the gold held by you is NOT equal to the gold held by governments*. Furthermore, just because governments "base" a currency on a precious metal, does not mean that your stock of that metal will be in line to even participate.  Even further than that, there is NOTHING to prevent a government from pegging the value of even YOUR gold, and REQUIRING you to sell your gold at a government determined price (patriotic duty, economy needs more gold, good of the country, people suffering, mama needs an operation, etc.,).   

Silver has NEVER been the subject of that kind of a target, that kind of _outright confiscation_, in recent history.  Gold has.  That is actually the reason why I prefer silver over gold, and consider gold risky to own, even though I buy and hold both.   




> ...silver, not gold, is more convenient for average persons, who are in the  decided majority, and whose income and purchasing drives whole  economies.
> 			
> 		
> 
> Says you.


No. Says reason, logic, and common sense. I actually argued in detail why that is true.  You advanced no counter-argument, but merely dismissed it with a two word "Says you." non-argument.  




> Do you really think we are going to go back to a physical coin currency system again?


History says so. Utah says so.  And some version of an H.R. 1098 in the future could say so.   When the fiat currency finally dies the death, as all must and do at some point in the future, there is a very good chance. It's the only way to crank up the wealth-siphoning machine again.   




> Historically there was a role for silver because physical coins were in circulation.


Oh yeah?  Did you miss the part about the US silver purchase act of 1934, and why it was enacted in the first place? The Coinage Act of 1873 put us on a _de facto_ gold standard, and eventually served to drive silver coinage _completely out of circulation_.  There was "a role for silver" in 1934 ONLY because FDR had STOLEN everybody's gold, which left a void that needed filling!  

*The US silver purchase act of 1934 was enacted because there was a role for silver that was NOT IN CIRCULATION (but needed to be).* 




> If you think those days are coming back, then silver might make sense. But I do not think circulating gold or silver coins will ever come back.


Yes, I do think those days are coming back. The seed for it has been planted in Utah, and is germinating even now.  Many other states are looking to follow suit, and cock their snoots at the Fed.   There is no question in my mind but that there is a "states' rights" showdown on the horizon, and only because of the Federal governments inept handling of money and finance.  




> So there is NO NEED for silver to be a monetary instrument...


On whose behalf are your speaking when you say "NEED"? Your notion of its importance or lack thereof?  We can argue about that. The "need" of TPTB? They have failed us, and I don't give a $#@! about them.  I personally have a need for Sound Monetary Instruments, and so does the entire economy. Even if people can't articulate or understand what it means, they do feel the grave, and ultimately deadly, life-taking catastrophic effects of a thoroughly debauched currency.  




> Maybe in poor countries where physical might circulate, but again I don't want what they poor have, I want what the giants have.


Well, then put all your eggs in your gold basket, and good luck, as you may end up with neither. 

The Industrial Revolution in the US was built primarily on silver, not gold, as citizens of greatest economic superpower in the world traded almost exclusively in the white metal for thirty years, from 1934 to 1964.  That eroded for four years and was finally defaulted on in 1968 -- no more Silver Certificate redemption. Three years later, in 1971, the gold rug was yanked.  TWO RUGS--silver for Citizens and gold for Governments--yanked out from under everyone.  Nothing but worthless fiat currency from there.  Two short years later, in 1973, the PETRO-DOLLAR was born.  And even that is coming to an end. 




> Join the blog and start posting. There are plenty of anti-silverbug things said and I am sure you will find someone willing to fully(and more correctly) explain their stance.


No interest on my part. I read through some of it, and don't really see any profit in following "anti-silverbugs" around and trying to get them to see anything. Pearls before swine and all (figure of speech, no offense to them).  In the Ron Paul _Economics and Sound Money_ forum, however, I care very much. You may think I'm arguing with you for the sake of our two-way discussion.  That is the smallest part of why I am engaging with you.  I am arguing mostly for the other readers, and like minds, so that we can all hone our own understanding.

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