Silver as a currency

[LibertiORDeth]

Would it be possible to use Silver as a currency, without any bank notes? I mean, just have different sizes of silver coins used in replacement of the Federal Reserve currency? Obviously Gold is to valuable to use like this, except for larger amounts, since an ounce of gold is worth so much that you couldn't break it down small enough since a 1 dollar gold coin would be almost microscopic.

 

[ghemminger]

Would it be possible to use Silver as a currency, without any bank notes? I mean, just have different sizes of silver coins used in replacement of the Federal Reserve currency? Obviously Gold is to valuable to use like this, except for larger amounts, since an ounce of gold is worth so much that you couldn't break it down small enough since a 1 dollar gold coin would be almost microscopic.

I have been exploring this idea for many months...apparently - it is very difficult to set up a commting currency since everyone has to aggree to accept it.

Euros, Foriegn Curency Cash will be KING - Prices will change.

 

[acptulsa]

Ummm... You aren't aware that we did just this through 1964 and only stopped because inflation had reduced the stated value so far below the intrinsic value of our coinage that people were melting it down wholesale? You didn't know that a silver dollar was, indeed, a silver dollar and that we had such low inflation over the first 175 or so years of our republic that the dollar was worth an ounce of silver for most of that time?

Check your pockets some time. Odds are that if you watch your coinage for a week, you'll see a 1964 nickel or a 1965 quarter or dime come through your pocket. How can this be forty-three years later? They minted millions upon millions of nickels in 1964 so that when they introduced the copper/nickel sandwich "silver" (coins from the dime up) and the hoarding began, we'd at least have nickels to make change with. Likewise, the 1965 quarter was minted for three years--there are no 1966 or 1967 quarters that were minted for circulation--because they'd have had to stop the machines long enough to switch dies if they changed the dates!

 

[robert4rp08]

liberty dollar

 

[LibertiORDeth]

Ummm... You aren't aware that we did just this through 1964 and only stopped because inflation had reduced the stated value so far below the intrinsic value of our coinage that people were melting it down wholesale? You didn't know that a silver dollar was, indeed, a silver dollar and that we had such low inflation over the first 175 or so years of our republic that the dollar was worth an ounce of silver for most of that time?

Check your pockets some time. Odds are that if you watch your coinage for a week, you'll see a 1964 nickel or a 1965 quarter or dime come through your pocket. How can this be forty-three years later? They minted millions upon millions of nickels in 1964 so that when they introduced the copper/nickel sandwich "silver" (coins from the dime up) and the hoarding began, we'd at least have nickels to make change with. Likewise, the 1965 quarter was minted for three years--there are no 1966 or 1967 quarters that were minted for circulation--because they'd have had to stop the machines long enough to switch dies if they changed the dates!

I understand, but silver is worth a lot more now.

 

[kipload]

I understand, but silver is worth a lot more now.

You're still not getting it. If you were to use the silver as a coin you could call it whatever denomination you want, and value it to whatever amount you want. Your version of a dollar could equal 1 ozt. or 5 ozt. of silver... So your 1 ozt. "dollar" is worth roughly 17.40 (I think that was the spot price yesterday) Federal Reserve dollars.

Look at it this way, the silver version of a dime will always contain .0714 ozt. of silver. So... it is always worth the Federal Reserve dollar equivalent to .0714 ozt. of silver. The value of your silver dime never changes (it will always be .0714 ozt.); it’s the value (purchasing power) of the Federal Reserve dollar that fluctuates.

 

[Dave Pedersen]

Silver is up again today. Silver is the only substance with which to make a national currency. Gold has been hoarded and is too scarce so it can be "cornered". Silver is too abundant to be "cornered" Now a dollar could be established to equal one one hundredth of one ounce and that would lock the value at 100 dollars per ounce. Considering the undervalued bullion market I think that would be about right. One one dollar coin could contain 10% silver and weigh one tenth ounce. A quarter could contain 10% silver and weigh one 25th ounce or you could use a copper alloy for quarters and lower denominations or a nickel alloy. Paper $100 notes could be redeemable for one ounce of pure silver.

The aspect of redeemability could be limited to at least one hundred dollars in increments of one hundred dollars so the issuer of the silver would only have to stock multiples of one ounce of silver. Any combination of paper notes totaling one hundred dollars could be redeemable.

 

[Staupostek]

You're still not getting it. If you were to use the silver as a coin you could call it whatever denomination you want, and value it to whatever amount you want. Your version of a dollar could equal 1 ozt. or 5 ozt. of silver... So your 1 ozt. "dollar" is worth roughly 17.40 (I think that was the spot price yesterday) Federal Reserve dollars.

Look at it this way, the silver version of a dime will always contain .0714 ozt. of silver. So... it is always worth the Federal Reserve dollar equivalent to .0714 ozt. of silver. The value of your silver dime never changes (it will always be .0714 ozt.); it’s the value (purchasing power) of the Federal Reserve dollar that fluctuates.

It would be like having double pricing on everything. A new radio could cost $17 FRD (Fed Reserve Dollars) or $1 Silver, depending on the exchange rate (price of silver). Just like in Europe where things cost X Pounds Sterling or X Euros, depending on the exchange rate between Pounds and Euros.

 

[Dr.3D]

Actually, there is less silver out of the ground than there is gold.
Silver is more scarce than gold and thus it is much easier to corner the market on silver.

 

[Dave Pedersen]

Actually, there is less silver out of the ground than there is gold.
Silver is more scarce than gold and thus it is much easier to corner the market on silver.

I have never heard of that.. I don't believe it. Got some documentation please? Thank you.

 

[AceNZ]

Would it be possible to use Silver as a currency, without any bank notes? I mean, just have different sizes of silver coins used in replacement of the Federal Reserve currency? Obviously Gold is to valuable to use like this, except for larger amounts, since an ounce of gold is worth so much that you couldn't break it down small enough since a 1 dollar gold coin would be almost microscopic.

I think it would be a little difficult to replace all money with just silver as a competing currency (at existing prices), because it's so bulky. It would take more than 50 oz for each $1000 -- it's just very bulky.

What I think would be better is a gold-based money, with gold alloys on the low end. Any mint could easily divide gold into small quantities and mix with other metals. For example, with gold at $1000/oz (round numbers), then a new dime would have 1/10,000th of an ounce of gold mixed with enough copper (or nickel, etc) to be the familiar dime size. That way, it's much more manageable on the high end.

I also think it's important to re-label money with the weight of the metal, rather than a currency value. The problem with "dollars" is that the government feels free to redefine their meaning. That's not as easy with weight. A gram-based system would be great, using milligrams on the low-end: a new dime would have about 3.1 mg of gold, for example, a dollar 10 times that amount, etc.

 

[Dave Pedersen]

The value of nickel and copper are enough to produce viable coinage out of those metals. Or you could just keep the bullion redemption with respects to paper and make coins out of zinc. Most of the "money" in circulation is now in the form of electronic digits, about 95% of all transactions are purely digital. But at any time if people want to redeem currency for bullion they should be able to do so at some standardized rate of exchange. You could let gold float freely on the market and lock the dollar to silver. If the dollar is not locked to any metal then it is subject to arbitrary devaluation through over supply.

 

[Dr.3D]

I have never heard of that.. I don't believe it. Got some documentation please? Thank you.

I had to hunt a bit but here is what I've found on the web:

Why Silver's Ready to Double in a Year
http://news.silverseek.com/GoldIsMoney/1174838871.php

Value of Silver vs. Value of the Dollar
http://www.dailyreckoning.com/rpt/SilverValueVSDollarValue.html

 

[Trigonx]

I have never heard of that.. I don't believe it. Got some documentation please? Thank you.

after reading up on mining and the demand for silver and how its the only industrial metal that is also an investment metal.

you'll be surprised how undervalued silver actually is.

 

[Dave Pedersen]

I had to hunt a bit but here is what I've found on the web:

Why Silver's Ready to Double in a Year
http://news.silverseek.com/GoldIsMoney/1174838871.php

Value of Silver vs. Value of the Dollar
http://www.dailyreckoning.com/rpt/SilverValueVSDollarValue.html

Thanks. I misunderstood your phrase "out of the ground". I can see that the industrial demand for silver is tremendous and will play an important role in the long term value of silver vs. gold. I agree silver is way undervalued even more so than gold. Perhaps it is time to back currency with a semi-precious metal like nickel or copper.. but they also are limited and in high demand.

Bottom line the dollar must be locked to a commodity or it means nothing. Perhaps the Manhattans had the right idea all along..

 

[Dr.3D]

I have never heard of that.. I don't believe it. Got some documentation please? Thank you.

You see, gold is not used up in industry like silver is.
Nearly all of the gold ever mined is still sitting around in a vault someplace.
Silver on the other hand, gets used up by industry and thus there is little left.

As the governments sold out their stocks of silver, they kept putting it into the market and thus kept the price of silver down.

The price of silver has been suppressed for so long, many of the mines have gone out of business because they could not mine it for the price it was selling for.

Now with the price going up, they can not get back into mining production fast enough to keep up with the rising demand.

Here is another video about this:
Why is silver’s current supply/demand situation so important right now?
http://www.monex.com/expert/supply-demand-important.html

If you call Monex and tell them you would like the free DVD called Why Silver why now?
They will send it to you. You will probably get the other DVD called Why Gold Why Now along with it.

Hope this helps.

 

[theseus51]

You can use silver for currency. You can even use pieces of coal or sticks of wood for currency. It doesn't matter, as long as the other side agrees to accept it as currency (and offer you what you would deem a fair value in return).

I personally don't care for silver as much as the silver bugs here. Claims of "undervalued" silver, relative to gold, have been around for decades. You would've thought that the free market would've allowed silver to shrink the silver/gold price ratio, no? Or are there other sinister, central banks artificially keeping the price of silver down for the last 40 years? And yeah, silver gets used by industry, but gold gets used for jewelry and store of wealth. The most common use for gold is class rings btw. Just cause one is used for machines doesn't mean demand will skyrocket. Much of that silver is recycled, the way copper is. People don't just throw it away once they're done with it. Hell, if we recycle aluminum, paper, and plastic, three of the cheapest materials in the world, we are obviously going to recycle silver.

 

[fx57]

Silver dimes are worth around a dollar now. Just use that as the currency... $100 = 100 dimes. There's your new silver dollar.

You can buy them by the bag from places like Apmex. Well, I guess you get a bunch of quarters and halves in there too, but they would work good as $2.50 pieces and $5 coins.

 

[Dr.3D]

You can use silver for currency. You can even use pieces of coal or sticks of wood for currency. It doesn't matter, as long as the other side agrees to accept it as currency (and offer you what you would deem a fair value in return).

I personally don't care for silver as much as the silver bugs here. Claims of "undervalued" silver, relative to gold, have been around for decades. You would've thought that the free market would've allowed silver to shrink the silver/gold price ratio, no? Or are there other sinister, central banks artificially keeping the price of silver down for the last 40 years? And yeah, silver gets used by industry, but gold gets used for jewelry and store of wealth. The most common use for gold is class rings btw. Just cause one is used for machines doesn't mean demand will skyrocket. Much of that silver is recycled, the way copper is. People don't just throw it away once they're done with it. Hell, if we recycle aluminum, paper, and plastic, three of the cheapest materials in the world, we are obviously going to recycle silver.

Yes, there is suppression of the price of silver and gold. This is why there is probably no gold left in Fort Knox. When the government decided to end the gold and silver standard, they started selling their silver reserves. As those reserves were slowly placed onto the market, the price of silver was kept artificially low. Other countries have also been putting silver into the market for years. Now after all of those 40 some odd years, they have started to run out of silver to place on the market and the price is going up.

While it is true much of the silver is recycled, there are a lot of chemical reactions that use silver and when they are finished, it goes down the drain, lost forever.
Many circuit boards are just thrown away when they are finished using them. They go to the land fill. Just because silver can be recycled, it doesn't mean it is always recycled.

If you don't like silver, then don't buy it.

 

[JSutter]

I personally don't care for silver as much as the silver bugs here. Claims of "undervalued" silver, relative to gold, have been around for decades. You would've thought that the free market would've allowed silver to shrink the silver/gold price ratio, no?

Check your history. Silver went to over $50 an ounce in the 80's [more than 3 times what it is was at the start of this year not even taking into account inflation]. Everyone who had silver lying around the house or had silver jewelry, or heirlooms were melting them down. The US government had a ton of silver that they dumped on the market to bring the price down again to keep inflation in check. The combined effect of all the individuals selling their silver and the government silver hitting the market did exactly what the government wanted. It brought the price way down and slowed inflation.

Now fast forward 25 years, there have been tons of new uses for silver from photography to circuits in computers and audio equipment to RFID tags for tracking shipments to lining clothing with microscopic amounts of it to kill germs to making keyboards embedded with silver to kill germs in hospitals [siler is anti-microbial that's why people used to keep silver dollars in the bottom of their milk containers]

A lot of the uses of silver end up taking it off the market for good, it doesnt get recycled much because it's in photographs, or electronics equipment, etc, etc, etc. But demand stays consistent and most of the easy sources of silver are gone. The government doesnt have a huge store anymore, very few people have real silver utensils, platters, bowls, etc in their cupboard anymore. The jars of silver coins are gone from most dresser drawers because they were cashed in long ago.

Demand has been outpacing new supply for years which is why you've been hearing silver was undervalued for years. Every year the available silver supply tightens a bit more which is why prices have been steadily creeping back up. Now with people worried about the US dollar and people wanting to invest in silver the industrialists are competing with investors for the silver supply and a lot more people are buying it and holding onto it.

Bottom line is pretty soon $18 an ounce won't be enough to get people who are holding silver physically to turn it in because they'll want to hold onto it like most people on this board are doing. Then the market will have to pay $20 an ounce, once the people willing to sell at $20 dries up it'll go higher and etc, etc.

Once prices come up more you'll probably see a huge surge in silver sales coming out of India where a lot of people wear it from jewelry, same has been happening with gold recently, people who have it are sellin g it because a few pieces now equal more than they make in a year.

That will help keep prices from soaring for a bit longer but sooner or later demand will be much greater than supply and you will see very high silver prices. I'm not talking about next year or two years from now. I'm talking long term. If you can afford to buy it now and hold it for 10-20-30 years then do it. I can guarantee you'll see a good return on your money and it's a lot safer bet than holding paper money in the bank or a bond or something of the sort.

You won't see enough of a return to be able to buy only silver and retire on it but it will be a hell of a compliment to a 401k or an IRA and it's good to have something physical to fall back on if all else fails.