Silver = something to think about it especially now.... ~ HS

[HistoryStudent]

http://www.silverseek.com/print/4206

Enjoy... ~ HS

[smilershouse]

Great article HS, thanks for posting.

And not because the article confirms my current belief, but because the fundamentals and commonsense are in place.

SH

[KnowLaw]

And not because the article confirms my current belief,...

With all due respect, I don't think you meant to equate what is occurring in the markets with any kind of "belief" (which implies mental acceptance of something as true, even though absolute certainty may be absent), but rather with common sense. The quote below from the article confirms what we all already KNOW to be true:

The repayment of debt (or default on debt – which is more likely) will result in significantly reduced economic activity. Significantly reduced economic activity will have a negative effect on the stock market, which in this case, will likely result in a huge crash. It is these conditions (a deflating debt bubble) that will drive gold and silver prices significantly higher.

Why? Because this will not just be a normal type of reduced economic activity, but one in which the monetary system as a whole is questioned or collapses (due to the excessive debt levels).

In a crisis like this, it will be all about preserving value, which will make gold and silver the most wanted goods. The excessive debt levels we have currently, mostly represent artificial value, or value that will never be realised. We now have a great opportunity to convert that soon to be destroyed value into real value, by buying gold and silver, with fiat currency.

That this economy is "artificial" (over and above any artificial value in the debt that has been built up in people's perception) and has been for many decades (being propped up in the background by deep pockets) is only one more indication of the on-going ponzi scheme that has been playing out ever since elastic "money" became the medium of international exchange.

There's no question in any of the minds of those in and or familiar with the precious metals industry that gold and silver will, at some point, need to be revalued (in the mass perception) as against fiat debt-based currencies which represent less than zero value to their holders. Once it dawns on the common man that what he is holding in his hands (be it a U.S. dollar bill, a French franc, a British pound, an Italian lire, a Japanese yen or whatever) is less than worthless, there will be a massive stampede toward commodities that hold and historically have retained their value, i.e. gold, silver, platinum, palladium, and other substantive commodities like oil and natural gas (not to mention food!).

[cpthnsolo]

I personally believe Silver will outperform gold slightly if and when metals ever take off, but I have to take issue with the title of the article versus the content. In huge bold letters the title reads, "Silver Could Preserve More Value Than Gold." However there is very little in the article to substantiate such a claim. The author's main case for stating this is:

In my opinion, silver bullion presents the better opportunity, when compared to gold. Silver bullion is still trading much lower than its 1980 high, and also at relatively historic lows against gold.

1) The 1980 high was an outlier that was a result of the Hunt brother's shenanigans. As such using it as a point of reference w/o mentioning what caused it really weakens an argument.
2) "relatively historic lows against gold" -- This is more GSR speak and it's correct when you consider all of known history. However I feel a MUCH more relevant/accurate GSR is found in the average since 1970. The average from 1970 through 2010 is just over 54 and right now we're at 55.55. In other words, the GSR is smack dab in the middle of it's 40+ year range.

FWIW I consider myself a silver-bug as I believe Ag will outshine Au in a time of crisis, but I hate reading silver articles where they reference the '80 high without a disclaimer and the "historical" gsr ratio. Honestly though we're splitting hairs on the subject at this point as anyone buying Ag or Au right now is going to be way ahead of 98% of the population whenever inflation gets here.

[HistoryStudent]

I kinda feel like Richard Russell... I'll let him say it...


"This time it really is different!"

[Gcubed]

I kinda feel like Richard Russell... I'll let him say it...


"This time it really is different!"

I wish I'd dumped it ALL a year ago last April. I'd STILL be waiting for a re-entry point.

Maniac Pumpers cost ya money.

EOM.

[southfork]

I wish I'd dumped it ALL a year ago last April. I'd STILL be waiting for a re-entry point.

Maniac Pumpers cost ya money.

EOM.

Only if you let them, good thing we have a balanced bull/bear ratio here.

[andial]

The title says it all,

Silver Could Preserve More Value Than Gold

[Gcubed]

The title says it all,

Silver Could Preserve More Value Than Gold

Pigs Could Fly To The Moon

[KnowLaw]

The title says it all,

Silver Could Preserve More Value Than Gold

Gcubed:
Pigs Could Fly To The Moon

Nice one, Gcubed.

But the real question here is: Will silver be allowed to "preserve more value than gold" given the wide discrepancy in the historical gold to silver ratio.

If silver can get back to even a 1:30 ratio, at $5000 gold that would be $166 in silver. That's not a bad gain from it's current under $30 the ounce (553% rise compared with gold's 313% rise from its current $1600 level).

Of course, that is a big "if" in that scenario.

[Gcubed]

IF silver gets to that ratio, I'm DUMPING every gram!!

[<===Foolsgold]

Simple truth, if the stock market sells off, silver will tank.

Don't get pissed off at me I own the sh_t too.

[Saguaro Kid]

Due to the unforeseen circumstances I would hesitate to articulate on such a delicate subject.

[HistoryStudent]

Due to the unforeseen circumstances I would hesitate to articulate on such a delicate subject.

That reminds me of the judge telling the pro-per defendant who was representing himself - that he had a "fool" for a client.

Yes, we never know what the future may hold when gold and silver sell physically in the same equal fiat amount when the ratio is around 55 to 1 now - and
the kicker - they only get it out of the earth at a 10 to 1 "ish" ratio.

I guess the HONEST question is:

If you take something out of the earth by mining (one of only three ways to make money in capitalism: mining, manufacturing, agriculture)
at 10 to one against gold. And the ratio in price is 55 to ONE and the money spent is ONE TO ONE - then...

[Fiat Metaler]

I personally believe Silver will outperform gold slightly if and when metals ever take off, but I have to take issue with the title of the article versus the content. In huge bold letters the title reads, "Silver Could Preserve More Value Than Gold." However there is very little in the article to substantiate such a claim. The author's main case for stating this is:



1) The 1980 high was an outlier that was a result of the Hunt brother's shenanigans. As such using it as a point of reference w/o mentioning what caused it really weakens an argument.
2) "relatively historic lows against gold" -- This is more GSR speak and it's correct when you consider all of known history. However I feel a MUCH more relevant/accurate GSR is found in the average since 1970. The average from 1970 through 2010 is just over 54 and right now we're at 55.55. In other words, the GSR is smack dab in the middle of it's 40+ year range.

FWIW I consider myself a silver-bug as I believe Ag will outshine Au in a time of crisis, but I hate reading silver articles where they reference the '80 high without a disclaimer and the "historical" gsr ratio. Honestly though we're splitting hairs on the subject at this point as anyone buying Ag or Au right now is going to be way ahead of 98% of the population whenever inflation gets here.

1. if you buy something good when it is expensive, if will protect your purchasing power less well than if you buy something good when its cheap. yes, this is basically a GSR argument, but the same rationale applies to land, stocks, bonds, etc. just because something is a quality asset does not make it a good buy - price matters.

2. why do you look only at the GSR since 1970? this is the era of paper money. if you have such a narrow historical view, then look only at a chart of paper money or stocks since 1970 - they do fine. on the other hand, if you understand that there is a fatal flaw to the paper money era, then it would be necessary to look at the GSR prior to 1970. For most of history, the GSR has been under 17. It was the demonetizataion of silver in the latter part of the 1800s that got the GSR out of whack. I probably won't convince you that the GSR ought to be 17 or will be 17, but at least consider the contradiction of your skepticism of paper assets with a reference to a GSR timespan that encompasses only the paper asset era.

[graspAU]

PIIGS Could Fly To The Moon

Correct economic spelling.

Silver is too bulky. Good to have some, but not too much.

[TimoneX]

Correct economic spelling.

Silver is too bulky. Good to have some, but not too much.

Central bankster scumbags like gold...not silver. I like both, but I like silver more in part because they don't have any of that barbaric relic.

[Irons]

I would add a snip here but the clear thinking gold bugs have me covered.

The pie in the sky crowd will never learn, but oh, will they whine and claim victimhood.

[TimoneX]

I would add a snip here but the clear thinking gold bugs have me covered.

The pie in the sky crowd will never learn, but oh, will they whine and claim victimhood.

That hurt my feelings. Why am I always being attacked? ;p

Happy?

[Gcubed]

That hurt my feelings. Why am I always being attacked? ;p

Happy?

C.C. Joe aint around and you drew da short straw?

[TimoneX]

Everyone gets a turn buddy!

Thinking of stacking some copper bars too...

[Irons]

Everyone gets a turn buddy!

Thinking of stacking some copper bars too...

......................

[Garyw]

I have given up on stacking silver for it to go sky high. I am holding for the rapture. or rupture. Dollars no longer have any value. No matter how many dollars it costs it is a bargain. If you intend to sell when it gets worth 50 or 100 dollars an ounce you are wasting your time trading back for worthless dollars. The best strategy is to hold till it is worth more than real estate. Then invest in dirt. You might get lucky and have oil and metal in your dirt.

[HistoryStudent]

http://en.wikipedia.org/wiki/Silver

Silver is money in the Bible at 2,000 BC with Abraham buying the lot.

ALSO = Joseph selling his brothers grain for silver to keep the 70 from starving in a drought.

In fact:

Silver was money in history for all common goods from 5,000 BC in SLAG form.



I like the fundamentals.

They take it out of the earth at about 6.5 to 10 to 1 against gold coming out.

However they spend one fiat unit each at one to one every day (dollar for dollar like) so at the ratio they are buying up silver
many times faster then physical gold.

I think if you just want gold great that your choice.

(I always wonder why somebody hates silver when silver was the common man's REAL money hundreds of years before gold left the KING
only money).


Gold has always been money too. Genesis 2. Right after in the beginning.

Soon a barrel of oil will trade for a silver eagle...

[Oz Waver]

http://en.wikipedia.org/wiki/Silver

Silver is money in the Bible at 2,000 BC with Abraham buying the lot.
ALSO = Joseph selling his brothers grain for silver to keep the 70 from starving in a drought.

In fact:
Silver was money in history for all common goods from 5,000 BC in SLAG form.

I like the fundamentals.
They take it out of the earth at about 6.5 to 10 to 1 against gold coming out.
However they spend one fiat unit each at one to one every day (dollar for dollar like) so at the ratio they are buying up silver
many times faster then physical gold.
I think if you just want gold great that your choice.
(I always wonder why somebody hates silver when silver was the common man's REAL money hundreds of years before gold left the KING
only money).
Gold has always been money too. Genesis 2. Right after in the beginning.
Soon a barrel of oil will trade for a silver eagle...

I like your thinking HS. However how long does it take for silver to be wiped out from the minds of the population?

It's been over 40 years since it's been actually used (at least partial) in nearly all countries and longer than that for actual exchange (for most).

Although I think that silver is money, valuable and may even have a little tucked away myself, but I've got to play Devil's Advocate here.

What if both silver and gold perform badly. People are so brainwashed and what we are seeing at the moment is massive "Hyper stagflation", what if it just continues and the whole middle class becomes poor and we have a small elite and those that work for them.

A lot of countries don't have any equality at all and people just don't have money to exchange for silver or gold and they also don't see the value in it. I doubt that there'll be enough time for the majority to be re-educated to see the value in precious metals and especially silver.

We have seen TPTB purchase "gold" and make the case for gold as central banks have been seen valuing it as part of their holdings.

However videos like Mark Dice really do confirm the public's complete ignorance of precious metals.

The whole reason to hold gold and silver is to use it as a store of value and a medium of exchange but we need others to view it that way too. So perception is possibly the most important thing ever.

What if... gold and silver never reach their potential in the possible scenarios for the future? How could that happen?

[Fiat Metaler]

I like your thinking HS. However how long does it take for silver to be wiped out from the minds of the population?

It's been over 40 years since it's been actually used (at least partial) in nearly all countries and longer than that for actual exchange (for most).

Although I think that silver is money, valuable and may even have a little tucked away myself, but I've got to play Devil's Advocate here.

What if both silver and gold perform badly. People are so brainwashed and what we are seeing at the moment is massive "Hyper stagflation", what if it just continues and the whole middle class becomes poor and we have a small elite and those that work for them.

A lot of countries don't have any equality at all and people just don't have money to exchange for silver or gold and they also don't see the value in it. I doubt that there'll be enough time for the majority to be re-educated to see the value in precious metals and especially silver.

We have seen TPTB purchase "gold" and make the case for gold as central banks have been seen valuing it as part of their holdings.

However videos like Mark Dice really do confirm the public's complete ignorance of precious metals.

The whole reason to hold gold and silver is to use it as a store of value and a medium of exchange but we need others to view it that way too. So perception is possibly the most important thing ever.

What if... gold and silver never reach their potential in the possible scenarios for the future? How could that happen?

its been 40 years since silver has been used as money, but 80 years since gold has been used as money. did that point escape you?

the chinese are buying gold and melting 100 kg bars into 1 kg bars. as pms become further integrated into money, and more broadly, the size per transaction goes down.

[HistoryStudent]

its been 40 years since silver has been used as money, but 80 years since gold has been used as money. did that point escape you?

the chinese are buying gold and melting 100 kg bars into 1 kg bars. as pms become further integrated into money, and more broadly, the size per transaction goes down.

The KEY word is CONFIDENCE. And sadly, the whole world is LOSING CONFIDENCE in their post 1971 "FIAT WORLD."

Sadly, only because it was mismanaged and looks like we are speeding toward a new non-paper "safe haven."


It's kinda like being damned if you are right and damned if you are not. With the mess coming.



The reason we have this HUGE deflation event worldwide is that so much PAPER is burning therein.

This was caused by a SEVERE reaction of the world toward a huge loss of money velocity (everybody holds on to their money)
and a severe default (read bank-RUPTURE) worldwide. Think major bubbles BURSTING 'round the globe.

That leads to a ROLL-a-COASTER event and severe ups and downs in the entire marketplace just like in Rome 2,000 years ago.
Something goes way up and then something goes way down. MOST sheeple follow their TV, Newspaper, Business News and get screwed both ways.

HOWEVER, Some Asian countries have told their populations to gain confidence in precious metals.


There's that word again...

[anywoundedduck]

Everyone gets a turn buddy!

Thinking of stacking some copper bars too...

Best to ignore those who are bashing silver, IMO.

The fact is, the chickens are coming to roost, and soon, it will be judgement day for those Banksters who are shorting silver on the Crimex. Despite the Banksters overt manipulation of the price of silver, down more than $1.50 on Friday, rather than starting a stampede for the door on the long side of the Comex Open Interest. much to the Banksters chagrin, the longs held fast and increased their Total positions (all months) by a record of over 6,000 contracts, for a total of nearly 128,000 contracts. (This represents nearly twice the number of ounces supposedly being held in trust in the ETF, SLV.) But what really has the Banksters losing sleep, is that the delivery month of July begins in only 4 days. And much to the astonishment of the Banksters, rather than selling off, the longs increased their open interest for July delivery by 150 contracts, with a total of over 34,000 contracts standing for delivery. (170,000,000 ounces).

I wonder what a default to deliver would do to the price of silver?

You can read all about it here:
http://harveyorgan.blogspot.com/

As Sgt. Joe Friday would say, "Just the facts mam, just the facts."

[HistoryStudent]

Best to ignore those who are bashing silver, IMO.

The fact is, the chickens are coming to roost, and soon, it will be judgement day for those Banksters who are shorting silver on the Crimex. Despite the Banksters overt manipulation of the price of silver, down more than $1.50 on Friday, rather than starting a stampede for the door on the long side of the Comex Open Interest. much to the Banksters chagrin, the longs held fast and increased their Total positions (all months) by a record of over 6,000 contracts, for a total of nearly 128,000 contracts. (This represents nearly twice the number of ounces supposedly being held in trust in the ETF, SLV.) But what really has the Banksters losing sleep, is that the delivery month of July begins in only 4 days. And much to the astonishment of the Banksters, rather than selling off, the longs increased their open interest for July delivery by 150 contracts, with a total of over 34,000 contracts standing for delivery. (170,000,000 ounces).

I wonder what a default to deliver would do to the price of silver?

You can read all about it here:
http://harveyorgan.blogspot.com/

As Sgt. Joe Friday would say, "Just the facts mam, just the facts."

Seems to me everyone with those "standing for delivery orders" are playing like George Soros did against the National Bank of England - and he won a BILLION
(read 1,000 MILLIONS) for his trouble - or should I say theirs when they had to cover their British Pound in fiat.

************************************************** ***************************


Currency speculation

On September 16, 1992, Black Wednesday, Soros' fund sold short more than $10 billion in pounds,[22] profiting from the UK government's reluctance to either raise its interest rates to levels comparable to those of other European Exchange Rate Mechanism countries or to float its currency.

Finally, the UK withdrew from the European Exchange Rate Mechanism, devaluing the pound, earning Soros an estimated $1.1 billion. He was dubbed "the man who broke the Bank of England".[27] In 1997, the UK Treasury estimated the cost of Black Wednesday at £3.4 billion.

On Monday, October 26, 1992, The Times quoted Soros as saying: "Our total position by Black Wednesday had to be worth almost $10 billion. We planned to sell more than that. In fact, when Norman Lamont said just before the devaluation that he would borrow nearly $15 billion to defend sterling, we were amused because that was about how much we wanted to sell."

Stanley Druckenmiller, who traded under Soros, originally saw the weakness in the pound. "Soros' contribution was pushing him to take a gigantic position."[28][29]

In 1997, during the Asian financial crisis, the Prime Minister of Malaysia Mahathir bin Mohamad accused Soros of using the wealth under his control to punish the Association of Southeast Asian Nations (ASEAN) for welcoming Myanmar as a member. (~ HS note his old partner Jimmy Rogers just used national TV to suggest INVESTING in Myanmar - funny about how it's nice to know where the bodies are buried, and how they all stick together right?)

Following on a history of antisemitic remarks, Mahathir made specific reference to Soros' Jewish background ("It is a Jew who triggered the currency plunge"[30]) and implied Soros was orchestrating the crash as part of a larger Jewish conspiracy. Nine years later, in 2006, Mahathir met with Soros and afterwards stated that he accepted that Soros had not been responsible for the crisis.[31] In 1998's The Crisis of Global Capitalism: Open Society Endangered Soros explained his role in the crisis as follows:

The financial crisis that originated in Thailand in 1997 was particularly unnerving because of its scope and severity.... By the beginning of 1997, it was clear to Soros Fund Management that the discrepancy between the trade account and the capital account was becoming untenable. We sold short the Thai baht and the Malaysian ringgit early in 1997 with maturities ranging from six months to a year. (That is, we entered into contracts to deliver at future dates Thai Baht and Malaysian ringgit that we did not currently hold.) Subsequently Prime Minister Mahathir of Malaysia accused me of causing the crisis, a wholly unfounded accusation. We were not sellers of the currency during or several months before the crisis; on the contrary, we were buyers when the currencies began to decline – we were purchasing ringgits to realize the profits on our earlier speculation. (Much too soon, as it turned out. We left most of the potential gain on the table because we were afraid that Mahathir would impose capital controls. He did so, but much later.)[32]

The nominal U.S. dollar GDP of the ASEAN fell by $9.2 billion in 1997 and $218.2 billion (31.7%) in 1998.

Economist Paul Krugman is critical of Soros' effect on financial markets.

"[N]obody who has read a business magazine in the last few years can be unaware that these days there really are investors who not only move money in anticipation of a currency crisis, but actually do their best to trigger that crisis for fun and profit. These new actors on the scene do not yet have a standard name; my proposed term is 'Soroi'."[33]

************************************************

I suggest in the long run the physical price of silver will soon be many times the paper price - for some reason... Just call it a shot in the ASS(ETS).

In history it is all easy to find the who, what, where, and when. The DIFFICULT "stuff is the HOW and WHY!"