Silver - Better Than Gold, But Still a Commodity 17 comments
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My take that gold was not a measure of anything except the desire to hoard - and my six reasons why gold is not a currency anymore brings me to my thesis on silver. Argentinum. Silver has been separated from lead and used in jewelry from 3000 BC. Now silver is a lot unlike gold.
Twenty five percent of silver is used in jewelry plus cutlery. I like silverware - I think it looks nice when it isn’t oxidized. Seventeen percent of all silver was used in one industrial application in 2006 - photography. It represented the seventh consecutive ten plus percent annual decline in use for this application. For three of the seven years, plasma TV picked up the slack, but silver is not used as extensively in the manufacture of LCD TV’s [or DLP]. The industrial use of silver has increased every year for the past decade - despite significant decrease of its use in photography.
The US government does not have any more silver in its strategic reserves - the last of it was shipped to the US Mint in 2001 for use in making pretty coins that are sold at $$$ numbers far exceeding their face value. I like silver coins. I think they look nice and shiny, and they will not dent your wallet as badly as gold will.
The EU outlawed the use of lead in solder. So Europe uses silver - to solder stuff - but of course, they ship whatever needs to be soldered in large quantities - to China, where it is still legal. Despite the decrease of the use of silver in photography, its use in superconducting electrical equipment, plasma TV’s and electronics - will increase - as will the use of silver for conventional photography and X-rays in developing countries [read India/China].
I think that going forward a decade, the decrease of silver’s use in photography in developed countries - will offset its use in industrial applications. I expect the use of silver in jewelry to stay constant, and its use in silverware will decrease with an increase in the price of silver. For the exact world production, demand, supply numbers, look at this article published by the silver institute.
So,
a. Silver is useful. It has thousands of industrial uses, and is a better conductor of electricity than gold. But it does oxidize, and silver oxide is not shiny, nor is it as good a conductor of heat/electricity as pure oxygen-free silver.
b. Silver is an industrial metal. Hoarding, jewelry and silverware are part of the silver pricing equation, but a much smaller percentage than it is with gold.
but, as with gold, it is not currency, nor a metal that is inherently valuable for just sitting around. It is valuable because it is useful. Buying silver will incur the speculator a significant bid/ask spread [the smaller the quantity, the worse the spread]; and, since it occupies more space than gold, one spends more money storing and insuring their silver hoard.
Bottom-line: Unless you are in a business that uses silver [or mines/purifies silver], investing in silver is an act that is in-line with speculating on a commodity. A commodity that once was a proxy for currency, but whose current industrial usefulness far exceeds its shine.
Disclosures: I do not speculate.
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This article has 17 comments:
Two decades ago, the ratio was around 17. Granted, times and conditions have changed but such a discrepancy doesn't seem to be justified.
Injury to insult is that NONE have resisted inflating the paper, money receipt from nothing, money supply to spend on themselves, and wars for profit, only to be paid back with INTEREST on the backs of those not even born yet.
The world has been decivilizing ever since the bankers put their roadblocks to freedom and prosperity with their govt sanctioned monopoly cartels that preclude ANY competition.
Doubt me?
Check out the horrors of inflation - unbelievable!
Seizing Your Assets To Cover Retirement Promises: How The Government May Do It
news.goldseek.com/Gold...
PM's NOT REAL MONEY YOU SAY?
How Abolishing the Fed Would Change Everything (for the better)
mises.org/multimedia/m...
Get Government Out of Coin Manufacture
www.mises.org/story/31...
The Corrupt Origins of Central Banking
www.mises.org/story/31...
(maybe the author knows more than this mere clown does?)
Thomas Paine on Paper Money
mises.org/story/2942
(Or this one? Concentrate on section II please author - it defines money)
What Has Government Done to Our Money?
mises.org/money.asp
I'd love to hear any feedback please!
BTW, Keynes & Marx loved fiat money, of course they were BOTH in the banker's pockets as were MOST ALL the progressive intelligensia of the time from media to academe to govt. All schooled by the same teachers of the Euro-dictators, whose policies we copied, from master race eugenics to planned societies and economies, like that grand success the USSR.
www.lewrockwell.com/bl...
Disclosure , I LOVE SILVER,have LOTS of it ,and WANT MORE !!
mises.org/multimedia/m...
But there is. In fact, the owner of five ounces of the PCGS MS 65 will gladly trade his coins for one of the 70 [since he values the coins in fiat currency anyway].
Bapcha
It is the same logic as saying a Van Gogh is worth a couple of bucks based on the value of the paint and frame.
Please see this one:
What Has Government Done to Our Money?
mises.org/money.asp
AS I said, concentrate on the true meaning of money. OW your entire view is corrupted with a foundation of clay.
Just as the general American understanding of our own history - what the state has compulsorily imbued for over 100 years, has most of us fully BS'd with its nonstop creation of problems that lead to the freedom stealing solutions that was govts ends in the 1st place.
Not only that, but it is FIAT that allows the debt finance of wars on the unborn that the people would NEVER stand for if taxed for wars in the here and now boys.
As to the value of gold:
I think the key questions are these:
1). Is the US dollar going to become substantially devalued over the next let us say 2-5 years due to money-printing efforts to prop up the economy?
2). If so, will the decline in the dollar be accompanied by a rise in the price of gold?
3). If not, when people flee the US dollar what will they put that money into?
I believe the answer to 1 is yes and the answer to 2 is yes. And because of the small amount of gold vs fiat money it doesn't take much of the fiat money to be put into hard currency (gold) to raise the price of hard currency.
But there is not enough gold for it to serve as safety net for people fleeing the dollar. Most of the money fleeing the dollar will probably go, I would think, into stocks and real estate.
Second..the silver will suffer because of photography nonsense has been discussed on credible sites for years..the numerous uses for silver..in water purification to name but one of HUNDREDS...more than make up for whatever silver use is lost from other sources.
Finally..what is someone who doesn't speculate doing writing an article discussing metals that are highly speculative?? Speaks to the point of not having the guts to back up opinions..a really pathetic article.
Now if thats not inflation buddy, NOTHING is.
JPM = Federal Reserve = fraudulent criminals who've broken constitutional law in 1913. The Congress, Wilson & SCOTUS were ALL equally criminal and complicit.
Separation of powers is meaningless when ALL three branches are run and positions filled by the CFR/NWO/Int'l Banking/MICC cabal.
As banking & Wall Street outsider Joe Kennedy said, "fifty men run the country, and thats a high figure"
For the really inquisitive - get your mind blown at just how damn incestuous our govt of professional criminals really is:
Wall Street, Banks, and American Foreign Policy
www.lewrockwell.com/ro...
And good on Geo & Bot for knowing the score damn few Americans even have an inkling of.
1) Industrial patents for silver exceed those of all other metals combined.
2) The drag on the supply and demand balance from declining photography usage is declining.
3) Because many countries spent decades eliminating their stockpiles of silver, traditionally mining supply was necessary to satisfy no more than 85% of demand. In the last few years this has ended (with the exception of China and to some extent India). This means mining must go from supplying 85% of demand to nearly 100% of demand. This adjustment cannot be made in the short run. Imply a huge spike in silver sometime in the next few years.
However I must say that the informal economy is trading Eagles, Maples and Kangaroos from hand to hand, and while care is taken to preserve gold coins in good condition, they are money coins, not numismatic rarities -- i.e., merely an ounce of .999 gold in a recognizable shape, easily exchanged in private trade or over the counter at a coin shop according to a daily buy/sell spread.
I like silver coins and bars because I think silver has farther to run up in dollar value, central banks have no supply, and silver is handy to pay in settlement of smaller bargains. Those of us who use PM coins may be many or few, but it leaves no paper trail.
jimrogers-investments....
Jim says he prefers Silver to Gold.