We’re seeing the argument, again, that silver stocks are being consumed in solar panels, medical applications and, of course, electronics. This argument has a certain temptation. After all, the standard assumption is that value is inversely proportional to quantity. Purchasing power is widely believed
Motivated Reasoning About Silver
Summary
- The dollar has (by far) the greatest quantity, and yet, far from the least purchasing power. It is one of the strongest currencies, despite - or perhaps because of - this fact. Also, the price of silver measured in dollars does not go up as a function of increases in the quantity of dollars.
- Therefore, the logic of silver becoming more valuable strictly on account of its decreasing quantity is broken.
- Silver is going up! It’s easy to lose sight of where things are headed, and why we took what might have been an inconceivable action before 2008 - buying silver - because the price action is exciting.
I'm founder of the Gold Standard Institute USA in Phoenix, Arizona, and CEO of precious metals fund manager Monetary Metals. I created DiamondWare, a technology company which I sold to Nortel Networks in 2008.