This is Why NO $50 Silver

Silver use is fading as technology advances.

dentist used to use silver in fillings , now most use tooth colored expoxy filling

photography was/is a big user of silver... Digital formats are taking over motion film, photos,microfilm,slides.

silver is used in high electronics contacts , but most electronical stuff is junk from china with very little silver or gold plate used in them.
even big names have cut PM use to make manufacturing cheaper.

Silvers main employer is jewlery , Women are buying stainless steel /brushed nickel alternatives becuase its cheap. Cheap earings,necklaces,braclets are being sought by
savvy shoppers ,wear it a few times ,with a few outfits ,to match a pair of shoes bought then in the forgotten box it goes. Off to by another set off $10 earings to match a new dress.

If you think about it gold /silver have been jewlery objects for thousands of years to soft for a industral use. Didn't have electric thousands of years ago they didnt know it was
excellent conductor.. yet people fought , killed and died for gold.

Makes you wonder what got programed into the human mind that " gold " has value....sure its scarce... but a thousand years ago it had no use other then decorative objects
take a piece of gold to the middle of the amazon find a tribe tha does not know of modern day man... I bet if the found gold in a nugget it would be overlooked as they roamed around the
jungle looking for something to kill and eat

In a nuclear fallout I bet silver and gold would take a backseat to radio active free food and shelter...

 

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That is ultimately one of the solutions to hyperinflation, however it comes hand-in-hand with total austerity. Once you can't print money anymore, you can't spend beyond your means, so all of the cuts that need to occur now will occur eventually. The question is if it will happen before hyperinflation -- like SilverCeder said, via politicians who are willing to be sacrificial lambs, because they'll go down in history as having caused the Greatest Depression -- or after hyperinflation when common people understand finally that it has to be ended any way that it can be. Human nature virtually assures the latter. We have to touch the stove and get burned before we'll believe that it's hot.

If people like PBS programming, they'll watch that same programming as a normal commercial network. Or it will remain supported by charitable billionaires like David Koch and "viewers like you". The fact is that public funding (taking by force from people and giving to others) does not work. No matter how wonderful the intentions, no government program is ever going to be as successful (or successful at all) as the same intention accomplished in the private sector. Even Bill Clinton has a private charity and does fundraising for that -- if he was such a fan of government, why not just give them the money? Same with government-flatterer Warren Buffet. Why not just pay everything in death taxes instead of gifting it to the Bill Gates Foundation? Two-faced government proponents will say we need higher taxes but then put their money into private charity and private business because they know better than to trust it to government. When a bureaucrat spends money that isn't his on someone he doesn't know, he doesn't care if it is spent efficiently or if the service is effective. Humans work best with "skin in the game".

There's silver in every iPhone, solar panel, and Prius. It's being infused into hospital sheets, water purification, and sportswear. Industrial demand for silver is stronger than ever. And it mostly isn't price sensitive. The amount in each product is so small that it doesn't matter if the price increases ten fold -- industrial demand won't wane. But it's the monetary demand that's going to blow the price out of the water.

They would also overlook a thumbdrive or Rolex. So what? Gold is useful as MONEY. That is it's principle use. In a society that doesn't trade, you don't need money. But the rest of the planet does, and gold is the best thing in the world suited to be money. That's why it's valuable.

And what, pray tell, would you do with more food than you could eat? It would just spoil and be useless. Imagine if instead you could trade it with some other hungry survivors for something which never spoiled? Something which you could trade for something else you need, like clean water? And the guys who have water don't need your food, but could use some shelter, which you can't spare. But the ones with extra shelter need food, not water. Now you could try to work out some kind of complicated barter arrangement if you knew all three parties, but what if none of you knows each other? Wouldn't it be great to have some "medium of exchange" that you could trade between each other which never spoils and thus is a good long-term "store of value". Something that you could divide up into as many units as you want, and each would be worth the same as every other one of equal weight? And it's suitably rare enough and difficult enough to acquire that it won't be devalued through oversupply? Yeah, that's gold and silver.

 

I'm not saying we should all have to pay for it involuntarily or that the government should run it, far from it. Unfortunately PBS and the Arts channel are the only channels I can watch without advertising attacking my subconscious. PBS has objective news stories and gives you the real deal unlike commercial networks which bombard you with subliminal messages and propaganda. I refuse to turn them on, so I guess I'll just end up finally breaking down and getting Netflix. It just erks me that we have to cut basic services, whatever they may be, whether or not they deserve to stay, because there is a class war going on that most people are oblivious to.

 

what goes up always comes down

 

In this case, it's the Dollar. It's going down to zero. Therefore everything denominated in the Dollar goes to infinity. And it does not reverse until the Dollar is backed by something of value.

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The trend is pretty clear to those who bother to observe it.

 

What happens if you substitute dollars with gold? Seems to me you get basically the same results. Of course you can't have gold and gold production in a 100% service society. Can't have money either. These are hard assets. Plus gold or money would act as a store of wealth and there is no savings. Services can only be paid with other services and they would have to be performed simultanously due to the fact that owning a services receivable would be a form of savings.

 

Perhaps, because there really IS a shortage of physical silver? What good do fiat notes do in purchasing more physical silver if there is a limited physical supply?

 

I just want to say one thing to people here who post that "silver and gold are money, they are natural forms of money". Money is the commodity of exchange. That is the number one function, to be an item that is accepted as the medium of exchange. There is no "natural money" anywhere in the world. No one thing in the world can you go into a shop and pluck down something to pay for your purchase. The US dollar is the closest.

I don't want to hear, "well I bet you could buy groceries in Walmart with a gold coin". No you CANNOT. What would happen would be the cashier or manager, if they knew the value of your commodity, would agree to exchange real money for your commodity and make an arbitrage profit from you. Yes, PM are a commodity that can serve as a store of value, but 99.999999999% of goods in the US, Europe, worldwide, are NOT price marked in terms of how many gold or silver grams it takes to purchase it.

The sooner everyone agrees PM are a commodity like oil, cotton, orange juice, iron ore, and coffee beans, the easier the discussions here will be. PM lovers could very well be right, but PM's fail the very first test of the definition of money. I am not saying its not a good investment, good store of value, good to have if an economy collapses, good to have as a hedge to a portfolio, just that it FAILS as a definition of money.

Chris

P.S. Also, I have a few thousand ounces of silver and 10-15 ounces of gold. I am very well aware of advantages that PM's have, so I am not a hater here.

 

If you substitute dollars with gold, then the money supply cannot physically be arbitrarily expanded. Gold is an element that is only created as the result of a supernova explosion; there is no other method of creating more. You can mine it out of the Earth, but this is very expensive, often times more expensive than the market value of existing above-ground gold. The amount that is liberated from the Earth every year only adds about as much gold to the total as the population grows, which means no per-capita growth in the amount of gold above-ground. Thus, the result of productivity improvements is a lowering of prices in terms of money (gold).

The "service economy" assumption was only for simplicity of demonstration. The same basic relationship holds true in the real economy, but with slightly more complex math.

I wouldn't advise holding fiat notes. All of my savings is in precious metals and all of my debt is in dollars.

Sorry but you're mistaken. Money requires certain inherent properties that fiat paper does not satisfy for any length of time and gold does. You might as well argue that toilet paper is a good semiconductor for making microchips. No it's not. You can try and maybe even make it work for a little while. But if you want something ideal for making microchips, you use silicon. Even if the government mandates that toilet paper is the only legal semiconductor, silicon is still naturally a better choice. So it is with fiat money and gold.

Well go ahead and stick your fingers in your ears and blindfold yourself too. Gold is always and everywhere money. You can indeed buy groceries with it. The main problem with Walmart employees is that they would have very little knowledge on how to evaluate a good trade in gold, but if it's a coin from a well-known mint, I bet you could walk out of any Walmart with groceries if you walk in with gold. The only reason items are not specifically priced in gold is because the government made fiat money legal tender. That is an extremely transient state of existence. The Dollar will fail and people will get very familiar with the price of things in precious metals again.

Cotton is a commodity with principle use in making clothing. Oil is a commodity with principle use in propelling vehicles, lubricating machines, and making plastics. Orange juice is a commodity with principle use in supplying nutrients to humans. Gold is a commodity with principle use in being money. Paper is a commodity with principle use in conveying written information, not as money.

 

$50 will happen

/thread

 

I hope there will be enough people around who believe this to sell to when the gold and silver reach their bull market climax. I'll need someone to sell to.

 

I'm under the impression that our dollar is backed by something in a round-about way: black gold. When the world stops using the dollar for oil transactions, then the dollar will really plumet. Agree/Disagree? Am I wrong?

 

The Dollar took a fairly significant hit this morning. Lowest I have seen in quite a while.
I suppose with China and Eurpoe increasing intrest rates the presure is now on the dollar. If we respond, it will just add to the PM increase as inflation will start rearing it's ugly head.....yikes..sort of damed if you do and damed if you don't.

RickieB

 

Excellent post.

 

Great thread here Yakpoo and you win either way!! As silver is creeping upward it's fun to follow as silver becomes the "little engine that could" saying, I think I can, I think I can. The slow pace of this train is simply a comparison to the silver boom. I salute you sir, all the way to the bank!! :thumb:

http://www.youtube.com/watch?v=bmuPE9p4gv8&NR=1

 

I don't think anybody knows for sure. If the dollar is no longer needed for oil purchases, then other countries will have less need to hold dollar reserves. That doesn't mean they will necessarily reduce their dollar reserves. What are they going to buy? Euros? Then there is the issue of what to do with the dollars. The only way to "trade them in" so to speak is to buy something in the USA, assets or trade goods, and either way it causes a trade surplus in the US that has the offsetting effect of strenghening the dollar. Then there is the Fed. They are incredibly more sophisticated than people give them credit for, and they have the tools to neutralize much of the impact IF THEY WANT TO. And those are probably the most important 4 words in this post.

 

Just to chime in to your good post Cloud, you can see oversees buyers participating more heavily in US goods purchases. In my industry, anything exportable is selling for a premium value versus items that are primarily for US consumption. In Iowa where my father and I own land, talking to real estate agents they are getting calls all of the time from people representing overseas buyers. I am not completely sure the full repurcussions of all of this, except to say I think this will lead to inflation of any exportable goods to US consumers.

 

Well go ahead and stick your fingers in your ears and blindfold yourself too. Gold is always and everywhere money. You can indeed buy groceries with it. The main problem with Walmart employees is that they would have very little knowledge on how to evaluate a good trade in gold, but if it's a coin from a well-known mint, I bet you could walk out of any Walmart with groceries if you walk in with gold. The only reason items are not specifically priced in gold is because the government made fiat money legal tender. That is an extremely transient state of existence. The Dollar will fail and people will get very familiar with the price of things in precious metals again.


Read more: http://www.cointalk.com/showthread.php?t=163365&page=13#ixzz1Ix3KbPk6

Not much to say really. You say gold is money simply because you say gold is money. It fails nearly every definition of money, but I guess if you say it is, then the world must bend to your will. I explained how "buying" something with gold is merely someone exchanging your commodity for money to make arbitrage, and you retort that "gold is money". I am sure that if someone knew the value of copper you could go into Walmart and trade $200 in copper for $50 in groceries too, or lead, or soybeans, or cotton bales. Are these things "money" too? Make you a deal, I will accept $200 worth of any commodity in exchange for either $50 cash or $50 in gold or silver all day long. The more you wish to trade the better!

In case you are interested, golds "historical" use has been jewelry, not as money. I can show you 5,000 years of history of gold jewelry long before there was money, but I am sure that would not interest you, because "gold is money".

 

To put it in perspective the US Nickel is worth 7.1 cents. 20 of them will only buy you a dollar's worth of goods eventhough their value is $1.41.

 

Please do, I would like to see your history on this. Before relatively modern times, a very short time in historical human terms, jewelry was a luxury that could only be afforded by the few. Gold as a currency, on the other hand, was used as currency for the intrinsic properties that make it perfect as a currency. You say that gold fails by every definition as a currency, yet the United States government, in its very first act of defining a currency, defined gold as a currency.