Supply and Demand states that Silver must rise in the long term?

Well..... we were having a decent conversation until you decided to make it personal. It's not about me, it's about the message. if you think I am delusional, which is what your post is saying, then put me on ignore.

 

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There are no "safe" government savings bonds for sale these days where the interest rate is covering even the official government CPI which is in itself understated. The only possibility that gets close is the I-bond which currently pays 0% (it's actually negative but the law prevents it from going below 0) but it has current inflation index of just 3%. Unfortunately they only allow $5000/year purchase for each SS#. I don't ever remember such a time where the Fed has held rates far below the inflation #.

So by your own criteria, the currency is not stable.

 

Of course, that brings up the question of how many people save money in this manner? And how many of the ones who do so aren't mentally challenged in some way? Even the New Testament speaks out against burrying money instead of at least earning bank interest, so it is an old problem with a well known solution -- invest the money someplace. Gold and silver have been decent holdings as have investment real estate, land, stocks, bonds, and practically any other asset [which is the theoretical basis for asset allocation]. I read once [but can't recall the source] that Ben Franklin believed a gradually depreciating currency would be good for the economy because it would force people to either spend it or invest it in productive assets. I happen to believe that gold and silver make perfectly good money. But it just isn't the only way to run an economy.

 

So does your analysis take into account the last 100 years? That is the questionthat I was answering. Over that time sometimes you would make more, sometimes less, than inflation. It evens out. Same as if you bought gold, sometimes it would be up, sometimes down.

 

I'm sorry I didn't phrase it better, but the point stands that it is a very low probability event.

 

If the money is pegged to your gold reserve preventing the arbitrary expansion of the money supply the only avenue available is to expand the reserve. If your reserve is serving a population of 100 million then it would have to be 3 times as large to serve at par a population 3 times as large (300 million).

 

It says as much in the dictionary, that gold and silver are money. To be fair, it also says that paper currency is money. I suppose the real difference is that one is sound money and the other is not. Also, for money to pass the divisibility test that means you need to be able to slice and dice it and not lose the value. Just because you can exchange it for divisible increments, that's not the same. You can't cut your dollar into 100 pieces of paper and expect each one to be worth a penny.

 

You don't have to expand the gold reserve. The only reason you would have to do this is IF you wanted to peg gold to the dollar at the same ratio as in the past, but the ratio doesn't have to be anything. The ratio is determined by the amount of gold available. The point of a gold standard is to have a static ratio, not a fluctuating one. This peg requires more gold to exist in order to print more dollars, so money cannot be printed out of thin air.

 

Lets stop the religion discussions and opinions

Whether someone is mentally challenged or not as a 'hoarder', and I'm sure there is a case to be made that I am one of those (thankfully I still have more than adequate liveable space), in my mind this is independent of the desire to have control of your finances and to be self reliant. Keeping your money in your own possession is not a sign of mental instability in my perception. To me it is because I only give trust to those who have earned it, a defense mechanism I have acquired after being burned enough times for not following that rule, and therefore anyone who has not proven loyalty does not qualify to have a hand in my finances, banks and brokers included.

I agree that physical gold and silver are not ideal for the 21st century with global exchange at a fast pace, but there's no reason they can't be used to back the currency that does fulfill that purpose.

 

I'm not sure why this is an issue. Let's keep in mind that even at today's growth rates it takes decades for the population to grow this much. Without any other change then yes indeed the currency becomes 3X as valuable/unit. I'm not sure why there is an issue with this when the alternative is to print money and make it 3X more worthless. (except with this power they don't stop at 3X) With the gold backed currency, the economy decides the worth of the currency. With the fiat, a group of old men in a backroom, with no governmental oversight, answerable to no one, and usually with the qualification of never having worked a real job, decides the worth of the currency. Now which one of these makes sense?

There is nothing to stop smaller units of currency from being created. This is why the USA had silver coinage, nickles and pennies all pegged to gold. The Swiss are considering a constitutional amendment to re-instate the gold franc in 2012 as a parallel currency for the people to hold. The smallest coin will hold 0.1 grams/gold. This is equivalent to ~$5.5 phiat USD issued by the Federal Reserve. If the USA is a "free nation" what is the problem with allowing the same in the USA?

One of the greatest economic expansions in human history, the 130 year expansion of the USA from 13 colonial states to a nation that crossed the continent all happened under the gold standard. It puts to rest any notion that economies can't expand without fiat or debt.

 

Its an outmoded definition then. You could not cut US coinage into pieces and expect to have them accepted, even when they were silver or gold, in the last century. How many cut into pieces half dollars have you ever seen? If your definition is correct, then there should be tons of these around.

In today's society, gold and silver are cimply commodities like oil, cotton, or corn, and are repriced every day in dollars. The fact that negotiation to buy or sell them is always denominated in dollars tells you dollars is the money of the US. Silver would be money ONLY if merchants priced items in so many grains of silver. The fact that you have to negotiate a barter each time you would ever wish to use silver or gold for payment in this country is prima facie evidence that they do not function as money in our society. Silver and gold serve as money just as much as a bushel of corn or a bale of hay does. All of them can be bartered with only if the other person wants them. Guess what? The first thing they will check, if you wish to try to barter with them, is how much they are worth IN DOLLARS!

 

If gold was simply a commodity it wouldn't be worth much, because it doesn't do much. Yes we measure the price of gold in dollars, but that is backwards and only since 1971. You're right about how things are today, but unfortunately that is also the reason why we can't pay our debt. I am of the school of thought that we will revert back to the old way of doing things out of necessity, and as I have stated the law dictates that should still be and have always been the case.

My point about cutting up coinage is that if it were legal to cut 90% silver US coinage up you could still get the melt value out of it. If you cut a FRN up the value is nil. That's why it fails the definition of money, but it works fine as a currency.

 

Oh you could very well cut a gold or silver dollar in 1/2 or 1/3rds, or whatever. What was destroyed was not the value, but rather, the governmental assay performed on the gold. It was then up to the seller & buyer to agree to the amount of gold or silver at hand.

On the other point, though millions of ounces were coined, you don't see very many gold dollars issued by the Charlotte mint. The reason for this being that once the Confederates took over this mint, the coins were cut, melted, etc. and used to buy European goods. This is the advantage of gold. This is the advantage of silver. It would never have worked with paper.

 

What you destroyed was the government guarantee, which is one of the fundamental bases of coins versus bullion. Take away the government guarantee, and all you have is bullion, and you are back to the pre-coinage, barter days. The fundamental change between barter and coinage is the government guarantee.

Btw, do you have any references that show that Charlotte gold was ever cut by the confederates? From my reading the Confederates simply did not have the manpower to staff the mint, or the manpower to run the mines. Why would they even cut the coins?

 

That is simply untrue. Uncoined gold has always been valued in terms of US dollars in this country. Repeating a 1792 that has been superseded multiples of times and is no longer valid law doesn't say anything about modern US coinage or monetary policy. A US dollar is no longer defined in terms of so many grains of gold or silver, much as some may wish it were.

Btw, the reason we cannot pay our debt? I am sorry, did we ever pay off the national debt in the 20th century, most of which we still issued silver coinage? No, then why not? Why wasn't silver saving us???

 

I think your a tad bit on this...just cause silver or gold go up doesn't mean they gained value...it could very well just be the dollar has lost value...gold and silver just sit there...their value is for the most part already determined UNLESS they suffer a shortage from demand over supply...

I remember when Gas was 1.19/Gallon and that was considered expensive...course that was when silver was $3-4

quick tidbit back in 1948 you could buy a gallon of gas for 2 silver dimes....

in 2012 you could buy a gallon of gas for 2 silver dimes....

 

I agree that recession is supposed to hit mid this year...I'm planning on selling silver soon...not all my silver but anything that doesn't have a premium involved in gonna be converted to dollars ready to buy up cheaper silver...also I'm buying up as many 2011W eagles as I can

 

Edited:
You can comment on numismatic content of books, but not religious interpretation that should obviously be personal opinion.

 

if we can't talk politics on this forum we really shouldn't talk religion

When discussing numismatics, religion sometimes is appropriate in reference to the history of the coin, just as political activities that can affect bullion are also allowed UP to the point where it is OPINION, then it is not.

We are a worldwide membership and that includes many political systems and religious beliefs, so opinions on any such are not allowed.




The part you edited out was 100% fact.