Gold prices and silver, 50 years?

Young whippersnappers!!

 

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Look at the price of silver back in the 60's, and then look at it in the 80's. Hard to tell what will happen in 50 years. If the last 50 is any guide it will be up and down a lot.

 

Or to put it another way, the dollar will have declined to 0.00002 ozt. gold.

 

Is that a problem? If so why?

 

What I find funny is how most people just do not "get" how numbers work. They do not "get" why the logarithm sheet for numbers starting with a 1 is used 100 more times than the one for numbers starting with a 9. Case in point: silver was less than a dollar an ounce for a long, long time. Back then all changes between 40 cents, 50 cents, 80 cents and ounce were discussed, worried about, and if the internet were around had pm shouting matches about. Today, all such movements between zero and $1 an ounce we view identical, since to us they were so low to begin with. Similarly, someday all silver price movements of between 0 and $100 an ounce will all be ignored as "quaint arguments" because the current price will be $3000 an ounce. This is the whole "going vertical" or "going exponential" garbage some people preach when viewing historical pricing indexed to modern prices.

Not sure this helps. Maybe the only people who followed me are the ones who agree with me, but still. Lack of mathematical knowledge creates more opportunities for intentionally deceitful arguments than anything else I know short of simple greed.

 

This is the probably the best post I have ever seen on this board. Especially the part about folks leveraging this situation for their own greed.......

 

It's a major problem. It means savers will continue to be punished and the costs for essentials, such as food and fuel, will likely continue to rise faster than wages.

 

We have been down this road before. The savers will only be punished if they are stupid enough to save Greenbacks. As far as costs rising faster than wages, that is a completely different problem, one that may or may not happen. A problem that can happen with both inflation or deflation. The problem is actually worse in deflation as wages get trampled faster than the cost of goods are falling.

Right now, folks ARE having trouble keeping even, yet the inflation is very low.
The reason is really simple, the economy is just not real strong and there are still more workers than jobs. If that turns around, companies will be forced to compete for workers and wages will rise, if the job market is really robust, wages will easily rise faster than inflation.

The problem of "keeping up" is really much more a supply and demand thing, than an inflation problem.

 

I always like to think of money put away for retirement or long term savings as claims on future resources. The thing nobody ever thinks of is that when it comes time to cash in their claims the storehouse may be empty.

 

Problem with such thinking is your claim is designed to get smaller each year. Its just how its built. Maybe its better to think about buying an asset and then swapping that asset for other assests as you need them. PM could be an asset to use, but so could many others. Might be smart to own many different types to make sure you own something worth trading with, yes?

 

Ok, but what other assets can you own without counterclaims or other encumbrances?

 

You are talking like PM's don't have their own encumbrances, which is just plain silly. There are many issues with holding physical PM. All asset classes have their own risks, plusses, and minuses. If you house gets robbed, you lose you PM's not your equities, right? When you diversify, you are not only spreading out the gains and losses, but also the encumbrances of each asset class.

 

I own farmland, cattle, antiquities, and collectible coins. This is beyond stocks and bonds I own.

I feel a very real danger of pm is when you convince yourself it is the only acceptable means of retaining wealth. It A way, butits not unique. Of course, any of these options are better than storing cash, whether its Euros, pounds, baht, or dollars. Currency simply is not a store of value.