Silver Will Never Be Valuable

Not sure how you mean consumed, gone.... Silver is an element and it doesn't just decompose or transmute into another element. It does react much more than gold, but the silver is still there within the molecule for recycling. If 1/2 ounce goes into a solar panel, in a few years, the panel will be scrapped and the silver is still there for recovery.

 

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What I mean is silver in a lot of cases, is used in such small quantities that it is not recoverable at all. There were billions of ounces in stockpiles just a few decades ago...that is gone now. It is not all in grandma's cabinet either.

 

This graphic tells the actual story of physical silver versus gold: http://demonocracy.info/infographics/world/silver/silver.html

Bottom line: All of the silver ever mined = 1,411,475 tonnes and all of the gold ever mined = 166,500 tonnes. That's a ratio of 1,411,475 / 166,500 = 8.48. On the other hand, the current ratio of gold price to silver price is $1,150 / $15.60 = 73.72

 

Well said...

 

Why would silver prices have anything to do with gold? What is the basis for correlating them? When people talk about gold to silver ratios, I don't understand why there is any expectation that the two should perform in tangent. Why not set a ratio to copper prices? Or ketchup prices? I understand they are both precious metals, but no one looks at the Apple to Dell stock price ratio just because they are both tech companies with any expectation that they should maintain an equilibrium.

 

Should be obvious... The people that buy gold
Also buy silver...

 

To what degree? Is that something reliable or constant? Or measurable? Seems rather anecdotal.

 

What can be derived from the following historical data?

• 2014 - Current gold-silver ratio = 74
• 2011 - Last silver/gold price spike (April 2011), ratio = 32
• 2007 - For the year, gold-silver ratio averaged 51
• 1991 - When silver hit its low, the ratio peaked at 100
• 1980 - Last great surge in gold and silver...the ratio stood at 17
• End of 19th Century - Fixed ratio of 15 was the universal standard
• Roman Empire - The ratio was set at 12
• 323 B.C. - The ratio stood at 12.5 upon the death of Alexander the Great

 

That since silver has been demonetized and government subsidies have ended, the gold to silver ratio has been far more erratic and prone to dips/spikes?

 

I believe that is exactly correct. What else can be derived from the data?

 

Gold and Silver are MONETARY metals, that is why..

 

Where?

Where -- in what existing market -- is currency tied to the value of silver? Or, for that matter, gold?

The point that Miko is making, I think, is that the gold/silver ratio since currencies were decoupled from silver and gold has been chaotic, unpredictable, and not tied to any significant real-world measure. It's still easy to calculate, it's still easy to follow -- it just doesn't seem to be useful for anything.

 

'Zactly. I don't see why any profitable inference can be taken from contemporary gold to silver ratios at any given time, any more than the silver to peanut butter ratio or the silver to Legos ratio. What is the foundation of the relationship such that anyone could expect them to perform in tangent, other than they both happen to be "precious" metals? They really are not monetary metals any longer, and likely never will be on any large scale.

 

Well in that regard I think you could be right. However, since there is not enough of the stuff to value to paper now.....if and when (IMHO) they have to do a reset, as in paper is backed by something, then the party starts. If not? I got shiny things!

 

They're not going to tie precious metals to currency ANYWHERE in the developed world in our lifetimes.........

 

I think the eventual global digital currency is going to demand a degree of compliance from participating nations that will erode the independence of large nations and utterly destroy the sovereignty of smaller nations. I can see them potentially trying to go it alone and stave off international interference with a domestic gold backed currency. But it will be a very small, relatively insignificant play.

 

You willing to bet on it? I have a folder that I have paper currencies in, it is called my inflation book. I made it for the kids so they could learn. I have now added Hungary 1946. It is enlightening to say the least.

You see the faith and credit (See TAXES or the ability to tax) of the US government means something. At least for now.......you see I can take a dollar anywhere in the world right now and it is wanted (for the most part). However, that might not always be the case as history has shown. However, I can and always will be able to buy food with an ounce of Silver, and maybe my freedom for Gold.....not so much with paper. It is an insurance policy, nothing more........

 

I don't think silver can go down too much further. A silver quarter is worth about $2.84 right now, and I saw gas at around that price. It was $2.94, but that's within 10 cents of it. Silver is just an indicator of how much things are worth. I'm sure there are a lot of others, but they aren't really available to most of us. I'm not buying pork bellies for instance. Silver keeps, and has been a store of value for a very long time.

 

My other favorite precious metal, cast iron in the form of Griswold and Wagner pans has had a little price tumble as well, but is still worth something.

 

What Josh's Coins had written in the first response is spot on.



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