Silver getting crushed today

I've been thinking of it this way. The dollar has a broadly accepted, government-backed, yet still faith-based 'face value', and a steadily decreasing power to purchase goods, every day. The more dollars, the less value. If you check an inflation calculator, the dollar is 25 times weaker than it was in 1913.

Silver has an 'historic wealth value', part emotional, part tradition. It's hard to quantify, as major banks simply manipulate the dollar/silver relationship for their own profit and to keep the dollar going [recently proven in court to have been ongoing since at least 1999]. Silver also has been in the U.S. for a very long time a proven and desired currency. It's a very realistic alternative to the dollar even if only a grassroots/back-door movement. I add the 'part-emotional' due to the way panic sets in to acquire silver at any cost once a run sets in.

'Demand' always fluctuates. Silver may have a present low demand/low value as people feel comfortable with the economy. If not so comfortable, demand changes.

If the $35/ounce silver purchase was a for-profit venture, it will probably not realize much profit at all, esp. short-term - why bullion is a bad 'for-profit' venture [unless you're Deutsche Bank]. However if it was an acquisition based on belief on a better currency, probably money well spent.

 

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I do watch the prices, but since PM and numismatic coins represent under 10 percent of what in invest each year in the stock market - and I am putting a ton (lots more than stock market or coins) into paying of my nice home before I retire - its not a panic when silver or gold goes up or down. But l like to follow and watch and try to make little moves on buys. Its fun.

 

Sheesh.

 

No country will ever try to go back to precious metal backing for obvious reasons. the Bank of China several years ago started "saving" accounts for the general population, and they were to be backed with gold that "actually" ( I wish there was a -sarcastic- font), would belong and could be withdrawn by the owner. 3 years later, they changed banking policy and all of that "gold of depositors" could no longer be withdrawn, just the then devalued Yuan/Reminbi would be the pay out. Of course no one in the US would take that chance~ Right? Look at all or the PM based IRAs and their prospectus. They keep that right also if they wish ( and devaluation has occurred). IMO.

 

I understand all the words, and I can draw a diagram of how they're put together, but I can't make any sense out of this.

The numbers I quoted were approximate, but should have been specific enough. That $37 spent for one ounce of silver (when PoS was $35) would today buy two ounces of silver (with POS under $17), plus change. All in nice, simple nominal dollars. The very same $20, $10, $5, and two $1 bills, tucked under a mattress instead of being swapped for silver back then, would buy you twice as much silver today.

How on Earth is two ounces "the same amount" as one ounce?

 

well I had a big post but I just deleted it too much info! Yes I bought at 35 but I also bought a heck of alot more at $13.50 to $16.50 So that couple expensive ounces are a lot cheaper now. And until I sell I am still ahead of a lot of folks that bought at $35 got scared and never came back. in 20 to 30 years if I lose $5.00 an ounce Oh well better luck in the next lifetime.

 

jeffB, it's a matter of semantics. That is to say, if you were to substitute "value" for "amount" in sakata's text, you will have brought your position and his into balance and equality, i.e., agreement. True, you can indeed now buy two ounces of silver rather than just one all these years later with your "fixed stash of cash under the mattress money", but please also note that those two current-priced ounces are now going for the same number of dollars as what one ounce of silver went for when you first hid your fixed number of dollars under the bed.

 

Agreed. But I think it's debatable whether such State decisions are in the best interests of ordinary citizens. To have assets that are physically possessed, and movable, can be a safeguard against gov't chicanery in the long-term. 'Bullion' is a good fit here, as well as goats.

 

I rather doubt there's much room for debate here, since the history of the world shows us that State entities as a fairly standard and routine matter of policy and practice tend to put their own interests ahead of those of their populations. Unfortunately, one major consequence of this hierarchy of priorities is that the more limited resources, and this is especially true of PMs, are almost always manipulated, quite often strictly controlled, and sometimes even limited to State ownership (think FDR and his nationwide confiscation of privately-held gold), thereby short-circuiting the desire of and the attempt by individuals to try to maintain even a modicum of monetary independence from the State.

 

And don't think this could never happen again!

 

I don't imagine for a second that it can't.

 

There is not as much incentive now. Back in Roosevelt's day the world was not run on fiat like it is these days.

 

Some people call it a sling blade, I call it a Kaiser blade. Some people call it fiat currency, I call it Monopoly money.

 

Well, you are right there! They certainly have created a monopoly.

 

In the middle of an FDR biography - haven't gotten to the 'gold seizures' yet. But wasn't it really a broad sweeping series of executive measures that were little enforced except for a few high-profile cases? The Fed could only print and pump so much money into the economy because it was tied to gold [I believe 40% at this time]. I guess Kurt would say here another example of why the currency should not be tied to PM's.

 

Believe it or not, what in fact ended up happening upon the announcement of FDR's directive, i.e. Presidential Order, almost from the get-go was that the average American citizen VOLUNTARILY marched him/herself right down to the nearest Federal Reserve branch and/or local bank and WILLINGLY handed over every bit of gold he or she owned in exchange for essentially worthless paper money, since simultaneously with this nation-wide confiscation of privately-held gold the very system itself of gold-backed currency was henceforth terminated. While admittedly this historically monumental makeover of federal currency policy proved to be a godsend regarding its contribution to the ending of the Depression, it was also the opening of a veritable Pandora's Box of possibly unforeseen consequences, the most debilitating of which in the long run being that the abolition of the gold standard proved to be the essential, even primary catalyst for the establishment of the ever-more-untenable burden of a ceaselessly-increasing national debt.

 

Well, probably a very emotional time where it was hard to see the long-term ramifications of one's choices. I think 'trust in government' is a major determining factor. Not sure where that trust level is at today. But I doubt high.

 

This is just a wild guess, but I don't think it would be too far from the truth to presume edited political discussion

 

So not to get in trouble here with a political thread but what will happen to PM's Ya think if this tax overhaul leads to a large sell off of stocks?

 

Really can't answer that. No, I mean REALLY. Sorry.