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

wouldn't gold and silver go up in a recession?

 

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Can you state this "guarantee" in words? I'd say that you can't because there isn't any fundamental difference between a government issued gold coin and other coins and bullion in terms of using gold as the basis for trade. (The USA accepted Spanish gold dollars as legal tender until 1857)

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Here is an excellent example of why governmental coins have no inherent advantage. It amazes me that most American coin collectors are clueless of this history as demonstrated by some of the comments.

It should be noted the first gold coins minted in the USA were not by the US Mint, but by the Bechtler Private Mint near Charlotte. I recommend a read of this history: The Bechtler Private Mint: 1831- 1850 Of note relative to this topic is the following quotation:

This lays to rest the notion that governmental coins have any advantage over other forms of gold and that the confederates were more than capable of running a mint and the associated mining operations. There were 30,000 people involve in the gold industry in the CLT are and these were not yankees running things.

Finally in regards to the coin clipping and melting, I recommend a tour of the Charlotte Mint Museum or even the Philly Mint where a discussion of confederate gold takes place. Not everything is on the web. However if you look up a history on the Charlotte or the even more rare Bechtler coins, you will find this is the fate of most of these coins.

 

As a follow up to my last post, here is an example of privately minted coins in the USA and one widely used for commerce in the South. Millions of ounces were minted by this private mint over the decades that it operated. It's an example of gold in use, in day to day commerce, by real people, all without any coinage from the government. It works and its very effective.

A couple of notes. Notice the use of the word "Dollar". If this were tried today, as demonstrated by the Norfed Liberty Dollar, the corrupt fiat ponzi operators would use every power at their disposal to stamp it out including accusations and charges of counterfeiting, economic terrorism, fraud, etc etc etc. Yet 200 years ago there were no such concerns. This is what several generations of brainwashing can do to people who consider themselves worldly, sophisticated and knowledgeable as compared to those of the 19th century. Amazing isn't it?

On the coin the word Rutherford is the location of the actual mint. This is a county near Charlotte. Rutherford Town is now known as Rutherfordton. These coins are very rare now.

 

The defining moment of the creation of coins was when the government started creating them in standard units of measure and purity, and then stamping them with the mark of the government as proof. This frees up transactions from having to be weighed and assayed every time as part of the barter process. This is the entire foundation of "money". Without it, all you have is bullion to barter with.

 

^It's a convenient assay of the gold in question. I've said this before. Beyond that, there are no other benefits over that of any other gold coin, bar, etc. As demonstrated by Bechtler, even that isn't anything that special.

 

It is interesting hearing these view points. As an aspiring economist I find it very interesting. In the earlier classes I can tell you there was much to do about equality. How should we spend our money where to best suit the needs of the people. Now I am actually learning what 95 percent of economists do. Profit maximization. They are for the most part to a firm what a lobbyist is to a politician. At the end of the day mists economists get paid by squeezing money from somewhere. While I respect all opinions, this leads me in favor of believing in inflections theory about anti saving. Their is no loyalty to the American consumer or to principal of responsible monetary policy. Be assured that big business is in Washington and there is nothing on the agenda involving sound policy.

So I guess I am torn here. I believe the arguments made by Chris and others that the dollar is the current viable and realistic form of barter exchange, but I'll tell you.. My optimism in the dollar weakens every day

 

What 95% of economists do is get it wrong :smile. Most popular economists are wrong so often they're a great contrarian indicator, yet the financial shows still have them on all the time. But you're right, they're nothing more than cheerleaders for their companies. However, I really think they believe the stuff that comes out of their mouths.

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In the medium/long-term the dollar's goose is cooked. The only thing that's saving us right now is that Europe is even dumber than we are.

The U.S. has backed itself into a corner where it has three choices; default (ain't gonna happen), drastically cut entitlements (ain't gonna happen), or print. However, the dollar will probably always be our exchange mechanism. I don't believe in the Mad Max scenario (although some violence, shortages and strife wouldn't surprise me at all). We'll just need a lot more dollars.

Simple supply/demand says that if you print more dollars you devalue them. Is it wise to put your money in a devaluing asset? In the future, I'd rather put it in appreciating assets and convert to dollars on an "as needed" basis.

What is and isn't currency is not really important. What is important is what item will hold or grow your wealth. I don't really care if that's dollars, gold or potato chips. I want the best ROI.

 

I apologize for the religious discussion, but DesertGem, if you would please also modify Cloudsweeper's post in this regard a couple pages back to be fair. I was merely responding to it offering my take on what the Bible says on interest and usury, and currently his opinion is the only one being displayed. If I can't offer correction about my own faith then the part I felt the need to correct shouldn't be there either.

 

This is pretty typical socialist Keynesian economics which are touted throughout acadamia. What they won't tell you is how that school of thought is responsible for runaway debt. If you aren't familiar with Austrian economics, that is much more akin to sound money and not transferring wealth from one class to another.

 

well back in 2009 Gold/silver prices dropped like a rock...
silver was around $21/oz and went down to $8-9/oz...
I forget the exact numbers on gold though...

 

I agree and disagree. Ignorance and stupidity is their disguise for malintent. Every cause has an effect, and they know full well what the effects will be before they do it. It's easy for people to believe they are stupid, because it is stupid, unless you understand that this was the desired outcome in the first place. You may ask why, and the answer is simple. Removal of the middle class.

Well put, +1.

 

Part of the reason for this is because precious metals are dominated by paper contracts, and as long as that is the case precious metals will continue to drop with the stock market in a deflationary pinch. However every time this has happened, PM's eventually bounced back higher than they were before the drop, and I see no reason this trend will not continue.

 

the key word is "eventually" I'm of the belief of making lemonade out of the lemons we're given and we've already talked about it's not easy to find pm's when the price goes down but I figure the time it will take me to find 'em when I sell before a recession is being paid back to me with the extra pm's I can acquire from the buy low sell high method...

 

i just looked into it and it said silver went down 50% and gold broke new highs.

 

Well that is a point of disagreement. I believe the invention of coinage was one of the most important inventions regarding commerce, you view it as a routine essay.

I don't know what "as demonstrated by Bechtler" means, some territorial, small refiner has a major influence on the importance of coinage on the world economy and history? Its the government guarantee that is most important, as amply demonstrated by the fact that all Americans accept coins every day with nominal metal value. Its common acceptance and a government guarantee that makes it "money". Any non-coin PM is merely another commodity, to be valued in dollars like everything else in our society.

 

I don't really disagree strongly with your post. My main concern is people talk about weakness of the dollar and then say you have to buy PM. I own PM, don't get me wrong, but how is stocks, or farmland, or real estate, or other assets no "worthy" of investment but PM is? Heck, if you really wished to argue hard assets are the best thing to be invested in, I would think farmland would be preferable since it can produce hard assets year after year, and so can many companies in the US that you can buy stock in.

Hard money guys have made the exact same arguments that are being spread today since the 70's. Heck, in the 70's it was probably even more severe, and the US was ending any day. Too bad there isn't any easy history on the internet for people to look up, since I seriously doubt that people could tell if the article was printed in 2012, 1998, 1985, or 1977. Its the exact same sphiel being sold every year, and every year a new group of recruits buy it.

 

I am sure you don't realize how much actual time it takes to try and allow some references to non-numismatic sources for threads such as historical references, and to limit opinions by those who may accept it as completely factual by their faith. I mean no disrespect to anyone who may do so, just that religion and political opinions belong on the Other website. I feel I have been very lenient for these areas in this subforum and thread, so I will probably delete offending posts rather than try to edit them to alls satisfaction. Just for kicks, I ask you to go to thsi page and see how many interpretations and opinions are in print for the parable of buried talents. Yes, the parable is in the religious book, but the wording and "message" is opinion. Geez.

http://bible.cc/matthew/25-18.htm

Jim

 

I own stock, a REIT and shares in companies that own and run farms .

Anything can be a worthy investment ... at the right time and under the right circumstance. I'm completely agnostic concerning investments.

I'm not sure why a "gadget" company has the highest market cap in the world and why people are cultish about it. I'm not sure what Europe is going to do from day to day. I'm not sure how much the BLS numbers are going to be cooked each month. I'm not sure whether Israel will attack Iran and drive up the price of oil. I'm not sure whether we're about to go into a deflationary recession. But if there's one thing I am sure of it's that the dollar will continue to depreciate. And at this time and under these circumstances that makes PMs, especially gold, the surest medium-term bet.

 

Gold and silver are not the same. Gold started the year at $874 and ended at $1087. This is a gain of 24.4% for the year. A very handsome return indeed for boss gold.