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<p>[QUOTE=&quot;InfleXion, post: 1529933, member: 29012&quot;]Gold and silver are treated as commodities, but they are not. They are elements. We cannot create any more of them than have already been deposited on our planet when the solar system was formed. So you can&#039;t breed them like hogs, or plant them like trees. What I use for my predictors are a number of factors that all point to higher silver prices. </p><p><br /></p><p>1. Physical inventory of above ground available silver is the lowest it has been in over 700 years. There is no government stockpile anymore.</p><p><br /></p><p>2. Silver was only deposited on the Earth by epithermal deposition, meaning at or near the surface of the crust. Gold was deposited by both epithermal and mesothermal deposition (deeper veins of metal). So there is no more Comstock Lode on the horizon for silver. As time goes on it will be increasingly risky and resource intensive to maintain current mining output barring a significant technological advance. Peak silver is underway.</p><p><br /></p><p>3. The gold to silver ratio is outside of its historic norms prior to modern issuance of fiat currency. Silver was historically valued between 15 and 20 times less than gold based on mining supply. Today mining numbers are only 7 times in favor of gold over silver, but above ground available supply for silver is actually 15 times less (more rare) than gold. Some say more silver would be mined if it were more cost effective, but I don&#039;t buy that. Demand exceeds supply, met every year by existing scrap. That should be enough to warrant it.</p><p><br /></p><p>4. Mines that used to be classified as primary silver mines are now classified as primary lead or zinc mines. This &#039;primary&#039; distinction is based solely on revenue, not quantity. Silver, lead, and zinc supplies are typically consistent among these mines, so for them to change from silver mines to lead/zinc mines means that silver is undervalued compared to those metals. This has only happened in recent history.</p><p><br /></p><p>5. The word silver literally translates to &#039;money&#039; in many languages. The same word is used synonymously.</p><p><br /></p><p>6. Negative real interest rates. Meaning that interest rates minus inflation rates are negative. This environment will always cause monetary metals to rise, as it means the dollar is being devalued. If positive real interest rates become the case then that fundamental is no longer in favor of metals, but rather to fiat currency. This can never actually be the case, since exponentially growing debt cannot be sustained by any other means than adding more compounding debt on the pile. For positive real interest rates to happen then intererst rates would have to exceed inflation, and there&#039;s no way they can catch up at this point without defaulting on the debt which is paid off by money printing.</p><p><br /></p><p>7. If we were to return to a gold standard, the only way it could work is to peg the ratio of existing dollars (paper, digital, treasuries, etc.) to existing ounces of gold reserves. By today&#039;s supplies of each that would be over $30,000 USD, assuming Fort Knox has all of it&#039;s gold. If it doesn&#039;t, that number goes astronomical. There is no way around that other than either destroying dollars or buying more gold, since any sort of fractional gold standard would require a proxy for the gold and would repeat the mistakes that undermined it before. Destroying dollars is not possible due to the deflation it would cause and thus put big banks underwater due to their assets going down in value, thus either necessitating nationalization and/or money printing to bail them out as well as putting the derivatives market at risk which the whole system hinges upon. If gold is to go to $30,000, and the gold/silver ratio is to go back to 20:1, that&#039;s $1500 silver right there. I do not advocate selling silver at such a price since it would be indicative of a hyperinflation. Best to wait for a new currency if anything.[/QUOTE]</p><p><br /></p>

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