Silver's 1985-2014 chart - there's long way down from here: Source: GoldPrice.org (We were above 47 $, but the chart doesn't show that. So it's not entirely accurate.)
I hope for $4 silver again! I wanna freaking buy 10 ounce bars every week till the cows come home! Next melt down go back to $47 and hello easy street!! Haha even though the reality of that happening over next 30 years is slim.
You are assuming prices will go back down to below 10 USD. Why should it? What if the prices don't go back down to that level?
I think we need to take into account QE and the extreme expansion of the money supply since 2008. Given the scale of the change in the supply of money, it is valid to argue that the old USD baseline is no longer relevant. The real question to ask is, what is the new baseline? And are we above or below it?
Indeed. Right now I think production costs are very important. This article mentions silver production costs of around 9 $ and 20 $. Not sure which figure is closer to reality, the mines must be manipulating the price as well. http://www.forbes.com/sites/kitcone...ine-silver-in-this-current-price-environment/ This other article (http://silverseek.com/commentary/20...primary-miners-real-cost-produce-silver-13222) says silver's production cash cost is around 10 $. Page 6 here in this 2013 document says cash costs were around 8.88 $ in 2012: https://www.silverinstitute.org/site/wp-content/uploads/2013/06/WSS2013Summary.pdf I would assume the 2014 production costs are a bit higher, perhaps 10 $? Could the new baseline be around 10-15 $ somewhere?
I'll have to check those later (gotta leave for work now). It may all come down to energy costs. I think there was a chart somewhere that showed the silver price along with the oil price. I can't recall if any correlation was present.
I think due to devaluation of fiat or "inflation" $20 of 2014 is like $5 of 1985 (im not precise of course). I don't think it will drop below $15 due to this. *puts on flame proof suit*
http://www.rba.gov.au/calculator/annualDecimal.html ($13.19 AUD in 2013 from $5 AUD in '85) http://www.usinflationcalculator.com/ ($11.05 USD in 2014 from $5 USD in '85) This is assuming you believe the official inflation rates. Go back another 5 years (start at '80) and it's $19.64 in AUD and $14.43 in USD.
Maybe 15 is the new 5, but anything above 15 is still too expensive, in my opinion. But someone should calculate the (theoretical) impact of QE on prices. It would be interesting, though I wouldn't know how to calculate it.
I love how the charts in USD are continually trotted out as if they are relevant to everybody in the world. There was no $5 silver in AUD. Silver never got down that low. $7 at best and more like $9 most of that time. In 1985, silver was around $8-$9 AUD. http://www.perthmint.com.au/treasury/silver.csv In 30 years, silver has gone up 2.5 times and house prices have gone up 10 times. Obviously houses were a far better investment than silver over that period. Historically, however, which is currently cheap and which is expensive ?
