[youtube]http://www.youtube.com/watch?v=ty_-Mf6QhpU[/youtube] "Our entire financial system is based on awarding total control of our money to a tiny, unelected committee of bureaucrats." ... like this one that should have been arrested ...
A price that is driven $1 > $5 > $1 inflicts the $5 buyer a $4 loss. It's not metal that stores value, it's you when you buy at $1.
Only when it's measured in dollars, I wouldn't be surprised to see that the 2011 high bought you roughly the same amount of iron or copper in 2011 as silver does today at today's iron and copper prices.
On a long enough time frame it is a store of value IF you can maintain ownership of it over that timeframe. I imagine those ancient Babylonian traders had to be very careful and grease the right palms lest some petty official decided to take that tempting store of wealth by branding the owner a criminal and simply comfiscating everything. Of course that would never happen in our more enlightened society.
PM's "work" better in an inflationary environment. We are seeing deflationary forces now so PM's are lower. As far as in the US, the Fed is big into trying to avoid deflation so they must have something up their sleeve down the road. I can't see them upping the interest rates so such it causes more deflation and further recession in the US. At least that is the line they have spoken since Bernanke, and Yellen is much like him in her views on the "great depression", etc. Maybe they are raising it now so they can lower it later to look like they are helping when the $h!t hits the fan. No matter what the talking heads say the US economy is not improving. Lower fuel prices are great but not enough. If it weren't for low interest credit cards and car loans it would really look bad here. PS As far as PM's as a store of value, that is generation to generation. There are going to be ups and downs. And long times with flat prices. We are going to see another "up" time and I don't think it will be more than 5 years away, probably much sooner. Just my opinion. Jim
most assets in general are a store of wealth. Silver has stood the test of time, but so has grain according to that article. So one could say grain if preserved correctly ( and preserved grain/seeds HAVE been found in Egyptian tombs) is an equally valuable a store of wealth as silver and gold over 23 centuries.
Replace $1 > $5 > $1 with iron1 > iron5 > iron1 and whatever you select. The general price level wasn't driven 1 > 5 > 1 Saved fiat didn't see its purchasing power 1 > 5 > 1. That is what a loss is.
Production costs are basically $1/oz, because most silver is a byproduct of other mined metals. So production costs can be ignored. So to me the question is what is the demand. The demand is high, because silver is a commodity used in the production of electronics (e.g. phones) and solar panels (whose demand will increase in the future). But what about supply? If there is a lot of digging of other metals, they are going to get a lot of silver, otherwise not. The other question is how much does it cost to recover/recycle silver? I think it was about $35/oz? I don't remember exactly. Does anybody remember? I bought my second kilo coin today, last year's koala for US$543 (including shipping). I am going to keep buying some more kilo coins, because they are quite fun, but I don't know if they are such great investments.
The aussie went about 131.5, other currencies have done similar things against the usd (as low as $0.04x to $1.1x and back to $0.69). Also, if you wanted to buy silver, iron, copper, oil or any number of other things with your saved fiat then it did actually do that, just in reverse 515. Regarding silver as a byproduct the supply side is still price sensitive, it might not be the primary target but the commodities complex is so depressed that copper and zinc mines are being pushed out hard. They wouldn't seperate, refine, smelt and transport it at $1 even if their mining target was something else that was economical, it costs more than that. It's neither here nor there though since the underlying metals that the silver is coincidental to is becoming uneconomical to mine. Plus, as I've said again and again, you don't need to have the price go under production for most miners, if you kill the 20% of the least efficient/most expensive of miners then you've taken out many many millions of ounces of supply, into an expanding demand market.
We should revisit this topic in 15 or 20 years. In that time frame I think there is a strong possibility of major production shortfalls and stockpile exhaustion, along with significant watering down of the value of fiat and a transformation of the global economic system to the detriment of citizens. For those of us who manage to live that long (and manage to to avoid government wealth confiscation), current silver stacks may prove to be a very nice store of value.
I suppose it depends on what your definition of "store" is. In 200 years, people may not have any interest in holding silver at all. In 200 years silver could be worth more than gold. The point is, there's no guarantee's at all. In recent years, clearly silver has not been a good store of wealth if you purchased prior to the onset of the bear market. This bear market could last 25 years....who knows for sure? That's why it may be smarter for some or many people to diversify their stack or their assets. Instead of buying just silver blobs for example, maybe adding some collector coins to your stack. There's lots of ways to diversify....that's just one example. .
Will there be another GFC in the next 25 years? A few I reckon. This bear market will not last long imo.
Of course your "other currencies" have done similar things, their value is a function of other currencies, that's what a formula causes. They're all relative, tied together, it's thus impossible for the USD to be driven up in value without others in the formula to be driven down. Silver isn't in that formula, neither are bread, a house and a lollypop. Commodities like silver were driven up relative to those other products not part of that formula, then down again. Why: savers making errors due to alot misleading, and some, the misleaders ahead, making advantage of them. 2011's $35 silver was 7 times 2003's $5. 2011's house and lollypop prices weren't 7 times their 2003 values. So theres a big stockpile silver out there now, and the demand drop alone caused $35 > $15. STILL 3 times 2003's price. And plenty stock out there (although not as worse as golds case) to bring plenty years to keep it there and maybe lower. So, if you claim here that those that bought $35 silver, when selling now, can buy the same goodies in our living together, well, please come on? Mining had little relevance to the price trend. That's what data proves. Mine Production 1990 521.8 1991 510.9 1992 485.3 1993 469.5 1994 451.0 1995 479.0 1996 492.9 1997 520.4 1998 542.7 1999 557.5 2000 591.5 2001 606.8 2002 594.5 2003 597.2 2004 613.6 2005 639.7 > 639.9 2006 642.7 > 643.3 2007 661.1 > 666.6 2008 683.1 > 682.7 2009 713.8 > 716.3 2010 750.6 > 751.2 2011 754.6 > 755.3 2012 792.3 > 789.3 2013 819.6 > 835.3 2014 877.5 877.5 is 2003 + 47% Story of the price: 1990 4.068 1991 3.909 1992 3.710 1993 4.968 1994 4.769 1995 5.148 1996 4.730 1997 5.945 1998 5.549 1999 5.218 2000 4.9506 (move > cumulative avg) 2001 4.3702 2002 4.5995 2003 4.8758 2004 6.6711 2005 7.3164 2006 11.5452 2007 13.3836 2008 14.9891 2009 14.6733 2010 20.1928 2011 35.1192 2012 31.1497 2013 23.7928 2014 19.0778 Do you see a serious correlation between mine production and price? I don't. Maybe you need to lend me your comical glasses? Just trying to be realistic here!
Did you mean that "bear market" in terms of purchasing power of silver? I can't see much reason to see silver acquiring more purchasing power. That's what stockpiles do: they compensate. The bigger, the longer. I made a big error. Bye bye 50% of savings. I won't stop adding, but I suspended it for a lower price and more silver. Could be another error, but considering that I had zero silver (and other) market(s) data back in 2011, a pure (and false) dollar balance based judgement then, then I think my judgement has a better chance now. Of course there will be another GFC, and much sooner. Over some months / next year? We will have GFC's as long as fiat saving people hold big savings. Because, GFC's are triggered by the central planning parasites, to make them waste their savings along temp bloated prices.
