Inflation adjusted. But see Finicky's comment above and link for commentary: http://www.caseyresearch.com/articles/time-to-admit-that-gold-peaked-in-2011
Oh my goodness. No wonder some people don't understand what I am talking about, when I say that silver will go back below $10 because that's where it was for most of the last 100 years.
To me, all this tells me that gold is actually a very poor hedge against inflation. And actually silver is even worse (see figure of gold and silver in 2012 $)
Silver had few practical uses in the past hundred years. Until fairly recently, industrial applications such as electronics, medical and consumer goods, made little use of the material's properties. Also, in the past, silver miners were able to access the "easy" silver near the earth's surface. There are much more difficult hurdles that miners must deal with today - not the least of which is a powerful environmentalist lobby, before they even deal with the advanced technology costs and the issues of employee salary and safety. Although I would feel pretty silly discussing future price predictions, especially based on historical charts (which have consistently proven themselves to be worthless), I do have confidence that the price of silver will rise. Not because some fortune tellers pretend an ability to interpret charts and graphs, but because the basic fundamentals are in place. Future price spikes are more likely to be driven by political and economic news events - and the public's response to them. These will produce temporary highs and lows based on sentiment. But the long-term price trend will be based on the fundamentals of supply and demand, both of which will continue to move in opposite directions .
Sorry, need to recalculate my numbers. I am trying to figure out what the http://www.caseyresearch.com/articles/time-to-admit-that-gold-peaked-in-2011 figures mean, and whether the ones at http://www.macrotrends.net/1333/gold-and-silver-prices-100-year-historical-chart are actually completely wrong. The trend seems indeed to be completely different. Can it be that different?? Thank you for posting this!!
That ... is just misleading people. What matters is not a peak, but an average price. 1980's average was $16.4 (1979's average was higher with $21.793) 2011's average was $35 Makes clear how different 1980 and 2011 were. 2011 far exceeded 1980's average. With +100%. Doubled.
What data are you using? Adjusted for inflation by whom? To me such a huge drop in price as shown in the caseyresearch site tells me that people who bought in the early 1980s have simply lost huge amounts of money. My father also bought in the 1980s bubble, and lost money. The fact that the 1980s bubble was much higher than the 2011 bubble simply tells me that people back then lost much more. You know how much people lost in the 2011 bubble (you are one of them). The economy is improving, buying lots of silver and gold now is very risky indeed. caseyresearch shows that there were 20 years of steeply falling prices, followed by 9 years of slightly increasing prices, and now 3 years of falling prices. In my opinion we are set to have a couple of more years of falling prices, until the economy fully recovers and inflation will pick up. Then potentially higher prices. The time frame of caseyresearch (1970-2014) is very misleading, and tells me that they simply wanted to show how the 2011 bubble isn't really a bubble. It's funny that the article ends by recommending to buy gold, and to buy their newsletter or something. This makes me question the quality of their data. If they really wanted to educate people, they should go on for another 50 years or something, to show people the long term trend, and not simply a once-in-a-lifetime bubble.
Just http://www.kitco.com/charts/historicalsilver.html Wasn't that obvious? It's not like that I read my silver prices from some blog. What I do want to add here, is that I recently discovered a series minor changes to 197x silver price data. 8 years changed, 2 years stayed. I talked about it in another topic. What the reason is for these edits, I don't know. They must have some reason, but since 2 years were unaltered, it must be certainly "weird" ones. Why would anyone adjust historical gold/silver price charts? Inflation adjustment is used for indexes and comparisons, not for absolute plain simple prices back then. At least, that's what I thought so far. Sometimes central banks also alter historical data, but that is when they moved towards another calculation method, or some other reference year (case relative index). But plain silver prices from 30-40 years ago? This aside. I see as main reasons for gold/silvers 2 decades hang, the economical progress in production/automation (computers and other technology), worldwide markets, and sales of existing stocks. The reason I have silver, is that I can't see much at present day, able to repeat such advance from present situation onwards. I agree with most what you say here. Back in 2011, I also subscribed to caseyresearch / ed steers newsletters / dailies, just as informational pieces, never based decisions on it. They gave me a 'buddy' feeling, alike 'look at what others on the silver market think and they're also against governments etc' In meantime, I learnt that most of it is bullshit, and that they probably do the same what governments do, whether they are eachothers big enemy, or not. I once stumbled over the statement that extremes are actually very similar. In meantime, I learnt that this is very true, and many historical examples prove it, where so called arch enemies join and/or do the very same crap.
Hi - "People who bought in the early 1980s have simply lost huge amounts of money...." Well No challenging that "The time frame of caseyresearch (1970-2014)" - would mostly be due to the two bull markets that debaters want to compare. Has the bull run to 2011 mirrored the entire bull market of the 70s or is the important inflationary aspect being misrepresented by the current method of measuring inflation? You can say that Casey Research could be misrepresenting the inflation because of a vested interest, but they have gone to another authority, John Williams of Shadow Stats, for a different method of measuring inflation, and John Williams does not flog precious metals. http://www.shadowstats.com/alternate_data/inflation-charts Also there is the question of the vested interest of the US government in changing the method of measuring inflation. Why have they changed the method really, and why accept their recent method? If you go back to the method used before unfettered money creation, you will get something like Shadow Stats measurement which applies the government's very own method used in 1980. So, "The time frame of caseyresearch (1970-2014)" is apt also because it encompasses the era of pure fiat money, from 1971 onwards, the rampant period of money supply expansion, especially post GFC, and the era of US government deceptive measurement of inflation
Yep I'd agree you have to be careful what measurement you use for inflation. We supposedly have very little inflation right now - but you wouldn't think so if you are trying to buy a house. Look at a chart for gold vs oil.
It wasn't very long ago (maybe a year) that my favorite national chain Sandwich shop regularly had my favorite 12" for $5.00 U$, $6 regular, but lots of specials, easy to eat one twice a week at $5. Now - same shop, same sandwich, $5 for a SIX inch, $7.00 for the 12". Many other examples, with necessities, like food, clothing. The thing about this inflation, is it only happens on the price side, not the paycheck side. I remember the rapid inflation of the Carter years, but paychecks climbed too. The other scary thing is that it knows no national boundaries. The notion of a "shrinking planet" was introduced to baby boomers in the 50's as a new idea. Now, just part of life. Good and bad things spread across the globe in days, or hours.
