What events NEED to occur for Gold/Silver to reflect TRUE VALUE?

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No doubt he based it purely on USD monetary base divided by estimated oz's Ag above ground.
Apart from numerous other Baloney fallacies, this whacko theory assumes that the financial system doesn't exists outside the US, and fails to acknowledge that there is soooo much more of value than just silver to divide into the equation.

 

I thanked this on the basis that you were making a joke. You were making a joke right?

 

WAR...... if a large war comes economic and policy changes...... pre-war will move metal prices to a new level...... a type of economic collapse(dont need to be a total collapse...can be a very large recession) usually comes first then the WAR.

 

Slam, what you are still avoiding to present is the most important part of your claim that all it takes is for the masses to pile into gold and silver. Unfortunately, such a claim bears little resemblance to reality.

You remind me of my friend who, when we discuss war and peace, he says that all it takes for the world to avoid all wars is for the masses to be peaceful. Like you Slam, of course my friend never bothers to even remotely specify how exactly is it that the masses will do what is claimed the solution to be (the masses suddenly doing something). Both of you are making far fetched statements and you know it's far fetched because you can not provide a single realistic scenario in which the masses will pile into gold and silver when the currency has greatly devalued. I have seen no evidence to date which corroborates the permabulls' claims that, predictably, when hyperinflation (aka "currency collapse") has set in the masses will always look to amass gold and silver....there's just no evidence for this spurious claim. During hyperinflationary times in different countries, the masses sought the basics like food and sources of energy. Anything can become money during this time; cigarettes, batteries, toilet paper, parcels of land with rich soils perhaps weapons and ammo, valuable antiques, rare numismatic coins and art would very likely, and yes, even gold and silver could...but it would be simply one amongst many forms of money. And all of those forms of money would eventually and quickly in today's world, I would argue, give way to an existing stronger or a new fiat currency. Even the US dollar, if ever it should devalue to oblivian, would be replaced with a new fiat currency or perhaps special IMF SDR claims would be issued to the US gov't that would be swapped for USD.

Keep in mind also that during a currency collapse, everything will become extremely costly. A common everyday postage stamp could cost hundreds of millions of that country's currency. Most people wouldn't seek to buy gold and silver because like everything else, they couldn't afford it. Instead, they'd buy what they needed to survive the week. Some very wealthy people may seek to amass gold and or silver, but there's no historical evidence that the masses will do this. For example, I can tell you for certain that in 1923 Germany (called Weimar republic at that time) most Germans didn't suddenly seek to amass gold and silver when the value of their currency was spiraling out of control. Also, gold and silver was being confiscated by the government. How do I know this? My grandparents were citizens living in Germany during those difficult years of the hyperinflation and they, like most people, were sanctioned by law to turn in their gold and silver. Like most people, they could hardly afford a loaf of bread...and you can't eat gold or silver.

Another thing you are failing to understand is that gold and especially silver are becoming increasingly less important to the masses. Sure there is variance depending on which part of the world you live in, but for most of the people of the world, silver and gold is not even seen as money anymore...because it doesn't function like money for most people of the world today.

So as we can see, even the favorite claim of permabulls (that during hyperinflation/currency collapse the masses will pile into gold and silver) is nonsense.

Have a read of this: http://s3.amazonaws.com/presspublisher-do/upload/567/JM_Hyperinflations_213-1.pdf


The true value of gold and silver or a pack of cigarettes or a gallon of petro or a sack of potatoes is what people are willing to pay for it today. There's no sensible reason to believe that the masses today, who are largely not interested much in gold and silver bullion any longer, will under any realistic condition all of a sudden pile into it. Stackers might. Certain investors might. Central Banks have sought to hoard gold at times (not silver any longer). Sorry to break the news to you but the masses today under any condition that I can think of, will not just like they will not seek to pile into pretty seashells.

But I could be wrong though I doubt it.



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Sorry but how does it not resemble reality. I said it in a vague manner but it still holds true. Tell me if everyone on this planet were to pile in 5-10% of their net worth into PMs? this itself will drive the price up many multiples of what its worth now. Literally this is how bubbles are formed, people start investing into PMs, more people get in, the paper price continues to increase and inflate. This is the same as property right now, more people are borrowing ("Piling in") to property it has grown more than 10% in Australia last year.

All it will take is some event, and it will be self fulling the price. People will see short term massive increases and a frenzy starts, the price itself will continue north like all bubbles simply people believe it will be worth more and onsell to the next.

Yes I have been here long enough, nothing has happened. I am not bitter like alot of the older stackers here from 4 years back. I still believe the time will come some day for the PMs to shine. You may not see that.

My reason is, ask yourself those around you. How many have truly stacked PM's out of their own research (without your influence?). I bet not many, they are none the wiser. The masses I refer to are the general public and awareness of the currency system. People have still not woken up to the current fiat system and how it works, so we are still at the mercy of that. Until something changes or an event which deeply hurts them financially. Hardly anyone other then those already educated on the fiat system will buy into PMs.

My thoughts are there's simply too much currency around, limited amount of assets to put them in. If you think PMs are a poor investment and that day won't come, by all means just sell your stack. I'm not trying to brain wash people like Mike Maloney, but at the same time I see flaws in the current monetary system and consumption lifestyle we have. Either I ride it like this all the way till I am dead or the system fails at some point.

The point I am trying to make is, for PMs to really make a difference. There needs to be mass awareness and mass purchasing (which also involves holding) by a lot of people on this planet. Literally having it behave like an asset bubble. If Bitcoins can do it, then Gold can too.

Slam

 

You still have refused to give a realistic scenario where that would happen....for the third time. This is getting to be a tiresome conversation. It's no different than me claiming that the price of dog feces will shoot through the roof when the masses start piling into it....and then refuse to provide a realistic scenario where the masses would want to buy en mass, dog feces.

Many parts of the world have been through plenty of severe crisis in the past several decades and the masses haven't piled into silver and gold. You even admit this yourself, "How many have truly stacked PM's out of their own research (without your influence?). I bet not many, they are none the wiser. The masses I refer to are the general public and awareness of the currency system. People have still not woken up to the current fiat system and how it works..." And if they haven't yet, they won't ever. If anything, silver and gold are much less important to the masses than ever before namely due to the fact that to most, it is no longer seen as money because it doesn't function like money. And even if hyperinflation did set in and the masses somehow magically and mysteriously finally "woke up", by then the masses wouldn't want to buy silver and gold but rather food and medicine and energy and things they need to survive the week. During a hyperinflation the cost (denominated in the currency that is going through hyperinflation) of EVERYTHING will skyrocket. If the US dollar hyperinflated, for a while it may be dangerous to even go out of your home...depending on where you live and other factors. The masses could not afford gold and silver and so the masses won't be piling into it. Besides, since they can't eat or drink it, run their radio with it, cure their illnesses with it, defend them self with it...what critical immediate use would it be to them??? And go out to buy it just to try to barter with it with the streets being so dangerous??? The masses won't be doing that.

So, for the 3rd time I ask you to provide a realistic scenario where the masses will be flocking and piling in to buy gold and silver.

There's not too much currency in circulation...that's not how QE works...at least not in the US. Besides, just because there is an inordinate amount of notes m in circulation, it doesn't mean that there will be significant inflation let alone hyperinflation. There are other factors that must come into play for that to happen. There are plenty of articles to read on this subject...do yourself a favor and read some of them. If you are only going to read permabull opinions, then you are doing yourself a great disservice.

Bitcoin's success is not comparable with the way gold and silver is valued because while Bitcoin and other cryptocurrencies are increasingly being used as a type of money, gold and silver are taking the opposite track...at least with the general masses.


Now, for the price of gold and silver to go higher, there doesn't need to be some great influx of the masses into gold and silver. We have seen gold and silver move considerably higher in spite of the fact that the masses didn't wake up. I'm sure there are plenty of fear mongering permabulls out there claiming that the masses will pile into gold and silver tomorrow and silver to da moon tomorrow...but they are wrong and it doesn't require the masses to pile in to move the metals prices significantly.

The masses won't pile into silver and gold but I am convinced metals will move higher in spite of that because we have seen this happen many times historically.




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Here is an article, but I will see if I can find something from Mike Maloney as well.

What do you think about this article: https://www.goldbroker.com/news/paper-silver-market-250-times-size-physical-silver-market-526

 

I don't think there would be a single scenario that will trigger this, other than a series of events leading to the general population buying and holding gold. I have given some scenarios in the past. I'll try to do it again.

I think by now we have established that for Gold inflate, a lot of it needs to be bought up and held and seen as precious and is of value. The other main thing is that it will need to be traded around for one purpose. To settle debts / deals.

At the moment we can see that from the currency wars everyone is racing to the bottom. We got US running QE programes, china buying large amounts of US treasuries, Japan running deficits and printing like crazy. At some point this can't go on forever. Its like the US print fresh currency and China trading their goods for this freshly printed paper.

In the finite world we live in at some point China or another crediting nations will want to call in their debts. The debtor nations will just hand over more existing currency. If this doesn't start a war, it will force creditor nations no choice but to introduce a FINITE currency (most likely linked/backed with a finite resource like gold). This may be the new reserve currency, where its main purpose is for settling international trade. This might be the event that will wake up the general public into buying gold, gold itself will be increasing in price until it finds a true market value.

Now you might think this is unrealistic, I don't think so. For countries that export and import they won't need to settle with this reserve currency there is bi-directional trade and trade is balanced (ie. they don't just leech). But for those that are one sided and currently import year after year more than they export. The exporting country will want payment / settlement in the reserve currency. You can't just keep leeching and importing with conjoured up currency. Its pretty obvious many countries know this, you can see why China is in a spending spree buying up farms, hotels, cinema chains around the world. They are trying to spread their risk, they know that this game can't go on forever (buy things with the current toilet paper currency we are using).

I see where you are coming from, I have doubted myself whether gold will or will not increase. I just feel that our current lifestyle and monetary system is way to broken for something not to give. Just have a look at how much stuff we have around the house and how much effort / work you needed to do to buy all that. It doesn't make sense to me. This is our western lifestyle (to consume and upgrade like no tomorrow).

Slam

 

Absolute crock of shyte.
Typical spin, and outrageous exaggeration by another permabull bullion salesman.
The similarities to Maloney are amusing.... so are the brazen motives.
This says it all:

 

Hi Slam,

I don't think you've made a good case, I'm sorry to inform you.

You have made plenty of assumptions and let me explain (again in some instances) the truth on the ground.

1) The alleged 'currency war' is actually helping to bolster the US dollar, not weaken it. The dollar outperformed gold in 2014 (and significantly outperformed silver in 2014). the global reserve currency is doing quite well compared to other currencies and better than many commodities including liquid gold (petro / fossil fuel oil).

2) The US QE program is not pumping billions of dollars into circulation every month. Also, in the US we have plenty of goods, services, and investment vehicles for money to be spent on. and concurrently we are in a very strong position in the world in terms of stability and viability. All these factors together means that the likelihood of hyperinflation in the US over the next couple or few years is very, very, very, very low.

3) There's no good evidence at all that any of the wealthiest nations (by GDP) will return to backing their currency with gold....A) there's too much at stake and B) why would the elites who are in charge and who benefit from fiat money want to change something that has been working well for them and the financial institutions?

4) The US dollar is considered the reserve global currency....good or bad, it just is. The Chinese are loaded with US dollars but they are also holding and buying US Treasuries by the hundreds of billions of those USD. If the Chinese stopped buying those US Treasury Bills and Bonds it would appreciate the Yuan and that would be bad for Chinese exports. So China is a major trading partner with the US and the US is their biggest customer I believe...the Chinese gov't doesn't want to do anything to ruin that precarious relationship and the US doesn't either because the Chinese are the largest net holders of US Treasuries. Each doing what they helps to stabilize each of their currencies. Yes, other factors come into play with what constitutes a stable currency, but until the Chinese Yuan becomes a competing global reserve currency, the US has nothing to worry about with its dollars being solvent and trusted. The Chinese Yuan may have decades to go before it is considered as a global reserve currency...if it ever becomes that.

The US has far and away the the most superior and strongest military and defense systems in the solar system. I don't say this as a brag but rather as a fact I have come to understand...especially since Russia now finds itself at the beginning of a very difficult financial struggle, it's military will also suffer. If some country finds itself on the short end of the stick in terms of wanting to repatriate all of its gold from our Central Banks or not being able to call in all of its debts to us...guess what....no one is going to force the US to do something it doesn't want to do. Again, this is not a brag, just the facts as I see them. Germany can do nothing to get the remainder of its 70% gold bullion from the Fed Reserve any faster than the Fed Reserve wants to give it. China could do nothing, even if they wanted, if they were in the same position as having gold reserves on American soil. China is currently in no better a position to cause a dollar crisis than Martians are.

5) The fiat US dollar is doing fine and probably will be stable for many decades to come still.

6) If hyperinflation of the USD occurred, there's no modern historical evidence at all which suggests that the masses will be piling into gold and silver. In fact, there's a SS member who last year had written about his experience in a Euro country where the currency hyperinflated (I don't remember which SS member or country). Anyway, if i recall correctly, the masses didn't pile into gold and silver....there were much more important things to buy than these metals...if they could even afford anything at all.


So we can see that there's no realistic scenario presented by you, Slam, that suggests or would cause the masses to pile into gold and silver. It's a complete fairytale pumped by some permabulls and those who don't really understand human nature and the way the markets work.

The good thing for stackers is that we don't need the masses to pile into gold and silver for the price to go up or for the perceived value to appreciate. So let's keep it real and remember that gold and silver are not money for the masses because it doesn't function like money for the vast majority of them. Gold and silver are assets and they are also commodities. Assets are not necessarily money.

Are there problems with a fiat currency? Yes, of course but that doesn't mean that countries will ever return to pegging their currency to gold or silver alone let alone backing their currency by these metals. Just because a fiat currency crumbles doesn't mean that it won't be replaced by another fiat currency. In fact, that's the only thing that has ever happened in the past century or so when countries have experienced hyperinflation. No country that I am aware of decided to then back their new currency with gold or silver.

Finally, gold and silver have no intrinsic value. They have intrinsic properties or characteristics. All the value they have ever had and still have is the value we attach to them or the perceived value we (collectively or not) give it.





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