ZeroHedge doesn't believe silver is money

Discussion in 'Silver' started by chimpanchu, Dec 19, 2010.

  1. chimpanchu

    chimpanchu New Member

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    http://www.zerohedge.com/article/fofoa-golds-focal-point-or-silver-money-too

    The argument is through out time people always fall back to Gold and Silver as monetary metals. Because both metals are STABLE.

    Keyword here: STABLE. What that mean is stable supply and value.

    Gold is NOT consumed therefore the supply of Gold in the world is STABLE.

    Silver is different now, since the raise of industrial age more and more silver being used in industry.
    Because of that Silver is consumed and the supply of silver is dwindling... meaning UNSTABLE!

    You cannot have monetary metal where the supply is diminishing!?
    There may not be silver in 10-20 years from now, how can a metal which at a brink of extinction be a monetary metal???

    ZeroHedge raised a very credible point. But it doesn't mean silver is not a good INVESTMENT, yes, silver is considered investment just like you invest in copper, cotton, sugar, etc... because silver WAS a monetary metal BEFORE industrial age, but now silver is an industrial metal.
     
  2. systematic

    systematic Well-Known Member

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    i just cant see the globalists allowing the great unwashed masses physically handle precious metals in a new monetary system - it just goes against their bloody principles at the end of the day ..... they arent called precious metals for nothing .....
    how they get "treated" in the meantine is another thing
     
  3. millededge

    millededge Active Member

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    From recollection it was Friend of Friend of "Another" (FOFOA, not ZH) who argues with great prolixity :( that gold and only gold ticks all the boxes for the ideal functions of money, in particular as a unit of account and store of value.

    I think his basic viewpoint about silver is that as a widely consumed commodity its value is too much at the mercy of industry and therefore too unstable.

    Pity he took an hour to say it :/
     
  4. Forge

    Forge Member

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    FOFOA's articles are always of length. If you've got the time, working through his articles and those that came before him is worthwhile to understand that perspective.

    Regardless of whether you like silver as a speculation or not, the points made are valid. Silver does not have the required stock to flow ratio any more; neither does it have the requisite uselessness to be truly monetary in nature.

    It is however, 'harder' money than fiat. The significance of this can be lost in the general thrust of FOFOA's argument; there may very well be a use for silver as a unit of exchange if and when our system collapses. Only gold will be wealth, but there will be a preference for harder money such as silver if fiat is abused and people lose faith in the currency (hyperinflation).
     
  5. JulieW

    JulieW Well-Known Member Silver Stacker

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    https://www.kitcomm.com/showthread.php?t=72867
    I think this a much more likely result in our future than the doomsday predictions. USA is a very powerful empire.

    Consider how little gold is held in private hands. Consider that vending machines and so on are a means to create a 'gold owning' class who have a vested interest in supporting this concept. Consider that this will allow most of our present to continue into the future, and that is what the government's of the world will be seeking.

    If you have ten percent of your money after an event like this and things cost 25% of what they did you'd be disgruntled. If you had zero and things cost the same you'd be in the streets with garden forks and the traditional weapons of the peasants.

    People talk of a 'black swan' event. I'd put my money on this one. They're boiling the frog slowly and they'll make sure it remains slow.
     
  6. dccpa

    dccpa Active Member

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    Why choose, buy both.
     
  7. Guest

    Guest Guest

    I've actually been stating this myself for quite some time in regards to silver. In as much as fiat isn't an ideal store of wealth because it's constantly 'devalued', so too will silver as an inverse reaction because it's going UP in value. It's lack of stability will be one of the main reasons why, in the event of a return to the Gold standard, that silver will never be reintroduced into the currency because sure as hell, it'll be hoarded just like the 1966 50c debacle.

    Silver in the short to mid term is absolutely the right choice because it'll have superiors appreciation as a percentage against gold, but in the end game for precious metals, it'll definitely be all about Gold. That's why the central reserve banks the world over store Gold after all.

    Always remember that Gold is money and nothing else.

    People point to it as 'useless' because it does nothing but store value, but that is precisely why it's so important.

    My 'end game' for silver is to trade it for gold and the gold I will keep for life.

    But even then, I will always keep at least 10% of my silver holdings no matter what comes simply because the fundamentals on Silver as an essential industrial commodity are so strong.
     
  8. chimpanchu

    chimpanchu New Member

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    Just watch this new Silverfuturist video, he pretty much summed up what being said in FOFOA.

    http://www.youtube.com/watch?v=xT2LDtZ8hyw
     
  9. systematic

    systematic Well-Known Member

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    returning to a gold standard is one thing
    using it as a currency on a global scale for the use of the great unwashed is quite another
     
  10. Guest

    Guest Guest

    The Gold standard is an assurance of convertibility through your banks and money brokers, that's all it is.

    So if you have fiat in hand, you can go to the bank and convert it to gold over the counter, no questions asked.

    There's absolutely no reason this process cannot be implemented for digital currency as well, as long as it's backed completely with physical.

    For many people, the 'assurance' alone will be enough to continue using their digital/paper as long as it's convertible exactly as they do today.

    For people like us, they will want physical in the hand and will claim such.

    The only difference will be that inflation will stall & the value of gold will skyrocket to account for the last 30 years of printing.

    The problem with a Gold standard today isn't a technical one, it's a political one.
     
  11. systematic

    systematic Well-Known Member

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    digital currency is far more likely
    physical gold and silver is highly unlikely
    he who has the gold makes the rules
    peasants dont make rules
     
  12. Ernster

    Ernster New Member

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    Meh they can call it what they want. As long as it makes me richer than I'm happy.
     
  13. systematic

    systematic Well-Known Member

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    being rich = happy is a fallacy
     
  14. chimpanchu

    chimpanchu New Member

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    Silverfuturist follow up video

    http://www.youtube.com/watch?v=huIXs_05H5E

    He made a good point about China may accept silver as a method of payment. Which in effect will monetize silver again.

    Knowing China, they probably will take any commodity as a method of payment over US dollar any time of the day.
     
  15. Guest

    Guest Guest

    Absolutely. Nothing is more important to me than my family or my marriage.

    But that said, the lack of wealth most definitely leads to misery.

    I know that from experience.
     
  16. Silver is Money

    Silver is Money Member Silver Stacker

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    I read somewhere that 95% of people who win big on the lottery are broke within 5 years. So while money may not always bring you happiness, you can have a bloody good time while you got it :D
     
  17. JulieW

    JulieW Well-Known Member Silver Stacker

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    Actually research shows that money does buy happiness. People who are moderately wealthy have better marriages and health and expect the world to be a better place in future.

    Unsurprising since stress is the great killer and destroyer and nothing is much more stressful than poverty and debt.
     
  18. donpaulo

    donpaulo New Member

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    Jim Rickards mentioned that after WW2 the euro powers exchanged fiat earned from their positive trade balance into gold.

    But the Chinese only have dollars and no metals in exchange for their trade balance

    This leads me to believe that the Chinese will accept anything of monetary value in exchange for renminbi err fiat

    I buy silver because I believe the ratio is tweaked

    but I have some gold too :)

    never believed silver was money, only a way to possibly make some money or perhaps preserve what wealth I have
     
  19. chimpanchu

    chimpanchu New Member

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    Are you going to swap silver for gold when the ratio is right at some point in the future?
     
  20. errol43

    errol43 New Member Silver Stacker

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    I think that it would be less than 5% here on the SS site. The price of silver would have to drop to $5oz for us SS members to loose a lottery win. We sure would have some fun buying silver and gold. Maybe the more we spent of the lottery win on silver the richer we become.

    Regards Errol43
     

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