Golden ChipMunk
Well-Known Member
Eureka Moments said:
PF again.
Three concerning questions about Silver?
- Thread starter Skyrocket
- Start date
PF again.
Pirocco
Well-Known Member
That's everybodies plan, but an important thing to realize is, and maybe that's how/why mmissinglink judges it in this negative fashion, is that it's not the metal / not anything 'intrinsic' to it, even not production cost, that will retain your purchasing power, but simply whether you were among the first, or the last, in stockpiling silver. In other words: success depends on the whole of purchase/sell decisions, as measured over the period that is your... ehm... 'investment' horizon.Skyrocket said:Pirocco, I'm looking for a good long term investment and Silver seems to be one of the safest ones that I can see but I am no expert. I'm hoping Silver prices will stay low for the next year or two so that I can stock up. Then I hope in a decade or two the price of Silver should skyrocket and stay there. At least that's what I'm hoping for. Buy low, sell high is my plan.
So if you state that Silver appears to you as one of the safest choices, it actually implies that you think you are among the first in stockpiling silver. If I have to judge that, then I'm gonna compare average USD prices.
1970-1982 > average price $6.83
1983-1992 > average price $5.72
1993-2003 > average price $5.01
2004-2014 > average price $18.11
Now, 1970-2003 was a period of great technological advances, which reduce production costs. So let's dig it and take just 2004-2014.
Seen like this, and with the current price level in mind, you may be right in your present-time 'one of the safest'. With my just below $30 average, I was clearly wrong, back in 2011-2012.
Yet, the current price level still is 4 times the one until 11 years ago. If a price can hang two decades due to sales of existing stockpiles and admittedly great technological advances, then a price level that is 4 times a previous one with just a decade inbetween, doesn't appear "that" safe to me. There is still quite some silver stockpiled out there, despite the $35 > $20 average price drop. Hence the "may be right".
The way you word it (you hope price stays low for couple years), seems to suggest that your looking for a good long term "investment" isn't an intended current fiatsavings > silver swap. Instead, it's an accumulation story, an important difference because it means that for ex if the price would hit $15 you can't say 'ok let's swap my 2 years saved fiat to silver'. What you call "investment" is then basically a batch dollars now and then, with your success everytime depending on your timing and whether or not other market participants give you an opportunity. Not really an accurate word choice then.
Pirocco said:
Just speculating on a couple of things....
Is it simply a case of Demand Growth vs. Production Growth over the period you highlighted, with production supply outstripping demand leading to stockpiles and hence falls in price? Will there come a time when this switches around and production cannot keep up with demand, and when technological advances are trumped by a decline in ore yields and rising energy costs?
More interesting though, I think, is the statement of "whether you were among the first, or the last, in stockpiling silver... in your investment horizon". If the world population continues to grow by billions of people every decade or so, then theoretically you should always be amongst the first in stockpiling silver, assuming the number of silver-stackers continues to grow along with population levels.
World population, Year, Time to add 1 billion
1 billion 1804
2 billion 1927 123 years
3 billion 1960 33 years
4 billion 1974 14 years
5 billion 1987 13 years
6 billion 1999 12 years
7 billion 2011 12 years
BUT, and here is the really interesting bit, there is a controversial argument that we may be amongst the last humans to live during these population levels and that our numbers could soon drop off quickly.
Of course, many people will be quick to claim this is just philosophical/statistical wankery.
Interesting, if unnecessarily vitriolic, discussion about whether silver is money.
I see the difficulty being that even officially, silver is treated ambivalently.
It is most evident in the fact that a 1oz Kookaburra has a face value of $1, whereas its metal content value is much higher. Is it a coin worth $1 at the shops or an ounce of silver worth spot?
Whatever you think of him, Mr Maloney's (I know! I know!) perspective is interesting. He describes the use of gold for trading before coinage was adopted and the difficulties encountered owing to the use of blobs with varying size and purity. He argues that gold only became money when its purity and divisions of weight became standardised, making it easy for buyers and sellers to assess the value of each piece.
So, if it is be universally accepted in trade, a precious metal (or shell, or potato masher) needs a recognisable and consistent physical form. Humans historically elected to use round disks of standard weight and purity with pretty pictures on them.
But what of silver today? Let's look again at the Kookaburra.
It's a silver coin. Is it money? Yes. It is issued as Australian currency with a value of $1 - the same as our fiat $1 mob of kangaroos coin. So we have 2 coins, worth $2 (face), made from 2 different metals and possessing greatly different intrinsic value because 1 is made from precious metal and the other is made from base metal.
Applying logic (in the mathematical sense), the chemistry of the metal does not determine whether a blob of something is money. In logic, when the outcome of a decision is not influenced by an input condition, we refer to it as a 'don't care'. Money doesn't care what it's made from, you can make it out of paper, if you really wanted to.
I think when considering whether silver is money, the answers are a little more complex than yes or no:
Q: Is silver money?
A: Yes, it can be, but not necessarily, and it works best when its in a form that people can easily recognise and agree on the value of each piece.
Q: Is money silver?
A: Yes, it can be, but not necessarily. My Kookaburra is silver, but your Nugget is gold and those notes are plastic.
Q: Is silver a store of value?
A: Yes. That is how we have used it in the past, but that doesn't mean its value density will remain constant when measured against other mediums which also fluctuate.
Q: Can you eat silver?
A: Don't be daft.
I see the difficulty being that even officially, silver is treated ambivalently.
It is most evident in the fact that a 1oz Kookaburra has a face value of $1, whereas its metal content value is much higher. Is it a coin worth $1 at the shops or an ounce of silver worth spot?
Whatever you think of him, Mr Maloney's (I know! I know!) perspective is interesting. He describes the use of gold for trading before coinage was adopted and the difficulties encountered owing to the use of blobs with varying size and purity. He argues that gold only became money when its purity and divisions of weight became standardised, making it easy for buyers and sellers to assess the value of each piece.
So, if it is be universally accepted in trade, a precious metal (or shell, or potato masher) needs a recognisable and consistent physical form. Humans historically elected to use round disks of standard weight and purity with pretty pictures on them.
But what of silver today? Let's look again at the Kookaburra.
It's a silver coin. Is it money? Yes. It is issued as Australian currency with a value of $1 - the same as our fiat $1 mob of kangaroos coin. So we have 2 coins, worth $2 (face), made from 2 different metals and possessing greatly different intrinsic value because 1 is made from precious metal and the other is made from base metal.
Applying logic (in the mathematical sense), the chemistry of the metal does not determine whether a blob of something is money. In logic, when the outcome of a decision is not influenced by an input condition, we refer to it as a 'don't care'. Money doesn't care what it's made from, you can make it out of paper, if you really wanted to.
I think when considering whether silver is money, the answers are a little more complex than yes or no:
Q: Is silver money?
A: Yes, it can be, but not necessarily, and it works best when its in a form that people can easily recognise and agree on the value of each piece.
Q: Is money silver?
A: Yes, it can be, but not necessarily. My Kookaburra is silver, but your Nugget is gold and those notes are plastic.
Q: Is silver a store of value?
A: Yes. That is how we have used it in the past, but that doesn't mean its value density will remain constant when measured against other mediums which also fluctuate.
Q: Can you eat silver?
A: Don't be daft.
Pirocco
Well-Known Member
What I highlighted, was that production had little to do with the price trend. Why keeping focussing on production then? It's clearly stockpiling & destockpiling that was by far the main price trend driver.SilverPete said:
See, those stockpiles weren't due to your 'production supply outstripping demand', they were not due to producers stockpiling surplus silver, but "investors" stockpiling silver.
The figures proves that:
Net Hedging Supply (former Producer Hedging) (positive means it's [SUPPLY], negative means it's [DEMAND])
1997 68.1
1998 6.5
1999 -16
2000 27.4
2001 -18.9
2002 24.8
2003 -21.0
2004 -2.0
2005 45.9
2006 -11.6
2007 -24.1
2008 -8.7
2009 -17.4
2010 50.4
2011 12.2
2012 -47.0
2013 -41.3
[OUTDATED] Implied Net Disinvestment (positive means it's [SUPPLY], negative means it's [DEMAND])
1997 78.9
1998 45.2
1999 42.0
2000 87.1
2001 -11.4
2002 12.6
2003 7.8
2004 -5.4
2005 -63.1
2006 -39.5
2007 1.4
2008 -9.3
2009 -116.3
2010 -158.3
2011 -132.3
2012 -160.0
Investment = stockpiling
Disinvestment = destockpiling
Makes pretty clear that this was the main price driver, not producer hedging.
You forgot a capital element: population growth affects all prices, thus renders to a net zero effect on relative prices, thus makes silver in real terms (purchasing power) better nor worser.SilverPete said:
My 'among the first' applies to the size of the existing silver stockpile the moment you buy. All stock will be sold one day. Because nobody will throw silver stock in the ocean. The higher that stock is, the more/longer it will undo eventual price rises due to eventual increasing demand (being demand that is present in other markets and leaves those for silver).
I'm not sure of the relevance of this argument with silver, or any specific asset.SilverPete said:
Some general comments:
If there are more people, then usually there are more producing people too. Demand rises, but so does supply. What is the limiting factor then: natural resources, and the degree of inventivity. We have had a century of a high increase in inventivity. The worlds population is middleages multiplied by how much?
What you name as 'Doomsday" could be just an opposite trend, spanning as much time.
Pirocco
Well-Known Member
That face value, the legal tender declared case (and apparently it also happens, so cheating with law, for non legal tender declared currencies like Andorra's Diner), has a quite ordinary reason: in some countries it makes it possible to sell the produced coins under a reduced tax regime.Gorth said:
Things are changing however, just look at Germany since last year.
For the rest, the face value is more a cosmetical / thought than a monetary aspect.
mmissinglink
Active Member
Gorth, you are thinking clearly in my view and I agree with you as well.
Anyone who has actually put their thinking cap on when reading my posts would know that I have never even remotely suggested that money can not be made in the form of silver and concurrently that silver has never been money.
Just the opposite is true....and in fact there has been zero cogent arguments put forth in this forum which shows how blobs of physical silver is treated and regarded as money today in most places. I have been waiting a long time for a good argument from those who claim that silver is money today....I should stop hoping for an impossible miracle.
In order for a type of asset to be treated and regarded as money, there have to be specific requirements met...they are not all being met by silver today. That's what the intelligently written article I posted a link to discusses.
Believe me, I am not opposed to silver blobs (no matter what their standardized weight is) being regarded and treated as money here in the US, but the plain truth of the matter is that silver isn't money today in the US. I would love to have the option of having a real ability to be able to pay my taxes, insurance, grocery bills, utilities, loans from family members, and everything else with blobs of silver....but I don't because physical silver blobs is not money today in the US....it just isn't.
.
Anyone who has actually put their thinking cap on when reading my posts would know that I have never even remotely suggested that money can not be made in the form of silver and concurrently that silver has never been money.
Just the opposite is true....and in fact there has been zero cogent arguments put forth in this forum which shows how blobs of physical silver is treated and regarded as money today in most places. I have been waiting a long time for a good argument from those who claim that silver is money today....I should stop hoping for an impossible miracle.
In order for a type of asset to be treated and regarded as money, there have to be specific requirements met...they are not all being met by silver today. That's what the intelligently written article I posted a link to discusses.
Believe me, I am not opposed to silver blobs (no matter what their standardized weight is) being regarded and treated as money here in the US, but the plain truth of the matter is that silver isn't money today in the US. I would love to have the option of having a real ability to be able to pay my taxes, insurance, grocery bills, utilities, loans from family members, and everything else with blobs of silver....but I don't because physical silver blobs is not money today in the US....it just isn't.
.
mm,
Doesn't your Constitution define G & S as "money"?
OC
Doesn't your Constitution define G & S as "money"?
OC
Drongo
New Member
As of the moment silver is not viewed as money. Not because it cannot fulfill that role, but simply because the central bankers consider it anathema and their ponzi fiat system would die a horrible death if silver (and/or gold) were ever to be readily accepted as a valid and prefered medium of exchange universally.
Thats not to say silver was NEVER circulated 'money', I have a 1966 round 50c that says otherwise.
Unfortunately this is testament to the power of the central bankers; that they can dictate what is considered legal tender with little to no oversight or public input.
GRESHAMS LAW: "When a government overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation. IOW, bad money drives out good money.
Thats not to say silver was NEVER circulated 'money', I have a 1966 round 50c that says otherwise.
Unfortunately this is testament to the power of the central bankers; that they can dictate what is considered legal tender with little to no oversight or public input.
GRESHAMS LAW: "When a government overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation. IOW, bad money drives out good money.
mmissinglink
Active Member
Old Codger said:
I'm assuming you are referring to Article I, Section 8, Clause 5.
Our Constitution has stated many things; doesn't mean that today it is law or an accepted norm by the people. Our Constitution has been amended many times and yes, there are those who argue that the Fed is not Constitutionally recognized to make tender but I don't think this is what defines what is and what isn't money anyway....so it's a moot point for that purpose.
Money has to have the confidence of the people to support it; unfortunately or fortunately, silver and gold blobs today are not seen as or treated as money in the US because the masses don't have confidence in it. One could argue that this is because we've been inculcated or fooled into putting our trust in fiat notes....I might agree with this but it changes nothing about the fact that today, silver and gold blobs are not money in the US.
.
I would say that gold is not money, but a store of some type of value. A smart country is China, where they think long term and not short term like the United States does. But why would China want to buy up so much gold?
Gold was money until 1933 in America.
But technically, gold eagles have a denomination.....
Gold was money until 1933 in America.
But technically, gold eagles have a denomination.....
"No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility."
OC
OC
Pirocco
Well-Known Member
I sometimes wonder about that China China and again, China.fltacoma said:
Was it ever calculated what the amount gold / silver there is, per capita?
Because, it's easy to state China buys lotsa this and that, there are lotsa people there too, and measured like it should be measured, that 'smartness' may not be what some suggest it is, by taking absolute instead of relative figures.
That way it's easy to declare any bigger country as better or worser, in anything.
mmissinglink
Active Member
Old Codger said:
Still doesn't mean that silver and gold blobs is money in America today...they aren't.
If you are so troubled that the clause you pulled from the US Constitution is not being followed as you think it should, you can always try to file a ton of complaints or even lawsuits.
Enjoy that adventure.
Silver and gold blobs are not money today.
.
Pirocco
Well-Known Member
You can check it yourself here:fltacoma said:
http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt
http://www.treasury.gov/resource-center/data-chart-center/tic/Pages/ticarchives.aspx
Jan 2007 China, Mainland: 353.6
Jan 2008 China, Mainland: 492.6
Jan 2009 China, Mainland: 739.6
Jan 2010 China, Mainland: 889.0
Jan 2011 China, Mainland: 1154.7
Jan 2012 China, Mainland: 1159.5
Jan 2013 China, Mainland: 1214.2
Jan 2014 China, Mainland: 1273.5
Latest:
May 2014 China, Mainland: 1270.9
To me, that looks more like treasuring the treasuries than selling them back.
They have the same amount as the year started with. And one can clearly see, that they still held and hold nearly all the treasuries they bought since 2007.
Where did you hear that they are slowly selling back?
Radio ZeroHedge?
or was it Radio Silver Doctors?
