vexing issues stopping silver from soaring

[amgyoubb]

I posted this to a thread that maybe was not the right one so I thought I would throw it out there again.


Caveat I don't have the answer ..

but a lot of the reason given to silver being well supported and possibly in short supply is the fact of industrial demand...if there is any serious downturn many of the industries that go to make up this industrial demand will also have a down turn and not need to buy as much silver....

you need fiat to buy silver and if people / investors lose their fiat either through losing a job or having their portfolio savaged by a large downturn in the markets they lose their ability to buy silver ........especially if it were to increases in value.

in a currency collapses people really lose their ability to buy PM's ..look at India now..gold sales are dropping off markedly as the cost of gold in Rupees is making gold acquisition all but impossible for the vast majority .

who is going to be able to buy silver @ $100 $150 $250 and with what if peoples buying power stays relative.

these points are issues that have me puzzled as to how big increases in the price of silver is possible..even considering large money supply..cause it aint going to come down to us..the stackers anywhere soon.

your thoughts appreciated.

 

[willrocks]

"who is going to be able to buy silver @ $100 $150 $250 and with what if peoples buying power stays relative."

That could be said more about gold.

The question is, if things get as bad as you suggest, who can afford NOT to buy silver @ $100 $150 $250.

If you haven't noticed, silver sales virtually stop when the price goes down, and skyrocket when the price is at all-time highs.

 

[CDNstacker]

ive said it in another thread but as bullion prices rise junk silver will take a big part of the market. At 100/oz a kennedy 40% half is worth 15 bucks USD. so there is silver at different price point for everyone. US junk silver like 90% dimes will be the new cheap bullion.

 

[Shaddam IV]

in a currency collapses people really lose their ability to buy PM's ..look at India now..gold sales are dropping off markedly as the cost of gold in Rupees is making gold acquisition all but impossible for the vast majority .

who is going to be able to buy silver @ $100 $150 $250 and with what if peoples buying power stays relative.

In a currency collapse currency becomes near worthless. People will lose their ability to buy precious metals with currency. They can however buy precious metals by exchanging useful things such as cars and property. Precious metals become a currency again in their own right, they become directly exchangeable, the part of the exchanges involving pieces of plastic with drawings of dead people printed on them is simply bypassed.

 

[amgyoubb]

"

The question is, if things get as bad as you suggest, who can afford NOT to buy silver @ $100 $150 $250.

If you haven't noticed, silver sales virtually stop when the price goes down, and skyrocket when the price is at all-time highs.

thanks Will... personally I dont think things will get that bad even with Euro contagion and money printing in the US.....but when silver hit its high of $50 that is still a" buyable price" for a lot of people .yes they could still buy at higher prices but their oz purchase will be smaller ..leaving many ounces still on the table..then not to look at this in isolation what drove the price up ???

if its a bad economy then industrial demand will be down leaving nearly 200 miilion ounces annual production looking for a home.

then as Jonesy pointed out "
"In a currency collapse currency becomes near worthless. People will lose their ability to buy precious metals with currency. They can however buy precious metals by exchanging useful things such as cars and property"

but this is an extreme situation and still cant be looked at in isolation..there only so much battering one economy can do and if they have no abilty to buy PM at all that a big support taking away from the price of PM's.
and unless all currencies dissapeer and all economies go up in smoke together there will still be other economies trying to sell their silver production..and carrying on as usual trading silver in fiat...


you can't look at things in isolation the reason that silver is driven up in price will be the reason that effects forces for the price of silver to drop as well.. a conundrum indeed.

 

[TheEnd]

Silver has been used as currency in the past .........It may happen again in the near future as smaller currency than gold.... The trick is having obtained enough of it to survive the collapse (who knows) and getting it for a good price and not paying the sky high prices that could evntuate..... I see silver as a poor mans gold but some say it could outperform gold so who the hell knows ?????

 

[Rinchin]

Since I started thinking of the whole Fiat Currency Vs Money situation I have changed the way I view all these wild claims of silvers future value.

When people start talking of $100, $150... it is easy to get bogged down focusing on these dollar figures. Your probably going to get more and more replies stating that these kind of increases in silver privce are simply a reflection of world economic situation crashing.

Try viewing the quoted figures as Current purchasing power..... so when I hear "silvers going to $250" I don't think wow who's gong to pay $250 for an oz.

Why would the purchasing power increase? Probably due to the various suppression claims for starters. In a economy where the paper players have less influence a more honest silver value must be reflected. But beyond this once the penny drops people will look to a secure investment to store their wealth... increasing demand.

Think of it more like $250 current purchasing power is about a weeks food needs for me and the missus, or whatever benchmark you think of.

There are a lot of different figures quoted, my personal favorite is Mike Maloney's 400oz for an average house..... this in itself avoids using the dollar amount to reflect the value and reduces the question to pure buying power.

Once the world begins to realize the intrinsic value of digital currency (zero) there is no point measuring the value of a legitimate asset in worthless dollar terms.

This way it doesn't matter if the economy collapses by inflation or deflation you retain purchasing power...... So in the deflationary outcome there are less dollars in circulation so the price might actually drop in $ terms, but if the dollars are harder to come buy the purchasing power could still increase.

The inflationary example is the one most people keep banging on about since our would reserve currency is coming hot off the printing presses in such huge volumes.... might be trillions/oz if they let the USD get like Zimbabwe.

The reality is that inflation or deflation are just different ways of dealing with the same problem.... America has spent the whole world into way too much debt and the only way out is to inflate or deflate their currency. This is exactly what helicopter Ben is talking about when he says they have "options"

 

[willrocks]

Once the world begins to realize the intrinsic value of digital currency (zero) there is no point measuring the value of a legitimate asset in worthless dollar terms.

I disagree with digital currency being worth "zero". Whether we like it or not a lot of the world runs on digital technology. Would you say an income producing digital business is also worth "zero"? With the digits there is a lot of infrastructure keeping the whole thing going.

The problem isn't that it's digital. The problem is simply that our current monetary system is at the end of its life-cycle. And as a result there are only two likely outcomes: 1. Inflate and kick the can down the road further, or 2. Let it deflate and go into a depression very quickly.

 

[Rinchin]

I disagree with digital currency being worth "zero".

On one hand your right people with talents and abilities working in a digital business represent real value, this ability and work is currently measured in digital dollars.

But it is not the digital numbers on the screen that give value to the work performed or services rendered. This is simply the current unit of measure.

Would a loss of confidence in the digital dollars not cause these individuals and companies to value their products and services in another medium?

Maybe you heard digital in a different way than I intended. To me digital currency is simply the paper dollars that are created electronically and hence lack the intrinsic value of a good roll of toilet paper.