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Merged Silver Over 40.00 / Real and fake prices

timhau said:
Yes, because things will never get so bad that people won't trade food for shiny objects.
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If that time ever occurs, it will in all likelihood be preceded by a longer duration where people will refuse to trade food for pieces of paper or plastic. The value of gold and silver depend on the existence of civilization as much as fiat and electronic money do, but they insure against the loss (and sometimes dramatic loss) of purchasing power that has occured and will occur within the context of a civilized, if financially unstable, society.
 
michaelsuede said:
The Fed redefines inflation by stripping out half of what consumers spend their money on.

Food and energy.

The notion that these should be removed from the core CPI, while housing should take up over 40% of the adustment, is patently ridiculous.
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I'm afraid it's far worse than this. It's easy enough to just look at headline inflation to presumably capture food and energy prices, but that isn't the problem. The problem is that the current formula which uses hedonic regression to measure "inflation" is several-hundred basis points lower than the results given by the pre-Clinton era CPI formula, as documented by John Williams at http://www.shadowstats.com. This is how economists can, with a straight face, claim inflation is low and fool people like iomiller, not because of core vs. headline.
 
Tippit said:
....John Williams at http://www.shadowstats.com. This is how economists can, with a straight face, claim inflation is low and fool people like iomiller, not because of core vs. headline.
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Williams has done absolutely outstanding work in providing a credible, carefully researched alternative set of numbers (including the M3 number) against a generally increasing propagandic set of government supplied numbers.

BUT I'm in favor of most of the people being fooled most of the time, so I like the government numbers.

PSST: let's not tell anyone about Shadowstats.com, okay? We'll just keep it a little secret.

:)
 
Tippit said:
... The value of gold and silver depend on the existence of civilization as much as fiat and electronic money do, but they insure against the loss (and sometimes dramatic loss) of purchasing power that has occured and will occur within the context of a civilized, if financially unstable, society.
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But gold and silver always were intermediate products in the context of bartering exchange, and today other intermediate products are dominent. Gold and silver will never return to this status.

For example, today even currency isn't really used. Electronic equivalents are. The question of relevance is what backs the unit of exchange presented.

So for example, suppose there was a major currency collapse. Visa would move to back it's cards with some commodity based basket, then the card presented would be good. And that could happen so fast you couldn't blink your eyes twice before it was in place. No gold or silver is necessary, just the elimination of governments from the concept of money.

It's the electronic equivalents which have created these possibilities, but they are not yet recognized for their potentials.
 
Wouldn't it be funny if precious metals were in a bubble state, like houses were recently, and dotcoms were before that?

Gonna have a nice laugh if/when the price tanks.
 
So you're saying a 100oz silver bar is soon going to be worth $100k US?

I have my doubts ;)
 
I have a bag of 1000 silver dimes.

At one point, each dime was worth 10 cents.

Today, each dime is worth over 3 dollars.

((¢300 - ¢10) / ¢10) *100 = 2900% increase

(($1000 - $42) / $42) * 100 = 2280% increase

I don't see why silver can't go to 1000 since the dollar has already lost 96.7% of its value.

Most of that lost value has occurred in the last 40 years. We will see an acceleration of value lost for several reasons. Not the least of which is JPMs fraudulent naked shorts and the Bernank's printing press.
 
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michaelsuede said:
I have a bag of 1000 silver dimes.

At one point, each dime was worth 10 cents.

Today, each dime is worth over 3 dollars.

((¢300 - ¢10) / ¢10) *100 = 2900% increase

(($1000 - $42) / $42) * 100 = 2280% increase

I don't see why silver can't go to 1000 since the dollar has already lost 96.7% of its value.

Most of that lost value has occurred in the last 40 years. We will see an acceleration of value lost for several reasons. Not the least of which is JPMs fraudulent naked shorts and the Bernank's printing press.
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For a whopping ~4.5% compounded return. Adjusted for inflation.

You'd be way better off owning, say, Berkshire Hathaway. Or a friggin utility that pays dividends.
 
roger said:
For a whopping ~4.5% compounded return. Adjusted for inflation.

You'd be way better off owning, say, Berkshire Hathaway. Or a friggin utility that pays dividends.
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This is true under normal circumstances.

However, we are no longer dealing with normal circumstances.

We are dealing with an out of control central bank and government.

In those situations, metals will out-perform such market gains.

They always do.
 
Metals do not 'perform'. They do no useful work by themselves. They are not productive. Their prices are based on supply and demand. Admittedly demand rises due to hysteria during inflation, but it also collapses. Historically silver has been nearly flat except for that super brief bubble/collapse a few decades ago. It falls back to flat. It always does. (because of that aforementioned 'it does not produce' point).
 
10 year return on silver:
april 14 2001: 4.38
april 14 2011: 42.20

Berkshire Hathaway Inc. (BRK-A)
Apr 16, 2001 64,200.00
Apr 13, 2011 121,227.00

Which would you rather own?
 
roger said:
Metals do not 'perform'. They do no useful work by themselves. They are not productive. Their prices are based on supply and demand. Admittedly demand rises due to hysteria during inflation, but it also collapses. Historically silver has been nearly flat except for that super brief bubble/collapse a few decades ago. It falls back to flat. It always does. (because of that aforementioned 'it does not produce' point).
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Metals preform when the dollar fails.

The dollar is failing.
 
michaelsuede said:
10 year return on silver:
april 14 2001: 4.38
april 14 2011: 42.20

Berkshire Hathaway Inc. (BRK-A)
Apr 16, 2001 64,200.00
Apr 13, 2011 121,227.00

Which would you rather own?
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Berkshire Hathaway.
 
I predict just a few months from now, I will dredge up this post and LOL @ 40.00 silver.

It will be a thing of a by-gone era.

Like nickel gum-ball machines.
 
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