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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
 Posted - 10/27/2009 : 19:54:02
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Ok, so I'm certainly not jumping off the bandwagon here, and I fully expect silver to outperform gold from here on out, but I am puzzled by one thing. I have never seen any analyst, either from the "woo-hoo, I'm going to be feelthy, frickin rich camp" of Jason Hommel or Izzy Friedman, to the more sedate and reasoned rationales of Richard Russell or David Morgan, mention the point that follows. Everyone predicates silver as being low-priced historically, particularly in regards to it's presumed inflation-adjusted all-time high ($125 if you use the Liar's Club CPI and much higher if you use the shadow stats) based on the previous "high" of $50 back in 1980. Hello??? Earth to greedy hoarders? That high was achieved in a milieu during which a bunch of Saudi sheiks was fronted by the Hunt brothers and attempting to corner the market. Do those particular set of circumstances exist today? Uh, no, I don't think so. So, is it just me, or are all these experts who keep promulgating the inflation adjusted all time high based on a $50 base price just full of hot air and empty posturing?
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Hoard now and hold on!
http://coppermillions.blogspot.com/
http://wherewillyoubein2012.blogspot.com/ |
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fb101
Administrator
USA
2856 Posts |
Posted - 10/27/2009 : 19:58:03
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While some of their estimates may have a rational basis, that Hunt thing invalidates any correlation with past history.
You're right about that. |
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Nickelless
Administrator
USA
5580 Posts |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
 Posted - 10/27/2009 : 20:20:11
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That's a good question. It's obvious to me there is some real brain power in this forum. What do our other vaunted members think? Mind you I still think we're going to win the game in the long run, I just don't need the vacuous cheerleaders rooting us on to our greatest victory of all time, when that previous score was because Ohio State was playing Benton Elementary.  Perhaps using the inflation-adjusted high of 1980 gold and then determining the 16:1 ratio would give a better indication? Whadda you guys think? |
Hoard now and hold on!
http://coppermillions.blogspot.com/
http://wherewillyoubein2012.blogspot.com/ |
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fb101
Administrator
USA
2856 Posts |
Posted - 10/27/2009 : 20:22:11
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You can't discount 1980 completely, the backdrop would have driven silver up dramatically anyway, it's just that the move was exaggerated drastically by the Hunts. So the closest thing you'd find to silver hitting its inflation-adjusted high was 1980, it just wasn't $50. Maybe it was $20, $25.. who knows?
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Country
1000+ Penny Miser Member
USA
3121 Posts |
 Posted - 10/27/2009 : 20:24:18
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Let's throw out the Hunt Brother's spike in SILVER. If you start in 1972 when Nixon got us off the GOLD standard, SILVER was about $2 per troy ounce at that time. I don't have a graph for the years 1972 to 1985, but if I did you would see, minus the Hunt Brother's spike, a long period over 30 years before SILVER really started to rise to about $4 a troy ounce. So, from 1972 to 2002, SILVER rose from $2 to $4 a troy ounce.
How much inflation occurred from 1972 to 2002? Let's say on average it was 5% to be conservative. That would mean 1972's $2 SILVER should have been worth in 2002, ($2)^((1.05)^30) = $20, adjusted for 5% inflation. It was grossly undervalued in 2002 wasn't it? If we move forward to January 2010 and use the same 5% inflation rate, the 1972 $2 price of SILVER should be ($2)^((1.05)^38) = $83.60 adjusted for 5% inflation. Now, if we used a 4% inflation adjustment to the $2 1972 SILVER, the inflation adjusted price of SILVER would be $21.68. It all depends on how much inflation really occurred doesn't it?
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---> Come to the new and improved realcent: http://realcent.org
The things that will destroy America are prosperity-at-any-price, peace-at-any-price, safety-first instead of duty-first, the love of soft living, and the get-rich-quick theory of life.
Theodore Roosevelt
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Edited by - Country on 10/27/2009 20:49:30 |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
 Posted - 10/27/2009 : 20:28:10
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That's probably a reasonable conclusion. It's a tiny complaint of mine, really, since no one is about to argue the merits of holding PM's. I just don't like the rah-rah element pushing it on false premises. Can you imagine in two years what the talking heads on CNBC will be gushing when both PM's and BM's (uh, I don't think I'll refer to base metals that way again ) are peaking? |
Hoard now and hold on!
http://coppermillions.blogspot.com/
http://wherewillyoubein2012.blogspot.com/ |
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Nickelless
Administrator
USA
5580 Posts |
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billo
Penny Collector Member
293 Posts |
Posted - 10/27/2009 : 21:54:23
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| Let's bring back the old 1:15 or 1:16 ratio. (But first a dip down to let me stock up.) |
That's not a dollar, mate...THIS is a dollar.
http://www.sendcongressapinkslip.com/ |
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Nickelless
Administrator
USA
5580 Posts |
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beauanderos
1000+ Penny Miser Member
USA
2408 Posts |
Posted - 10/27/2009 : 22:46:55
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| Billo, you got your dip the last two days. Don't ask for more, it's already cost me an arm and a leg (a mere flesh wound!) As Cramer would say, buy buy buy. In fact, I'm headed over to ebay right now to pick up more silver while the other bidders are disheartened (gee, and I only lost appendages) |
Hoard now and hold on!
http://coppermillions.blogspot.com/
http://wherewillyoubein2012.blogspot.com/ |
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jonflyfish
Penny Hoarding Member
USA
693 Posts |
Posted - 10/27/2009 : 22:52:45
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Who needs the Hunt brothers when the CME Group Nymex Comex can squeeze this stuff to unimaginable (to some) levels on a credibility squeeze if traders begin demanding physical delivery? Spikes and "Black Swans" are not supposed to happen (like the 100 year flood that happens every 7 yrs or so) but they do all the time, and the reasons are usually uncorrelated from one instance to the next. Hunt style phenomenon or not, anything can happen at any time for any reason. And when it does, I will not ignore it or throw it out as an anomaly. I will believe the tape when it shows the unfathomable.
Cheers! |
The first panacea for a mismanaged nation is inflation of the currency; second is war. Both bring a temporary (and false) prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunities. |
Edited by - jonflyfish on 10/27/2009 22:54:18 |
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country_bumpkin
Penny Sorter Member
USA
86 Posts |
Posted - 10/28/2009 : 14:16:33
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Ignore the hysterical 1:15 or 1:16 ratio - it means nothing.
The actual ratio of gold to silver is closer to 1:10.5 for all that has ever been mined in history, and silver isn't going to go to $100 anytime soon, especially with digital cameras taking a larger chunk of the photography market year after year.
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He who goes a-borrowing, goes a-sorrowing.
- Benjamin Franklin |
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billo
Penny Collector Member
293 Posts |
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Nickelless
Administrator
USA
5580 Posts |
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billo
Penny Collector Member
293 Posts |
Posted - 10/28/2009 : 23:01:58
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| Throughout most of history silver was a lot stronger, a true companion and complement to gold. I think it still has that intrinsic value, and the current situation is unnatural. I believe these metals were created to be used in conjunction for storing wealth, in addition to their other uses. |
That's not a dollar, mate...THIS is a dollar.
http://www.sendcongressapinkslip.com/ |
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Lemon Thrower
1000+ Penny Miser Member
USA
1588 Posts |
Posted - 10/29/2009 : 05:14:28
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quote:
Originally posted by beauanderos
Ok, so I'm certainly not jumping off the bandwagon here, and I fully expect silver to outperform gold from here on out, but I am puzzled by one thing. I have never seen any analyst, either from the "woo-hoo, I'm going to be feelthy, frickin rich camp" of Jason Hommel or Izzy Friedman, to the more sedate and reasoned rationales of Richard Russell or David Morgan, mention the point that follows. Everyone predicates silver as being low-priced historically, particularly in regards to it's presumed inflation-adjusted all-time high ($125 if you use the Liar's Club CPI and much higher if you use the shadow stats) based on the previous "high" of $50 back in 1980. Hello??? Earth to greedy hoarders? That high was achieved in a milieu during which a bunch of Saudi sheiks was fronted by the Hunt brothers and attempting to corner the market. Do those particular set of circumstances exist today? Uh, no, I don't think so. So, is it just me, or are all these experts who keep promulgating the inflation adjusted all time high based on a $50 base price just full of hot air and empty posturing?
its a good question. an even better question is whether the optimistic predictions for silver are meaningful if you base it on the 1980 top in silver that was very briefly held.
sure, the hunts are gone. but butler has identified a lot of factors going the other way:
--potential for short covering rally
--potential for all fiat paper to erode
--gold to silver ratio to compress
--supply shortage due to how silver is mined - mostly as a byproduct of base metals, the demand of which is down as the economy slows. |
Buying:
Peace/Morgan G+ at $15.00
copper cents at 1.3X
wheat pennies at 3X
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keys
Penny Collector Member
383 Posts |
Posted - 11/04/2009 : 19:15:36
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I have been considering the arguement that the Hunt Brothers were the number one reason silver shot up so fast and so high, but let us also consider the pre-hunt brothers move concerning silver.
Fist step-
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Second step-
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Third step-
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(You have to go through steps one and two before going to three, if you go straight to step three you get an error message from kitco.)
1963-1966 the silver price was $1.293 per ounce, the historical price of silver from 1792-1813 and 1817-1836, (though $1.293 was more purchasing power way back then.)
See what happened to the silver price in 1967, well before the Hunts considered silver as something to own. It averaged $2.06 per ounce, an increase of 59.3%.
Things to consider-
Silver was at $1.293 from 1963-1966, manipulation or what?
While there was obviously manipulation going on back then, the manipulation ended when silver reached $2.06 in 1967.
It gives silver holders hope that history will repeat itslef and silver will go up.
The Hunt Brothers foray into silver began in 1970, They were a major reason silver went up but not the whole reason. If you can't afford gold you buy silver, which is what those concerned about inflation did in the 1970's.
The Hunts are no longer the 800 pound gorilla in the realm of silver, yet the metal has gone up in price since 2000, not as high a price as gold has reached, but high enough to be affordable for those who can't or won't buy gold.
Silver has been the 'cheap' precious metal compared to gold, and like gold, had been in the doldrums for two decades.
This is just my thought on the subject of siver. While I would like to see silver go up to $25 or $50 per ounce, I realize this will take some time to happen, but in the meantime I will take comfort in knowing that four measily silver dimes easily bought a gallon of gas back in the 1960's and can be exchanged for a gallon of gas today. Silver preserves my purchasing power, what more could I ask for from a precious metal?
Take the rah rah boosters of silver the same way you take the rah rah boosters of gold. They both expect triple digit gains in a year or two, but if that really happened, then it would be time to get out before the PM bubble bursts. |
I change with the times-
but like silver coins found in your change
I stay the same.
*****************
The United States of America started out as the new Republic of Rome.
Will The United States of America end up as the New Imperial Rome? |
Edited by - keys on 11/04/2009 19:23:33 |
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Lemon Thrower
1000+ Penny Miser Member
USA
1588 Posts |
Posted - 11/05/2009 : 05:24:58
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quote:
Originally posted by keys
I have been considering the arguement that the Hunt Brothers were the number one reason silver shot up so fast and so high, but let us also consider the pre-hunt brothers move concerning silver.
Fist step-
You must be logged in to see this link.
Second step-
You must be logged in to see this link.
Third step-
You must be logged in to see this link.
(You have to go through steps one and two before going to three, if you go straight to step three you get an error message from kitco.)
1963-1966 the silver price was $1.293 per ounce, the historical price of silver from 1792-1813 and 1817-1836, (though $1.293 was more purchasing power way back then.)
See what happened to the silver price in 1967, well before the Hunts considered silver as something to own. It averaged $2.06 per ounce, an increase of 59.3%.
Things to consider-
Silver was at $1.293 from 1963-1966, manipulation or what?
While there was obviously manipulation going on back then, the manipulation ended when silver reached $2.06 in 1967.
It gives silver holders hope that history will repeat itslef and silver will go up.
The Hunt Brothers foray into silver began in 1970, They were a major reason silver went up but not the whole reason. If you can't afford gold you buy silver, which is what those concerned about inflation did in the 1970's.
The Hunts are no longer the 800 pound gorilla in the realm of silver, yet the metal has gone up in price since 2000, not as high a price as gold has reached, but high enough to be affordable for those who can't or won't buy gold.
Silver has been the 'cheap' precious metal compared to gold, and like gold, had been in the doldrums for two decades.
This is just my thought on the subject of siver. While I would like to see silver go up to $25 or $50 per ounce, I realize this will take some time to happen, but in the meantime I will take comfort in knowing that four measily silver dimes easily bought a gallon of gas back in the 1960's and can be exchanged for a gallon of gas today. Silver preserves my purchasing power, what more could I ask for from a precious metal?
Take the rah rah boosters of silver the same way you take the rah rah boosters of gold. They both expect triple digit gains in a year or two, but if that really happened, then it would be time to get out before the PM bubble bursts.
the hunt brothers are irrelevant. first, it was plenty of their own money, saudi sheiks is a red herring. second, they busted only when the govt got the exchange to change the rules. hunts were highly leveraged and the exchanged dramatically raised the min. margin requirement to be long. and they were successful until that point because the exchange as a whole was short more silver than it had to deliver. And the hunts did this while the u.s. was selling off all the silver it had - it no longer has any silver.
the situation today is opposite. the govt has no silver. the leveraged speculators are agents of the govt who have maniupating the price to the down side. if the rules change (FTC is considerting this) its the shorts who go bust, not the longs.
as for the ratio, i have never heard of 10.5 to 1. My understanding is that silver is 15-16 times more abundant in nature than gold,and that they were priced at that ratio for all of history until the silver in the new world was discovered after which the ratio jumped to 17 to 1. then came the era of paper money and central banks. |
Buying:
Peace/Morgan G+ at $15.00
copper cents at 1.3X
wheat pennies at 3X
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Lemon Thrower
1000+ Penny Miser Member
USA
1588 Posts |
Posted - 11/05/2009 : 05:30:37
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quote:
Originally posted by beauanderos
Ok, so I'm certainly not jumping off the bandwagon here, and I fully expect silver to outperform gold from here on out, but I am puzzled by one thing. I have never seen any analyst, either from the "woo-hoo, I'm going to be feelthy, frickin rich camp" of Jason Hommel or Izzy Friedman, to the more sedate and reasoned rationales of Richard Russell or David Morgan, mention the point that follows. Everyone predicates silver as being low-priced historically, particularly in regards to it's presumed inflation-adjusted all-time high ($125 if you use the Liar's Club CPI and much higher if you use the shadow stats) based on the previous "high" of $50 back in 1980. Hello??? Earth to greedy hoarders? That high was achieved in a milieu during which a bunch of Saudi sheiks was fronted by the Hunt brothers and attempting to corner the market. Do those particular set of circumstances exist today? Uh, no, I don't think so. So, is it just me, or are all these experts who keep promulgating the inflation adjusted all time high based on a $50 base price just full of hot air and empty posturing?
to more directly answer your original question, 850 for gold divided by 17 gives you 50 for silver. what is amazing, and augurs for authenticity rather than phony pricing, is that silver hit 50 several weeks after the gold bubble popped.
a more important point for those inclined to be skeptical is that to look at the 850 or 50 numbers ignores the fact that gold and silver held those prices only briefly. i think that is a fair point to an extent. what happened then was volker came in to head the fed with the mission of stamping out inflation no matter what the pain. interest rates surged immediately, peaking at over 20%! the carrying cost for metals in that environment meant they had a negative rate of return, so they were sold. Today, jim sinclair argues that any price rise will be permanent because the dollar in the future will be tied to a certain amount of gold. |
Buying:
Peace/Morgan G+ at $15.00
copper cents at 1.3X
wheat pennies at 3X
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country_bumpkin
Penny Sorter Member
USA
86 Posts |
Posted - 11/05/2009 : 15:44:17
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quote:
Originally posted by Lemon Thrower
as for the ratio, i have never heard of 10.5 to 1.
You must be logged in to see this link.
Now you have.
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He who goes a-borrowing, goes a-sorrowing.
- Benjamin Franklin |
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Lemon Thrower
1000+ Penny Miser Member
USA
1588 Posts |
Posted - 11/05/2009 : 16:47:30
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quote:
Originally posted by country_bumpkin
quote:
Originally posted by Lemon Thrower
as for the ratio, i have never heard of 10.5 to 1.
You must be logged in to see this link.
Now you have.
thanks - you learn something every day. still, i have read in numerous sources that throughout history they were exchanged at about 16 to 1, not 10.5 to 1. also, that the 16 to 1 is close to their natural occurrence.
ironically, factors that would tend to push your 10.5 number LOWER are the fact that some silver is consumed in industry or lost (this is extremely rare for gold) and that silver is somewhat harder to mine in that its less economic or has to be mined as a byproduct of lead or copper.
don't know what to make of the 10.5 number but i do agree silver is underpriced relative to gold in the long term. |
Buying:
Peace/Morgan G+ at $15.00
copper cents at 1.3X
wheat pennies at 3X
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country_bumpkin
Penny Sorter Member
USA
86 Posts |
Posted - 11/05/2009 : 17:09:44
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That's what I thought, too. I found that reference and it seems authentic.
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He who goes a-borrowing, goes a-sorrowing.
- Benjamin Franklin |
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Cody8404
Penny Hoarding Member
USA
602 Posts |
Posted - 11/05/2009 : 17:48:44
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If you look at the world history charts there was a spike of the silver to gold ratio for 5:1 in the 1500 when the Spanish stole the gold and silver from the Mexican Indians and took it to Europe. This changed the ratio because of the amount of silver the dropped on the market. The markets returned to the 1:15-20 ratio after China absorbed the excess.
The historic price is hard to say if this was high because this was before the dollar or even most modern currencies.
If you look into very early history silver was more valuable because gold, electrum, was found in nature, but silver was only available when refined from electrum.
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Awake, O kings of the earth! Come ye, O, come ye, with your gold and your silver, to the help of my people, to the house of the daughters of Zion, to the help of the people of the God of this Land even Jesus Christ. |
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vrbsroma
Penny Collector Member
394 Posts |
Posted - 11/05/2009 : 18:17:56
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| To add a little here, I think it bears mention that, throughout ancient times, gold and silver were used in conjunction with one another when creating coinage. The Romans, for example, have silver denarii and gold aurii. Greeks earlier the same. |
As far as I know, it is stated "In God We Trust" on the US dollar. How can I trust this currency if I do not believe in God?
Possession is nine-tenths of the law.
When I give my two cents, they're always copper! |
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Lemon Thrower
1000+ Penny Miser Member
USA
1588 Posts |
Posted - 11/05/2009 : 20:01:08
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quote:
Originally posted by Cody8404
If you look at the world history charts there was a spike of the silver to gold ratio for 5:1 in the 1500 when the Spanish stole the gold and silver from the Mexican Indians and took it to Europe. This changed the ratio because of the amount of silver the dropped on the market. The markets returned to the 1:15-20 ratio after China absorbed the excess.
The historic price is hard to say if this was high because this was before the dollar or even most modern currencies.
If you look into very early history silver was more valuable because gold, electrum, was found in nature, but silver was only available when refined from electrum.
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Buying:
Peace/Morgan G+ at $15.00
copper cents at 1.3X
wheat pennies at 3X
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Silver's all time high - an inconvenient truth
Forum Locked
But yeah, hopefully we can stock up first!
