Silver Dips Below $30

Still waiting for the $25 and below mark that was predicted over 18 months ago by whats his name.

Indeed so but that never entered my mind. Silver will be VERY useful if we do have a SHTF situation but it will not be until after the dust settles and people get back to some semblance of life that is in excess of merely surviving another day. During the early days of SHTF, brass and lead will be THE precious metals.




Yes, that will be true... initially. PMs would come into their own during the recovery from the SHTF scenario but not during it.

If you want to know what I think, just ask me and I will be happy to share. I never said that any gold or silver standard would necessarily appear after the SHTF. It might and then again it might not. I think that it probably will, most likely as part of a basket of commodities backing or at least partly backing the currency. The world is in the process of discovering that unbacked paper currency is basically a bad idea if we desire a strong economy that is sustainable over long periods of time.

One thing that I find curious is the number of people who are so wrapped up in the price of goods and services in vastly inflated paper money terms that they cannot fathom the idea that a gold or silver standard for money need not adhere to the same pricing structure. If we can buy the same goods and services with $150 in paper money or an oz. of silver, then an oz. of silver would be a decent daily wage. I am not saying that you are doing this but this can be seen in many of the comments found on Internet. They are usually given as reasons why we cannot possibly go to a gold or silver money standard. Gold is only $1600 an oz. and not $20.67 an oz. today because the US dollar has lost over 95% of its buying power since 1913. Without this loss of buying power, gold would still be $20.67 an oz. and silver $1.29 an oz.

They would devalue the dollar in hopes that it would increase exports and slow down imports. Think back to the 1930's when most people would say the SHTF

Nominal higher profit but in dollar terms only. Real inflation represents a reduction in buying power of those same dollars, offsetting any real gain.

Now, there's a price inflation effect that results from too much easy credit. This oversupply of dollars entering the market tends to drive up the price of college tuition, cars, real estate and such. This might be the kind of inflation you're thinking about, but ultimately the effect is the same: the buying power of these dollars is diminished.

I believe that this was the plan. My concern about it was with the basic assumption that the economy needed more money to grow. Money is one of those things that an economy must have to work well but the amount is critical and difficult to determine. If too little money is available for the efficient transfer of goods and services, THEN economic growth will be stunted. If the right amount of money is available, the economy will function at its best, all other factors being equal. If too much money is available, then bidding for goods and services by people flush with cash will drive up prices and we have an inflation problem. This happened in the late 1970s and Paul Volcker as Fed Chmn. had to raise the prime interest rate to ridiculously high numbers, like 21%,to break the back of inflation. This happened because such a high rate strongly encouraged savings and discouraged borrowing and spending. This reduced the amount of money available in the economy which eventually brought inflation down from very high levels to a level that easier for the economy and the people to handle.

PMs as backing for money has a wonderful effect on government. It provides a mechanism whereby government spending is curbed by the will of the people. For example: when times are good and people have a choice of whether to fold paper money or PM coins, we tend to hold paper money because it is more convenient.
This allows more PMs to be available to the government for spending since they do not need to hold as much in reserve to redeem as much paper. When times are not so good, people get nervous and cling to the solid value of PM coins. This removes PMs from government control and reduces the amount of PMs that the government must hold to redeem more paper. Without a PM money standard, there is no direct control mechanism available to the people to control government spending. There is a secondary mechanism available via the political process but that has been shown not to be all that effective.



Indeed they could. In fact, I would bet money on that outcome and I am not much of a gambler. My thought is that the US government, like all governments, have some of the same attributes as an animal. When threatened, they will respond and most likely with overwhelming force. As to the gold supposedly in Ft. Knox, we do not really know that it is still there or that it has not been adulterated in some way or that it hasn't been leased, hypothecated, rehypothecated, or otherwise had its ownership compromised in some way. There has been no audit of this for 50 or so years and with all the shenanigans that government and the banks have pulled over the years many Americans would like to see a full and complete audit of the official US gold hoard. We deserve to know what its condition is, whether that is good or not.



I would agree with that. There are virtually no situations that are as simple as they are perceived to be. Personally, I am not too concerned about any rogue bankers or their ninjas. The government has a monopoly on the use of heavy force in this country and I can't see them giving it up as long as the government exists. If it were to collapse, then it would be a whole new scenario... and probably a more dangerous one at that.



Thanks, Lars. The great thing about this web site is that it allows us to educate each other. Knowledge is one of those things that everyone has some of and few of us have the same knowledge. By sharing and discussing what we know and what we think and why, we are able to educate each other so that everyone here gains something.

Indeed they did, MK, and I would agree that the 1930s was most definitely a SHTF situation. My parents lived through those days and I have heard MANY stories about their lives during those times. Not suffering as they did is a major reason why I collect PMs. Even back in the 1930s, anyone with money could buy pretty much whatever they needed. Stuff was available but money was in very short supply. As paper money becomes less and less valuable, PMs will hold their buying power and provide access to vital goods and services, even during some pretty bad times.



That would have been an amazing but terrible time to live in Germany. I have read some about that. My favorite story is about an American business man who was traveling in Germany in those days. He got a meal at his hotel that was so delicious, he tipped the cook a US silver dollar. The cook was stunned by such a HUGE tip and thanked the man profusely. Converted to their hyper-inflated currency, this was a vast sum of money. In fact, the cook called a family meeting, including a lawyer and an accountant, to decide how best to invest this sudden wealth. A single Morgan dollar? Egads!



Yes, IF they can successfully raise their prices. Depending on the business conditions present, they may or may not be able to do that. In the chemical business this was referred to as "nominating" prices because we never knew if a price increase would succeed or fail based upon the actions of the other chemical companies with which we competed.



It might not be the point for the gainfully employed but for those living on a fixed income, it is very much the point. Losses of buying power can be quite serious for some of us.

No, but I bet that it occupied a really good share of that time!



Somehow, I don't think that you are the type of person who sells his soul for mere money and then feels he made a good deal.

Doing the right thing is absolutely essential. It's what we're here for. All else is basically a distraction. We can tell what is of true value by the fact that we can take it with us when we leave here. These would be things like honor, integrity, truth, love, compassion, and a clear conscience. Ya did good!

Absolutely, Lars. But if one handles the rest of the list that I posted, well-raised kids and grand kids almost always result.