Let's start this by looking at the historic value of silver. A day's wage, in silver, for skilled labor about 100 years ago, ranged from being a silver dime, to a silver quarter during the great depression in the 1930's, to as much as a silver dollar. Henry Ford paid his workers, what was considered a very excessive $5.00 a day. In silver, at .72 oz. per silver dollar, that was 3.6 oz. of silver per day. |
But remember, that was an extremely high and very unusual wage. It was made possible by the very high productivity of the assembly line, and little government regulations or taxes. If silver returns to historic norms, it will be an ounce of silver, or less, for a day's wage. But if there is scarcity of silver, it may be more like a 1/10th of an ounce of silver per day. Or perhaps, a silver dime for two weeks of labor!
The reason is that the U.S. has well over 100 million workers, yet the world has about 250 million oz. of silver in known inventories! If 1/10th of an ounce of silver is a day's wage of $100, then an ounce of silver would be $1000/oz.
The other historic value was the gold to silver ratio. Gold is overvalued relative to silver, because at current prices, it takes 55 ounces of silver to buy 1 ounce of gold. Historically, this ratio was 15 or 16 to one ounce of gold. Given the relative silver shortage, this ratio could hit 10:1 or 5:1, or even 1:1. Anyway you look at it, gold is far more overvalued than silver.
If we had the 15 or 16 ounces of silver equal to one ounce of gold ratio today, silver would be around $130 an ounce. But, due to silver's scarcity, that ratio should certainly deserve to be exceeded, to at least 5 ounces of silver to one ounce of gold. Thus, silver would be valued at about 1/5th of $1700, or around $340, assuming that gold is fairly valued at $1700. But, if gold should really be valued at about $5,000 per ounce, then silver would be about $1000/oz.
In both of these examples, this does not mean the price of everything else would shoot up. I would expect that most prices would remain the same, or close to what they are now. If consumer prices rise by a factor of ten, then you can increase the "future value" price for silver also by a factor of ten, so that silver would be $10,000/oz, and 1/10th of an ounce of silver would be $1000, so that a 1/10 of an ounce of silver would be able to buy the things you'd buy today with a day's wage. And if you truly believe that an economy would be run more efficiently, as I do, without all the fraud of the dollar negatively affecting things, then you should assume, as I do, that a day's wage of silver (however small of an amount that would be) should help the average consumer to be able to buy more than a day's wage of fiat money can buy today.
People will start to realize that no other commodity has the unique historical value, and upside potential that silver has. This combination of factors forms my view of silver as an investment.
There may come a time when the silver price moves up so sharply, so violently, it will be something which the world has never seen. There is no experience that any human has experienced that can prepare anyone for what may be coming. This would happen because the world has never totally abandoned using silver as money, until this generation. The world has never seen such a deficit and scarcity of real money. And the world has never seen such a huge build up of false wealth, as represented by the enormous amounts of paper money that are being printed by nations around the world, with NO backing by REAL money.
Silver today may not be just a "once-in-a-lifetime" opportunity. It may not be just a "once-in-100 years" event. It may be an event that has never before occurred in all of human history. In recent years the increase in money being printed with no backing, and put into the global banking system is staggering. Money is being printed with NO accountability, and NO restraint! Relative to the world supply of silver it is absoulutely beyond reason that these worthless IOU's can retain their value.
As awareness of the historical value of silver has become more widespread in recent years, silver's price swings have become more remarkable. The great surge in price of the late 70's that took it from $5 an ounce in 1978 to almost $50 in early 1980, and the price swings in the early 80's, were followed by many years of price supression. Silver started showing signs of life in 2006 which took it from about $6 to $21 in early 2008. This was followed by the market crash in late 2008 which took commodities on a nosedive. Silver followed and went all the way down to $9 in late 2008. Then came the at first gradual, and then astronomical rise from around $10 in early 2009 to nearly $50 in April 2011. There was the opportunity to make nearly five times your investment if you made the right moves at the right time. Then in early May 2011 there was a significant drop, down to the low $30's. This is all just an example of how dramatic the moves in silver can be. And I believe even more dramatic moves in silver price lie ahead.
These are tough financial times for many. The corrupt forces behind government and media have encouraged people to become debt ridden, dependent, ignorant slaves. Just trust us they will suggest. Give up your Constitutional Rights and trust your "leaders".
History is a teacher, and in past times there were people who not only survived, but prospered in times of economic turmoil and hardship. God makes a way for people who trust in Him. Those who seek His guidance on what to do in all things, including financially, will be blessed. And this could be your opportunity to access a great blessing.
The world will tell you to invest in the wrong things at the wrong time. That's how THEY make their money. There are silver bugs who buy silver and never sell, and miss great opportunity. There are those who buy at the wrong time, and sell at the wrong time. And they'll advise others to do the same. Maybe not deliberately, but the result is the same.
There is a time to buy, and a time to sell. Just as there is a time to plant, and a time to harvest. Investing in silver is no different, except that there is an amazing potential unlike virtually any other investment. Seek out God and ask Him what you should do, and when you should do it. Seek Him out on EVERYTHING. If you're sincere, you'll find the answer is there for you.