Questions and Answers about Precious Metals
A friend recently asked me if the manipulation of the silver market had been exposed yet. This question is not uncommon, and I will usually take a few minutes to explain what I know. However, I realized I had never taken the time to explain the fundamentals of silver to this friend before. So, I decided to answer some of the basic questions I get on the subject of silver.
Is the price of silver really manipulated?
To shed some light on the concept of price manipulation I will quote President Lyndon Johnson from a speech he gave when he signed The Coinage act of 1965. If you recall this was the year silver was taken out of our circulating coinage: (emphasis my own)
“Now, all of you know these changes are necessary for a very simple reason – silver is a scarce material. Our uses of silver are growing as our population and our economy grows. The hard fact is that silver consumption is now more than double new silver production each year. So, in the face of this worldwide shortage of silver, and our rapidly growing need for coins, the only really prudent course was to reduce our dependence upon silver for making our coins. If we had not done so, we would have risked chronic coin shortages in the very near future.”
President Johnson went on to say:
“If anybody has any idea of hoarding our silver coins, let me say this. [The] Treasury has a lot of silver on hand, and it can be, and it will be used to keep the price of silver in line with its value in our present silver coin. There will be no profit in holding them out of circulation for the value of their silver content.”
Today, the United States Treasury holds no silver and the value of the silver in a 1964 Dollar Coin has risen 2,109%.
Even with the government actively working to suppress the value of the silver-first by using up the reserves held by the Treasury and now by manipulating the paper trades – the price is still going up.
Why manipulate silver?
Precious metals are money. I repeat, gold is money, and silver is money. They compete against government issued or fiat currency. As such, they can be used as a measure against the performance of fiat money. The 2,109% increase in a silver dollar’s value is not good news if you need people to use the currency that has lost that value. Silver is telling us the true extent of the inflation that is consuming the purchasing power of the money we are told to use. Our Government’s solution to this disparity in value was to flood the market with physical silver to lower the price and when the Treasury’s physical supply ran out they manipulated the price through rigged paper trades. We have been given the illusion that our financial environment (fiat system) is a safe place for us to store our wealth. The precious metals are revealing the truth about inflation – that our government, by way of the Federal Reserve, does not want us to know.
What is Silver really worth?
Chris Duane has done research on the historic value of silver and he found 1/10th of an ounce of silver or (2.5 grams) represented a days pay for a Roman Soldier back in the days of the Great Roman Empire. Back then they were literally paid in Silver and that weeks pay would look like 7 of today’s dimes. What would an average soldier get paid today if he worked for the same amount of silver? $20.99 a week. Less than an a Dollar Silver coin.
Judas sold out his best friend Jesus for 30 ounces of silver. Today that amount of silver would be worth $818.00. Like the Soldier, this amount don’t make sense. But in the case of Judas when you apply Duane’s research to translate the historical value of the metal, 30 ounces of Silver was worth more than a Roman Soldier made in one year. I do not pretend to know the real unsuppressed value of physical silver, but I do know it is not the $27.27 it is being sold for today.
When will I know the manipulation has been exposed?
You will know the manipulation of the Silver market has been exposed when you see the main stream media calling silver, “The investment of the century.”
And if you understand the fundamentals of precious metals- a few of which I touched upon above- chances are you will not sell your silver at any price.
People are beginning to wake up to what is happening not only in the silver market, but the world economy as well – buyers the world over are slowly appearing. Silver was once mined in a 16:1 ratio to gold. Today that ratio has dropped to 9:1.
What would make buying physical silver a bad idea?
Most “experts” will tell you that owning precious metals is a bad idea. I agree with them… 99% of the time. We are living in the 1% of the time when owning precious metals is a good idea. Simply because they are unequaled as the ultimate safe haven. The best place to store your wealth with minimal risk of losing purchasing power.
I would advocate selling physical silver and gold if four things happened.
1. The Euro Zone starts to stabilize.
2.The United States stops spending more money than it takes in (via a balanced budget.)
3.The United States begins repaying our debts to foreign nations, especially China.
4.The Federal Reserve stops printing money from thin air.
I have nothing against stocks, bonds and savings accounts and I have no particular fascination with white and yellow metals. However, more and more economists from all over the world over are beginning to see where the road we are on will ultimately lead us if we do not change. Far too many of them see paper money continuing to lose its purchasing power. Some believer we will see the price of silver surpass the price of gold in this decade.
If nothing else, I want the dollars I place into silver and gold to be able to buy as much or more than they would if I had left them in a bank. I think I have done a fair job of explaining why you wanted the silver coins over the paper money. I believe the smart money is in holding the white metal over any paper.
D. James LaSalle
“There must be some way out of here” said the joker to the thief.
“There’s too much confusion”, I can’t get no relief.
Businessmen, they drink my wine, plowmen dig my earth.
None of them along the line know what any of it is worth.” Bob Dylan
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husssaid - August 2, 2012
Thank you D. James for this valuable information, i read before about Silver and how it’s price is manipulated in the market, as this gives more opportunities for future savings than Gold as long as it’s price is manipulated. I saw a curve for both Gold and Silver values along with paper currency and there was a drop in Silver prices. Gold and Silver a tangible assets that their values should go in parallel with the respect of paper currency and that is not the case and leads to multiple questions in our heads to know the reason.