Will Silver Save Us?

Did you have a coin collection when you were a kid? Pops travelled all over the world for business and would bring back coins from places like China and Indonesia and Great Britain. They were mesmerizing to me. It was fun to hold them and stare at them, to feel their weight. Those coins weren’t even made of silver because silver had been taken out of the money many years prior, but even still, there was something special about them. I knew nothing about money or currency or finance or economy, but I did know that these round pieces of metal (that LOOKED like silver) had value. I still have those coins. Silver (and gold) had been used as money for thousands of years, and it wasn’t until 1971 (in America) that our money was finally severed from these precious metals. We’ve paid a heavy price for that decision ever since. Why did humans choose silver and gold as money? Because they are: scarce, durable, a store of value, a unit of account, and interchangeable. Nothing else works as well. You can watch Mike Maloney’s great series The Hidden Secrets of Money to learn about money and its history. Highly recommended. Did you know that from ancient Roman times all the way up to the late 1800’s the equivalent of a silver dime was the payment for a day’s labor? Roman soldiers were paid a silver denarius – 19th century American miners were paid a silver dime. That’s 2,000 years of essentially stable prices. And what is the value of that day’s labor today? $150-$200 here in America, depending where you live. That would put an ounce of silver at around $2000. So why is a silver dime (one minted before 1964) only worth about $2 and the spot price for one ounce of silver only $27?

It seems to me that silver must be the most undervalued commodity of all time. Price suppression of silver has been happening for decades, and its price is fixed by entities outside of the view of the people. Many smart people still think free markets set these prices, but I don’t believe this to be true. Entities such as the London Bullion Market Association (LBMA), the central banks, COMEX, and institutions like J.P. Morgan all play a role in the control and suppression of the price of silver. Bill Murphy of GATA (Gold Anti Trust Action Committee) is a good resource to start with if you want to try and sleuth out the truth behind the manipulation of gold and silver. Good luck! You’ll need it.

So here we are, sitting on sub $28 silver. Silver, up until the late 1800’s, had always been somewhere between 1/3 and 1/20th the value of gold. Meaning, for 1oz of gold you could buy between 3 and 20 ounces of silver. Right now you can get 66 ounces of silver for 1 ounce of gold! Seems like a screaming buy to me.

Who knows when we will see silver valued as it used to be. I’ve heard that the new quantum financial system will be using gold and silver to back our money, just like olden times. If that’s the case, I would have to think the value of silver would need to rise dramatically to catch up with gold and all the dollars out there in the world.

All I know is I’m going with my inner child on this one. I love to look at silver, to hold it. I know deep down inside that it’s important – it has value. It is said that gold is remnants of age-old stars, long ago exploded, or pieces of our sun that were ejected in historic explosive solar bursts. Perhaps the same is true about silver. It sure feels like holding a star in my hands. With that, I’m going to get more of it, and hold it, and expect the best.