monthlysilverEveryone in the precious metals community is scratching their heads over the recent behavior of the price of silver.   At the end of the day, the severely depressed price level can only be attributed to the extreme degree of manipulation and price containment activities of the Federal Reserve and the U.S. Treasury’s Exchange Stabilization Fund team (which is officed in the same building as the NY Fed).
Besides containing the upward price movement of gold and silver in order to support its effort to prop up the dying U.S. dollar, the question is, why is silver being hammered like this with Comex futures?   Ultimately, I believe a severe shortage of unencumbered physical bars for delivery into India and Asia has developed.  More on this in the next few days.
In the meantime, you can see from the 20-yr graph of silver that silver is, by far, more oversold than at any time in the last 20 years:


 

Submitted by PM Fund Manager Dave Kranzler, Investment Research Dynamics:

(click on graph to enlarge)
monthlysilver

 


    • The statement of “Very over-sold” can a backhanded compliment. You are at record values…because you just entered a bear market. Not that I think we are there yet, it has certainly depressurized and is hardly “set”. 
      Short term outlook:

      “Without active hedge fund sponsoring on the long side of silver, the metal’s prospects are not good. Silver MUST HAVE HEDGE FUND MONEY CHASING IT to move higher. It is that simple”.

      http://traderdannorcini.blogspot.com/2014/05/silver-comments.html

    • Once upon a time….
      Shoulda…
      The mining cost ratios are currently nicely aligned. From a miner’s perspective, they’re well priced against each other. Please offer an argument more fundamental than “shoulda” for the ratio to drop?
      I see silver was more overbought in 2011 than in recent history also. If we reduce that blowoff-top, the MACD doesn’t drop as high during the current dip. Also, the dip after the 2011 top was more oversold than the current one even?

    • Missiondweller … “silver should be at $80, unless you think gold is overvalued”
       
      Both are undervalued. The central purpose of money and markets is to determine the optimal prices (ratios) of things in each other’s regard. Markets exist to ‘clear’ efficiently, so new goods can ‘fill the vacuum’. Ideally, the value of money in circulation should so equal that of goods-at-market for the markets to fulfill their clearing function. By trending toward that end, ‘prices’ of both money and goods undergo Price Discovery until the equilibrium of that time frame is attained.

      For money to perform that task it also has to be restricted to the same conditions of supply-demand as the goods it trades for. So, if we take all gold and silver available for possible use as money, including copper as  ‘change’ for silver and divide that quantity by all goods-at-market on any given day, their values (relative ratios) MUST be MUCH greater in Purchase Power than implied under this paper paradigm. In fact … possibly too high … for practicality, which is why palladium. platinum and rhodium are very likely destined to become included into the monetary scheme once mankind wakes from this bizarre credit nightmare,

    • Regarding the historic ratio of gold to silver. Tim Seymour on Fast Money said that the ratio is 60-1 during normal times. Why would he say this when it is pretty much universally understood that the historic ratio is 16-1? He either is misinformed or was deliberately trying to paint the picture that gold and silver are trading “normally” right now. This is what the mainstream viewers are being fed on a daily basis regarding the metals. 

    • The way silver is mined has changed hugely since 1:16 was normal. Gold, not so much. Deep well style mines rather than river panning. Silver is scooped up by huge caterpillars from open pit mines. The ratio is bound to rise from that changed reality?
      Tell me I’m crazy, and support it with good arguments.
      I am 100% in silver, but starting to see the changed reality.

    • I see XC Skater is in the mining business. Clearly one who has such a thorough an uncorrupted understanding of TRUE unmanipulated costs, and one who knows that the TRUE costs of mining 1 oz of .999 silver is less than 20.00. I’m certain Skater is not digesting the net numbers vomited out from the corps in order to lure investors into believing their profitability; No, XC Skater has a deeper understanding of the TRUE fundamentals, and this is his/her basis for such a devoted protection of the pricing we are all enduring today.
      I have a more simplistic response….
      I myself could not locate, mine, refine and smelt an oz of lead for twenty bucks. The simple fact that a burger flipper earns more in 2 hours the retail cost of an oz of refined silver, a resource and asset so rare that every man on earth cannot simultaneosly own an oz is the only trute testament to this sad manipulation of prices.  Only faux paper representation (in which may be supplied in infinite amounts) is soley responsible for the ridiculous valuations we are witnessing today Skater.  … But then again, you already knew that; and I’m aware of your awareness… Men like us state these things in order to educate the fence riding masses who know no better. You’ve been here long enough to know better yourself…. So let us continue in perpetuity for the sake of winning hearts and minds… Or in your case, misleading them.

    • So much sarcasm, I cannot really understand what you mean. Please strip it from the drama?
      So are mines over-or understating their costs? I like to go by SCS Rocco’s calculations which seem to be both the most exact and highest in the business.
      Best I can gather from it, there are mines that are mining at a modest profit currently, and willing to do so.
      You know that most silver does not reach industry or bullion manufacturers through future contracts, but rather through forward contract. I am not aware how pricing between them works out as the deals are different, but what we see are realized price/oz (not necessary spot-determined) and total costs realized.
      My point : you don’t need to go to COMEX or LBMA to get silver at those levels. Mines are making it happen, albeit with difficulty, and not all of them are managing as well.

      Let’s use more universal logic than ancient history’s price ratios. 
      What is a fair profit margin for a company in hard laborous work? Think of logging, salvaging ship wrecks, etc? Should we add 30% to the total cost? 100%? 1000%?
      Let’s say you have a huge old dead tree in your garden, and I am contracted to have it removed. The deal we make is that it is going to cost me 3 man days of labor, one trip with a van, and 2 with a woodchipper. My total cost I have calculated to be $1000. What should I charge you for the job? $1400? 10,000? 

    • @XC Skater – While it is true that mining of the metals has become much more sophisticated over the years we also must acknowledge the diminishing ore grades and decreasing overall supply. It is becoming harder and harder to find plentiful deposits of either metal. I’m not sure what you would consider to be a fair ratio but if they are pulled out of the ground at about a 9:1 that tells me the price should be closer to that than the current 65:1. 

    • @gogetter1132
      I think a “fair” ratio start at cost. Are we trying to be fair to hopium sniffing stackers or to miners, or to banksters?
      The 1:9 says nothing. What is the mined ratio between palladium and gold? Platinum and gold? Is gold overpriced then? I thought everyone agreed it was underpriced through manipulation?

      A lot of people WANT gold, whicch is why it’s being mined at 1:9. It would be lower and can drop if people get more into gold.
      That the cost ratio is closer to 60 than to 9 comes from where the gold is found. Silver scooped up, gold drilled from a mile down.

      I, too, got into silver believing the hype as presented on sites like these. For a whole set of other reasons, I still prefer silver. But I don’t see the fundamentals for a lower GSR. Even the leveraged paper silver price makes zero sense to me, althought eh graphs don’t lie. Short-term, silver is leveraged. Long term, not so. As ratio managed to go higher over a long term. I suspect due to upscaling of open pit mining, and lack of ways to do so with gold.
      Sure, ore grades are dropping in silver. Most of the cost of mining silver is now oil, not labor.
      But gold ore grades can’t be going up much to suspect silver to outperform 4x. Makes no sense until someone offers a valid argument.

    • XC Skater … “Tell me I’m crazy, and support it with good arguments.”
       
      Last time I looked at the world production figures (3 months ago?) copper is being mined at an 80:1 ratio to silver and silver in turn was produced at about a 9:1 ratio to gold.

    • @PatField
      What do mine ratios have to do with a discussion of what ratios SHOULD be?
      A ratio says very little on the cost of production. If they come from the same pit, sure there is a correllation of sorts.

    • XC Skater … “A ratio says very little on the cost of production.”
       
      All of this jibber-jabber about gold and silver ‘cost’ of production is … nonsense. The very mining of gold and silver in excess of use as components in goods manufacture is … nonsense.

      The real worth in those metals is their ideal functionality as the most perfect money yet devised. Otherwise, they’re no more or less than  metallic elements of dirt that may as well be spread out onto diminished farmland.

      This explanation is a highly complex sentence and somewhat technically worded, for which I apologize, but it’s necessary to be succinct. So, I broke it out to a series of separate lines.

      While serving demand for their ‘industrial’ needs,
      the amount of these metals that can afterward be put into circulation as money of a practical sizing,
      to draw volumetric inter-related valuation equal to goods-at-market
      existing in a period of time proper to timely clear the market for new goods all at optimal ‘pricing’,
      is what makes their circumstantial ratios of geological abundance, of so high a priority to determine.

      The credit-’money’ scheme is doomed to self-destruction by constraints in which it must be designed. By ignoring this fact and plodding on ‘analyzing costs’, ‘demand’ and ‘projections’ as the bellwether reference is sheer folly, like trying to see reality in rooms of undulating mirrors.

      The paramount ‘worth’ of identifiable ‘money metals’ is derived from … and wholly attributed to … their utilization as money. Since laws of economics compel them back into that function, to view them in rejection of that parameter is tantamount to ‘discussing’ physical life as we know it … absent water.

    • @PatFields
      Your points are all valid, but in another discussion.
      People pointing to the historical ratio then expect that silver and gold are to take their age-old positions in global and local economics, as the one true form of money. All fiat for that needs to be extinct, and refused universally.
      Still, when there was not fiat credit diluting the value of PM”s, what was it that set the purchase power ratio between silver and gold? The mined ratio itself? Their respective popularity? I think it all started with the effort required to obtain a mass unit of say 90% pure. Men, horses, shelter, tools, land. Gold was being panned out of rivers, and people were doing well with that. Required only manual labor. Perhaps silver was relatively expensive because it took an larger undertaking to come up with any decent quantities in useful purity.
      The individual prospectors had a cost of living equal to 2 meals. And they could pan maybe 1 gram (ball park) a day? One gram of gold was then worth 2 meals and some profits. Silver’s value included horses and tools and buildings and land owned.
      What changed? Gold is still hard manual labors, deep underground. And silver is being dug up along with other metals, from big open pits where hardly a soul is found. Mega industrial, mostly automatic. Highly efficient extraction rates.
      I don’t think it’s a stretch to say that the historical ratio is historical. To come to a new fair ratio, one would need to get the calculator out, not a long term chart. Reality has changed.

      There are moments when I hope silver will become as all-important as we can dream up. But do I want to live in a world where silver had floated to the top? Mad Max seems a less hostile environment. Because we would be entering such an era 7 billion strong.
      My current (already for 3 years) investment horizon is around 10 years. When I see how long prices are being suppressed I think perhaps a good spike could happen in 5 years. Or, PM’s are kept off the big table and it could take 20 years. I kinda wish I can trade my PM for something actually useful, like land, before I am old. I am not stacking just for the MadMax² experience.
      I can see that silver rises and drops faster than gold does, but no-one has been able to explain me WHY. I used to believe the standard hype about the smaller market, industrial metal, etc. But the PAPER is behaving like things, making no sense whatsoever, paper being 100% disconnected from supply/demand and possibly only very loosely connected (near bottoms) to mine cost through participating miners in COMEX.
      In 2011 we saw GSR drop from 70-ish to 32. Turns out this was only paper speculation at work. Not historical values exercising their authority. And paper manipulation (margin hikes) had to halt it. Yes, else we would have seen GSR 20 by August 2011 when gold topped in a similar event.
      Yes, if every soul took it upon themselves to own an ounce of silver, this would take many, many years. Even if we were to sell ours to them at spot, there is not enough out there to make it happen. But it’s maybe 100,000 stackers (high estimate) hoping/expecting this to happen. It’s a prepper nut scenario at this stage. And I in my own unique way are part of them.
      We’re all waiting, expecting, this to happen. No-one is making it happen before we have MadMax². No-one is creating new demand for PM, boosting its monetary roles. I have a serious plan to launch a 90%PM, 10% premium, BTC-style globally universal currency. I’ve written about it in serveral places and no-one has responded to me. Not even PM frontrunners. Everyone (of those 100,000 nuts) are caccumulating, and hoping for SHTF. No-one is interested in preventing it. 
      I would like the PM game to advance relative to the global destruction of modern society as we know it. If it all collapses, don’t we want a useful PM currency already, rather than having to find out how it works? The elite holding most of the PM’s, because we failed to re-monetize it ourselves?
      I am envisioning a self-remonetization of metals which goes beyond praying, hoping, willing, stacking. I want to DO it. But out of many hundreds who have read about my Open Coin Standard, no-one has approached me. That doesn’t hurt my feelings or ambitions as much as it makes me pessimistic of this community to think outside the box. Sculpt the future of humanity.
      Y’all seem to prefer to be rich and powerful overlords when your uneducated neighbors are suffering from the SHTF which you saw coming decades beforehand.
      We are standing by while TPTB are deciding for us which role PM’s will be granted in the next reality. How has that been working out for you thusfar?

    • XC Skater … “when there was not fiat credit diluting the value of PM”s, what was it that set the purchase power ratio between silver and gold? The mined ratio itself? Their respective popularity?”
       
      The first recorded analysis of this, of which I know, was that of the ‘Spanish Scholastics’ at Salamanca when they observed the price effects from import of South and Central American metals in the mid 1400s. Because the free market derived ratios had stood for millennia they were taken as fixed, so astonishment arose to see the change unfold and prompted their research. Since then a series of papers have been produced on the phenomenon, of which Richard Cantillon’s is specially noteworthy.

      This fixation on recovery methods and local or regional abundance, is overshadowed by the discovery of the periodic table of elements and empirical experience that the GSR is about 1:10 (ironically, the more ancient standard). Even the distribution itself is tangential to the Natural Geologic Ratio when the metals are estimated against the world’s goods-at-market, the supreme object being to divide all money into all goods, so as to arrive at optimal price discovery for any one item as inter-related to all others in the whole matrix.
       
      “Y’all seem to prefer to be rich and powerful overlords when your uneducated neighbors are suffering from the SHTF which you saw coming decades beforehand.”
       
      You can’t be lumping me into that category of ‘Yall’, since I’m completely alone in this genera, who’s set out a workable plan to preserve everyone’s status quo of living standards and savings, while concurrently solving the banknote dilemma. Moreover, I believe I’m also completely alone in mounting a legal campaign to discount the cumulative banknote depreciation foisted on people, robbing us of our Labor by its extreme over-’valuation’.

      Now, instead of sheer bellowing and grousing over minutia … what’s YOUR plan?

    • @PatFields
      Y’all was not necessarily addressing you personally still. TBH I lose track of screen names all the time.

      No-one seems interested to respond to my idea that the mining of silver and gold have both changed, in different ways, forcing us to reconsider fair value. If someone corners both markets, doesn’t sell, we a re left to look at new production, but dreaming away over pretty historical charts.
      Gold on the surface seems to have gone nearly extinct, or at least by relative price suppression (to cost of living, or rather: risen living standards) rendered uneconomical for panning and other 100% manual methods of extractions. Gold mining has gotten harder. Silver has become almost automatic. Base metal miners can’t help to dig it up. Only need to refine the already crushed ore. And silver is a relatively heavy mineral, perhaps not the hardest to extract from its ore body, gram for gram or dollar for dollar.

      My plan is to be fiat-independant, and have something that will POTENTIALLY increase in value, rather than having something that CONSISTENTLY drops in value in times of crisis. For that, PM is great. There is a potential to be better off. And replacing my unfounded blind hopium for silver’s moonshot has come silver’s ability to procreate. In my hands, it does. It’s alchemy, with my brain as the catalyst. Gold is inert to this alchemy. 
      While I recognize that historically, even the past 10 years, silver is valued low to average compared to gold, and that it acts as a leveraged gold in short-term large moves, while prices are currently closer to all-time lows than to even recent highs, I don’t not see underlying REASON for the GSR to have to drop. A couple ticks, sure. The GSR has fluctuated forever in recent history where it was not fixed. So if the cost ratio were to be roughly 60, no problem for the (especially the paper) price finding to let it fluctuate between say 80 and 40. And yes, due to silver being mined harder (largely as by-product), and closer to the surface, silver ore grades are likely to drop faster than gold’s which is very much cherry picked, precision extracted.

      I offer my plan of creating a PM-centric coin standard, and no-one responds to it. Just attacks my disbelief that we are supposed to return to an unfounded now highly speculative merely history 1:16 ratio. 
      When I got into this community I of course read how it was largely made up of nutcases. But their logic appealed to me. Now I see that within the enlightened there is still a vast lack of vision. Already I feel like I am out-growing this community. This happens to me whichever fascination I adopt. And I find myself innovating before getting bored. And I get my validation only many years later. My inventions and objects of fascination ridiculed and ignored are now enjoyed by many who were part of the ridiculing.
      I will follow this winding road to find my goal, and keep you all updated as to my progress. But I don’t expect anyone to follow until much later. 
      Based on my own personal timing and visions in the past, there is a solid 8-10year delay between vision and reality. Siver’s run up could be over 5 years out at that pace. And I am OK with that. Time to get more, and farm more. I am.
      I got in looking for a 10-bagger. If this drags on long enough, a 3-bagger might suffice for what I am looking to get out of it. A nice transition to the next asset class. 

    • XC Skater … “No-one seems interested to respond to my idea that the mining of silver and gold have both changed, in different ways, forcing us to reconsider fair value.”
       
      I am responding. I’m respectfully saying it’s superfluous given the greater (essential) utility of money in metallic form; which is to divide into the whole of goods-at-market, so all its sub-divisional ratios can be related to that of the sum of money metals.

      This is about the fourth or fifth time I’ve pointed out that Isaac Newton himself, couldn’t devise a better ‘valuation’ for the money metals than their natural geological abundance, believed at the time to be 16:1 SGR. His unquestionably superior logic and unparallelled scope of subject mastery led him to the deduction we might divert from, only with the very highest degree of hesitation.

      Through further scientific refinement, we now believe that ratio to be 10:1. Novel approaches of ‘Current Production Figures’ or ‘Human Action’ is fine for neighborhood stores or cities or regions to understand vague ‘marginal utility’ appearing in any given time frame, but as for a ‘Global Standard’ for the gross total of money metals applicable to the purpose of clearing markets at un-biased, objective ‘pricing’, nothing meets the test of logic found in Nature. Disagree as you’re compelled, but that’s my settled position.

    • @PatFields
      With time, all the great minds of our past turn out to have been incorrect or incomplete in their vision. For the reality they lived in they were right as could be, even ahead of their time. this is part of why I don’t live by written word of which the ink has had time to dry.
      To join your argument of Nature’s valuation…
      Nature buried gold deep, and coated the earth crust in silver. Humans were placed on the surface.

      Even if they were present 1:1 at equally acessible depth and ore bodies, one metal could still be a power of magnitude harder to refine, but instance due to being deposited in tiny parcles bonded very tightly to the most common mineral in the ore body.
      For instance, gold is often presented in nuggets, on bigger than the other. I have not researched it, but how large do silver nuggets get? If there is 1 ounce of gold in a given ore body of 1 tonne, and 10 ounces of silver, but gold is distributed into 75% large lumps and 25% sand-like particles, versus silver 90% sand particles and 10% large lumps, the cost of mining .75oz of gold would indeed be relatively cheap. This however is not real-life practice. And current reality is what should ratio-price our PM’s, not the devotion of a few ultra-biased stackers. 
      The Nature argument doesn’t strike me as legitimate anymore as it did the first time. I preached it to others also. But I now see that we need to mine a heck of a lot of silver before the mined ratio gets more leverage.

      It’s it’s wiser to be critical of one’s own assertions than to try to disprove the one who doesn’t go with the flow? When I went along with others, usually I have been guided onto a dead-end track. My own explorations got me the insights that took me to the next level. This may not go for everyone, but it sure works out well for me. 

  1. Cool. For a fews thousand years 1/10 0z silver equaled wages of a working man for a day. So if a man earns $100 a day in May 2014, then silver should be $1000.00 per ounce. So compared to the parasites’ digital nothing, digital nothing is 50 times overpriced. So if silver became honest money again, it would work toward destroying the parasites digital nothing or bringing down digital nothing and the assets purchased by Ponzi air currency by a factor of 50. The Dow is now 16,500 priced in parasites’ digital nothing. If the Dow were priced in real money, silver, it would fall 50 times to around 330. Also the parasites’ power would fall 50 times as well. If this scenario is correct then we can see how important to parasites that they put the world in their communist police states, steal all the gold and silver owned by nothings, and murder all nothings for having the gall to figure out the parasites’ lame Ponzi schemes and expose the parasites for what they are, Satanists. Also a problem for parasites is the fact silver is not used only as honest money, silver uses half the annual mined silver for important products that companies would pay much more for silver than $20 per ounce. All governments fear silver, even those who are not run directly by Rword Fed parasites, and don’t want to stamp silver in to money because countries have so much digital nothing. Parasites encouraged some stamping of coins in silver to put on a brave face that silver is unimportant. India is acting human and India’s silver imports have got to be infuriating Rword Fed parasites. Parasites control a lot of nukes horrible diseases so we can expect parasites will use these tools to wipe out any country or entity that promotes of hurts parasites’ digital nothing in the name of honesty, that is, silver as money. Hope honesty, silver, increases in price, but we know Rword Fed parasites will use every one of its Trillions in digital nothing to destroy any person, place or thing that has the gall to promote honesty, that is, silver. When I consider touting the benefits of silver in my name, I turn on RT or WaPo and see what parasites with a lot of digital nothing do to Peeps in Ukraine, Syria, Libya …and soon coming to the USA, via HAARP ing LA, who even think about fighting for honesty.

    • @Anon123: Lets not overlook that 1,000 FRN per ounce is the historical value which is no longer valid because of the industrial destruction of the global silver stock. Today there is only 1/400th of silver available per capita than there has been historically, which mirrors the rumored 400 to 1 paper selling of Ag. Subtract the 75% industrial use of the annual silver supply and the monetary supply equation gets even crazier!!! 1000 x 400 = 400,000 if we take every oz from industry and use it for money. If not, multiply it x 300%. 700,000,000 oz Ag supply minus 500,000,000 for industrial uses leaves us with 200,000,000 oz / 7,000,000,000 people = .03 oz per person, 1/10th of a gram (300th of an ounce per person per year on the planet)! Anyone that says Ag is rare is making a galactic understatement! Thank our lucky stars most people are galactically ignorant about money right now.

    • Still, if you want another ounce of silver, it but takes $20 given to a miner happy to keep the business going.
      $20, an average hour wage? 
      Why would it ever be triple digits unless a unless supply/demand situation and physical absolute shortage?
      If I want 1000 sweaters, I pay an Asian the price it costs, $5 or so each. Or open a factory of my own to do it for same or less.
      If I want silver, I pay a Mexican $20 per ounce. Or make it myself in bulk for the same cost.

    • Jan. 1919Silver 12, May. 1919 Silver 17, May 1920 Silver 60, Jan. 1922 Silver 249. May. 1922 Silver 375, Sept. 1922 Silver 1899, an. 1923 Silver 23,277, June 5, 1923 Silver 80,953, Aug. 7, 1923 Silver 4,273,874, Oct. 2, 1923 Silver 414,484,000, Nov. 5, 1923 Silver 54,375,000,000, Nov. 30, 1923 Silver 543,750,000,000. When the fiat monetary system collapses nearly all industrial uses for silver will end because the product would be to expensive for everyone except those who own silver! Energy will be expensive, such as oil, but not compared to how expensive Ag will be. Silver solar panels may be just a memory. PMs will be money.  

    • LOL, cool isn’t it! To think that after the paper fiat lie of “money” crashes, that the new yearly wage in silver could be 1/10 of a gram & every ounce saved is 300 years worth of min. wages! Or you could put 300 men to work for a year with just one ounce of Ag! Sell an ounce of Ag for 100 FRN or even 1,000 FRN — OH HELL NO! :) Let someone else sell for that, watch the price fall for a few years and when all that is used up… WATCH WHAT HAPPENS!

  2. Here’s an idea that might have some relevance today. Think of it like the  wind and elevation doping  sheet used by a sniper
    Strip away the artificiality of the FIAT dollar signs when valuing any good or service, such as is occuring in Venezuela and its street and black market barter systems, and go with real money.
    Someone may have done this to provide us with a dollar doping chart, or better yet, a precious metals to goods and services dope sheet.  The thought process behind calculating windage and elevation is apt here to, since those variations must be factored in when targeting.
    2 gallons of gas                      One 90% silver dime
    1 week of groceries                  One ounce of silver–depends on feeding a family of 2, 3 or 4.
    Full dental exam                     90% silver half dollar
    One good used car                  1 oz of gold–utility, not the brand of the vehicle, is the determinant of its worth.
    One serviceable home             1 oz of gold—McMansions have the same utility as an 1,800 sq ft 3 br home
    I hour of physical labor            1 90% silver dime
    One serviceable fire arm          One ounce of silver
    Ammo?                                  Ammo is life–whatever the traffic will bear
    Farm land                               3-5 ounces of silver per acre depending on its utlity
    Farm animals                          Chickens  1 silver dime.  Sheep or goats  .5 oz of silver each. Cattle 1 oz per.
    Manicure/pedicure                    Those are luxuries but are beneficial for health  1 silver dime for the pair
    Water                                     You’re on your own.  It should be there for the taking. Hydraulic despots get hung
    Fuel                                        1 cord of wood.  3 dimes.
    1 suite (not suit) of clothing 4-5 dimes includes shirt, shoes, coat and 2 pr pants.
    I did factor the dollar value on a few items using the prices from the 1930 to 1950. Precious metal values will be based on what labor will accept for its work. Attorneys will see a dramatic drop in their rates since Common Law will resume it’s rightful place. Doctors will see a huge drop in their rates, like my great Grandfather who took pennies, dimes, fish and fowl as payment. Bankers may have a place in this society but will be on a really short leash.
      Values are better determined using the prices from the late 1800′s in my opinion. Most items that we take for granted will disappear
    anyone care to take this precious metals doping guide as a project?  It could be very valuable
    MaryB  You have a good sense of this in your trades.  
     
     

    • For those who believe it is only a matter of time until TSHTF…
      In addition to stacking silver, a person may want to consider the future value of medications
      1 small tube of toothache remedy:  The seller can name his price
      1 painkiller pill:                              The seller can name his price
      1 bottle of aspirin:                           The seller can name his price
      1 bottle of antibiotics:                     The seller can name his price

    • With no nation on earth using silver and gold right now it would have to be valued in fiat terms… right now a ~1.75 dimes is = gallon of gas. I always trade at the days market rate plus whatever premium the coins usually have. Like a dime is $2 more or less right now.

    • I see that as just giving it away! I would not spend 10 cents silver on a lousy 2 gallons of gas!  Look at it this way. When no one wants worthless fiat paper and it has no value anywhere and Ag & Au are the only money left, total annual mine supply is only equal to 1 to 2 grams (one dime is 2.25 grams of Ag content) a year per person. Who would use an entire years share of Ag for 2 gallons of gas after the event?

    • @AGXIIK
       
      “Bankers may have a place in this society but will be on a really short leash.”
       
      Bankers WILL have a place in our world after the SHTF but not banksters.  Banks are in the business of lending money because they HAVE money to lend.  Who will have money after the SHTF?  Why, the stackers, of course.  Many of us will make a very good living running small local banks that do honest lending of silver and gold at fair interest rates.  Using honest money will put a lot of pressure on us to be honest as well.  Since many of us are inherently honest, this will not be difficult.  Bankers such as we will be beneficial to our communities.  We will take honest pride in that and be a large part of the rebuilding process that occurs.  This is not to say that all stackers will become bankers but it is likely that many of us will do just that.
       

    • Ed_B … “Banks are in the business of lending money because they HAVE money to lend.”
       
      In the immortal words of Nat E. Dred the Rasta Gourmet … No, no, noooo, no.

      ‘Neither a lender nor a borrower be, if one is ever to remain free.’ Banks are for safekeeping of commercial receipts and discounting of Real Bills between those commercial depositors, to earn and then roll the discounts for its clerical work at clearing the bills on maturity, thus deriving steady cash-flow covering over-head.

      THEN, from their own accumulated ‘reserves’, to lend relatively small amounts to consumers for ‘big-ticket’ items they’d saved a meaningful part of the price to obtain.

      This presumptive notion of banks existing to lend, is their lying, self-serving propaganda, fed to societies like … ganga … yeah, yeah, yeaaaaah, yeah.

    • Brother Pat… it often occurs to me that you and I do not live in the same reality.  But then, why should we?  With vast differences in experience and locale, how could it be otherwise?  Without borrowing and lending, we will all be really free and many of us most likely starving.  Just because banking can and has been abused does not mean that it MUST be abused.  Will any banksters survive the coming SHTF?  Maybe.  But I would bet that their numbers would be few.  An enraged world will NOT be a friendly place for them.  When the dust clears from the SHTF, what then?  Joe over there wants to start a business servicing small engines.  He has a place to do this but needs to obtain parts and a few tools.  What to do?  A small business loan from a fellow local could be just the ticket.  Being local, I KNOW Joe pretty well.  I know that he works hard and is trustworthy.  I will loan him some money.  It is a SMALL part of my stack but by loaning him some seed capital, it very likely will get his business up and running more quickly than by other means.  As a bonus, when my chainsaw or tiller quit working, I know that Joe will be happy to fix it for me ASAP.  Yes, he will pay off his loan, in full, and on time.  I get a bit of interest for taking on some risk to my capital.  We both win.  Now, Fred over there is also well known to me and he also wants a loan.  Truth to tell, though, Fred is kind of lazy and prone to hitting the moonshine when he should be working.  He is also known to cheat on his wife.  If she cannot trust him, how can I?  Sorry, Fred, no loan for you.
       
      To recap:  old banking = banksters, thieves, liars, cheats… new banking = local business owned by stackers in their own community, trustworthy, honest, fair, reasonable, making a living but not a killing.  ;-)
       

    • My Friend Ed, on this matter of banks, we don’t live in different realities, so much as we view things with different perceptions. True, our experiences may have bearing but not locale.

      We perceive lending and credit quite differently. You seem to equate them, whereas I separate them into two distinct facilitations. Loan of money only has relevance where money is necessary. That most often arises at final consumption, not in the course of production. So, to lend a neighbor ‘Larry’ money to acquire an engine for his personal car, is necessary as he’s the final consumer. But, if Larry came into a car (say from his son) needing an engine to re-sell at a gain, credit of that engine from a ‘junker’ to Larry, is the appropriate choice. Once re-sold to the party who’d agreed to buy it, then Larry can recompense the ‘junker’.

      The example scenarios describe Loan and Real Bills. You see, to enable Larry’s production doesn’t require money … it requires combination of the junker’s Capital (the abovesaid engine) and Larry’s Labor. Acquisition at Market requires Money. Capital and money work hand in hand to bring components of products together and then to distribute those products into society in a kind of circular continuum.

      Taking our simple example further … if the ‘junker’ holding a Real Bill (his invoice endorsed as accepted by our industrious Larry), needs to have money to pay workers to further disassemble the rest of the car from which the engine came, he can sell the Real Bill to a banker (or private investor with money seeking returns on it) at the prevalent rate of Discount from it’s face value. The ‘Discount Rate’ on Real Bills will be different (lower) from an ‘Interest Rate’ on Loans because of the vastly different Risk Quotient between them, which should be quite apparent to you.

      This is the un-sung, deeply suppressed ‘American Way’ of finance that catapulted our States from Mercantilist dependency on English Lords, to independent self-initiating, self-governance. Look at the chart of living costs. How much money was needed for our poor Colonists to raise themselves up to the world’s most prosperous population on Earth? It’s a flat-line, because they utilized credit of Capital, as opposed to Loan of money. Loan, my dear Friend, is to be very sparsely utilized.

      Those who learn this ‘secret’ open themselves to ‘diversify’ into highly secure Real Bill investment and the more speculative loan of money to consumers. It also allows the ‘enlightened’ to begin fully independent enterprise through Real Bill Capital credit, without the banker’s ‘seed money’ delusion to encumber them from the outset. Those ‘most likely starving’ will be the ones (like the old Antebellum Southern Slavers) who refuse to secure the method in their minds.

      Now you have some idea why Adam Smith became so famous and highly lauded back in 1776.

  3. http://www.zerohedge.com/news/2014-05-12/commodities-trading-titan-staffed-former-goldman-and-jpm-employees-quietly-growing-s

    A Commodities Trading Titan Staffed With Former Goldman And JPM Employees Is Quietly Growing In Switzerland
     
    Folks I doubt the manipulation we have been dealing with for so long is going to end
    They are just taking it off shore & out of the reach of the SEC – CFTC & what ever regulatory agency in the US may decide to finely do their job & try to end the fraud they love to do so well
    Check out the link
     

    • As a broken record I state : quite useless without the less available and interpretative cost ratio in the same graph.
      And a cost to spot markup ratio for that matter.
      A good cost price ratoi analysis on a single time point from that 1:16 era might already offer good insights.

      Could GSR have been 16:1 for centruries with costs being 1:64 all that time? No-one opening extra silver mines to get in on the superbly profitable business? Gold and silver come mostly from separate mines, so if one is relatively overpriced (which silver would be today at 16:1), the market would adjust. Especially if price is government fixed. 
      If today the 16:! would be enforced, and gold to stay similarly price as today, nothing really changes, heck yeah I would invest in silver mines.

    • @silverrrrr , thanks for the linkey, here is the Gold-Silver ratio chart for the past 100 years.
      From this chart, 16 seems to be a number close to the bottom of the range.
      The range between 40 and 50 seems to be a good middle ground; anything below 40 looks like a good point to rotate out of silver and into gold.

    • @silverrrrr
       
      “If that’s not enuf, ask AGXIIK, I think he’s at least that old….”
       
      Lol… brother AG is not nearly that old but when one looks at his worldly experiences, he DOES seem to have collected about a century’s worth of that in his 62 years.  ;-)

    • silverrrrr … “macrotrends … they’ll give you 100 years”
       
      It’s crucial to bear in mind that any chart period for silver (or gold) defined under any credit-’money’ scheme is self-delusional adulation of sheer numbers in a vacuum, since the credit, in its fiat ‘value’ preservation will ALWAYS work to suppress the metals because they stand as its existential nemesis.

  4. XC Skater,
    Even if you want to discuss the 100 year GSR chart above; realize that for the last 100+ years, western society has generally been dominated and under attack from the various Central Banking cartels. Whether you want to frame the arguement on value in USD, Pounds Stirling; etc. the fact is that fiat has been accepted and even preferred over that last 100+ years. Andrew Jackson, Jefferson, Franklin, et al warned of the influence and corruption; ie: ‘paper is poverty and the ghost of money”; etc. Try to think about what other s here are saying: when the fiat paper goes to zero and the general public rejects paper; will possession trump the paper price quote, and for what will you consider trading an ounce of gold or silver for? History; including PRESENT DAY in countries without a central bank’ argues a silver dime is valued at a day of labor; for over 3 Billion people TODAY.

    • All nice and true, but not relevant in this discussion focussed on fair value and gold:silver ratio.
      You are taling about dead guys who have barely seen the birth of automobiles and planes. Let alone large scale industrial mining.
      A gold mine a century ago vs today. How big a change? Slightly lower mortality rare of the workers? Although nowadays they are executed when rebelling, but that’s another discussion.
      A silver mine a century ago vs today? Ponder that.

      Ore grades may have fallen, but silver has been taking advantage more of industrialization to reduce production cost than gold has. At least that is my understanding. Someone with actual knowledge please tell me off, educate me.
      Talk of GSR 16 is pure hopium without relevant arguments, and with the 100 years chart at best a possible bottom at silver’s next BIG rise. 2011 wasn’t real big of course.

    • XC Skater,
      Over 3 Billion people not under the direct control of western central banking earn a dime silver equivelent, in monetary systems not inflated via fiat. Worse, the central banks have engaged in forex exchange manipulation for so long; there is presently little reference of value-for-value trade in the world as goods are expropriated from the producing nations at fractions of their value; creating much of our global distress. That you are willing to so easily discount the wisdom passed on to posterity by those whom understood why banks are more dangerous than standing armies is in itself also telling. 
      Please review some of SRSRoccos recent articles as you seemed to agree with his cost analysis. All of todays known silver deposits, whether shovel ready or some requiring many $100′s millions for mine development = < 10Billion ounces, or well under 2 ounces per capita in known reserves. Even if all of it could be mined over the next 10yrs and no new uses for industrial silver are developed, silver is truly a rare element. Yes, new discoveries will come; but there will likely be few major new deposits minable under anything but idealized fiat inflated and subsidized conditions; where energy is still available for such superfluous activities. 
      Beyond monetary value discussions; when antibiotics become scarce, the old saying ‘born with a silver spoon in your mouth’, or ‘blue bloods’; referring to the original reason why silver was so precious; will again be understood.
      Yes, the western central banks are currently crushing fiat alternatives, and you are technically correct; while arguing from a card table in a casino that is going to collapse; as some have also observed.  Rather than ponder whether an ore body is economic at $20/ounce; why not ask how Belgium can take down $100B in US Treasuries in a month? lol.
      You are simply arguing moot points!

    •  @silverseeker123 … “History; including PRESENT DAY in countries without a central bank’ argues a silver dime is valued at a day of labor; for over 3 Billion people TODAY.”

       
      I take a lot of guff about using ‘outdated’ two and three hundred year figures (pre credit-’money) in my thinking, but in this instance it’s me who’s ironically calling the ‘outdated’ tune.

      This is because, by the early-mid 1800s, sophisticated silver extraction technology (hydrological , open pit) had developed to where the cumulative total amount of silver divided out to 7 ounces for every man, woman and child on Earth (and still does now).

      It makes greater sense in this more evolved mining paradigm, that the ‘dollar a day’ standard extant at that point, supersedes harkening back to the Biblical-Roman standard of a 10th ounce daily standard.

  5. silverrrrr  Sheep and goats.   They eat nearly anything so they keep the weeds down so food cost is low.  Manure makes for good fertilizer   Goat milk is perfect replacement for cows milk and makes for good cheese.   Meat—you bet.  I’m a glutton for mutton and will scam for lamb.  Got mint sauce.?
    Sheep wool? The best for highly durable clothing

    • @MaryB
       
      Maybe you should.  She who can spin wool into yarn that can then be made into cloth will have a tremendous advantage in the local market place over those who cannot.  Wool clothing may be hot and itchy but even that is better than running around BA!  ;-)

    • Those who use the AS word on someone else are in my experience of the most hateful self-superior racists themselves. AS is the only anti word referring to a race. S invented the word. And every time you use it, it enforces dislike against you. Ever considered being calm and friendly? Wouldn’t look bad on you. Those using the AS word online typically show the very lowest of courtesy against other humans. Want to be compared to other self-superior races? Don’t dream that such a connection would have to be far-fetched. The sons and daughters of Israel are looking REALLY BAD globally. By the policies of the country, its tentacles entangled in other societies it has no business to be other than to mean harm. And yes, everyone on this planet has had negative experience with them and their individual superiority complex. If being offended by an illegitimate superiority complex equals being AS, yes I am also. I prefer however to treat you as an individual, not as stereotype member of a club that has offen insulted, offended and disadvantaged me unfairly. Using the AS word on anyone, even if they identify themselves as contrary to your leaders’objectives, makes that very hard to do.
      Do you in your culture use compassion and restraint? Or only hate. Prove it. Practice it. I am atheist and capable of interacting respectfully with those who disrespect others for no reason at all. Can you? Drop the AS word. It’s no better than calling a patriot a terrorist before knowing who you’re dealing with.

  6. rocketsredglare  It’ll be interesting to see what 90% silver dimes might buy.  Silver and gas prices have followed some interesting course but right now with gas at $4 a gallon, that dime won’t go to far.  It was able to buy a gallon 80 years ago when gas was 10 cents a gallon   My thoughts are that gasoline could be very scarce—so could anything silver.  It’ll be interesting to see how these two items balance.   Gas may be a real luxury and silver very rare.  

    • @AGXIIK
       
      Gas ceases to be a luxury and becomes a vital necessity when a loved one becomes seriously ill or badly injured and the nearest doc is several miles away.  Effective transportation CAN be much more than a mere luxury.  There will likely come a time when local alcohol production will be done to power vehicles that were formerly powered by gasoline.  An outstanding business opportunity could be created by those who know how to modify vehicles to burn alcohol efficiently instead of gasoline.  I know the basics of this but would need quite a bit of additional study before being able to do it effectively.  High quality ethanol could be used to power chain saws, tillers, and even small vehicles.  That could be VERY handy if gasoline supplies become minimal and / or prohibitively expensive.

    • AGXIIK … “Gas may be a real luxury and silver very rare.”
       
      There it all is in a comprehensive nutshell … rationality. The rest is temporal, peripheral fine tuning.

  7. Good point Ed_B    My BOB has stored a limited amount of regular gas, 10 55 barrels with stabile.  It’s rotated regularly and used fully each year with no adverse effects on vehicles.  This small stock would provide power for high MPV vehicles like small cars and motorcycles.  This solution to a limited shortage would be fine but long term fuel, wood alcohol and diesel, is the secondary means for fuel.  Propane is also a backup fuel. I stocked 10 5 gallon bottles plus 30 1 gallon for temp cooking.  We have alternates to that including solar ovens, solar panels (not enuf IMO) and wood.  It’ll be  a combo of 20th, 19th and 18th century technology.  MaryB is far more resourceful than us on that score.  Her barter skills and foresight is always welcome.
    You note on the banking enterprise using old school monetary metals is a good one.  There was a day not that many decades ago when the simple expedient of honest banking (and I have to admit that is an oxymoron that nearly impossible for me to get around) would provide a limited means to restart commence, maybe becoming a bit of the lubricant to restart local communities.  From my conversations there are many people in Nevada who are very deep stackers, Mormons amongst them. Nevada is a precious metals rich state with large aquifers, decent farm land and an abundance of open space.  Most is claimed by the evil empire of of the east.  That’d change quickly when the people take back their common law  and property rights.
    Cheers. Pat Fields.  Sometimes the blind pig finds an acorn

    • Good plan on the drummed gas.  Adding a stabilizer is a must if polymerization is to be avoided.  I have stored gas for up to 6 months without a stabilizer.  Being in a closed container that is kept relatively cool also helps.  Any longer than that, though, and I would be using Stabil or some similar product.
       
      Your mention of diesel reminds me that early diesel engines were run on peanut oil, so it is possible to fuel a diesel engine with light oils derived from plants.  No doubt a bit of modification is needed for that to work well and this likely won’t work too well in freezing temps.  But it could be a viable alternative for those who can grow peanuts, sunflowers, or other oil-rich crop.  Crushing these seeds and then boiling them with water will result in the oil floating to the surface, where it can be skimmed off.  Rather than a chemical process, it is a physical process.  These are simple and usually work pretty well.  They also tend not to create a lot of useless byproducts.  After the oil is skimmed off, the water and remaining plant residue can be used as an animal feed additive.
       
      Agree 100% on MaryB being a diamond of a resource in her town.  People like her are few, far between, and of immense value when discussing how to thrive when others are barely surviving.
       
      The oxymoron of “honest banking” IS a new concept that requires some getting used to, no doubt.  But, I submit that it IS possible and that it can be made to work beneficially for most small communities that are trying to pick themselves up, dust themselves off, and restart their local economy.  No, this is not guaranteed by any means but if it can be made to work, it will be of considerable value to everyone in that local community.  This is a great way to keep “me” in lower case while keeping “US” in uppercase. :-)
       
      Yep, Nevada has a lot of promise… as long as water can be found.  If not, then it is a hot and arid place where life would be very hard.  It has its current population because there is electricity available to pump water.  If that should ever fail, there will be some very serious problems there.  On the other hand, you folks DO have an abundance of sunshine for your solar energy panels, solar food driers, solar hot water heaters, solar ovens, etc.  Making the best use of what you have on hand is one of the keys to success in this world of ours.
       

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