Coming Speculative Mania in Silver Will Dwarf Nominal Highs, Set New REAL High

Zeal011113ASubmitted by Adam Hamilton, Zeal:

Back when silver’s last secular bull climaxed, the US median household income was under $18k!  Today it is around $50k.  Across the nation new houses averaged just $76k while new cars generally ran less than $6k.  A candy bar cost a quarter.  It is grossly misleading to look at decades-past prices without first converting them into today’s dollars which we all understand.  That creates a righteous apples-to-apples comparison.

Today’s secular silver bull, while erratic, is much more consistent than the 1970s one proved.  Silver’s gains have been more gradual, the periodic sharp surges as greed waxes excessive haven’t been extreme like the 1974 example.  This implies today’s bull has a much larger investor constituency deploying capital more gradually over time.

Thus today’s bull is considerably more robust, it has a stronger foundation than the 1970s one.  This supports the thesis that today’s secular silver bull will ultimately prove larger than the last one.  The better the foundation, the more investor capital deployed before that crazy popular-speculative-mania phase sets in, the higher silver can potentially rocket when the general public finally comes storming in.

So despite all the silver bearishness out there today spawned by silver’s recent weakness, its secular bull looks far from over Popular speculative manias cap secular bulls, and though the spring-2011 upleg was strong it was nothing remotely close to mania-caliberSilver is going to see much higher highs, dwarfing April 2011’s near $50 real, before this secular bull has fully run its course and finally gives up its ghost.

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Silver bearishness has naturally mushroomed following this metal’s rough December.  A growing chorus is declaring silver’s secular bull finished, implying it must have peaked after silver’s dazzling April 2011 surge.  But secular bulls climax in popular speculative manias, which dwarf the silver action of a couple springs ago.  Looking at silver in real inflation-adjusted terms drives home the point its bull is far from over.


For any multi-decade price comparison, adjusting for inflation is essential.  A dollar today is worth a lot less than a dollar in the past.  The Federal Reserve keeps conjuring up new fiat dollars out of thin air, inflating the money supply.  As it grows faster than the underlying economy, relatively more dollars compete for relatively less goods and services.  This monetary inflation bids up the prices of everything.


And to get an idea of what a secular-bull-ending popular speculative mania in silver really looks like, we have to travel back to the last one in early 1980.  Silver peaked at the then-breathtaking level of $48, which no longer sounds extreme.  But a dollar back then went a heck of a lot farther than a dollar today.  The intervening three decades of relentless inflation have greatly eroded each dollar’s purchasing power.


Back when silver’s last secular bull climaxed, the US median household income was under $18k!  Today it is around $50k.  Across the nation new houses averaged just $76k while new cars generally ran less than $6k.  A candy bar cost a quarter.  It is grossly misleading to look at decades-past prices without first converting them into today’s dollars which we all understand.  That creates a righteous apples-to-apples comparison.


Unfortunately the most widely accepted inflation gauge today is the US Consumer Price Index.  Even though it greatly understates true monetary inflation for political reasons, it is still the inflation yardstick that Wall Street accepts.  Using the horribly flawed CPI to recast past silver prices into today’s dollars is actually very conservative.  Since this construct lowballs inflation, it really understates silver’s last mania.


This first chart looks at the last four decades or so of silver prices, showing what a real bull-killing popular speculative mania looks like in today’s dollars.  The nominal (not inflation-adjusted) silver price is shown in red, while the real (inflation-adjusted) silver price is superimposed in blue.  This uses the CPI to recast silver prices in constant November 2012 dollars, the most recent monthly CPI data currently available.


Silver has always been a hyper-speculative metal, which greatly amplifies the magnitude of its popular speculative manias that climax secular bulls.  The terminal ascent of its last one in late 1979 and early 1980 was mind-boggling.  It skyrocketed vertically in a legendary parabola, and then immediately collapsed in a legendary crash.  In today’s dollars, silver’s January 21st, 1980 high was actually over $142 per ounce!


A popular speculative mania is a far cry from even a strong bull-market upleg, they’re entirely different beasts.  During these ultra-rare events, an entire population (not just investors) becomes enthralled with a rocketing price.  It comes to be seen as a sure thing, an easy path to quickly multiplying wealth.  This leads to crazy behaviors that would never happen in normal times, often called the “madness of crowds”.


The mainstream media covers the rocketing price excessively.  It becomes the hip topic of choice in nearly all conversations.  People who never invested in that asset before literally borrow money (even mortgage their houses) to buy as much as they can as quick as they can.  People are hypnotized by the rapid gains, foolishly convincing themselves that the price will continue surging forever.  It is pure insanity.


While the spring 2011 silver upleg was certainly powerful, it was nothing like a popular speculative mania.  The only people captivated by silver’s advance then were a small fraction of total investors.  Silver was not covered in the mainstream media and even CNBC gave it little airtime.  Silver was certainly very overbought and needed to correct, but this bull’s latest peak was not driven by the general population.


And this real silver chart really drives home that critical point that guts the bears’ thesis that silver’s bull has ended.  Silver’s advance in today’s secular bull has been much more gradual than the 1970s one.  Its April 2011 peak near $50 in today’s dollars was only about a third of its January 1980 one.  And afterwards, there was no crash like we saw in 1980.  Silver consolidated high and held most of its gains.


Provocatively, today’s silver bull ought to ultimately see a popular-speculative-mania-driven real peak that far exceeds January 1980’s.  Back then the rest of the world was much poorer, so most of silver’s mania was from American and European buying.  Today Asia is far wealthier in real terms, with growing middle and investor classes that have a deep cultural affinity for precious metals.  Imagine when they go crazy for silver!


The Information Age will also contribute to a bigger speculative mania.  Several decades ago financial information was hard to come by, but today it is ubiquitous.  When silver eventually starts marching higher in its secular bull’s mammoth terminal ascent, the Internet will be abuzz with hyper-bullish commentary.  This will seduce in far more normal non-investor people than participated in the last mania.


Silver’s latest April 2011 peak, the upleg leading up to it, and the secular bull that spawned that upleg truly look nothing like the last secular bull.  Silver still remains a tiny alternative investment scorned by Wall Street and ignored by mainstream Americans.  It has yet to capture the popular imagination as the ultimate sure-thing investment.  We haven’t seen anything close to a popular speculative mania yet.


While that first chart revealed how small and gradual silver’s current secular bull has looked in constant-dollar terms, it is also important to consider the terminal gains.  The signature of manias is the sheer speed and magnitude of the rallies they ignite.  When a vast new pool of capital starts deluging into an asset class that is too small to handle such demand, the resulting price spike defies imagination.


This second chart zooms in on silver’s last secular bull rendered in today’s dollars.  It notes the terminal gains in silver’s two largest surges of that bull, in nominal terms since these are short multi-month spans.  It also shows silver’s nominal calendar-year returns, which also strongly suggest silver’s current secular bull is far from over.  The contrast between silver’s last secular bull and today’s couldn’t be starker.


These final two charts are best considered as a pair, as together they really highlight just how immature silver’s current secular bull looks.  Since we’re on the popular-speculative-mania thread, let’s start with terminal gains.  I broke them down into monthly increments, showing how much silver surged in the final month, 2 months, 3 months, 4 months, and 5 months leading into major toppings.  The results are telling.


The first huge surge of silver’s last secular bull happened in early 1974.  In the final month before silver’s peak, it surged 67%!  Don’t let that slide by without thinking about it first.  A 67% gain in a single month is breathtaking.  If that happened today starting at silver near $30, it would be over $50 just 4 weeks from now.  The final 5 months before that 1974 peak saw silver rocket 134% higher, once again incredible.


But as amazing as that 1974 surge proved, it wasn’t a popular speculative mania.  Mainstream investors who never before thought about or bought silver didn’t flood in.  That didn’t happen until late 1979 and early 1980.  And the terminal gains seen in that last mania were truly epic.  Silver skyrocketed 104% higher in that surge’s final month alone!  In the final 5 months, its price blasted an insane 417% higher!


If you scroll down to the next chart showing today’s secular silver bull, the terminal gains seen leading into its latest April 2011 peak paled in comparison.  Despite how exciting and profitable silver’s spring-2011 surge proved, this hyper-speculative metal only rallied 31% in that upleg’s final month and 81% in its final 5.  This is less than a third and less than a fifth of what was seen in the last speculative mania!


Secular bulls don’t end until they bloom into a popular speculative mania that sucks in normal everyday non-investors heading into the climax.  And when mainstream capital pours into an asset that hasn’t seen so much demand before, its price explodes higher with a fury that can never be matched in even the largest normal upleg.  The terminal gains in April 2011 were nowhere near popular-mania velocity.


And the aftermath of that flood of popular buying is a crash.  Once greed gets so extreme that anyone willing to buy has already bought, only sellers remain.  So the mania price promptly collapses.  Note above that the silver speculative mania ignited in August 1979 near $27 real.  After shooting up to $142 in January 1980, silver was back down near $32 by March 1980.  The entire mania was wiped out in just 2 months!


Contrast this with the April 2011 aftermath.  That large upleg really started humming in September 2010 after breaking above $20 real.  It peaked just under $50 in today’s dollars in April 2011.  But despite the subsequent near-crash, the worst silver levels seen in the couple months after the peak were still near $34 real.  So instead of the entire upleg being wiped out, nearly half its gains survived even at worst.


And the longer-term aftermath of a popular mania is even more severe.  When people get fooled into buying into the top near mania-extreme prices, the subsequent losses are so brutal that they never come back.  In calendar 1980 and 1981, silver collapsed by 44% and 47% respectively!  The general public that bought in and fueled the mania was so demoralized that they aggressively dumped silver for years to come.


Meanwhile in 2011 and 2012, silver merely lost 10% and then gained 10%.  Such modest losses after a big upleg are definitely not what the devastating aftermath of a popular speculative mania looks like.  Instead of collapsing like after the 1980 bull-killing peak, silver simply consolidated high in recent years holding on to most of its secular bull’s gains.  And they themselves offer another major contrast.


Popular speculative manias are so massive that they drive their underlying secular bulls’ gains stratospheric.  In nominal terms silver launched a staggering 3627% higher in its last secular bull, and this translates into a still-amazing 1859% in real inflation-adjusted terms.  When the public falls in love with and floods into an asset, the resulting bull-market gains end up being gargantuan beyond belief.


In today’s secular bull, as of its latest April 2011 peak silver was only up 1094% in nominal terms and 842% in real terms.  These are less than a third and a half respectively of the precedent the last secular silver bull set.  And remember that happened without significant Asian participation in a much-poorer world with vastly less paper money, and without the Internet to whip up non-investors into a silver-lusting frenzy of new buying.


And finally consider silver’s calendar-year returns.  Back in the 1970s they were erratic, with down years and mild up years sprinkled between the big up years that made the entire bull.  As a speculators’ playground, silver sure doesn’t rise in a nice straight line.  It surges dramatically and then consolidates for a long time.  These consolidations shake out naive investors who don’t understand silver’s nature.


And silver’s annual performances have been erratic in this bull too as this final chart shows.  Sometimes it is up big, sometimes it is down big.  But even large down years like 2008’s stock panic don’t prematurely end silver’s secular bull.  It bounces right back as sentiment recovers, something to remember today in this current environment filled with silver fear, despair, and bearishness.  Silver’s gains aren’t smooth.


But there is definitely a mean-reversion tendency in silver’s returns.  Weak years are generally followed by strong years, and vice versa.  After 2008’s stock panic crushed it, silver soared 52% in 2009 and 83% in 2010.  And those incredible years led into the high consolidation of 2011 and 2012, with their 10% loss and 10% gain.  So if silver’s secular bull is indeed alive and well, it is certainly due to surge once again in 2013.


And there’s one more thing to note in this real-silver comparison.  Today’s secular silver bull, while erratic, is much more consistent than the 1970s one proved.  Silver’s gains have been more gradual, the periodic sharp surges as greed waxes excessive haven’t been extreme like the 1974 example.  This implies today’s bull has a much larger investor constituency deploying capital more gradually over time.


Thus today’s bull is considerably more robust, it has a stronger foundation than the 1970s one.  This supports the thesis that today’s secular silver bull will ultimately prove larger than the last one.  The better the foundation, the more investor capital deployed before that crazy popular-speculative-mania phase sets in, the higher silver can potentially rocket when the general public finally comes storming in.


So despite all the silver bearishness out there today spawned by silver’s recent weakness, its secular bull looks far from over.  Popular speculative manias cap secular bulls, and though the spring-2011 upleg was strong it was nothing remotely close to mania-caliber.  Silver is going to see much higher highs, dwarfing April 2011’s near $50 real, before this secular bull has fully run its course and finally gives up its ghost.


Interestingly, silver is already in a young new upleg that most traders refuse to see because they are blinded by today’s bearishness.  While this metal was pounded back down near $30 in December, just under its 200dma, it spent much of last summer languishing around $27.  Silver is slow to gather steam, with gradual early-upleg buying slowly building momentum into the exciting large late-upleg surges.


And the Fed’s new QE3 Treasury monetizations that are just starting this month are wildly bullish for silver.  This metal has always been a go-to asset in inflationary times.  That last mighty upleg that peaked in April 2011 happened to be largely driven by the Fed’s last major inflationary campaign, QE2.  So 2013 is shaping up to be an amazing year for silver, and probably even better for the beaten-down silver miners.


When traders are bearish on silver after its slumps, they just abandon the stocks of the companies that bring it to market.  The silver stocks plunge to deeply-undervalued levels relative to silver, they are pretty much left for dead.  This creates great opportunities to buy low for brave contrarians who understand silver’s bullish fundamentals and aren’t spooked by temporary weakness.  The newest persists today.


Most silver stocks are trading as if the bears are right, as if silver is doomed to grind lower from now to the end of time.  But in real terms today’s secular silver bull looks far from over, and silver is early in what is likely to prove its next major upleg.  So the excessively gloomy psychology plaguing silver stocks today won’t last.  Contrarians who understand this have been buying cheap silver stocks in recent months.


It isn’t too late.  Last month we published our latest deep-research report on silver juniors, the highest-potential of all silver stocks.  We spent 3 long months investigating nearly 100 silver juniors trading in the US and Canada, and gradually whittled them down to our dozen fundamental favorites.  Each is profiled in depth in a fascinating new report.  One was already bought out at an epic 72% premium, as silver miners realize how dirt-cheap the explorers are.  Buy your report today and get deployed before silver runs!


We also publish acclaimed weekly and monthly subscription newsletters for contrarian speculators and investors willing to fight the crowd to buy low and sell high.  In them I explain what is going on in the markets, why, and what specific trading opportunities it is creating.  Buying low when stocks are deeply out of favor has led to a stellar track record.  Since 2001, all 634 stock trades recommended in our letters have averaged annualized realized gains of +34.8%.  Subscribe today!


The bottom line is a real comparison shows silver’s current secular bull is far from over.  This metal’s latest interim high a couple springs ago was relatively low in real terms, and resulted from an upleg that was nothing like a popular speculative mania.  And secular bulls don’t end until the general public falls in love with that asset and starts flooding in.  Silver hasn’t seen anything like that for several decades.


The current bearishness is merely a typical psychological response to silver’s recent weakness.  When prices fall, traders start to believe they will keep falling indefinitely.  So they look for bearish theories that rationalize their beliefs.  But succumbing to this groupthink is a grave mistake.  Broader perspectives reveal silver’s secular bull is far from over, creating a great buying opportunity for contrarians today.


Adam Hamilton, CPA


January 11, 2013


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  1. Silver is going to see much higher highs, dwarfing April 2011’s near $50
    -  -  -  -  -  -  -  -  -  -  -
    All the more reason to separate your nicer phyzz from the rest.  So throw all those worn-out Walkers, Barber & Standing Liberty ‘smoothies,’ holed halves, and dented dimes into a separate jar.  Be ready to dump them on ebay or Craigslist once the Silver mania re-ignites and then you will have some additional fiat to cover your day-to-day needs.
    BTW I had an 1854 Seated Liberty Half Dollar with a hole in it.  So I purchased a bagful of small rings from a craft store and used pliers to open it, put it through the hole and bend it back closed again.  Then I purchased a Silver chain to slip through the ring and volia!  I had a very unique and soon-to-be-very much appreciated Christmas present for my sister, who was born exactly 100 years after that coin had been minted.
    She told me she LOVES this necklace!

    • LOTS of ‘blah, blah, blah in the above article by Mr. Adam Hamilton, wonder how many SD’ers waded through all that just to read my comment above?

    • Its a lot to wade through, but he is real.
      Find something that cost $50 back in 1980, is still sold in the same quality and size as then, take a couple of these, average them and that will give you a good idea what might be a guideline.

    • Good question, Mammoth.  I am sure that I am like many of the other readers hereabouts in that I often skip the articles and jump right to the comments.  They tend to be a lot more interesting.  As is happens this time, though, I did read most of this article, although my eyes do tend to glaze over when the charts are brought out.  This looks to me like good basic analysis, which is what most of us have already done and is why we stack silver.  We’re convinced that silver is under-valued and should be selling for considerably more money than it currently is and that its true value will be realized at some point.  
      Unfortunately for those who trot out what happened in the 1970s and 1980s, the investing world is a vastly different place today, so I am not sure how much the past can tell us in the current investing environment.  Interesting stuff for sure but just how useful it is may be another question.

  2. Very cool gift  Mammoth.  I bet your sister thinks the world of you.  I know you have some sort of 6th sense when it comes to finding deals on junk bullion.  I was wondering what a person would do with large amounts of JB dimes, quarters and halves if silver did take off. IMO when everyone is selling, we are buying and when everyone is buying we should be selling (at least some of our stack). The question I have for myself and wife is what to do with JB   It’s real money, it’s Constitutional silver but I don’t see much of a chance of us taking these silver coins to the grocery store or gas station and buy our stuff.  It’s s shame that about 90%of JB was taken to the refinery during the last silver boom, thus removing a bit of a national treasure, it seems like we should be using JB as part of our coinage spending.  Just trying to get a handle on this. I have a lot of JB so this does pose an important question. Selling on Ebay or Craigslist gives me the willies.
    Maybe making jewelry and chains with the worn coins would prove to be a profitable business. Starting to set that up now might work well which silver rings and chains are still cheap.

    • I like my ratty 90% :-) especially the 30 barbers I got under spot, sure they are all good condition at best but the price was right! Think I have 170+ silver dimes now.

    • @MaryB, 170 Silver dimes is a nice start!  Hopefully you have some nice mercuries in that stack.  Apologies for trashing the Barbers, but the obverse design of these coins is anything but inspiring and most of those that I’ve come across are pretty well-worn.

    • Yeah, I am not a fan of the Barbers either.  The design simply does not appeal to me.  The good news for those to whom it does appeal is that I am not out there bidding up Barber coin prices or taking them out of the market!  ;-)
      OTOH, silver IS silver and in a SHTF situation few will care what a coin looks like when using them for trade.  Weight and purity will be about all that matters. 

  3. @AGXIIK, Junk Silver will be very good to have it TSHTF.  Keep that bagful of dimes – those will be good for purchasing small items.
    Having said that, I do recall feeling irked when the LCS showed me a quart-sized bag filled with Mercury Dines that a widow had brought them.  Her husband has saved them, and then he died so she was selling them.  Made me imagine my kid selling my stacks years from now, after I am gone.  Oh well – look at it as having insurance…

    • Yes, it will.  It very well could be the only money that people really trust.  That’s important in a trading situation.  I have five $100 face US 90% coin bags just for this purpose… dimes, quarters, and halves.  Most of the quarters are those Statehood proof quarters.  They are the same weight and fineness of silver as the regular Washington quarters but are cheaper so more silver can be had for the same or less money.  I especially like the rolls I bought for $212 each a year or so ago.  :-D

  4. Good Morning all,
    Just hanging in there and really don’t take much stock in what a number cruncher has to say nor do I really take stock or belief in charts of yesteryear or yesterday’s for that matter. Insofar as the American public waking up and buying Silver because the dollar continues to shrink is really of no consequence as working families are too busy trying to make ends meet and surely won’t have any funds of Fiat to purchase Silver as additional tax burdens overcome them/us, and to boot the population has their heads buried in the sand as to what is really happening to their world and simply don’t want bad news as the propaganda liberal media tells them/us that all is well. I don’t really believe that any of us who post here have anything more than faith, not facts that precious metals will rise. Sure there is a lot of hype from those who post articles, but it is really our faith that causes us to lean on one another and post here. Time goes by and by and hype slowly rises and falls. As far as I can personally see, only faith in the rise of precious metals as there is nothing else that will ensure our financial security. Hell, I am a cranky old bastard and I sour easily at times with my posts here, but I will stand with you and hope to live long enough to see how all turns out. Just looking for that light at the end of the tunnel like you.
    Ranger from Texas

    • Don’t be so sour @Ranger. At least your DCA isn’t $36.31 like mine. You are right about faith though. I started at $42.15, but fortunately I truly believe so it’s easy for me to just follow blindly and buy the dips.

    • Yeah, Ranger, us old farts do tend to be grumpy.  But there are good reasons for that.  First, everything we have that still works hurts and anything that doesn’t hurt doesn’t work!  ;-)
      In addition, I am finding that with age comes a natural reduction in the amount of B$ that I am willing to tolerate.  Just getting tired of it, I suppose.  That, or I am getting ready to take up residence in Heaven, which is a B$-free zone.  ha ha
      As to silver… what the hell?  My attitude is why not own silver?  We know from our own lives that it is a helluva good inflation medicine and that the Gov and the Fed are hell-bent on creating a lot of inflation these days, so why not own something that doesn’t get printed to extinction?  As the WOPR computer said in the movie War Games, “the only way to win the game is not to play it”.  That’s how I feel about the inflation game.  The less I play it, the better I like it!
      I am not expecting silver to “go to the moon” anytime soon.  If it did, that would be cool from the investing standpoint, although it would likely mean that everything else was going to hell in a hand-basket and that would not be so good.  To make me happy, silver does not need to shoot up in value suddenly… all it needs to do is keep up with inflation and be my financial insurance plan in case we have a currency crisis or some other damned-fool-induced economic collapse event.  Not sure how likely that is but I buy insurance on my house and car, even though they are VERY safe in my care and unlikely to need it.  In no case will I bet my financial future on what any economists think.  Most of them are idiots whose primary job is to convince some college, financial firm, or government agency to hire them.  They have incorrectly diagnosed the problems with our economy at virtually every turn and have failed to detect ANY of the bubbles that have come along.  I exclude the Austrian school economists from this rant because they certainly do know what they are talking about.  Being right most of the time gives them credibility… unlike the rest.

  5. When even the paper boy starts talking about silver , is the time I plan on checking every single ounce before purchase for fakeyness.

  6. Theer’s the story of the Wall Street tycoon who knew it was time to sell out in  1929. It was when he heard the shoe shine boy talk about investing the stock market and doing it on margin   When the paperboy starts taking about investing and making more in the silver market, it’s time to sell. 

    • I’m with you on that @AGXIIK but what do we buy then to preserve our wealth? farm land? commercial real estate? A nicer home? mineral rights? I do like milk. How ’bout a dairy farm?

    • Determining when to sell an investment is a lot more difficult than determining when to buy it… at least, it is for me.  I probably will not recognize when the proper time to sell a good part of my silver arrives because the price is likely to be rising quickly then and silver will simply look like a great investment that is getting better and better.  I will probably take the coward’s way out and do some dollar cost selling, although that may not work too well if there is a lot of price volatility at the time.  Another tactic that might work would be to 1) only sell amounts of silver for cash that will be spent immediately and 2) buy other real assets with the silver. 

  7. 40OZ I’m thinking trading some silver for ag land out Hwy 50 past Fallon, near Battle mountain and BLM land. Cheap at $2,000-5,000 and acre with water, streams and some small lakes. Good access off highway with local stores. Hunting, fishing and farming, no codes or regs. You buy it, you build it and no one is the wiser. Much of the land backs up to BLM and unlimited space. Good elevated ground with defensible perimeters. With a quiet sale and small seller carry, silver passes as money through escrow, avoiding taxes on cap gains during purchase process. Frig the gummint and IRS
    Re the video IE999 Very good one. Say Molon Labe to the dot and praetorians. 1,000 to one,,, bad odds for the elites

    • Buy it in small enough increments to be below the thresholds.
      Farm land is going to be the hot commodity in the future, economy collapses farm land and the small communities near them will form local economies.

    • Yikes, AG!  My wife and I passed through Battle Mountain last year on vacation and even spent a night there.  What a dumpy little greasy spoon / truck stop of a town that is.  Hell, even the people there looked worn out, so it must be a hard place to make a living.  I hope that the land is MUCH better than the town.  lol
      From what we saw of it, the land around there wasn’t that great but got better as we headed northwest from there.
      But… as they say… beauty is in the eye of the beholder and it is also likely that the land that isn’t near the highway is much nicer than that which is.  Parts of NV are quite nice, so it’s just a matter of finding the right part!  As you well know, access to year-round water is the key to doing anything useful with dry country land.
      Up here in the Pacific NorthWet, getting plenty of water is NO problem.  A few hundred billion tons of the stuff fall out of the sky every fall, winter, and spring.  For us, finding sunlight is more of a problem!  ;-)

  8. As I look out on the world, the most fundamental commodity is Labor. Its expense uniquely brings forth everything else. My research shows that the daily average labor-silver ratio stood at about 1:1 for three centuries prior to the mid-1800s. However under-valued today, as can be well and truly argued; in banknote terms, presently, that translates to a CURRENT value per silver ounce between 150 and 160. So, this article’s anticipated ‘high’ silver-banknote analysis predicated on a ‘speculative blow-off peak’, is STILL beneath the labor-silver ratio that rather ought to be the CURRENT FIGURE … AT MINIMUM.
    I say, at minimum, because the historic labor-silver ratio evolved from an environment in which the overwhelming majority of silver’s usage was devoted to its monetary role and conversely, wasn’t yet affected so greatly by technological influences magnifying labor productivity. While futile studies of technological influence on productivity have been conducted in the false, completely distortive vacuum of the banknote scheme, none exist of which I’m aware, that factor the thoroughly objective qualifier of silver’s supply-demand control element into their conclusions.
    Because of ‘industrial applications’ and the criminal governmental ‘de-monetization’ of silver, the most ancient average daily labor-silver ratio of 1:0.1 could possibly again be closer to a valid case, but only when the imaginary’price effect’ of banknote ‘money’ is eradicated from the markets and all available silver emerges back into monetary circulation can this ratio be re-established and again confirmed reliably on a purely supply-demand scale.

    • Interesting comment, as usual, Pat but what are the units on that ratio?  I was thinking Troy oz. per day of labor at first but am not sure now.  Looking farther back in time, weren’t Roman soldiers paid the equivalent of 0.1 Troy oz. per day… about equal to a silver coin that is roughly 1.5 times the size of a US silver dime?

    • @Ed_B Both the contemporary and ancient are … average day’s labor … per Troy ounce. As far as I know, Western Civilization from ancient times to England of the Middle Ages, measures PMs in Troy-Weight. We have all sorts of Biblical and commercial records to confirm that in the ancient era, a tenth ounce per average day’s labor was common.  However, perhaps because of higher production or more freely circulated coinage altering the supply-demand fundamental data, the three centuries prior to the 19th, that I investigated, revealed the norm to have become an ounce per day (5 shillings or 1.25 dollars).

    • “However, perhaps because of higher production or more freely circulated coinage altering the supply-demand fundamental data, the three centuries prior to the 19th, that I investigated, revealed the norm to have become an ounce per day (5 shillings or 1.25 dollars).”
      Interesting.  That seems to correspond roughly to the time when Spain was discovering the New World and looting its silver and gold for all it was worth.  A huge increase in the supply of silver would certainly create inflationary pressure on prices, including labor.
      My grand father served in the US Army in 1918.  He was stationed in England for a time and was paid the princely sum of a 5 pound note each month.  The British soldiers thought that to be too much money for a mere grunt to be paid each month and were none too shy about mentioning it.

    • @Ed_B
      Off the top of my head, I think a Pound equated to 5 dollars in that period, so your Grampop (mine was a cannoneer in France) came to a bit less than a dollar a day. Your correlation with Central American silver inflation of the 1400s may have merit. I never had occasion to investigate the 12 and 1300s, Certainly Florentine records of that era could reveal some pretty reliable data to compare to the 14 through 1700s and extrapolate from

    • That is my recollection as well, Pat.  Less than $1 a day seems a minimal rate of pay but that was much stronger money back then that could buy a lot more than the terribly inflated paper money of today.
      Also remember Gramps telling me that when he worked in a logging camp in Colorado, the men were paid $10 a week… in gold.  They worked very hard from sunup to sunset for 5 days for that money.  They lived in tents at a camp in the woods and only went home on weekends.  A few of them were injured pretty badly or even killed on the job.  It was rough work.  One day, the timber company decided to pay the men in paper money because it was more convenient.  They almost had a riot on their hands!  Those men worked terribly hard and were in no mood to settle for pieces of paper.  They knew what REAL money was and that was what they would have for the REAL work that they had done.  The company backed down when they saw how important it was to them and sent a rider on horseback to town to swap their payroll paper for gold from the bank to pay the men.  Not sure now but am thinking that this must have been around 1914 or so.
      Wow… Florentine records.  Who would have thought that there would be any of those left in the world from so very long ago.  Live and learn, folks!

    • @Ed_B … “that was much stronger money back then that could buy a lot more than the terribly inflated paper money of today”
      Well, Ed, there’s the dichotomy of comprehension we’ve ALL been brainwashed to unquestioningly internalize. Copper, silver and gold were no more or less ‘strong’ than their naturally derived supply-demand realities … demanded. In that sense, they are as ’weak’ as some other good MAKES them. by its own combined rarity and desirability. It’s ALL about RATIOS, and whenever people’s delusions tempt them to defy those ratios … THAT’S when the TROUBLE starts.

    • Understood, Pat, which is why I try to define the relative strength of money in terms of real goods, such as food, oil, land, etc.  I agree that we are dollar-centric in much of our thinking because that is what we deal in on a daily basis.  Because I could once buy a gallon of gasoline for $0.25, I symbolize that event by referring to that as stronger money than the $3.25 I now have to pay for a gallon of gasoline.  Yes, I fully realize that it took more labor to earn that old quarter than it does to earn a quarter today but still need some point of reference in all this.  Until we get to the point of using wage-hours as our currency, which some localities have done, it will be difficult for most of us to think in those terms… especially since not all labor is seen as being of equal value.

    • @Ed_B … “not all labor is seen as being of equal value.”
      Yep. That’s why an … average day’s labor … equated to an ounce of silver (providing, by the way, two day’s average sustenance).  Another curious numerical alignment I saw in that study was that if all silver known to have been mined were equally divided out among all living human beings, the share would be … 7.5 ounces each. A little more than an ounce for every average day of their labor! God IS good.

    • Yes, “average” is indeed the operative term here.
      “God IS good.”
      Indeed so and pretty much by definition!  :-)
      We keep reading in various articles just how under-owned gold and silver are here in the US.  I agree with that as far as gold is concerned and have experienced it myself via people I know, few of whom actually own any gold other than perhaps a piece of jewelry or two.  
      That said, those of us who have been stacking silver for a while and have reasonably large stacks must be bringing the silver ownership average up considerably.  I have read that the average ownership of silver in the US, for example, is about an ounce per person.  If true, that would be about 300 million ounces of privately owned silver in the US.  If the amount of silver above ground at the moment really is in the area of a billion ounces, the US population owns just under 1/3 of it.  That seems like a decent amount of ownership on a world-wide scale, if not on a personal one.  Of course, this all hinges on these figures being correct, which they may not be.  Do you think that silver and / or gold is / are under-owned in the US?


  10. This guy wants out of his silver posistion. Thinks there are no buyers. He thinks the worlds best financial minds are idiots! the same ones who always end up right.

    The video cannot be shown at the moment. Please try again later.

    • Hey Rocket, I’m not discouraged about my kids and grandkids getting the fruits of my labor,
      I would also like to enjoy the fruits of my labor with my trophy wife of 50 years. Just waiting
      on “WHEN” to happen!!!!!

    • Now that is one bitter and emotional man.  Some of us would describe him as having “weak hands” and maybe that is true from our point of view.  Like many of us in the liberty movement, however, I support his right to make the choice of whether or not to own any particular items, including gold and silver.  I would not resort to calling him an “idiot”, a “moron”, or any other unsavory appellation, however, as he seems to think appropriate.  Owning PMs is a choice and he is free to make that choice just as we are.  I will NOT be offering him any sustenance, however, should be come banging on my door after the SHTF because he is not prepared for it and I am.  Such is life.

    • One of two general categories seem to apply. Paid ‘Sock Puppet’ recruited off of Craig’s List, or ‘Get Rich Quick’ speed freak. In either case the blank wall behind his head ironically serves as an allegorical reflection of his apparent mental capacities.

  11. @RocketsRedGlare LMAO believe it or not I listened to the video but it will be the last time I listen to him. Lol O! Well! there’s a few in every crowd. @Ranger And Don’t You watch this Ranger, it will just depress you more. Lol
    Well I guess I’m a Retard, Moron and an Idiot. Lol. It also looks like he is holding up a SBSS 1oz Medallion

    • You are none of those things, Charlie, and all of your friends hereabouts are well aware of that.  :-D
      I would not suggest that anyone put ALL of their money into any particular investment but a share of what we have in gold and / or silver seems only prudent to those of us who have read a little history. Bless those who are “all in” on their investments, whatever they may be.  I can only hope that it works out well for them and do not begrudge them an excellent return on their investments.  In fact, I admire their courage in going with that in which they believe.  Experience has taught me many things about life, not the least of which is that I can and will be wrong from time to time… in spite of my best efforts at being right.  Given that, I will stay diversified in my investments while still owning a generous portion of PMs, mostly silver, as a hedge and an insurance policy against a US dollar / economic collapse.  A prudent person considers all of the possibilities before them, does their best to judge the likelihood of their occurrence,  and then assigns what resources they can to ameliorating the difficulties that such occurrences could have on them and their family.  Having done that, all that remains can be left in the hands of The Lord.  That’s what He is there for but we must do all that we can first.  I feel as if I have done that in my own life, just as I am sure that many others have.  Those who frequent this site are most certainly among those who have done and who continue to do all that they can to face an uncertain future. Our best is all that we can do.  Hopefully, it will be enough.

  12. Ed B that’s my impression of the small towns tucked off the hwy.  Some areas can be dangerous with some tough people who don’t like city slickers.  My BOB is mostly present and former military with first rate skills in hunting and other prepper abilities.  I’m more of the large stack silver guy who can help buy stuff they can’t afford.  We blend skills and assets to make for a solid group.  The acreage would be sublet to one of our BOB who is good at animal husbandry.  Some are close enough to the area to blend in. I can blend in anywhere and get along with everyone. Plus I’m not afraid of heavy lifting hard work (for an hour or two due to age, decrepitude and laziness) One of our BOB is an expert gunsmith and knows how to reload ammo.  We would have someone set up full time as a resident with extra bivvies as a multi family redoubt. I saw Doomdays Preppers last night for the first time, amazing as it might seem. It was very interesting to see how one family built a complex out of 20×80 Conex boxes  Each one can be fashioned into a 320 apartment. They cost about $4000 each and are the least expensive living quarters that I can imagine. Once insulated and equipped with doors and windown, ventilated etc, they can are virtually bullet proof.
    Anyways, I could ramble on but these sorts of plans are in the future. 

    • “My BOB is mostly present and former military with first rate skills in hunting and other prepper abilities.”
      An excellent group with which to be associated, then.  I would be happy and grateful to be a member of such a group.
      “ I’m more of the large stack silver guy who can help buy stuff they can’t afford.”
      Yes, same here, although I do have considerable gardening and greenhouse skills.  I am a good shot with a rifle or a pistol, although my shotgun skills need improvement.
      “I can blend in anywhere and get along with everyone.”
      Definitely a very good skill to have.  I usually get along with people very well when meeting them in person but sometimes have trouble communicating what I think via the Internet.  A lot of my communication skills come via body language that does not get transmitted or received via text messages.  :-/
      “One of our BOB is an expert gunsmith and knows how to reload ammo.”
      I’m not any kind of a gunsmith, expert or not, lol, but do quite a bit of reloading for my .357 mag, .41 mag, and .45 auto.  I do not reload for my Saiga AK because the ammo is so cheap and much of it is steel cased, which can be reloaded if you have the proper dies for it, which I do not.  I have an RCBS Rock Chucker press, Lee dies and bullet molds, and the usual scale, bullet puller, micrometer, lube pad, tumbler / polisher, etc.  Anyway, reloading is definitely a fine skill to have. 
      “I saw Doomdays Preppers last night for the first time, amazing as it might seem.”
      Yes, it is an interesting show, for sure.  I watch it every chance I get.  There are flaws in it, though, such as their insistence on listening to economists as “experts” in the area of future financial matters.  These guys are wrong much more often than not, never see a bubble forming, and don’t believe that the US will default or that the dollar can ever crash.  They have some of the worst case “normalcy bias” I have ever seen, yet the “expert preppers” always refer to them whenever anyone says that they are preparing for an economic collapse.  I trust my own thoughts on this WAY more than I would trust any Keynesian economist.
      “It was very interesting to see how one family built a complex out of 20×80 Conex boxes”
      If you are referring to those steel shipping containers, I agree.  They can be made into bug out cabins, underground shelters, root cellars, and other useful things.  There are multiple YouTube videos on this and all of them are well worth watching and interesting.  If buried underground, though, the roofs must be supported by additional bracing to hold up under the weight of the dirt put on top of them.  Precast foamed concrete panels are light, strong, and work very well for this.  The containers I have looked into are 10×20, 10×30, and 10×40 feet in width and length.  I could see an underground shelter / storage place being made from a few of these connected together to create multiple rooms.  An “H” pattern seems especially good to me for some reason… two forty footers and a 30 footer as the bar in the “H”.  This would also allow for some exterior underground storage next to the shipping containers, with concrete walls to support the dirt near the containers.  The ones that are set up for refrigeration shipping are well insulated, but might need some exterior coating to ensure that ground water did not penetrate the living and storage places. A trench next to or under such a container could be filled with river rock and serve as a downhill groundwater drain.
      “Anyways, I could ramble on but these sorts of plans are in the future.”
      Indeed so and for me as well.  I am very interested in this kind of thing and would be happy to exchange some private messages on this topic at any time.  :-)

  13. I REALLY enjoyed these posts.  I see myself in most of them….old, cranky, bunches of silver in the safes, and most of all–little tolerance for BS–.
    To all of you: Keep doing what you enjoy doing!  That “WHEN” will come too soon, ya know.  Hell, I’ve even softened on my position regarding my kids’ pie-in-the-sky daily living.  I’m gonna make sure they reap the benefits of my “smarts” that I couldn’t convince them to see while upright here.  They’ll see it (handwriting on the wall) soon enough.
    Take care my silver kin…

    • “Take care my silver kin…”
      And you as well, Bro.  While most of us will likely never meet in the flesh, we have so much in common that we might as well be related.  :-)

  14. There’s a fine how-do-you-do.  I’m paying my handyman 1 ounce of silver per hour  Thank you for the intel on historical silver pay rates.  I’ll tell him next time I see him.  Maybe not.  It’s a bad idea to short change a person who works on your home wiring

    • Indeed so, AG… and your plumbing as well!  ;-)

    • @AGXIIK
      Well, I did qualify the figure as representing an … average … day’s labor (schlepping stone or picking corn). You can take solace in the fact that I also found that highly skilled people (i.e.: archetects) commanded as much as 8 ounces per day.
      As your fellow falls in between, you might consider your agreement as gracious generosity.

    • @AGXIIK: I usually pay in fiat and suggest they buy their own silver with it! I did tip the roofers with some Ag last month however. I don’t think they had ever seen a pure Ag coin. When they held it I could see the gears turning in their heads and some lights turning on! 

    • “When they held it I could see the gears turning in their heads and some lights turning on! ”
      Hopefully, they were waking up to the idea that buying their own silver is a good idea and not that your place would be a good place to visit when you are not around!  We had some guys at our place to replace the roof a couple of years ago and a different group to replace the heating / AC as well but I would not be making any noises around them about what I had in the house.  Not saying that you did that, RRG, but it sure pays to be cautious these days because we just never know for sure who’s naughty and who’s nice.

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