Eighty years ago $100 purchased 400 ounces of silver while today that $100 purchases about 4 ounces. Someday soon $100 will purchase only one ounce of silver.
Depending on how rapidly the money supply is increased and how quickly confidence in paper money evaporates we may see the day when it takes ten, or more, $100 bills to purchase a single ounce of silver. Hyperinflation has happened in many countries in the past 100 years and many good analysts believe that it COULD occur again in Europe and the United States.  If hyperinflation occurs, your silver and gold will be worth much more in nominal dollars and will, to some extent, protect your purchasing power. Unfortunately, life in a hyperinflationary economy is likely to be exceedingly difficult for most people.
Prepare by purchasing physical silver and gold and storing it outside the banking system.

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Submitted by Deviant Investor:

Step into the “Wayback Machine” and journey back in time to:

1932: Silver was selling for about $0.25 per ounce (average annual price per Kitco.com). Our $100 bill would buy about 400 ounces.

1962: Silver was selling for about $1.20 per ounce. Our $100 bill would buy about 83 ounces.

1982: Silver was selling at about $10.60 per ounce. Our $100 bill would buy about 9 ounces. (Early in 1980 silver spiked to about $50 per ounce for a day or so and then crashed.)

2012: Silver was selling for about $31 per ounce. Our $100 bill would buy about 3 ounces.

Today:  Silver prices have been volatile. Our $100 bill will buy perhaps 4 ounces of silver.

Over the course of the last 100 years, during which we have been blessed with the Federal Reserve and massive government spending, our $100 bill no longer buys 400 ounces of real physical silver; now it will purchase only about 4 ounces.

 

 

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What have we learned from our quick survey of the history of silver prices?

  • Prices are volatile – they can go drastically higher and then crash.
  • On average, $100 buys less silver with each passing decade because the currency is worth less each decade.

What can we expect for the price of silver? It seems obvious that:

  • All paper currencies eventually decline in value to their intrinsic value – approximately zero. Voltaire understood this concept almost three centuries ago. Several hundred unbacked paper currencies have become worthless since the time of Voltaire.
  • Governments and banks represent the status quo so very little will change without a crisis or collapse. Governments spend more than their revenues and borrow the difference, thereby increasing total debt and the money supply. The status quo involves the creation of more and more currency, all of which is backed by debt, not assets.
  • US Government Revenue, Expenses, Official Debt (rounded in $Billions):
1971 2012
     Expenses 210. 3,500.
     Revenues 187. 2,400.
     Official Debt 408. 16,100.
    • Inflation and debt are “hardwired” into our monetary system. Don’t expect government spending or total debt to decrease unless there is a massive financial crisis.
    • Official debt is shown but it does not include unfunded liabilities for Social Security, Medicare, Pensions and so forth. The total debt including unfunded liabilities has been calculated in the $100 – $200 Trillion range and rapidly rising.
    • As the money supply and total debt increase, average prices increase. Hence silver has increased from a few cents to many dollars per ounce. Five cent coffee and $0.19 gasoline are ancient history.
    • The process will continue until it no longer can – perhaps a few years, perhaps a decade. Don’t bet on the imminent demise of a system that enriches banks and the political elite while it increases governmental power.

 

  • Plan on reduced purchasing power of unbacked fiat currencies.
  • Bet on the inevitability of higher silver and gold prices – because the value of the paper currencies is decreasing every year.

Click on image to enlarge.

Click on image to enlarge.

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For the Future

Eighty years ago $100 purchased 400 ounces of silver while today that $100 purchases about 4 ounces. Someday soon $100 will purchase only one ounce of silver.

Depending on how rapidly the money supply is increased and how quickly confidence in paper money evaporates we may see the day when it takes ten, or more, $100 bills to purchase a single ounce of silver. Hyperinflation has happened in many countries in the past 100 years and many good analysts believe that it COULD occur again in Europe and the United States. If hyperinflation occurs, your silver and gold will be worth much more in nominal dollars and will, to some extent, protect your purchasing power. Unfortunately, life in a hyperinflationary economy is likely to be exceedingly difficult for most people.

Prepare by purchasing physical silver and gold and storing it outside the banking system.

 

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Click on image to enlarge.
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    • That does seem awfully low.  It did that in the early 1930s.
       
      See:  http://www.goldmastersusa.com/silver_historical_prices.asp
       
      It’d be awfully nice to buy a couple of tons of it at that rate! :-D

    • But we were still on the Silver Standard! 
      $1 contained .77 oz so that is kinda fictitious, isn’t it? HMMMmmmm…
      I mean their figuring THEN, not this reporting now. I suppose it is a correct story. 
      Thx @Ed_B!

    • Yes, we were.  But then, the value of metals sometimes diverges from the value of that same metal in coins.  When the metal is worth more than the face value of the coins, they all disappear into personal hoards.  When the face value exceeds the metal content, it remains in circulation as money and no harm done.
       
      I just wish that we could get the heck away from “dollars” and go with grams of silver and gold instead.  Yep, everything could be priced that way so no need to keep the Spanish “dollar”  (do-LAR?).  Yes, off in the distance I can hear Pat Fields calling for “grains” but I have a more metric bent when it comes to weights and measures.  lol

  1. Well there you have it UnderGround. .77 silver in a dollar, .25 per oz. Hell, if every silver dollar weighs an oz you actually only lose .23 into the “fictitious realm of money. If silver dimes were 90% and ten makes a buck, then you would profit nearly three fold, no? Those dimes are nearly 1/10 oz so then the equation is as follows: spend 1.00 (.9 oz of silver) for 4 oz of non govt Mint silver and net profit 400%! 
     
    See! Silver was manipulated down in value then! :)

  2. See? If you ask me, the whole fractional reserve coinage system is just as flawed as the fractional dollar. When an oz of gold ISN’T an oz of gold value, be it higher or lower, you have problems!

    Either you hoard PMs or you hoard coinage, whichever cost less for more!

    • I also advocate stacking NICKELS and Copper Cents! ($.01)
      Copper “pennies” are going for about 3 cents each, on eBay!
      A “nickel” is actually worth $.05 NOW and will be higher as 
      inflation takes over. The new “golden dollar” is only worth $.06 and can be exchanged for 
      20 nickels, which is a 16:1 increase! 
      These are just a couple of easy stack alternatives that do ADD UP! 
      Along with Silver and Gold, of course!

  3. ” Unfortunately, life in a hyperinflationary economy is likely to be exceedingly difficult for most people.”
    Difficult? How about every day being a fight between life and death. Wake up folks and prep. Something very ugly is headed this way. It’s going to take many lives… I’m going to Las Vegas and get shitfaced…

  4. Excerpt: “1932: Silver was selling for about $0.25 per ounce.”

    Since I endeavor to try to see things from the vantage point of reality, I read this and wondered how far, say my Grampop would have got, walking into a bank in 1932 with a roll of quarters requesting exchange of 20 dollar coins AND his quarters back to boot? The silver-weight of that combination equaling an ounce, after all. So, just what in hell IS that stupid nonsense? To say that a Plantation Scrip stamp is worth 500% of its nominal equivalent in coin is transcendental delusion! It’s a Whirling Dervish entrancement.

    Excerpt: “1962: Silver was selling for about $1.20 per ounce.

    Okay. So, that’s the proper exchange for the banknote and silver coin! But, of course that’s the juncture where Jumpin’ Jackass Johnson shut down silver coin minting! Can’t have fairly valued banknotes competing against coins. OHHH NOOO! They had to get back to that 500% premium from the ‘good ol days’ of Ruse-a-veldt.

    Of course, folks on this forum familiar with my positions will expect I have to offer my counterpoint against the notion that this calamity is CAUSED by turpitude in people, but rather the banknote scheme itself.  NO ONE ‘runs’ it and NO ONE has control over it.  If we let ourselves fall for any of that subterfuge, some ‘new savior’ can be propped up on stage and passions will quell while the same old ruinous crap churns on in the background.

    The banknote scheme was designed as a ‘Perpetual Money Machine’, where currency and debt co-generate each other infinitely. Its creation was believed to allow constantly increasing economic activity and the ‘trick’ was to keep the interest generated currency inflation under that growth rate. This was the impetus for creating a global network of co-operating ‘Central Banks’.

    What wasn’t foreseen was that the gross level of debt, made intolerable by depreciating purchase power of the currency, would culminate in a Debt Saturation, shutting down Interest Service Fund creation. The alternating waves of debt defaults and huge currency printing that we’ve been watching over the past decade are the result of that Debt Saturation spreading across the world and deepening in its resolve and urgency.

    The ONLY path that can resolve this conundrum is abandonment of the banknote scheme … utterly and entirely. It’s a financial cancer of the single-most violent malignancy that no ‘witch-doctor’ out of government, the banks or ANYWHERE else can chant away from economically killing us all.

     

  5. The sub text to this story is that life gets extremely ugly when the currency collapses. So stacking is only one part of your survival strategy. There is also food and water but none of this will preserve you unless you are armed. Your neighbors who laugh at you today and call you a paranoid kook because of your preps will become an extreme liability. They will go nuts and become out of control lunatics when supplies of real goods become scarce. They probably won’t be armed but dangerous none the less. This is the time to lay low and let these pathetic individuals meet their fate apart from you.

    Then the real siege will begin against the armed marauding gangs that will pillage neighborhoods looking for sustenance.
    The cops will have long gone and left their beloved professions to hide out from angry enemy citizens because they are no longer being paid in marketable currency. Cops will have crapped their bed by having been  bullies and hated by the communities they were sworn to serve and protect. People will not forget and when the SHTF they and their families will be toast. There are a number of dead people at the hands of cops and folks aren’t forgetting. So no sympathy for you stooges. You and your families will all fry because of your actions. It’s called street justice.
    So that’s the world of high priced PM’s. You better be ready.

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