Mike Maloney is considered an expert on economic and monetary history. In the two short videos below, he makes a case for $15,000 gold and, based on his outlook for gold, makes the case that silver is an even better investment than gold. His thesis is based on the historically tried and true idea that "silver is poor man's gold." As Mike explains: "when the common man turns toward silver because gold is too expensive, that's when the price of silver explodes. Enjoy:
Saturday, February 20, 2010
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i think if these numbers were ever to be reached we
ReplyDelete'd better have guns and ammo to keep the barbarians at the gate.
Why do you believe that the gold/silver ratio will revert to its historical mean? Could the expanding ratio signal a demonetization of silver and that it will be the trend forward? There need be no poor man's gold in today's age of fiat currencies and electronic banking. Or rather, fiat is the poor man's gold.
ReplyDeleteAnonymous 1: Agree. $5k gold means it will not be pretty in this country
ReplyDeleteAnonymous 2: I believe in "regression to the mean." Silver is cheap because of the rampant manipulation in it, especially by JP Morgan. Also, silver went from extreme oversupply to, now, shortages developing. I also believe the bulk of the masses with money left will flock to silver. We are seeing that happen already with record silver eagle sales in January and shortages in 1 oz. minted coins that have developed. Right now a very small % of the country is funnelling money into gold/silver. Imagine what it will be like when 20-30% of the country rushes in.
I don't disagree that both gold and silver will rise. I just have trouble understanding why so many are certain that silver will outperform gold. The answer for me lies in whether the world over will view silver as money. The 15 ratio was generally the above ground supply of silver versus gold when both were monetary metals. If silver was to achieve the role of money along with gold, then the ratio will depend on the supply ratios.
ReplyDeleteIf silver is not deemed as a monetary metal, then its value will depend on its industrial demand.
I don't know what will happen with the ratio. I tend to believe that it will continue to climb. Silver may no longer needed as a monetary metal when fiat can serve as a fractional currency to gold, the role silver once performed. Its heavy use in industry instead of gold when both have very similar chemical properties is an indication. Central banks holding gold and not silver is another.
I think the masses will flock to anything not dollars. Silver will be one avenue, but most will be spending the bulk of their dollars to purchase the basic necessities. Which may amount to not much. That is my best guess, but who really knows.
The other reason Silver will skyrocket is because it will probably become more rare than Gold. Silver has been decimated throughout the industrial age as once it is used it is not recovered.
ReplyDeleteOTOH, most Gold ever mined is still around. As such, I think the G/S ratio will go below 10 and maybe even go par with Gold.
Joe M.
Ebay gold price is 50%+ over "spot". The end is really near (for the pretending of normalcy in the currency markets, if you count silver as one).
ReplyDeleteI am actually getting scared now. It's one thing to speculate how this is all going down to hell and the other thing to really "see" the beginning of the end.
Just rented the diaster porn 2012 and the last 2 years certainly FEEL like watching the movie the whole time - not that I believe in the physical destruction of the Earth but it certainly feel like a wholesale destruction of some sort is gonna happen soon.
Julia, a colleague and I used say 8 years that we would eventually see things happen in this country that would blow our mind. It was easy to say that when you didn't know what it would be. You are right, it is now frightening to experience events that blow my mind, as we are seeing now.
ReplyDeleteWhat blows me away the most is just how quickly and subtly our Govt has become Orwellian and is becoming totalitarian.
Anonymous, for most of the last 20 years, gold was not viewed as a monetary metal, and it still isn't by a large majority of the Western population, especially in the U.S. Europe is starting to hoover gold now.
ReplyDeleteWhen you look at 5000 years of history, 90% of which utilized gold AND silver as money, it is easy to understand how quickly the perception of silver can, and will, tranform.
You may or may not know this, but silver coinage is the "official" currency mandated by the U.S. Constitution.
Dave, 8 years to see things happen, from when?
ReplyDeleteWe started discussing how we thought the U.S. would economically and politically crumble back in 2002. One of the main differences is that we thought JPM would blow up and be used to monetize the derivatives problem instead of AIG. Also, the big foreign Treasury buyers are being a lot more patient up to this point than we expected.
ReplyDeleteTo me, $5000 gold is not nearly as scary as say tech stocks trading at 200x earnings.
ReplyDeleteAt my office, folks are still talking about the great deal they just got hocking their gold jewelry (for pennies on the dollar). After 7+ years of trying to convince my friends and family, not one of them has bought any gold. The masses are definitely still asleep.
If you look at the mountain of fiat dollars, t-bills, and other paper "promises" floating around vs. available oz's of gold, 5k seems very reasonable.
@Aman: I was just pointing out to someone this morning that 98% of all Americans are clueless about gold. That's why these gold jewewlry buying companies are spending so much money advertising to get the masses to sell their gold.
ReplyDeleteAnyone who thinks the gold bull is anywhere the end is completely ignorant of the facts. In fact, based on on using the U.S. hoi polloi as a contrarian indicator, the gold bull is still in the 1st or 2nd inning of an extra-inning ballgame.
Morning!
ReplyDeleteI am thinking that $75,000/oz. would be more reasonable wjen the dollar unravels to the gold and oil price.
I could then certainly consider quiting the alps and exploring the FL keys for a while!
The shear size of inbalance between promised gold and deliverable gold will surely be more astonishing than we can percieve currently. I am convinced it is going to be monumental.
I have been pooring myself the last 3 months buying 0.102kgs of gold and I just sneaked in three weeks ago and got 2.98kg's of silver bullion too. The silver is now up 11.2% in the first 3 weeks. That there $1500 an oz prediction would then surely sort me a nice piece of marine hardware to cruise the keys in!
Bring it on!!
haha
I buy my gold and silver bullion here:
I would be interested to hear if anyone has any knowledge of BullionVault where I am purchasing my gold. It seems pretty solid and is allocated physical in a vault in Zurich.
What thinks thee is this paper or physical?? :)
The sutski bit in the link is there so they know I sent you of course ;)
I also tweet weekly gold price hilarity from
@spotgoldprice
Cheers!!