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Re: Hi-yo Silver, away!

By: fizzy in ROUND | Recommend this post (0)
Wed, 11 May 11 7:59 AM | 84 view(s)
Boardmark this board | De's Test Board 		Msg. 32899 of 45510
(This msg. is a reply to 32896 by Decomposed)
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The US Dollar was originally defined as silver.

Here's some trivia for some of you: The US Dollar was to be our version of the Spanish "pieces of eight" silver coin, and the latter was thus used interchangeably in the US until the mid 1800s.

http://en.wikipedia.org/wiki/Spanish_dollar

For most countries it would make vastly more sense to monetize silver than to go back to gold AT LEAST FOR INTERNAL USE. Silver is, as you say, available in many -- perhaps most -- countries. Gold, on the other hand, is not much produced in the US anymore and many counties have no gold mines at all. For a non gold producing country to base coinage on an element which was only mined in other countries would be fundamentally abhorrent ... not to mention unnecessary.


I have come to realize that men are not born to be free. Liberty is a need felt by a small class of people whom nature has endowed with nobler minds than the mass of men. -Napoleon

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The above is a reply to the following message:
Re: Hi-yo Silver, away!
By: Decomposed in ROUND
Tue, 10 May 11 7:47 PM 		Msg. 32896 of 45510

fizzy,

re: "Poor people can still buy silver but 2 gold coins already are approaching the total net worth of probably a majority of Americans..."

Based on that reasoning, silver shouldn't go up either - but GRAVEL should. You can get a lot of gravel for a dollar.

I'm only saying that somewhat tongue-in-cheek. I don't believe silver to be scarce. It just wasn't worth mining for when it was $3/oz. It wasn't worth the trouble.

At $100/oz or so, the world can pull all the silver it could ever want out of the ground. The silver deficit that currently exists WILL fill, setting a relatively low cap on silver's potential price.

Gold? No such luck. While the supply grows about 2 percent per year - and never seems able to do better than that regardless of gold's various prices, both lofty and low, over the years - the demand for gold is increasing exponentially. If, as I think they will, pension funds decide to get in on gold's bull run, the price will skyrocket. And if there is ever again a decision to back money with gold (I doubt that will happen in the U.S., but I think it's probable in some countries) the price will be off the charts.

I could see some countries backing their currencies with silver too, btw. I just don't think silver has the "ENORMOUSLY larger potential market" that you think it does.

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