Finding the Real Price
By Dr. Jeffrey Lewis
The four major monetary zones have
collectively printed over $40 trillion currency units (call them dollars if you
want) over the last 6-7 years. Most agree that about 180,000 tons of gold exist
At today's price of around $1250 per ounce
that would be about $7,200,000,000,000.
The gold price would need to rise at least
five and half times to back all of the $40 trillion in world fiat, or at least
$7000 per ounce of gold. At a 10:1 ratio, that would put silver at $700 per
The only way to pull this monetary fiasco
together, without defaulting the entire edifice, is to revalue the metals up to
that level. Would they do it? No way. Will it happen naturally? Perhaps, though
not without disorder and confusion.
And if there were any economists left out
there with a tiny semblance of formal training about the role of gold and silver
in economies for thousands of years — there’s a motivation to keep it under
Everything is suppressed, only silver more so.
When we attempt to get some idea of where we
ought to be, we can use inflation adjusted highs for comparison. Conservatively
speaking, if we used regular CPI we'd be at around $100 or more. If we went one
step further and used the old way of calculating CPI - without all of the
hedonic substitutions - we'd be up over $350 per ounce.
Re-monetizing the metals would be the ultimate
step. That’s not a prediction for $7,000 gold or $700 silver.
I don't think we will make it that far over
$100 per ounce without some sort of monetary reset.
But it sure is one hell of an
For more articles like this, including thoughtful precious metals analysis
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silver, short of outlandish fiat price predictions, check out http://www.silver-coin-investor.com