SilverGoldMarketNews   Home | Buying Silver/Gold | Archives | Mining | Contact

News, Information, Commentary and Resource Links for Investors in the Current Great Silver/Gold Bull Market

 
 

Recommended
Archives
 Ted Butler
 Jason Hommel
 Douglas Kanarowski
 Clive Maund
 David Morgan
 Jim Otis
 Charles Savoie

Continuous Charts
 Gold
 Silver
 Gold/Silver
 Silver/Gold
 $USD Index
 Dow Industrials

Futures Charts
 COMEX Silver Daily
 COMEX Silver Weekly
 COMEX Silver Monthly
 CBOT Silver Daily
 CBOT Silver Weekly
 CBOT Silver Monthly

 COMEX Gold Daily
 COMEX Gold Weekly
 COMEX Gold Monthly
 CBOT Gold Daily
 CBOT Gold Weekly
 CBOT Gold Monthly


Resource Links
 CoinInfo.com
 Commitments of Traders
 CMI Gold & Silver
 Forex Traders
 Forex Trading
 GATA
 Gold Silver Worlds
 Harvey Organ's Report
 Honest Money Report
 Kwaves
 Kitco
 Kitco Casey

 Kitco Silver
 Metal Prices
 Miner's Manual
 Money Changer
 Moon Phase Calendar
 Resource Investor
 Silver Futures News
 Silver Bear Cafe
 Silver-Info.com
 Silver Institute
 Silver Prices 1344-1998
 Silver Strategies
 Silver Stock Report
 TheGoldAndOilGuy.com
 TheSilverExchange
 Trading Charts

 Turd Fergeson's Metal Report
 

 

   
 

 

   
 

 

 

 

 

   
   
 

Intrinsic Value and the Final Battle for Silver

By Dr. Jeffrey Lewis

When looking at the intrinsic value of hard currencies like silver relative to that of paper fiat currencies like the U.S. Dollar, some serious questions need to be asked and answered.

Here is one series of questions that can be used to initiate such an analytical process and some rational answers:

  • What is the intrinsic value of fiat currency? The value of the paper they are printed on.

  • What is the nature of a measuring stick? To provide a consistent gauge of size or value.

  • What is backing all fiat currencies? Debt.

  • What backs debt? The debtor’s ability to repay the debt.

  • What supports the ability to repay? More debt.

  • Why? No growth.

  • Why is there no growth? Too much debt creates a higher servicing burden, which crowds out capital formation. No capital and no savings mean no growth.

The Solution?

The official solution to this troubling fiat currency situation has been to simply print more paper currency or generate more electronic currency.

Deeply indebted governments, which are enabled by private central banks that benefit from the interest being charged on this debt, typically wish to stretch out the ruler so that their debt appears smaller.

Nevertheless, debt is not a commodity. Debt is instead an obligation to repay. As more dollars chase fewer goods, the end user ultimately suffers from inflation eating away at their paper currency’s purchasing power.

The Promise to Pay Versus a Final Payment

Fiat currency is only a promise to pay. Providing a hard asset like silver is but one form of a final payment. Silver works as a hard currency because of its intrinsically valuable properties.

Silver is also relatively easy to use as a currency, which has been proven over the many years of its use in practice. This fact would have been commonly understood just 100 years ago, and it has been a matter of common knowledge for more than a thousand years.

In its physical form, silver was valuable even when it was plentiful. Now it is actually scarce, even more scarce than gold. This surprising fact has been hidden from the general public.

Perhaps the ultimate value of silver will come from the need of governments to use it as a final payment in exchange for massively overextended debt levels and the resulting loss of confidence in their paper currencies, as well as from the strategic need of silver for industrial purposes.

Future Silver Wars?

Looking forward, the ultimate battle for silver may eventually be fought between its industrial users and the big banks who will be desperately buying silver in a quest for quality collateral.

The big banks clearly have the advantage both in the paper marketplace and in political circles given their much larger lobbying capacity. Nevertheless, the end users of silver may appeal to the strategic, military industrial complex for control over its price.

At that point, the retail investor may be more aligned with the big banks that have for decades conspired to make cheap silver possible and accessible via their use of the paper futures markets.

From this perspective, it would seem a shame to miss out on the current opportunity to buy physical silver while its price remains artificially low before the silver wars begin in earnest.

For more articles like this, and to stay updated on the most important economic, financial, political and market events related to silver and precious metals, visit http://www.silver-coin-investor.com

 

Site Design and Maintenance Services by: Sundancer Graphics, Inc



© 2015 Sundancer Graphics, Inc.