Silver vs. guld. Låt oss avgöra frågan.
Hittade en intressant diskussion på ett forum på nätet. Guld och silver har starka förespråkare på båda sidor. Vissa menar att guldet utgör den enda sanna värdebevarande tillgången. Att silvrets efterfrågan i första hand är industriell, varför silvrets funktion som värdebevarare därför är sekundär. Att silvret därför vid en utökad kris därför kommer att falla. Andra menar att silvret vida kommer överträffa guldet i värdeutveckling.
Postar som följer diskussionen som jag tycker var intressant. Vad tror ni?
Alec,1- the 15 to 1 or 16 to 1 ratio Ag/Au is basically a legal construct...or a myth. Over the past 150 years, the ratio of prices has higher than that...probably closer to 25 to 1. That stems from better modern extraction from both primary and co-product deposits making silver cheaper to produce as time goes on. When the 15 to 1 is legally enshrined, as in a bimetallic standard, it results in an oversupply of silver to the market. A prudent investor would do a lot more research into this ratio if they were using for decision making.
2- the spike high of $50 for silver is likewise suspect. It was an extremely short spike high created by the Hunt Brothers. Again, using that number for future price predictions is dubious...
As much as I would like to see silver go to the stratosphere, investors need to keep in mind that there is a mountain of supply that is and will be coming to market by miners that can easily produce for cash costs of way less than $15 per oz. If we see prices like $50, $100 or higher, it will be for such a short time with such immense bid/ask spreads that few investors will be able to take full or even significant advantage of it.
Robert,The 15 to 1 ratio exists because that is roughly the ratio that these metals are found to exist in the earth. So I disagree with the "legal Construct" argument. The ratio was made legal due to the natural ratio in the earth.
As far as supply, the above ground stocks of silver have been largely consumed for industrial uses and their abundance is no longer true.
The spike to $50 is was due to its limited quantities and low pricing. It takes very little money invested in the metal for it to shoot upwards. This makes the case for silver stronger NOT weaker. When the investment starts in that direction again I expect to see silver prices explode by a percentage not matched by gold.
Alec,Based on crustal abundance, the ratio is about 26 to 1.
https://docs.google.com/spreadsheet/ccc?key=0Ato5Wi1bL4dDdFhfZmVid2Z1a0w1S3FOWFE5UEpvbmcThe 15 to 1 number is based on state of the art thinking... in 1850. It simply is not true anymore. The number 15 or 16 to one was chosen by legislators when trying to implement a bi-metallic standard. That should be a clue that it is probably not correct. Government decision making on monetary affairs is often wrong. (Generally, silver is not "money", it is used historically to make money, but that is not the same thing. That is the subject of another piece I am working on).
Likewise, the above ground stocks of silver are large.
There are 19,600 metric tons in the main western world ETFs. About equal to one year world mine production...which is at an all time high. How much do you think china and india have that they don't discuss?
"Silver mine production rose for the ninth successive year in 2011, to a fresh record of 761.6 Moz (23,689 t). "
http://www.silverinstitute.org/site/supply-demand/silver-production/http://minerals.usgs.gov/minerals/pubs/commodity/silver/mcs-2012-silve.pdfLastly, how many of the sovereign coins and bars produced by every mint worldwide have been melted down? Almost none. There were 16 million silver eagles made in the US last year. For a report I am working on, I will get the worldwide figures...they are significant. Little to none of that material has been melted and entered the scrap market. It all sits above ground as stockpiles.
http://americansilvereagles.us/us-mint-sales-figures/The biggest source of demand for silver has been investment...by far. When that sector gets cold feet...watch out. That is the real reason silver was cheap in the 90s.
In summary, there is silver all over the place. It is in the ground and it is above the ground. Miners (especially in the new world) have ramped up production to world record volumes of metal being produced and more is on the way.
I just don't see how there will be demand to soak up all the excess production...
Robert,No disrespect intended but I strongly believe that time will prove your view on silver to be wrong. Silver to gold ratio is going to hit single digits.
In 2010, Silver mined was 735 MM ounces to golds 85 MM ounces. That is roughly a 9 to 1 ratio. Obviouslyif this was to be maintained over many years, it would indicate that there is a distortion in the current ratio.
Meanwhile nearly all mined Gold is still existing above ground either as jewellery or bullion. Much of the silver stocks have been consumed in industrial applications (photography and other consumables).
The silver that allegedly exists in ETFs is none existant. It is paper backed by paper. ETFs are a way of diffusing money from chasing after real physical investments. The physical silver is gone. If you have not already done so, you should familiarize yourself with the writings of Ted Butler.
You speak of hidden silver in China and India. So what? They also have hidden gold in these countries. In fact they are more concerned about hiding their gold reserves than the silver.
Lastly you state that silver is not "money"!!! Are you kidding me? Silver is MONEY, and more so than GOLD.
In Spanish the word PLATA means money and it means silver. What about POUND STERLING? That was a monetary system based on sterling silver as a base for the currency. In French, ARGENT means money and it means silver. And I could go on but I think my point is made.
What are the qualities of real money? 1. Acceptability - Everyone must accept it to purchase goods and services. 2. Durability - It should last a long time. 3. Portability - Easy to carry around. 4. Scarcity - Scarce enough to be valuable, not common such as sand or pebbles on a beach. 5. Divisibility - Can be divided into small units.
All of these qualities are shared by both GOLD and SILVER. Don't see why you say Silver is not money.
Gold is a store of wealth for nations and the very rich. Silver is the money of the people for day to day transactions. We are at a crossroads where FIAT currency is going to lose all its legitimacy. What will replace it? Silver not Gold. Why? Because you need volume. And when that happens (I.e. the Fiat experiment ends), Silver will be hotly demanded.
Alec,Sprott's and Gold Money both have records of their silver bars. For sure, there are some delivery bars at the COMEX. Not 100%, but not zero. 75% of world demand is speculative investments- all that silver is piling up in inventory. There is not any way that all the silver coins, rounds and bars that have been produced by mints around the world over the last 10, 20 or 100 years are gone.. They are in speculative hoards. At the right price, much of this supposedly lost silver will reappear on the market.
Regarding money - at the present, silver is not money. It doesn't completely meet any of the tests. It is not
1) a unit of account (unless you are Silver Wheaton)
2) it is a very volatile storage of value (and always has been). If you think it is a store of value then crude oil, real estate and salt are all money. And Pt, Rhodium and for that matter Rare Earths.
3) and it is not an efficient medium of exchange (nowhere can you directly exchange silver for another good, except in a barter situation. All of its transactions go through dollars or some other "money" as an intermediary)
That could change in the future. Hugo Salinas Price has novel and interesting proposals, but realistically, the chances of implementation are slim. Legal tender laws in the various states of the US are a sideshow, but serve the purpose of exposing poor government fiscal situations.
None of the above change the fact that currently, silver is not money. You can't pay your rent or buy gasoline with it...unless you convert through another medium.
Lastly, silver in the US and Canada was not directly used as money- ever. We have had a gold based currency that enshrined the 16 to 1 concept. Over the 150 years up to 1960 the market price of silver was nearly always WELL below the silver value of US and Canada coinage. Hard money advocates should not ignore that during those times, the money was made of silver, but you still could not directly use silver as money. Two different things. The silver bulls use that confusion to manipulate public opinion to serve their own purposes.
Robert,This is my final post on this subject so you will allow you the final word on this topic.
Obviously you are well read and quite bright. However you conveniently skip details and omit information in order to support your preconcieved opinion of silver.
1. You mention two ETF's that are, IMHO, amongst the best run. The vast majority of the available ETF's cannot/will not provide proof of physical bullion. These are paper silver holders and you cannot count those investments as holders of bullion. Why do you not point that out?
2. You say silver is piling up as a speculative investment. So is gold. The argument initiated in this thread was Gold vs Silver. Your point is irrelevant.
3. I did not say that silver is gone. I said much of it has been consumed in industrial applications. That is a true fact. Gold does not have many Industrial applications so virtually all of the mined gold is sitting somewhere. Gold stock piles are massive relative to Silver.
4. You originally stated that Silver is not money as an argument to why gold is a better investment. Gold too is not a unit of account, it is a very volatile storage of value and it is not an efficient medium of exchange.
5. You state that based on my definition of money that crude oil, real estate and salt are all money. That is a cheap shot and totally unwarrented. My definition was based on Acceptability, Durability, Portability, Scarcity, and Divisibility. Clearly your examples do not meat these criteria.
6. You state that Silver is not an efficient medium of exchange. There is truth to some degree in that. That is how Paper money first came into existance. Banks would hold your gold and silver and issue you credit reciepts in the value of the gold and silver holdings. It was easier to carrypaper reciepts than pounds of gold and silver. That has since morphed into (soon to be worthless) FIAT money.
7 You say that in the US and Canada silver has never been used as money. That is FALSE. The US coinage act of 1792 specifically declared gold and silver to be money. A constitutional dollar (in the United States) is defined as a silver coin containing 371.25 grains (0.7734375 troy ounces) of pure silver.
As far as Canada is concerned (and the USA too), silver was the foundation of all our coins (except for our copper cents). This was a practice that ended in 1967. The reason being was so that the public would accept it as legal tender. Over time this has been slowly and methodically stripped away from us by governments. Why you try to deny this fact is beyond me.
8. Just because money does not physically change hands does not mean that it is not money.
9. The fact that market value of silver was well below the value of the silver contained in the coins means nothing. This is irrelevant. If it had been worth more, governments would have simply diluted it. Silver was put in the coins to validate it as REAL money.
You and I can argue on this topic till the cows come home. In the end will we each choose to believe what we want to believe. All I want to do is give other readers a different point of view and a different interepreation of the facts.
