Interesting Silver Chart

Steve27

Shows silver in 2012 dollars adjusted for inflation:

DoubleEagle59

Even without the adjustment for inflation, silver is at lowest end of appreciation when you compare it to all other metals including gold, copper, zinc, nickel and others.

bronco2078

Could you please reupload the chart but index the y-axis in hamburgers?

guitarwes

Seems like it would be more of a gradual upslope in the 80's, 90's, and 00's due to higher demand with the drastic increase of electronic gadgets. I guess there was already enough physical silver on the top side of the dirt to be consumed without raising the price much due to demand.

cohodk

The graph to me shows how massively insane prices were in 1980. This is evident by be disastrous crash and the decades long drop into oblivion.

Just because prices got insane once does not mean they will become insane again.

derryb

<< <i>The graph to me shows how massively insane prices were in 1980. This is evident by be disastrous crash and the decades long drop into oblivion.

Just because prices got insane once does not mean they will become insane again. >>


Are you now saying they are not insane now?

jmski52

I don't think you can really make a case that the 1980 spike was anything more than a speculative spike and blowoff. Most of the spike was based on speculation that the Hunts were trying to corner the silver market, and the reason that they initially got involved in silver was because inflation had been ignited by the oil shocks of the 1970s.

I'm pretty sure that the ratio of national debt to GDP and problems with big bank insolvency due to $1.4 trillion in overstated mortgage derivatives weren't the problem back then. (But they sure are now.)

Adding to Guitarwes's comments, it very well could be that the consumption that has taken place for the past few decades has now soaked up most of the easy silver supply and that the market is now reacting to something else than just speculation. If anyone really knows, they ain't talkin'.

I really like silver. Always have.

derryb

what is thought to be bad money is being traded for what is thought to be good money. At least that is what I am doing.

jmski52

Yes, your dollars are crying out for help, "save me! save me!" Mine are doing the same.

Baley

I agree, it is an interesting chart, even a fascinating chart.

Much like a Rorschach test,, what we see in it is influenced by our psychology, and what we say we see in it tells us much more about the observer, than it tells about the picture itself, or about the phenomena illustrated

derryb

<< <i>I agree, it is an interesting chart, even a fascinating chart.

Much like a Rorschach test,, what we see in it is influenced by our psychology, and what we say we see in it tells us much more about the observer, than it tells about the picture itself, or about the phenomena illustrated >>


Rorschach test - I like it. I was looking for a nickname for financial charts, thanks.

jmski52

Baley, are you trying to corner the silver market and just not telling anybody?

Baley

I love silver, and have been buying it periodically for 38 years, and have sold very very little of it (and most of that was in 1979 )

But when I look at that chart, I do not predict that silver will go to $66.46, or $142.04 per ounce any time soon. Rather, I conclude that about $30 is a fair price for it currently, all things considered (existing stocks, mining trends, growing industrial demand, growing coining and marketing of novelty silver investment products, investor emotions, other things), and that a fair trading range for the next few years might be about $25-$45. Edited to add: the price could very well go outside that range. But I doubt very seriously that it would stay outside that range. Opinions differ, and that's what makes a market

jmski52

when I look at that chart, I do not predict that silver will go to $66.46, or $142.04 per ounce. Rather, I conclude that about $30 is a fair price for it, all things considered (mining trends, growing industrial demand, growing coining and marketing of novelty silver investment products, other things), and that a fair trading range for the next decade or so would be about $25-$45.

Well, I pretty much agree with you. Where I might diverge from your opinion is that while agree that market conditions may be truly reflected in the current price, I will confess that I don't know what the actual condition of the supply chain is. That being the case, I would've thought that we would hear about something significant here if it were to happen, positive or negative.

Most of the data I see seems to have been processed and massaged by parties that are at least one or two steps closer to the real facts than I am. Unless you are an insider, it's simply hard to know the story, and even if you are an insider, you only get to see about what a flea sees on the back of a big dog. You aren't even sure whether it's a St. Bernard or a Wolfhound.

My Rorschach impression is that silver is more widely used than when I was a young silver enthusiast, but it still has a fallback position as a monetary metal. That's the fundamental that keeps my interest alive. Rumour has it that the mines aren't as productive or as plentiful as a few decades ago, and that most of the easy primary metal surface deposits are gone. And yet, I hear of new mines in Mexico which cause me to have concerns about oversupply. And so it goes.

Yukoncornelius1

What I find interesting is that when the dollar had real purchasing power decades ago a person was also rewarded with a decent interest rate when putting savings into a CD, now the dollar has lost much of it's purchasing power and people are paid hardly a thing on their savings.

This is likely to continue until some type of currency issue arises, because of this I feel that gold and silver offer good refuge for people saving money. Will PM's save someone if there is a total currency meltdown, I'm not so sure it will in the long run but in the short term I do think it will allow people to convert into currency and purchase food, gas, booze, etc. while protecting their purchasing power.

The other thing silver has going for it is huge industrial usage so there is not a big surplus of it laying around, this is another bet on silver if you believe that the world's economies will keep growing over the coming years. I prefer to think that the world will keep creating things that require new technology which silver will play a huge part in.

The stock market may very well keep chugging along but with many baby boomers reaching retirement there needs to be as many new stock investors as there are people drawing out of the market.

The bond market investors have handily beaten stock investors over the past decade but with interest rates currently so low I don't see much potential there, in fact I would argue that bonds could very well be one of the worst places to invest your money going forward.

So the dilema is where do you invest your savings? I still don't think that PM's have had a parabolic blow off top yet so in my mind silver is one of the areas of investing that seems to make sense to me. Will I be proven right in my assumption, only time will tell but if there is a blow off top I will be cashing out most of my holdings and looking for the best place to invest my money.

cohodk

<< <i>

<< <i>The graph to me shows how massively insane prices were in 1980. This is evident by be disastrous crash and the decades long drop into oblivion.

Just because prices got insane once does not mean they will become insane again. >>


Are you now saying they are not insane now? >>



I think I've been saying for quite some time that I believe pm are fairly value. To me this means prices can fluctuate up or down 25 percent. It also means I believe prices will remain stagnant until there is some unexpected external shock. Continued QE is not unexpected so this why PMs have not responded to the lastest round. Nor will they react to the next unless it is unexpected.

roadrunner

The Hunts were responsible for taking silver from $25-$35 to $50. But $30 silver would have occurred w/o them just because gold would have pulled it along.
So in comparing prices today compare it to a non-Hunt $25 peak in 1980. The Hunts' actions from 1973-early 1979 did absolutely nothing in
pushing the silver market. In fact silver's gains in that period were less than gold where the Hunts were not involved. In the ensuing 30 yrs
the world has burned through billions and billions of ounces of silver depleting most every stockpile that once existed. The world had a crap load of silver
in the 1960's. Gold on the other hand has had 30 yrs of more accumulation. There aren't billions and billions of ready ounces of silver any more. One thing
I find interesting in the silver chart is that it actually ran up in price from the 1940's to 1980, far longer than just 1962-1980.

TheCARDKid

It seems like silver has been way, way, underrated as a long term investment.

-For example, just the melt value of a 1964 Roosevelt dime (90% silver) is 16x it's face value now! The same with a 64 Kennedy half dollar (90% silver).

The 90% silver washington quarters have likewise gone up in value. You could have stuck a '64 Roosevelt dime or half dollar in a drawer almost 50 years ago, and it'd have a similar value now as the Dow Jones Industrial Average. The DOW was about 850 in 1964. What does that say about modern financial planners, lol? Or the whole financial services industry. Plus all the transaction and tax fees associated with stocks (i.e. mutual fund fees).

I thought stocks were suppose to beat *everything* over the long haul (past 10 or 20 years).

-I think part of the problem with silver for the past 20-25 years, we like exciting things. The media gravitates to hot, sexy things. Apple stock, gold, the latest IPO (facebook?). The latest tech stock. Biotech, etc. Silver (and bonds) are boring by comparison. Very drab.

Baley

<< <i>Shows silver in 2012 dollars adjusted for inflation:

>>



the updated graphic will have the little "bear" symbol over the 2011-2013- 20?? time period

jmski52

If you really want to tempt fate, start shorting 30-yr Treasuries, on margin.

cohodk

<< <i>If you really want to tempt fate, start shorting 30-yr Treasuries, on margin. >>



I think PMs were largely being acquired because of the low interest rates. It didnt cost much to borrow money and PMs were in a bull market. So if interest rates go up then the cost to carry gold increases. This combined with dramatic underperformance the last few years could result in further liquidation of PM investments.

And since gold does not pay a dividend--hence interest rate protection--its shine could be tarnished.

Just a thought.

derryb

<< <i>If you really want to tempt fate, start shorting 30-yr Treasuries, on margin. >>


Will be a great play (TBT), but not yet. Interest rates are going to have to break away from the grip of the FED - will take time.

jmski52

As we know, precious metals ran up during a steady rise in rates during the late 1970s and as we also know - the investor sentiment is at least as important to the market as interest rates. Rates rose steadily during the mid-to-late 1970's and precious metals caught fire at the very same time.

The difference between now and the late 1970's is the debt burden on the economy, the black-holed FASB liabilities on bank balance sheets, the pathological overspending, and the unprecedented money creation being used solely to support the stock market via QE to the banks, which is mainly being deployed to prevent a bond market rout and to present the appearance of a healthy economy.

What we have right now is - unprecedented. Understand that. We have no previous model for this. Circling back, I do think that the direction for precious metals prices will continue to depend on investor sentiment. In my opinion the options for solving the real problems are disappearing, and I think that precious metals will be more widely-viewed as an asset having no counterparty risk as things progress.

I think that everyone's personal savings and retirements are at total risk in this scenario. I also think that higher interest rates will be necessary to reconcile the debt, but I don't know what role precious metals will be given in the reconciliation process. IMF calls gold an unencumbered Tier One asset now.

If I had to make a single bet on how to stay out of big trouble in this environment, I'd be in precious metals over stocks, bonds, cash, diamonds, farmland or other commodities. To be sure, there is still plenty of risk in PMs - I just don't see anything else with fewer risks. Just my opinion.

Baley

<< <i>
If I had to make a single bet on how to stay out of big trouble in this environment, I'd be in precious metals over stocks, bonds, cash, diamonds, farmland or other commodities. To be sure, there is still plenty of risk in PMs - I just don't see anything else with fewer risks. Just my opinion. >>



What would you do in in uncertain future if you didn't have to make a single bet to "stay out of big trouble"?

Myself I'd spread it around among several of those named asset classes, and maybe a few others as well. And if something spiked I'd sell some of it and allocate the money to buy something that's got a good track record over the long term and is currently out of favor.

jmski52

I'd spread it around among several of those named asset classes, and maybe a few others as well. And if something spiked I'd sell some of it and allocate the money to buy something that's got a good track record over the long term and is currently out of favor.

That is certainly the classic, traditional approach. I used to do that. The current problem (for me) is that I place different levels of risk (including various types of risk) on most of those other assets - risks that in my opinion exceed what is acceptable for me at this stage in my life.

It's purely a judgement call, and I'm happy with my track record.

Yukoncornelius1

<< <i>

<< <i>
If I had to make a single bet on how to stay out of big trouble in this environment, I'd be in precious metals over stocks, bonds, cash, diamonds, farmland or other commodities. To be sure, there is still plenty of risk in PMs - I just don't see anything else with fewer risks. Just my opinion. >>



What would you do in in uncertain future if you didn't have to make a single bet to "stay out of big trouble"?

Myself I'd spread it around among several of those named asset classes, and maybe a few others as well. And if something spiked I'd sell some of it and allocate the money to buy something that's got a good track record over the long term and is currently out of favor. >>



While I think having a stash of silver is a good thing I would never use it exclusively as my investment of choice. I agree that a person should have a good mix of different assets to both preserve wealth and generate capitol gains or income.