The Last Investable Moment for Silver

Silver Investing

In the context of the current U.S. Dollar valuation bubble, silver’s eventual price rise seem inevitable. This paper currency bubble commenced with a desperate flight to quality, despite the fact that the U.S. Dollar had been an intrinsically worthless currency since it was taken off the gold standard by Nixon in the early 1970’s.

Silver is one of many sought after investment choices when risk aversion is high. What makes it a convenient choice happens to be that the metallic commodity has special qualities that have historically made it one of the best forms of money.

The key is not to say that silver would necessarily become a medium of exchange, although it might indeed be useful as an asset that could be bartered in an emergency situation.

Still, once the U.S. Dollar devaluation finally occurs, silver’s use as a medium of exchange in the aftermath would probably quickly transform into the metal’s other traditional use as a store of wealth.

In other words, what above ground silver is left would very likely return to the vaults, probably being held as the basis or backing for the next new script. The fiat currency cycle would then begin again.

The Dirty Dollar’s Secret

The dirty secret is that while having sound money like silver indeed seems like the rational thing to do, the short term pain of this transition from the paper Dollar seems unbearable and impossible to reconcile other than in an emergency situation. This self-reinforcing collective fear of short term pain is also why the politics reflecting this seem so entrenched. 

Still, in terms of societal pain, not individual, the concern over others’ wellbeing is used to rationalize putting off the inevitable. This questionable argument is also used to vilify just about anyone who would go against that sentiment as self-serving, deluded, etc.

The U.S. Dollar is a debt-backed currency. Never before has such an intrinsically worthless currency survived very long as a medium of exchange. Eventually, the interest payments on the debt become too high to service and the inevitable bursting of the Dollar bubble will begin. A small rise in the rate demanded for debt would quickly eclipse tax revenue.

The Silver Trader’s Dilemma

Trading paper silver rationally seems nearly impossible. Nevertheless, the paper price does not really matter as long as you are a long term physical investor and not a short term futures trader.

Furthermore, if you are an equity trader, you are typically better off by just buying an index, which usually beats the hedge funds that use it as their yardstick.

The moment that confidence in the U.S. Dollar eventually breaks, the opportunity to buy silver will be over. Sadly, complacency currently rules and that precious moment will be lost to those people who preferred to wait on the sidelines rather than jump into the chronically undervalued physical silver market with both feet.

Price controls are very powerful and can effectively shape perception, even where history is readily available, evidence of a paper versus physical separation exists, and the shortage of physical silver is widespread.

The Value of Seeing Silver Clearly

The short term price and investor anxiety effectively obscures their ability to perceive this situation. This phenomenon seems especially notable among the waiting multitude who are otherwise one step away from the internal shift to buying silver.

When the true value of silver hits them, the precious metal becomes the obvious investment choice in their personal flight to quality.

Silver may never return to its constitutionally mandated position as an official currency, its long forgotten status as the coin of the realm, but that does not mean it will not be an excellent future investment for you and your loved ones.

Once the revaluation of silver occurs, the lesson of its value as a store of wealth and a medium of exchange will not soon be forgotten.

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Silver Investing 
Thank you Jeff! Excellent writ, sir. You are so right, IMO, as a die-never LTSB (Long Term Silver Bug). At the moment, I'm convinced...even though my friends …

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