Another Plausible Silver Prices Scenario

by MarK Yarbro
(Dallas Texas USA)

Please allow me to offer an alternative scenario, which I believe that you will really enjoy!


When projecting future silver & gold prices, everyone tends to look at two primary factors: 1.) historical norms for the silver/gold price ratio, and 2.) the naturally occurring underground ratio of silver to gold {15-1 or 12-1, depending on whom you ask}.

I wish to offer another, more practical perspective.

Before the US stopped minting silver coins, the worldwide supply of above-ground silver was approximately nine (9) billion ounces, thanks primarily to the Comstock Lode.

Since that time, silver has been consumed at a phenomenal rate (as you have covered exhaustively in countless articles) until today roughly one (1) billion ounces remain above ground. In contrast, virtually all gold ever mined still exists (approximately 175 metric tons).

So, let's do the math: 175 metric tons equals 6.1 billion ounces. That means that gold is six times more available than silver, or in other words "SILVER IS SIX TIMES MORE RARE THAN GOLD" when you are talking about physical, hold-it-in-your-hand form - which is really how anything is valued by a marketplace or individual...especially in a crisis.

Everyone knows that, in a financial meltdown of any type, demand will skyrocket for precious metals as a temporary store of wealth. Prices are expected to skyrocket as the flight to safe haven investment vehicles intensifies.

MY PREDICTION is that, for a brief period Silver prices could possibly elevate until they are ON-PAR with Gold. Deep pocket drug companies and manufacturers of all sizes will maintain a constant demand for physical silver in order to keep their businesses operating...at a time when the supply has dried up due to the flight to safety by both institutional investors AND private individuals.

Of course, that would only be for a short time because the really sharp traders will sell in the peak and purchase revenue-generating real estate; and become fabulously wealthy in a very short time.

I feel the need to tell everyone who will listen to me (my employees, my adult children, my vendors, my church friends, even the folks behind the counter at the gas station and fast food restaurants) to heed the words of the Prophets (both divinely inspired and secular) and BUILD YOUR OWN ARK!!!!!

A flood of poverty will soon be upon us, and thanks to Bretton Woods it will affect every nation. Some will fare better than others, but those countries who have large gold reserves will fare better than others...and private individuals who have gold and silver reserves PLUS food storage and a means to protect their possessions, will survive.

Thoughts?

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May 23, 2015
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Good NEW
by: annsgde

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Sep 29, 2013
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Very good video on this topic NEW
by: Craig

I hope you enjoy this video, it does a good job on this topic we're discussing.

http://youtu.be/y-IemeM-Ado

Sep 29, 2013
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Very good video on this topic NEW
by: Craig

I hope you enjoy this video, it does a good job on this topic we're discussing.

Sep 28, 2013
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B.S. Hogwash Continued NEW
by: Anonymous

That is why this SPIKE IN SILVER PRICES PREDICTED will never happen, at least not until the Gov't is good and ready. By that time your bank accounts will be empty as they steal it. I've heard this prediction over-and-over-and-over for the past 3 years and what has happened? Nothing. Silver prices are going nowhere, when Wall Street JP Morgan and Blythe Masters runs White House and has the Working Group run the fiscal policy of the Federal Reserve Banksters.

Sep 28, 2013
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ILLEGAL Gov't Activity NEW
by: Anonymous

You know this is TOTAL B.S. and Hogwash, Why? because the other day the CFTC dismissed the entire Andrew McGuire instituted CFTC investigation into the Silver manipulation and JP Morgan. Why? because it's the Gov't, your own Gov't doing the manipulation. And when it's your own Gov't doing it, it cannot be prosecuted unless Eric Holder wants to prosecute himself for Fast & Furious or Benghazi, or the IRS scandal to audit Tea Party members, or Illegal NSA ILLEGAL and UNCONSTITUTIONAL domestic spying on all your phone calls and emails, and metadata on your travels or whereabouts or any other number of crimes the Gov't does.

Sep 28, 2013
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Currency NEW
by: Craig

If you've read the book Currency Wars, you will recall the opening scenario where Russia and China pool their gold reserves and establish a new gold backed currency in non-petro dollars. Pretty realistic in that they (Russia & China) just recently had a Bretton Woods style meeting.

Considering many countries around the world are already transacting in non-USD's and even the IMF has spoken of a new currency, it seems likely this is the path it will go imo. For the most part, other countries are likewise losing in the race to the bottom wrt money printing, as Ben debases ours. The list is getting too long to reprint of those countries on the verge of monetary collapse.

But back to PM's. When the Weimar Republic experienced their currency collapse, PM's were not immediately useful. The goods were simply not available to purchase at any price. It was only significantly later that the metals came into play, as they had been a warehouse of value for those that had them.

The writing is on the wall and even mainstream thinkers are starting to get antsy about what is going on. I'd be remiss if I didn't tie this conversation to the 3rd seal i.e. black horse. A days wage will only buy a measure of wheat and many will be hungry. Whether it's inflation, or scarcity, the net result is the same. So as you say, prepare.


Sep 28, 2013
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Gov't Confiscation, Taxation, & Reporting NEW
by: Mark Yarbro

There is much fear and concern about confiscation...some valid and much overblown. The reality is that confiscation only makes sense IF gold and silver were somehow re-monitized (officially government recognized as "money") which is highly unlikely (not impossible, but very difficult).

In 1933 FDR was able to issue executive order 6102 because at that time GOLD WAS MONEY. Today, thanks to President Nixon, that is no longer the case. Gold confiscation is the last step in a lengthy process because the world financial markets are very different than they were in 1933. For more details Wikipedia contains a very nice "History of the US Dollar". It mentions the Bretton Woods Agreement of 1944 which tied all world currencies to the US Dollar.

What this means is that all international transactions must be in US Dollars. When Russia buys oil from Saudi Arabia (or natural gas from Syria) they must first convert their Rubles to Dollars, then the Saudis must convert the Dollars to Riyals. Thats great for us...but not for everyone else.

The reason countries were willing to do this was they were all broke or practically broke from WWI and in the throes of WWII. The United States had not yet joined the war and we held most of the world's gold reserves and thanks to the Comstock Lode we held the vast majority of the world's silver reserves as well. Today both are almost totally depleted.

Taxation and government reporting are a different matter. Thanks to the Bank Secrect Act of 1970 and the infamous "Patriot Act", all transactions of $10,000 (or multiple related transactions totaling that amount) must be reported to the IRS via form 8300 (see IRS publication 1544 for more info.) Otherwise, the government has no official mechanism for tracking gold & silver purchases. There are rumors that the new Obamacare law contains some language about regulating gold retailers. I guess we'll see.

As for taxes, here in Texas there is a $1000 threshold for precious metals purchase. Single purchases of less than $1000 are subject to standard sales tax, but if you buy more than $1000 there is no sales tax! Pretty cool huh? This is a great place to live :-)

IMO you should be more concerned about theft of physical metals than government confiscation. I would be happy to share articles about non-traditional methods of hiding your physical assets on and around your property. Just drop me a line at therealhongkongphooey at gmail dotcom

Sep 28, 2013
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Not following NEW
by: Craig

The last anonymous post was not clear. Could you please restate what you mean by a normally functioning ... not adding up.
Thx.

Sep 28, 2013
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Contradictions NEW
by: Anonymous

If the world unravels...there will be few companies operating in order to demand silver. You can't have a normally operating, normally functioning society and business sector under the apocalyptic conditions as pointed out in the last paragraph. Silver will no doubt gain in value but the scenario doesn't add up.

Sep 28, 2013
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Silver vs Gold NEW
by: Anonymous

Mark, good discussion. I am thinking of putting some more $$ into PM's, so believe me, I'm not emotionally tied to either at this point, just trying to decide which way to go other than USD, which has to become extinct.

Your point about qty's is valid. Gold seems to be a better way to store value in bigger qty's wo/ the bulk of silver. Also as you say, gold is tough in small amounts, whereas silver is easily handled all the way down to junk silver for barter and exchange.

From what I'm seeing, some seem to be changing their tunes wrt Au vs AG, w/ Ag starting to take more of a lead. As I've been looking at Ag coins vs junk vs hockey pucks, etc. there is no clear winner for the end game. What have you learned? Is there a benefit to going with more common stuff for example?

Sep 28, 2013
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Government Ineptitude NEW
by: EruditeMan

On the surface, presuming accuracy of AG and AU tonnage figures available in the marketplace I accept your logic and ultimate outcome. The only fly in the ointment is international Governments propping up banks of the world, private/personal wealth confiscation and outright manipulation of advertised inventory. Some individuals retain AG and AU "in hand" but others use firms with supposed storage facilities. When Governments fail they will nationalize (a.k.a. steal) any/all AG and AU it can confiscate. This will distort the action of trading market prices.

Sep 28, 2013
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Casting no aspersions on gold NEW
by: Mark Yarbro

You are correct that China and Russia are amassing large quantities of gold. China has bought over 1000 tons from US sources this year alone.

Practically speaking, most people can only afford to make frequent, small investments which are much easier to do with silver than gold. For example, today $100 will buy you four silver "rounds" with pocket change left over, but the smallest quantity of gold is 1 gram bars which today costs $59.

Also, the "premium" (or seller's profit) for silver rounds is as little as 99 cents over melt (e.g., the price of silver today is $21.73 so you can buy 1 oz.rounds for as little as $22.72 each)

Unfortunately, smaller quantities of gold carry huge premiums. 1 gram bars currently average 25% markup. :-(

Equally important is my original point that silver has the potential to appreciate in value much faster than gold, even if gold becomes "monetized" as you suggest. As they say, where goes gold there also goes silver.

One last thing; have you seen the new CombiBar? Some are saying this might be what future money could look like: hardassetsalliance dotcom slash landing slash is-there-gold-in-your-wallet (or if you prefer www.goo.gl/E4KtTl)

Sep 28, 2013
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Gold backed currency? NEW
by: Anonymous

As much as I would like to agree w/ your assessment of silver, what I find most interesting is the huge tonnage of gold that China, Russia and others are holding and expanding upon. One must ask why they are doing this, and the only answer I can think of is to dump their USD's and prepare for an alternative currency backed by gold.

When the world economy goes in the dumper, manufacturing uses will be minimal for some time until a recovery, however, if the USD loses its hold on the reserve currency position and an alternate, gold backed currency takes over, doesn't it make sense that gold will dominate the market? Especially if the new monetary system is cashless, and must have some sort of good faith backing. Not sure where that will leave silver on that point.

Finally, in the end, both metals will be of great value since the anti-christ will be honoring his god with them eventually. eg. Daniel 38-43

Sep 27, 2013
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Typo correction NEW
by: Mark Yarbro

Yes, yes, that was a minor typographical error but THE MATH IS STILL CORRECT. Obviously, I meant 175,000 metric tons of gold which is 6.172 billion ounces of gold.

Again, the key concept here is that silver is estimated to be 12 to 15 times more common underground...BUT silver is, in fact, six times more RARE than gold ABOVE ground (in the real world where you can actually store, use, and trade it!)

Do your own research; do your own math; and for heaven's sake please PREPARE!

Sep 27, 2013
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Scary but true NEW
by: Dave

I am afraid this is exactly what is going to happen. I have all the gold and silver that I should need. However I am worried about all my family and friends who didn't do the right thing. I know they will be turning to me for help. I will not be able to help all of them. How will that play out?

Sep 27, 2013
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figures... NEW
by: Suisu

…something's wrong with the figures in the article:
The total of ever mined amount of Gold is about 175000 metric tons! (factor 1000 higher than above stated).

…even the number in ounces is wrong: 175000 metric tons of Gold equals about 5.63 Billion ounces!
(1 troy ounce equals 31.1034768 metric grams.
1 metric Kilo contains therefore 32.15 ounces
1 metric ton contains 32150 ounces

Please do the math (again)!

Sep 27, 2013
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Silver more valuable than Gold NEW
by: Tommy

I agree wholeheartedly with your assessment of the values of Silver and Gold. The innumerable uses of Silver give it much more utility than Gold. Gold is used for jewelry, for certain electronic connections and a few other things. Silver has the 2nd most uses (after crude oil)in the world. New uses are being invented on an almost daily basis too. The fact that Silver has been used in these products in miniscule amounts and not being recycled, means it will only become more rare as time goes by.

The USGS even went so far as to predict that Silver could be the first element on the Periodic Table TO BECOME EXTINCT!!! Perhaps as soon as 20-25 years from now. What would be the value of Silver then? Boggles my mind thinking about that scenario.

I started saving Silver many years ago, because I couldn't afford to save Gold. Not to mention, you never seem to find Gold coins in circulation, but my wife works for the bank and has brought many Silver coins home with her over the years. She even brought me a SOLID ROLL of Silver Dimes home once. NICE... Along with the wheat pennies, a PROOF old nickel, Silver Certificates, US Notes (red seals),I end up getting a few valuable items every few weeks. They're still out there, you just need to keep your eyes open.

In the end the price of Silver will undoubtedly be MUCH HIGHER than it is today. Making for one of the (if not the best)best investments you can make. Buy a little every week, it adds up quickly and before you know it, you'll have a nice stash on your hands....

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