Read the Beforeitsnews.com story here. Advertise at Before It's News here.
Profile image
Story Views
Now:
Last hour:
Last 24 hours:
Total:

Silver could well be better to hold than gold

% of readers think this story is Fact. Add your two cents.


People buying gold as a security against possible future hyperinflation of paper currency should remember that in the GReat Depression, governments confiscated gold from citizens and banned gold holding.  In a situation where paper currency loses value rapidly, silver could well be a  better investment.  Silver attracts VAT, whereas gold does not.  But look at the relative potential price swings between gold and silver before deciding which you think is best.

The Gold:Silver Ratio

When I talk about a gold standard throughout history, I also mean gold-and-silver standards, and even monetary systems which were 95%+ silver, as was the case in places like China.

In practice, most day-to-day transactions were done with silver coins. Gold was much too valuable for small transactions, although very handy for large commercial transactions. An ounce of gold today is worth $1,250. When was the last time you carried a $1000 bill? We don’t even make them anymore. There’s a $100 bill, which is actually quite popular worldwide, but hardly used in the U.S. Our largest common bill, for daily use in legal transactions, is a $20 bill. If you were going to buy a house, you might want to use two hundred one-ounce gold coins, weighing about 14 lbs, instead of 3000 oz. of silver, which weighs about 210 lbs. However, if you were going to buy some socks, you wouldn’t want to pay with a one-ounce gold coin or even a tiny tenth-ounce coin.

This problem — of gold’s excessively high value for small transactions — was resolved through the widespread use of gold-linked paper bills. You could use a $1 bill instead of a 1/20th oz. (or 1/1000th oz.) gold coin. Thus, people didn’t need silver anymore. Britain officially went to “monometallism” in 1816, and most countries followed toward the end of the 19th century.

For most of human history, silver has traded around 12-16 oz. of silver per 1 oz. of gold. This ratio changed slowly. It didn’t bounce around, 12:1 one month and 15:1 the next month. For example, in 1789 U.S. Congress declared that the official silver:gold ratio would be 15:1, reflecting a market price of about that ratio. Over a few decades, the actual market price drifted closer to 16:1, so to reflect this, Congress changed the official ratio to 16:1 in 1835. This was the only change in the official gold/silver ratio until silver was effectively demonetized in the 1870s.

You can go back to historical times, and find that this ratio is about the same. Plato mentions a 12:1 ratio, and at the death of Alexander the Great it was 12.5:1. During later Roman times, it was 15:1. This still seems like it varies a fair amount. But this is over several centuries. For any one person’s lifetime, the ratio would be very close. It might drift from 15:1 to 16:1, or from 12:1 to 12.5:1. In other words, practically unchanged.

Thus, gold and silver were practically the same, just like $1 bills and $20 bills.

The important part of this graph is not the prominent blue line, but rather the light yellow line. This shows the gold/silver ratio going back to 1344. So you can see, it was very stable.
Here’s a closeup of the last couple hundred years. Once again, very stable, to begin with. The “decline” you see in the gold/silver ratio in the 1860s was actually due to the depreciation of the “greenback” paper dollar during the Civil War. The gold/silver ratio didn’t actually change then (I don’t think) from its prewar 16:1 ratio. It is a statistical error.The big change came in the 1870s, the “demonetization of silver.” This was apparently a natural market (human) phenomenon, not a government edict, although governments soon reflected market reality in their official policy, which in turn accelerated the process. Bimetallism had long had minor but irritating problems with the slight variation in the gold/silver ratio. The advancement of the gold-linked-paper system, and payment by bank transfer and so forth, had eliminated the need for the use of silver coins as small-value money. You could use a $1 bill instead. In effect, silver was no longer used as a “monetary commodity” and became more like an industrial commodity, although one with some remaining monetary characteristics. From the mid-1870s onward, silver begins to vary wildly in value compared to gold, for the first time in history.

Silver coins were still used, but they became “token” coins, with a commodity value less than their monetary value. A $0.25 coin (quarter) was valuable in the 1920s, 1930s or 1940s primarily because four of them would make a dollar, and the dollar was then worth 1/20th oz. of gold, or 1/35th after 1933.

The point is, when I talk about a “gold standard” I also include within that gold and silver bimetallism, and also systems which were primarily silver-based. Until the 1870s, they were effectively the same.

The Gold:Silver Ratio
September 12, 2010

The Gold:Silver Ratio


Source: http://tapnewswire.com/2017/02/silver-could-well-be-better-to-hold-than-gold/


Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world. Anyone can join. Anyone can contribute. Anyone can become informed about their world. "United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.


LION'S MANE PRODUCT


Try Our Lion’s Mane WHOLE MIND Nootropic Blend 60 Capsules


Mushrooms are having a moment. One fabulous fungus in particular, lion’s mane, may help improve memory, depression and anxiety symptoms. They are also an excellent source of nutrients that show promise as a therapy for dementia, and other neurodegenerative diseases. If you’re living with anxiety or depression, you may be curious about all the therapy options out there — including the natural ones.Our Lion’s Mane WHOLE MIND Nootropic Blend has been formulated to utilize the potency of Lion’s mane but also include the benefits of four other Highly Beneficial Mushrooms. Synergistically, they work together to Build your health through improving cognitive function and immunity regardless of your age. Our Nootropic not only improves your Cognitive Function and Activates your Immune System, but it benefits growth of Essential Gut Flora, further enhancing your Vitality.



Our Formula includes: Lion’s Mane Mushrooms which Increase Brain Power through nerve growth, lessen anxiety, reduce depression, and improve concentration. Its an excellent adaptogen, promotes sleep and improves immunity. Shiitake Mushrooms which Fight cancer cells and infectious disease, boost the immune system, promotes brain function, and serves as a source of B vitamins. Maitake Mushrooms which regulate blood sugar levels of diabetics, reduce hypertension and boosts the immune system. Reishi Mushrooms which Fight inflammation, liver disease, fatigue, tumor growth and cancer. They Improve skin disorders and soothes digestive problems, stomach ulcers and leaky gut syndrome. Chaga Mushrooms which have anti-aging effects, boost immune function, improve stamina and athletic performance, even act as a natural aphrodisiac, fighting diabetes and improving liver function. Try Our Lion’s Mane WHOLE MIND Nootropic Blend 60 Capsules Today. Be 100% Satisfied or Receive a Full Money Back Guarantee. Order Yours Today by Following This Link.


Report abuse

    Comments

    Your Comments
    Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

    MOST RECENT
    Load more ...

    SignUp

    Login

    Newsletter

    Email this story
    Email this story

    If you really want to ban this commenter, please write down the reason:

    If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.