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The (Pathetic) Price of Silver

by Jeff Nielson, Bullion Bulls:

The price of silver popped above $20/oz (USD) last night. Woo-hoo! Silver is “rallying”, and happy days are here again. Really? How soon we forget.

Look at the chart above. Can anyone see a rally?

In the spring of 2011; the price of silver was pushing $50/oz, and that price was still just a fraction of any reasonable, fair-market value. Then we had the Great Take-Down. The price of silver was smashed all the way down to the $20/oz level by the middle of 2013, in a series of massive (and illegal) plunges in the bankers’ paper-silver market.

At that point, the $20/oz level became the floor for the silver market, for a full year, until the middle of 2014, when the bankers began steadily grinding the price of silver (and gold) lower again. Now we have the price of silver finally (and suspiciously) returning to that previous bottom, and we have most people calling this a rally.

The price of silver is now only 40% of its previous peak. It has now barely recovered to its 2013/2014 floor. But this just frames the issue in terms of the bankers’ phony/fraudulent paper markets. We also have the real world, for those readers who choose to dwell there.

In the real world, a fair-market price for silver would be somewhere around $1,000/oz, today. The metrics for that number were explained in a previous commentary. For almost all of our history, workers have been paid for their labours in silver. Over all those centuries, the “average wage” was roughly one ounce of silver per week.

If we consider the “average wage” today to be somewhere around $50,000/year (roughly $1,000/week) then that directly translates into a paper price for silver of $1,000/oz. While few other commentators have embraced that four-digit number, any/all respected commentators in this sector are still advocating a three-digit price for silver.

If we take even the lowest three-digit number, $100, this still puts the current price of silver at only a ludicrous fraction of its current, fair-market value. If we go back even three years in time, to when silver had first been crashed to the $20/oz level, would anyone at that time have considered it a “rally” to see the price of silver (back) at the $20/oz-mark? Of course not. But grind the price down to $13/oz, and hold it there for a few months, and suddenly most people are excited that silver is priced at $20/oz.

This is a classic example of how the bankers (and their media sycophants) have completely altered our perception of reality, just by manipulating their phony, meaningless, and illegal paper prices for various goods. To understand the absurdity of this paradigm, we need to step back further (and further back in time), to when we had a rational and legitimate price structure, and a legitimate monetary system in our world.

Back when we had a legitimate monetary system, the world was “priced” in terms of gold and silver: hard assets – and real money. How many ounces of silver for that piece of furniture? How many ounces of gold for that piece of real estate. That is reality: a world where we exchange hard assets for hard assets.

Then the banking Crime Syndicate was handed control of our monetary system, by governments which were (at that time) merely weak-willed and cowardly, rather than being totally corrupt as they are today. Now the bankers have completely altered our perception of reality.

For the first time in all of human history, the world was/is priced in terms of paper – worthless paper. How many (worthless) scraps of paper for that piece of furniture? How many (worthless) scraps of paper for that piece of real estate? The questions have no meaning/relevance, because the paper has no value. It is pure economic insanity. Yet, for almost all of us, this is now “normal.”

By simply manipulating the (phony) paper price of anything, to any level – and then holding it there – the bankers are now capable of convincing/deceiving us into believing that this phony, paper price is the “value” of that particular hard asset. Complete and utter nonsense.

You cannot express “value” in terms of worthless paper. It is an oxymoron. How many Monopoly dollars for that piece of furniture? How many Monopoly dollars for that piece of real estate? Try paying for something with the paper “currency” from a board game, and people will laugh at you. Yet if we offer to pay for a hard asset with the equally worthless currency of the bankers, suddenly the worthless paper becomes acceptable. Even more absurdly, that phony price we pay in worthless currency for the good is equated with being its value.

It is only in world of legitimate markets (and legitimate currency) where price = value. Where either our markets or our currency loses its legitimacy, price no longer equals value, indeed the phony, paper price loses all relevance.

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2 comments to The (Pathetic) Price of Silver

  • Paul

    I retract my statement when I wrote “what fake rally Mr Nielson”
    You were right then and you are right now.
    Well done for putting forth a logical assessment into what the
    real silver price should be in US$.
    I believe the only way Silver and Gold will attain their true value
    is when the whole fraudulent financial system collapses.

  • Fraser

    Agree again and again with Jeff, love his work, great analyst! Indeed, let’s save our “woo-hoo” for the $200 mark and stop getting hysterical at $20.

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