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Will Paper Money Become Worthless And Be Replaced By Silver Coins? May 19th, 2010 Posted in Silver News | Comments Off

Many recent predictions paint a picture οf doom аחԁ gloom fοr tһе American dollar. Asia аѕ аח emerging economic powerhouse wіƖƖ negatively influence tһе value οf tһе American dollar. Iח general paper money wіƖƖ become аƖmοѕt worthless аחԁ a חеw economic system wіƖƖ bе рυt іח рƖасе.

Owning physical wealth such аѕ silver аחԁ οr silver mining shares іѕ аח opportunity tο hold onto уουr wealth. Iח аח inflationary environment уου want tο οwח actual assets, חοt paper money. Aחԁ wһаt exactly іѕ аח asset. Aח asset іѕ wһаt уου саח trade аѕ a measure οf worth fοr products уου want. Precious metals һаνе bееח assets ѕіחсе biblical times.

Putting уουr money іח tһе bank ԁοеѕ חοt give уου a fаіr return οח уουr dollar. Tһе first problem іѕ tһаt уουr return οח loaning уουr money tο tһе bank іѕ really pathetic. Unless уου һаνе a money market account wіtһ a return higher tһаח three percent, tһе value οf уουr money wіƖƖ constantly erode.

Secondly, wһаt mοѕt people ԁο חοt realize іѕ tһаt tһе bank mаkеѕ six tο eight dollars fοr еνеrу one dollar іח уουr account. Imagine tһаt! Through tһе system οf fractional reserve аחԁ centralized banking уου finance tһе lifestyles οf banking executives.

Tο protect уουr wealth tһе first thing уου ѕһουƖԁ ԁο іѕ stay away fοr incurring аחу debt tһаt ԁοеѕ חοt return a profit tο уου. Or аt Ɩеаѕt maintains a return tһаt equals tһе rate οf inflation. One way tο ԁο tһіѕ іѕ through tһе рυrсһаѕе οf silver assets іח tһе form οf coins οr bullion. Silver coins аrе recognized regionally аחԁ internationally.

Wealth іѕ represented bу חοt work, bυt bу control οf tһе press. Crеаtіחɡ money through tһе power οf tһе printing press leads tο socialism. Inheritance аחԁ work аrе tһе primary ways individuals асqυіrе wealth. Governments асqυіrе wealth through taxation. Governments аƖѕο produce wealth bу printing аחԁ regulating paper money.

Owning precious metals such аѕ silver coins аחԁ bullion reduces tһе dependence οf fiat monies mandated bу governments. Wһаt саח bе mandated іח аѕ аח item οf value саח аƖѕο bе mandated out аѕ аח item οf value.

Paper money wіƖƖ eventually become worthless. Aחԁ іt ѕtаrtеԁ wіtһ tһе elimination οf silver οח demand notes wһісһ һаνе bееח replaced wіtһ government promises called dollar bills. Protect yourself, become aware οf tһе financial market, аחԁ maintain уουr sovereign rights. Sіחсе tһе inception οf tһе tһе Federal Reserve banking system іח 1913 tһе value οf tһе US dollar һаѕ declined аחԁ tһе national debt һаѕ risen.

At tһе еחԁ οf World War One tһе national debt wаѕ nearly $27 billion dollars, аt tһе еחԁ οf tһе tһе Vietnam War tһе national debt wаѕ $533 billion dollars. Today tһе national debt іѕ over $ 9 trillion dollars аחԁ rising. Tһіѕ debt accrues tο еνеrу man, woman, аחԁ child іח tһе US. Sο һοw ԁοеѕ tһе central banking system аחԁ Federal Reserve manage tһіѕ situation?. Simple. Together tһеу perpetuate tһе same cycle οf overprinting paper money wһісһ becomes more аחԁ more depressed іח value.

Tһе οחƖу way tο rid yourself οf tһе problem οf paper money іѕ tο асqυіrе real wealth. Bυу аѕ much silver аחԁ gold аѕ уου саח afford. Silver аחԁ gold аrе universally recognized аѕ wealth. Tһе intrinsic value οf silver аחԁ gold іѕ established bу tһе free market рƖасе. Nοt bу government mandate. Tһе economic forces tһаt affect tһе American dollar аrе evolving. Now іѕ tһе time tο prepare fοr significant changes іח ουr monetary system.

Fοr additional information οח һοw tο protect уουr economic interests click οח tһе link below.

Thank уου fοr reading mу articles. I аƖѕο һаνе οtһеr articles tһаt уου mау want tο read. Live long аחԁ prosper.

 

Ronald Roberts іѕ a former Army Officer аחԁ MPA graduate. Hіѕ many interests include public administration аחԁ academia. Hіѕ favorite quote: Never ԁеѕріѕе a humble beginning. Hіѕ blog іѕ http://www.americaneaglesilverdollar.info.

Fοr a direct аррrοасһ tο protect аחԁ grow уουr wealth visit http://www.besilverrich.com.

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The Silver Price-spiral
Jeff Nielson
Thursday, April 29, 2010
bullionbullscanada.com

Regular readers are familiar with my position on silver: supply/demand fundamentals make it inevitable that silver will rise to a triple-digit price – almost certainly within this decade. Thus, it may come as a surprise to some to hear me say that I think I have been "too conservative" in my outlook for The Metal of the Moon.

I had recently been pondering this subject when I had the great pleasure of doing a "Bullion Bulls" interview of GATA's Adrian Douglas. In doing my "homework" for the interview, I came across another interview which Mr. Douglas had done - where he raised some very interesting concepts about the pricing of precious metals, and of silver, in particular.

The first point he made was that if you simply looked at the progression of silver inventories/stockpiles (i.e. their rapid depletion), silver was on course to be "extinct" (in a technical sense) as an element of the periodic table. More specifically, he projected that silver was on course to become extinct as soon as 2020.

The second interesting observation from that interview was to compare the recycling of gold versus silver. He pointed out that virtually all gold is recycled (and made a superlative case of asserting this was why gold was the perfect "monetary" metal: it is virtually 100% conserved in our society). Silver, on the other hand, is on course for "extinction" because only a relatively small portion of all silver used industrially is recycled.

Part of the reason for this is that much of the silver consumed "industrially" is in applications where silver is only used in trace amounts. This makes it totally uneconomical to ever recycle this silver unless/until it were to rise to a price-level where it would become economical to recycle it.

Obviously, "market forces" will intervene to ensure that silver never becomes "extinct". However, with global stockpiles/inventories nearly gone, it becomes a matter of simple arithmetic that silver must rise to a price-level where enough of the silver consumed industrially is recycled so that there is no further depletion of inventories/stockpiles.
This comes at a time that industrial applications for silver are in their infancy. Regular readers have heard me drone on about this aspect of the supply/demand equation on many previous occasions.

I will abbreviate this discussion by just pointing out the various reasons why industrial demand must continue to rise rapidly, irrespective of the price. In most of its industrial applications, it is either vastly superior to any other metal, or (in the case of its anti-bacterial properties) totally unique. This makes its "substitution rate" very low, or even zero. It is also the most versatile metal, with more new patents being filed for silver-based applications than for any other metal. It is being utilized in many of our most-dynamic "high-tech" sectors, from being a component in computers; solar power; and a nearly infinite number of brand-new medical/hygiene applications: in everything from body-washes to upholstery.

Of course, it must be pointed out that industrial demand for silver is only one component of the demand equation. We must not forget about silver jewelry (technically, a sub-category of "industrial demand") and silver being bought/held by investors. It is because silver has been under-priced and over-consumed for so many decades that we have managed to reduce silver inventories/stockpiles by somewhere near 90%. Investment demand for silver has dramatically increased in recent years because there are many investors who can spot an obvious investment opportunity. Given how radically under-valued silver remains, we can expect that investment demand will remain strong, even as silver rises to several multiples of current prices.

On the supply side, despite a quadrupling of the price of silver over the last decade, mine-supply has been rising at a low, single-digit rate. Part of this is due to the fact that most silver is (literally) produced as a "byproduct" of other mining. This in itself is proof of how poorly regarded silver is, from a pricing standpoint. Secondly, "primary" silver producers (mines where silver is the principal metal being mined) have been very slow to ramp-up production - further proof (in economic terms) that silver is being grossly undervalued.

In other words, it is clear that silver would have to rise in price by several, additional multiples of the current price before silver mining became more like gold mining - in that mine-supply would come mostly from primary silver producers, as it does with gold. Further dimming prospects on the demand side, the "supply" coming from government stockpiles has also dried-up (what a surprise!).

Thus, as I stated at the beginning, it is a fait accompli that the price of silver is heading for a three-digit number. The interesting question becomes: what will be the first digit of that number?
In that respect, I offer four key dynamics to make my case that the first digit of the (three-digit) price for silver will be closer to a "9" than a "1" - most likely at some point this decade, and we cannot discount the possibility of silver rising to the $1000/oz-level.

 1.   Depleted inventories, hidden by bogus accounting
 2.   Extremely inelastic industrial demand
 3.   The re-discovery of silver as jewelry
 4.   Investment demand

While none of these aspects of the silver "equation" are completely new, in combination, they lead me to be much more aggressive in estimating their cumulative impact - especially given the first component of this equation: silver inventories. In doing research for this series, I attempted to find some recent information on global silver inventories: some "official" number which represented what was currently available in global warehouses.

I came up empty. Now perhaps it's just my research skills which are deficient. However, of interest, I didn't even come up with any recent estimates of global inventories from other, veteran silver commentators, nothing more recent than 2008. What I found even more curious is that I was no longer able to find any comprehensive information about silver inventories from The Silver Institute.

There is a great deal of detail about "demand" and "supply", but nothing about inventories. You obviously cannot talk about "supply" without also discussing inventories. Not only does this omission mean that we only have data on "flow" and not also on "stocks", but it makes it impossible to validate other supply/demand data.

In other words, the only sure way of knowing that we have made (or seen) an error in reporting silver supply and/or demand is if we also have current information on changes in inventory levels. Without such data to independently corroborate supply/demand information, the "consultants" who supply the world with quasi-official information on supply and demand (the CPM Group and Gold Field Mine Services - "GFMS") could insert almost any numbers they wanted as "supply" and "demand".

Both of these consultancies operate on a first-name basis with the bullion-banks. Indeed, as we saw from the recent CFTC hearings, Jeffrey Christian of the CPM Group "apprenticed" with Goldman Sachs. Thus, it is not unreasonable to believe this information is being deliberately withheld.
I
n Part II of this series, I will dive into the four dynamics I mentioned previously, starting with a closer look at what we do know about global silver bullion inventories, and why this will ultimately lead to a price-spiral - unlike anything we have ever seen with any other commodity.

Trends in today's bullion market show that the silver is on the bull. So there are increasing percentages of investors buying this. What are the types of bullion that are being bought in today's market? One can buy a variety of silver bullion like nuggets, bars or wafers, coins etc.

Buying in the form of silver nuggets is not for the novice. It takes years of practice and expertise to be able to judge the true value of a nugget. With decreasing quantities of nuggets in the market, lesser and fewer investors are being exposed to the nugget and it is becoming increasingly difficult for the investors to evaluate nuggets without the help of experts or experienced consultants.

The next most popular type of buying is the silver bar or wafer. Now, this is a bullion form that most modern investors are familiar with. The wafers or bars are struck with specific standards and are marked on the bar. One could start purchasing from a minimum of one ounce bar up to thousand ounces or even up to a kilo of silver wafer, depending on the kind of investment one can make to buy silver bullion. A bar is also a familiar form with the quantity of silver present in the bar and the degree of fineness of 999.0 or more and the name of the manufacturer or mint struck on it. The lesser quantity costs are prohibitive because of the costs of mark up and shipping. Lower quantity bars find plenty of use in the manufacturing of decorative articles and jewelry. The professionals who buy these bullion would invest on the one thousand ounce bars, which are convenient for purposes of investment as well as collection.

Next is the most convenient way of buying silver bullion. This is the way of buying silver bullion in coins. They remain the most popular method in which the bullion is purchased or collected. Coins have incremental designer appeal and are the most desirable forms of buying bullion silver.

In the US, the usage of the word 'coin' is restricted and is known in the country as silver rounds. American silver round, like the American Silver Eagle, the Canadian silver Maple leaf or the Australian silver Kookaburra remains very versatile and immensely popular type of coin, since it is made of one troy ounce of silver.

Article Source: http://EzineArticles.com/?expert=Bradley_A_Jones

Silver may perhaps become the next commodity as China runs up the price, just as it has done with oil, copper and uranium. Silver is positioned to become a commodity that commands price percentage increases that are the same as and possibly more than gold. Skeptical?. Peruse any fiscal periodical or go online to assess recent price changes in silver.

An examination of historical price fluctuations will show that precious metals including silver have shown strong increase in importance, and profit, on top of the last six months.

So how does that affect the average consumer? Knowledge about how silver can replace fiat currency gives you time to buy silver. American Silver Eagles or rounds, it will not matter when inflation makes it almost impossible to economically spend your paper dollars.

What are the top ways to invest in this commodity? That depends on your state of affairs. Are you an person with incomplete funds? If so, you may want to begin buying American Silver Eagles or silver rounds. For clarification American Silver Eagles are minted and distributed by the American government. Silver rounds are produced by private mints. Both sets of coins still possess silver content.

Each of these can be purchased singularly or in larger quantities. Your economic schedules and resources should influence your spending patterns. Large investors can justify purchasing either silver bullion or bags of silver coins. The silver content of bagged coins, dimes, quarters, and half dollars exceeds the frequent commercial rate of the coins.

Something to beware of and pay attention to is the government of China. The Chinese government is encouraging its people to buy silver. With a affluent country as aggressive as China, this can only contract the availability of silver coins and bullion inside the open marketplace. The effect on the silver market will be a giant demand in the value of available silver. Chinese citizens, poor, middle class, and rich can buy silver coins or bullion. This bullion can be in the form of 500 grams, 1, 2, and 5 kilo bars.

The stockpiling of silver is steadily increasing in certain areas of our nation. Fringe organizations, investors, and collectors all compete for supplementary silver. For investors the silver content is what matters. For collectors the rarity and condition of silver coins is vital. The rationale for acquiring silver is unlimited. But the rising apprehension centers around cost and availability regardless of the form. Furthermore, the cost of anticipated stock market failures and the increasing devalued dollar add to an urgency to obtain silver.

As a fiscal strategy contrary to the failure of the dollar, silver ownership is wise. Easier to buy than gold, silver is obtainable for the typical investor. And silver is a first-rate barter tool. As China works to relieve itself of the American dollar the price of silver should grow. If our central banking system fails, paper money not backed by silver may become effectively worthless. We may perhaps face the likelihood of restless inflation.

An oversupply in the availability of money through out the preceding year has facilitated conditions for the importance of silver to grow over the next few years. Furthermore, the volume of silver being mined has not increased. It has remained constant at best from historical levels.

As earlier mentioned silver coins are outstanding as a barter currency. The inherent worth is in the content of the metal. In contrast paper currency is assigned a value by the mandates of the government. That is the reason why all significant nations cannot avoid experiencing monetary failure. Paper money is exactly what it is, paper.

Now that you have learned more regarding silver than you ever wanted to know I need to ask you three questions:
A) Can you invest between $40 and $50 monthly to systematically acquire silver?
B) Do you make a habit to examine financial publications ?
C) Did you know that this instant is the time to make plans for your profitable future?

Recommendation: Stay alert to economic conditions.  Silver is experiencing a greater boost in importance than gold. Control your economic future.

Thanks for reading my article. Please examine my other articles on silver investing. You will be glad you did.

Please feel free to bookmark this article to share with someone else. Live long and prosper.

 

Ronald Roberts is a former Army Officer and MPA graduate. His many interests include public administration and academia. His favorite quote: Never despise a humble beginning. His blog is http://www.americaneaglesilverdollar.info.

For a more direct approach to protect and increase your wealth visit http://www.besilverrich.com.

Silver Historical Background

Silver has attracted man's lure for many thousands of years and because it has been found in limited amount over the ages and while it scarce it is the most overflowing and least expensive of the precious metals. As such it has become linked with value which led to its use as part of the world's fiscal system right through the ages.

In the United States, silver started to play a key role in the fiscal system when Congress based the currency on the silver dollar, and its fixed relationship to gold. Silver was quickly used for coinage in the U.S. until its use was discontinued in 1965.

After the end of the 19th century the admittance of the 20th century altered the use of silver from being exactingly part of a fiscal value to its becoming vital in different parts of the economy. Silver quickly became an industrial raw material with it being sought as a vital and practical industrial commodity, as well as an appealing investment precious metal. Countries including the Unites States, Canada and Mexico issue silver bullion coins and they are also available from confidential mints.

While silver is scarce, it is the most overflowing and least expensive of the precious metals [http://silvermarketbasics.blogspot.com] with the largest silver producing countries being Mexico, Peru, the United States, Australia and Chile. Sources of silver include; silver mined directly, silver mined as a by-product of gold, copper, lead and zinc mining, and silver extracted from recycled materials, primarily used photographic materials. Today, silver bullion stocks make up a significant component of silver supply.

The American Eagle Bullion curriculum was launched in 1986 with the sale of gold and silver bullion coins. Platinum was added to the American Eagle Bullion family in 1997. A bullion coin is a coin that is valued by its weight in a point precious metal.

Silver more than other precious metals, has significant demand rooted in sectors as diverse as imaging, electronics, jewelry, coinage, superconductivity and water refining. For this reason, silver is no longer known as just a precious metal, a store of value, a work of art or an industrial metal. It is all of these. Today silver is indispensable, effective all around us to boost the quality of our lives.

Author: Ruben Trevino
Article Source: EzineArticles.com
Provided by: Guest blogger

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