When the worldwide Silver spot price is calculated, it is a complex equation with several factors playing into the overall equation. The entities with the most power over the Silver spot price do not generally exchange physical Precious Metals but instead use derivative commodity contracts to determine the price of physical Silver. Silver is traded virtually 24 hours a day through many exchanges such as Chicago, Hong Kong, London, New York and Zurich. The Silver spot price is then calculated using the near-term, or the nearest contract with the most volume, futures contract prices
The most important exchange in determining the spot price of Silver is the COMEX, a branch of the Chicago Mercantile Exchange. COMEX is the most influential trading market for Silver futures contracts and consequently has the greatest impact on Silver’s worldwide fiat currency spot price. Futures contracts for Silver on the COMEX represent the projected price of 5,000 ounces of Silver on a hypothetical future delivery date. However, most futures contracts are never settled in Physical Silver, just cash. Hundreds of ounces of “on-paper” Silver are traded on the COMEX for every single ounce of Physical Silver that is ultimately delivered in the real world.
https://learn.apmex.com/investing-guide/silver/how-is-the-silver-spot-price-set/
Now hold on just a minute…
The whole price of silver isn’t based on anything real or fixed, which we knew, because value is subjective, but to go from that to “yeah this one place in Chicago says what the price is based purely off hypotheticals” is neat.
Unlike the stock market, which is supposedly (but not actually) price set off the last trade, the silver market spot price is fixed based not off how easy or hard it is to get actual silver, but based off a “guess” by the Chicago Mercantile Exchange.
“Is anything these people do not founded in fraud?”
(No.)
How crazy is it that when anyone walks into a store and goes to buy silver, the price that’s asked is there not by any value judgment of the buyer or seller, but because some guy in Chicago says he thinks silver might be worth $X on MM/DD/YYYY.
The fact that they’re able to fix the price through futures contracts screams that they’re playing some game in the present to buy or sell based off the current price, literally knowing what they’re going to set the price to at some future date. RICO can’t come fast enough. They literally know what the price is going to be, because they’re actively setting it in the present with “futures” contracts. That’s nuts.
So... given all the above, does anyone have a clue what the real price of 1 troy ounce of silver is? ... or SHOULD be? I suspect that the "real" price would be to remove all the manipulation and directives from COMEX, calculate in terms of real buying power as compared with a dollar or pound or some known currency, and come up with an approximation of the true value of an oz of silver. Has anyone been able to do that?
Generally speaking, I see most people agree that the "real" price of silver should currently be around $5K based on actual physical silver reserves. Silver is odd, in that we mine it at a deficit. We use more of it every year that we pull out of the ground, so over the last 70-ish years since the technological revolution that resulted in modern computers, we've actually LOST silver reserves, meaning it should be worth more than it was in the early 1900s like some are saying.
But I digress, there's no real concrete answer. I'd give you some links, but I have literally dozens of them book marked and it'd take me forever to go through all my bookmarks to find the relevant ones. My best advice is to just research it yourself by looking up things like "what's the real price of silver" or "What SHOULD silver be valued at".
That's what I typically do, and you'll find answers ranging from $2K all the way up to $50K an ounce. The former mostly being based on things like the debt clock silver ratio, and the latter being a speculative guess by some industry experts (Actual precious metal company executives, not like, Forbes morons), based on previous examples like the silver run in the 80s with the Hunt brothers and taking those ratios and numbers that were true back then and applying them to todays modern market.
Keep in mind, the larger numbers tend to account for factors like FOMO, and "ape behavior", which in all honesty probably will happen. The same people who buy bitcoin and crypto religiously will no doubt jump all over the silver ship when it starts taking off, thus driving it's value temporarily FAR higher than it's actual legitimate value as everyone and their brother with a few thousand dollars will want to get in on it in hopes of getting rich.
But just like with crypto, that'll eventually crash back down to a more reasonable level after people hit their ceiling of what they're willing to spend.
TL;DR: Should be roughly $2-5K right now, will most likely be worth AT LEAST that much, but will likely be worth more for a short period of time as everyone and their brother flocks to the newest "moon asset" and drives up the price through panic and desperation
FYI, this isn't financial advice, do everything at your own discretion. I'm just answering your question the best I can.
Fascinating, thanks.
I’m expecting $FRN 10-12K per Oz, and that’s just when the certificates get unrolled, without the FRN actually devaluing to oblivion.
This thread didn’t get near as much attention as I thought it would. It seems like a big deal to me, given that we are talking about the valuation mechanism of our actual, lawful, constitutional money.
$5k seems like a safe bet. $50k isn’t unreasonable. Plan on the low side.
A reasonable estimate is somewhere between the inflation adjusted price of commodities in 1900 compared to now, and the price of an ounce of silver times the average number of outstanding contracts per physical ounce. (“Paper to Silver Ratio” on usdebtclock.org - currently 403x)
I trend closer to the latter, but the former should be a safe baseline. 75% of the gap seems like a safe bet. There’s no telling what it ends up being though, as market forces aren’t currently acting on it.
Hmmm.... cogent reply, but I'm still wondering about a concrete value. After years of casual stacking I've ended up with a moderate pile of physical silver. I will never sell it or see it as an 'investment'.... but it's a hedge against currency collapse.
There is no concrete reply. Value is subjective. The best we can do is guess.
Supposedly, that’s what they’re doing, except they’re actually doing market manipulation so they can know the price, because they’re setting it.
I think the range I named is a pretty reasonable assessment of where price should end up, and that’s in current FRN valuations.
Once things flip, we should end up up trading assets for assets, not dictations (“fiat”) for assets.
https://www.reference.com/history-geography/much-did-things-cost-1900-9e40559daa251473
I agree with MOST of your analysis (very Respectfully). My only divergent opinion (and it is only my opinion) is that once true price discovery functions are triggered, when the manipulation machines break down, the logical baseline you theorized (1900 to current-adjusted for aggregate asset appreciation) will absolutely be applied in the initial price discoveries, BUT I expect we will see a PREMIUM to THAT price. How big of a premium? Not sure. If history repeats itself, and the currency degradation is the impetus for the free market parole for precious metals, precious metals will take on the defacto role of physical MONEY, as well as industrial metal. When that happens, the market mechanics of supply and demand will kick-in, as well as the human penchant for behaving irrationally when markets “go rogue”. The perfect storm for gold and silver.
I made a separate comment explaining my logic … that said, I believe that Bitcoins price action since 2016 will be damned close to what we should see. Absolutely NOT the same time frame, but much more condensed, with less downside actions. I know this is gonna cause eye rolls so exaggerated I can hear them 😂 … but I am 100% convinced we will see 50x the 2015-2018 average ‘pre-covid price’ of about $14oz. Yes. That is not unreasonable to expect, if you understand free market mechanics and market behaviors during times of economic distress. I believe $750-$1150oz when the damn breaks is absolutely in the realm of possibility. When will it happen … cant say, my track record of ‘whens’ is abysmal. My friends and family will verify this is an immutable fact - I am never wrong about the what, and I have NEVER been right about the when 😂😂😂
Well I sincerely hope you're right, what I'm sitting on (after years of casual stacking) could amount to a hefty amount.
I hope you make generational wealth. I know I will.
😄