Currently Paper Gold is selling @ over 100 X amount mined for the year, and Silver is worse at north of 400 X the amount mined.
I'm not going to research gold in depth for this article, but Silver mining produces around 1B Troy Ounces a year currently so its about $30 B a year in new silver worldwide, a very small amount of Gross World Product of 100T, but with paper trading over 400 they turn it into a $12T churn.
Most silver is mined as a Byproduct of other mining, Gold ,Aluminum, Copper, and other . Several reports that China is buying up silver pre-refining and that isn't reported in the 1 B ounces. Will do research and confirm or deny with sauce.
Silver is the most conductive elemental metal and that is it's usefulness in Electronics, Batteries, Solar Panels. Without the conductivity of the silver where needed, all of the above would be unpractical in regards to power transfer efficiency. Over Demand for silver has been the case for a few years, but the amount of silver stockpiled up by industries, central banks, and bullion collectors, etc... Is massive.Silver is also antimicrobial and used in internal and external medicines
Another bright spot will be when silver is legal tender and in common use. A downside is lesser demand because Meh solar, and electric cars suck.
Gold @ 100 Paper per actual oz mined, which is crazy numbers high too. Gold is also used in electronics, but a lot more sparingly, its purpose is where staying shiny and untarnished matters like CPU and connector pins. They don't have to be solid because bost electricity travels along the surface of the wire. Gold is used in dentistry, but its not that big of market. Some estimates put gold at over 50% in Jewelry, but I think that is misleading. All the Central Banks are sucking it up and have been since their inception.
Gold is more steady in % of ups and downs, but silver is way more useful, Link shows ratio of mined/ price etc. of gold and silver From link:
Geologists estimate that there are approximately 19 ounces of silver for every ounce of gold in the earth’s crust, with a ratio of approximately 11.2 ounces of silver to each ounce of gold that has ever been mined. Interestingly, the silver-gold ratio in ancient Egypt was 1:1.
Current Gold silver ratio is about 85, so gold is way over valued compared to scarcity and silver's usefulness.
So what does this mean for gold and silver prices?
Well if the US Debt Clock is accurate on the plan to use Gold, Silver, and other commodities as money, it will increase demand and should put a huge dent in the silver and gold stockpiled up by whomever. Gold likely to be harder to use for small purchases, silver will be the buy groceries. get your hair cut currency .
There are all kinds of off the chain estimates, but how much silver and gold that has been mined over thousands of years? How much coin minted does the world need?
Gold was 20.63 in 1913, The first minimum wage law in Cali was introduced in 1913, setting the rate at $0.16 per hour. That 1 oz of Gold took 129 hours of Min wage Labor to buy. 2024 Gold at 2344 an oz, Cali Minimum wage is 16 an hour so an Oz of gold would take 146 hours at Cal Minimum wage, actually more hours because of all the taxes we pay in 2024. But reasonably close.
In 1913 A nice suit cost 16 bucks, a nice hat under 10, a good pair of shoes 5 bucks, lets say 1.5 Oz of gold. Today a nice suit can be had for 600, but you can pay literaly 10's of thousands. You spurge and get the 1,500 dollar suit, 250 bucks on shoes, and another, 200 bucks on a hat. So its cheaper now, but mass produced compared to taylormade.
Gold and silver is a way to keep your wealth from going blip. Not necessarily to get rich! However there seem to be a lot of factors to consider. When the fiat paper on gold, silver, and other commodities goes away Its true value will be shown. I'm optimistic that the prices will rise, but some people are coming up with crazy prices. Gold is already bouncing around its record. Silver is at 28.50 but The silver all-time high was US$48.70 per ounce, a level it reached on January 18, 1980. Demand is greater now than then, but the 400X mined sold via paper keeps the price down. So if silver was at 48 44 years ago, its reasonable to assume it may go that high again.
People predicting 5,000 silver are crazy! All the people stockpiling will start selling long before 5,000
Very cogent reply, thanks. I too think it's unrealistic to think that silver would go, and stay, at $5000/oz, there are way too many market forces to act as "confounding variables" to accurately predict its price.
In the scenario you laid out, it is QUITE interesting how the individual buying power, wages, silver and gold have maintained relative equal ground.
As to your last point, I never have considered silver as an "investment" in the traditional use of the word. I never planned to 'buy low, sell high.' It has always been put back as a secret hedge against disaster when the dollar won't buy anything. Such disasters could include anything... major earthquakes, civil war, invasion, nuclear war, total collapse of the dollar... anything that might cause the dollar to become worthless. Then and only then would the silver come out, and the 'lead' to protect it and my family.
Exactly. PM is a storage of wealth to lock in value so inflation can't keep chipping away at it.
I think you're spot on regarding "too many variables to predict price" going forward...I mean think about it.
On one hand you've got say, photovoltaics that use silver ink to silkscreen the buss bar grids onto the wafers/cells and if you've followed the market for the past 25 years, you'd know that sub $4/watt was a goal for a long time... and we've been there for a few years now (it's sub $3/w now) - So there's room for that to equalize now that China has cornered the market on production. Increasing input costs via more expensive silver would obviously make prices go up.
But then you have things like consumer electronics. If say the price per ounce went from a spot of say $30 to a spot of $300, you're now looking at an incredible increase all across the board on everything from kids video games, phones, tablets and PCs now ridiculously priced. Good video cards now hovering around say $750, would probably be like $5k - so who's going to buy that? I won't say nobody, but 95% less ...it would seriously decimate a number of companies and markets that exist right now.
The other thing that is a possibility, or really an inevitability, is the dollar going to zero, causing a world wide reset of pricing on everything, where prices are rolled back to circa 1913 numbers. This is where face value of PM minted coins could actually be the real numbers, where a one ounce silver eagle is $1, a one ounce gold buffalo is $50 (50:1 ratio BTW) and everything is reset to that "constitutional" yardstick. Of course that's not cut and dry either because a quarter is still $0.25, and the nickel enrobed POS they've been passing off lately is in no way worth 1/4 of an ounce of silver...So yeah, not everything is cut and dry.
It's really hard to say how it would all balance out... and if history is any gauge of who gets cornholed when currency shits the bed, I'd say hedge your bets and get the lube ready, because it's always the hard working citizens that have to reap the whirlwind while the rich manipulators of the hidden hand club do another rich man's trick... let's hope this time instead if a rabbit, they pull out a honey badger and it turns on them...
The cost of electronics part of this is really overinflated. Yeah, cost WOULD go up, but the thing about it is, the companies that make those products push out so much that it equalizes via economies of scale. The more of a particular product you deal in, the less the price of the "materials" matter, and the more the end price matters. This assumption also doesn't account for the fact that electronics are sold at stupid high markups.
For example, a typical iphone costs roughly $200-300 to manufacture. They then typically sell that same phone for $700-2000. That's a 330-1100% markup. They can, and will, sell at a lower profit. Some profit from a lower markup is better than no profit because no one will pay $10K for an iphone.
TL;DR: Stupid high silver prices really aren't gonna change electronic prices that much. It may go up slightly, but it's more likely that it'll just eat into the profit margin of tech companies.