Silver price breaks free? Passes $66/ounce?

A correspondent shared that tidbit in the headline with us here at The Price of Liberty.

Here are some thoughts, and not necessarily good ones. We’ve often discussed the relative worthlessness of the modern so-called “US dollar.” We have long supported Robert Kyosaki’s statement that gold and silver are God’s (that is, real) money. Not green pieces of paper, and not bits and bytes in some digital form.

For several centuries, though often in flux, the ratio of the value of gold to silver was 20:1. A Troy pound of silver (a pound sterling = 24 shillings: 1/2-oz silver coins) was an ounce of gold (90% as I recall). Twenty US cartwheels (silver dollar, 1-oz silver coin) equaled a 1-oz gold coin, a double eagle. Roosevelt, power-hungry and warped, messed that up, but things limped along for another 40 years. Then Nixon, and a half dozen other G-7 leaders, really messed things up. 

If the 20:1 ratio is still valid (who knows?), then an ounce of silver should be valued at about 200 or so Federal Reserve Notes (FRN) – fiat currency. And the average skilled worker, to compare to an 1880s ranch hand, would be paid 30 oz Az a month: “$”6,000 FRN (72,000 FRN per year).

And a 12-ounce can of Coca-Cola, equivalent of a 5.5-ounce bottle in 1930 selling for a nickel, would cost 10 FRN at a drug store or convenience store. Of course, with modern production, economy of scale, that should only be about 1/5 that: 2 FRN. Similar calcs can be done on other goods and services. That is why you can buy a can of coke out of a vending machine for as little as FRN 1.50 today. Or a 20-ounce bottle for FRN 2.50 or 3.00. Productivity CAN beat inflation to some degree.

But inflation is “good” for government: they want inflation, as well as creating it. Debt-based currency (not just fiat money but a particularly vicious version of it). So they build it in, and at the same time preach a false message of “Deflation is bad.”

But methinks that there is a limit to how far they can push, and we are nearing that limit. The nations of the world of 2025 have pushed the idea of debasing the currency beyond virtually anything historically. (In sheer volume if nothing else: Zimbabwe, Argentina, and Weimar Germany are the historical “pros” at such insanity.)

Those historic efforts, whether Roman Imperators or crazy democratic regimes, have always come to an end, with loads and loads of tragedy. Can we expect it to be any different today? Sooner or later, the house of tissue-paper cards will come apart. It will take a very tiny gust of wind to spread the mess. Even countries that still pretend to hold to a gold standard (Confederatio Helvetii and Norge (Switzerland and Norway)) will likely be sucked into the vortex. Misery, hunger, fear, war, and disease are the end result.

Unless some semblance of sanity can be preserved. Well, more accurately, reestablished.

We’ve shared our thoughts. What are your thoughts?

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