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Silver is Money!

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Published : February 21st, 2012
478 words - Reading time : 1 - 1 minutes
( 4 votes, 3/5 ) , 2 commentaries
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I was very pleased today to read Eric Sprott write about how and why silver will return to use as a currency! I AGREE!

http://silverdoctors.blogspot.com/2012/02/eric-sprott-silver-will-become-currency.html

This process will start slowly, but can proceed very rapidly, once it starts. Fundamentally, it should start out with people first using silver as a form of savings. Our customers do this when they place orders for silver from us, at
www.jhmint.com.

Next, people will use silver as a unit of account (as we do in our business as a bullion dealer). If we are not growing ounces, I'm losing money in business. After all, I can get capital gains in dollar form in the silver by letting it sit and do nothing, and watching the price increase. The bullion trade, actually taking a risk, and doing work, should result in increased ounces of silver. If I let myself be deceived by "increased dollars" in the pile of bullion as the price rises, I might actually be taking losses in silver ounces, and not know it, if I'm not careful. Thus, I must account in terms of ounces of silver, and use silver as a "unit of account".

Finally, and this is the last step, people will use silver as a unit of exchange, or as a currency.

The process of silver being used as money is accelerating now, as Eric Sprott notes that a few mining companies are using Sprott's silver ETF, PSLV (which I respect and have recommended for a few years now) as a form of savings. Notably, Endeavor Silver and First Majestic, two great silver mining companies that have the right management perspective on their own product!

Eric notes the excellent investment fundamentals of silver vs. gold in the USA, most notably, that investors are pouring about equal amounts of money into silver as gold. Or actually, investors are buying slightly more dollars of silver than gold! Thus, investors are buying about 50 times as much silver ounces as gold! (In the USA). And yet, the world only mines about 11 times as much silver ounces as gold. This means that as the US dollar fails, and as US investors continue this trend of buying the precious metals in nearly equal dollar ratios, and begin to actually buy their "fair share" of the silver and gold markets, and then, finally, more than their fair share as the dollar continues to inflate, that silver prices will go up much faster than gold prices.

Here is an excellent article I wrote a few years ago on this topic, of why silver is money, even though no nation is currently using it as a medium of exchange, or currency. Please read it as a great review of the fundamentals of why you need to buy, hold, and save, in terms of silver!

Why Silver Is Money
(Phoenix Silver Summit Workshop Speech)
http://silverstockreport.com/2009/Phoenix-workshop.html

 

 

Companies Mentionned : First Majestic | Metals X |
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Jason Hommel of silverstockreport.com has written over 100 articles on why people should buy gold, and especially silver bullion and silver stocks. His free silver stock report covers more companies than any other. Jason received a B.A. in Psychology from the University of Colorado at Boulder. An adept biblical scholar, he has also written 100's of articles on theology. Aged 34, he lives in Penn Valley, CA. In response to requests for stock tips, Jason, while not giving out investment advice, offers a "look at his portfolio", which shows his top investments by rank, updated monthly.
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Latest comment posted for this article
Silver Is Better than money for our clients. Thanks for the write up Jason Sir all well observed facts. Silver video from a coin shop. http://www.youtube.com/watch?v=oHzcEq9asi8&feature=youtu.be&a Papli makes very good points seeing the ratio move pas  Read more
ash - 2/21/2012 at 8:37 PM GMT
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Silver Is Better than money for our clients. Thanks for the write up Jason Sir all well observed facts.
Silver video from a coin shop.
http://www.youtube.com/watch?v=oHzcEq9asi8&feature=youtu.be&a

Papli makes very good points seeing the ratio move pass 1:20 would a step in the right direction.

Prerequisites to silver ever becoming currency are , firstly, it must surmount the $ 50 jinx of the 80s, secondly, threaten the gold to silver ratio of 1:16 and possibly beat it, thirdly, the industrial demand should remain subdued to spare its use in coinage, fourthly, the central backs should sit back and allow this to happen in spite of all the gold they hold and fifthly, some economist should bench mark the value of the specified silver coin Vis a Vis other competing currencies not necessarily the dollar.
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