500 Silver Eagles To Purchase A Home in the Future

Mike Maloney Home 500 oz of silver

In a new video, Mike Maloney explains how a person will be able to purchase a home for 500 ounces of silver or less in the future.  I actually think silver will buy even more.  Mike believes this will occur due to home valuations falling considerably as they re-balance from the huge bubble during the past decade.

In the video, Mike shows that even though the price of silver has fallen considerably from its high in May 2011 of nearly $50, it was only a correction building a base for a much higher move in the future.

Furthermore, Mike explores the Gold-Dow Ratio will head back towards the 1:1 ratio and even surpass it by only a half of an ounce of gold buying the Dow.   As you can see from the Screenshot below, Mike points out how the volatility is getting more severe in the cycles which is setting up for a much more extreme move going forward:

Mike Maloney Gold Dow Ratio

I highly recommend the video as Mike Maloney refocuses the precious metal investor to look at the longer term.  Many gold and silver investors today have become a bit disenfranchised due to the much lower prices.

VIDEO LINK HERESilver & Gold vs Stocks & Real Estate — Where Are We In the Cycle?

Also, Mike answers some of the members questions at GoldSilver.com which are very interesting.

My Views on Gold & Silver Valuations Are Even More Bullish Than Mike’s

The only place where I may differ from Mike, is on the DEGREE OF VALUATION.  I believe gold and silver will become two of the best physical assets to own due to the global energy constraints in the future.

You see, in the past every time we had a cycle where gold and silver became more valuable to the Dow Jones or home values, we always had a growing energy supply in the future to power higher economic growth.  Indeed, this time will be different.

A great deal of real estate values will decline over-and-above their re-balancing from the decade-long bubble in this market because economic growth will fall as energy supplies decrease.  Thus, over building in all real estate sectors, Commercial, Industry & Residential will suffer from falling demand.

We will not see a return to the GOOD TIMES.  This was a one way street that is now topping.  Owning precious metals will be one of the only ways to protect wealth as most other assets will decline in value.

This is why I believe individuals will be able to purchase homes in IDEAL locations such as in smaller towns and farming areas for maybe 200-300 ounces of silver.  It takes about 10,000 ounces of silver to purchase the median priced home today.  We must remember, the collapse of the U.S. Dollar will throw the United States into a third world economy destroying most paper assets.

Thus, very few people will be holding onto physical assets that protect wealth.  That is why I believe gold and silver will become EXCELLENT INVESTMENTS rather than just the typical stores of value.

The coming ENERGY WALL is going to destroy the way we have been doing business for centuries.  Stock price valuations will evaporate.  Those who were smart enough to exchange worthless paper assets for superior physical ones will those calling the shots in the future.

Mark my words….

I will be providing more analysis and data on how energy will impact the precious metals, mining and overall economy at the SRSrocco Report.

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39 Comments on "500 Silver Eagles To Purchase A Home in the Future"

  1. I still don’t see how the Au/Ag ratio will only be 15 for the following reasons:.

    1. If it comes out of the earth (currently) at 9:1, then why wouldn’t the free market set that ratio for starters? The price ratio through history was pretty much based on how it came out of the ground. What exactly prevents this natural ratio from re-establishing when the bankers lose control?

    2. How much sliver is in the landfills? It’s basically in the BILLIONS of ounces, is it not? Humanity hasn’t thrown away BILLIONS of gold ounces. Doesn’t that skew the Au/Ag ratio away from historical norms?

    3. When in history (like pre-WW2) did you have rapidly growing industrial uses for sliver? Sure, they used it for water preservation and some other things, but not like today.. How does that not put further pressure on this ratio in silver’s favor? (By the way, how in the hell is solar PV managing to grow exponentially in THIS economy, but that’s a different topic).

    4. The cost (e.g, diesel) of pulling silver out of the ground is MUCH better for silver than for gold right now in part because it tags along with many of the other base metals. Wouldn’t one expect that advantage to ‘taper’ if or when the economy crashes and there is less overall mining activity?

  2. The ratio of price has to do with mining costs. Both metals are fluctuating at similar levels in relation to their extraction costs (silver is a little more underwater) and currently that ratio appears to be in the 40s.

    Trade the metals based on the ratio, but don’t expect to see 15/1 in my opinion as it doesn’t seem realistic. I will start moving to gold when it reaches 30/1ish range

  3. I’ve just about given up with my PM investments. I’ve been invested since about 2004 and the last 2 years have been brutal. The so called “experts” keep saying: The bottoms in! Only to have the price drop even more.

    As annoying as this correction is in PMs…theres still NOTHING* else on the planet worth investing in!

    * Well maybe farmland but how many of us can farm?

    Stocks are a no no. As are bonds. Saving cash in a bank is risky for a variety of reasons and having physical cash strored in a safe somewhere is no good either as it is losing value everyday due to inflation. I wouldn’t touch real estate.

    So the question is, what now?

    • Have you studied the previous PM cycles? If not, take the time to watch how over 90 percent of the rise occurs in the last ten percent of the bull market. EVERY Bull Market ends in irrational exuberance and unrealistic prices. The graph looks like a space ship taking off. Each new high is always followed by a low until the last part of the bull market. All bull markets last between 14 and 20 years, so we have some time left before the huge move. Listen to Jim Sinclair, David Morgan, Richard Russell, David Morgan and others from his generation as they lived through the last PM cycle. Manipulations never win in the end…the MARKET always prevails. Hang on its going to get crazy…..

      • Jason, you have to ask yourself how long do you have to invest. If it is 10+ years, stop worrying. Other considerations are: art, classic cars, guitars, emerging markets, 3D printing is growing exponentially, farming groups where you buy the land and others farm on it, new energy technology. Anything not related to paper wealth.

  4. The manipulation can go on for only so long. Don’t lose faith even if it takes many more years, which is not how the economy looks to be, physical metals will be the best source of wealth.

    The banks, institutional investors, foreign countries and a small part of the public have woken up to the fact gold and silver have always been money. I’ve never seen such a short supply of coins, 2014 coins are already being sold at premiums it wasn’t this way a few years ago, just wait, hold on to your PM.

    You won’t be disappointed.

    Aaron

  5. @Jason, don’t give up on metals just yet. The same reasons you may have been accumulating last decade still applies and then some. If PM investors remove their blinders and look at the entire horizon of things to come it’s a no brainer to simply store one’s wealth in PM…ad infinitum.

    BTW, I’m not sure what you mean by “brutal”. If you simply stack and hold, there’s no damage. It’s only when you start selling off at bad positions is when it’s painful. Seriously, why would anyone in physical sell into a fiat ever again?

    • @Antonio ” I’m not sure what you mean by “brutal”… Seriously, why would anyone in physical sell into a fiat ever again?”

      No offence man, but your comment allows for serious insight into the minds of far too many of those who hold gold. Unable to imagine the current plight of the many who -believing in the hype – went all in. Possessed of a groaning board full of tired cliches which have run out of relevance to the current circumstance of ‘marketless markets’, this species of pm cultist checks logic and empirical evidence at the door of the SOPHISTICAL SALOON, so as to be better able to float canards like ‘no brainer’ … without a hint of the unintended irony.

      Although they remain for the most part mute, there is in fact a legion of folks who made their financial plans on the basis of believing in an ever-upwards bull market in pms,.. and now suffer the double jeopardy of being forced to sell off what they instinctively know to be the best means of protecting their long term prospects. A lot of pundits out there have hurt a lot of people, with their buffoonish boosterism, berift of any commonsense cautionary caveats. But don’t exact any hubris or apologies from them, any time soon. Now THAT’s “BRUTAL!”

      And speaking of hubris, I would definitely recommend it… as an alternative to a smug re-iteration of cliched ‘wisdom’, and which runs counter to the narrative some have clearly bought into lock stock and barrel. Seeing things from another’s POV does wonders for keeping things ‘really’ real. Not everybody with the wisdom to see parts of the trail ahead is able to “keep stackin” after all the major smackin of the last couple of years. And anybody who pretends, at this point, to KNOW what that trail holds for us should be considered a either a charlatan or sock puppet.

      There will be light at the end of the tunnel. But the sides of the road will be littered will folks who couldn’t quite get there. Victims of a cabal of serial manipulators whose powers and persistence were never factored into the warm n cuddly bedtime stories of the Gold Gurus.

  6. The value of silver can not be explained by its relative scarcity versus gold. There are other metals even more scarce than gold which are less valuable than gold in the market.

    The main difference between gold and silver is that gold is mined in order to hoard it. Silver on the other hand is an important industrial metal.

    The main disadvantage of silver is that it is too cheap. One can not lift $100,000 in silver. The same amount in gold is just 4 to 5 pounds and can be lifted by everybody. Gold is portable. Silver is not easily portable.

    Perhaps it all comes down to the fact that women prefer gold jewelery to silver jewelery.

    • Robert… while silver is valued at 60/1 to gold, that ratio will decline as panicked investors try to protect wealth. Even though silver is indeed an industrial metal, it is also a monetary one as well.

      I don’t know any of the OFFICIAL MINTS producing copper Eagles, Maples, Philharmonics, Pandas, Libertads, Koala’s-Kookabura’s and etc and etc.

      I imagine the Gold-Silver ratio will decline to 10-1 or even less. So, that means you will be able to carry a great deal more silver.

      steve

    • Without silver, technology is finished.

      It is the key ingredient in ALL TECHNOLOGY…The only element mined from the earth that connects all the tech pieces to fruition.

      Here is something to think about…they took it from our money in 1963…funny how the space race kicked in, computer industry kicked off with National Semiconductor, high tech military, nuclear, tv, etc, etc…

      That is why it’s price is artificially low, so the masses are afford cheap/enslaving tech and the corps/bankers.govt can control the world with the key element the debt and death paradigm.

      They took it out of our money because they needed it for something else…that is more important to them.

      • the price suppression is a fuckin crime against humanity. Why? because the artificially low prices means its not treasured and people are throwing it around like it was copper or tin and there won’t be enough in the future.

        • Bastards have to keep the price low so that all of their mind control crap is avail to everyone.

          Web…everything they do is a crime against humanity.

          but…not for much longer.

  7. hyperinflationary bust/reset is inevitable. silver coin per capita is 1 ounce per person worldwide optimistically. in USA, silver per capita is around 1 ounce per person, but in China, it is far far less than 1 ounce, more like 0.1 ounce per person!

    so, my guess is 1 ounce of silver should be able to buy 1 square meter of apt/house not in a small town, but in a big city like shanghai, or beijing.

    so, i’m more bullish than steve.

    • Judejin… you actually gave me a good laugh. I thought I was more Bullish than Mike… and you are more Bullish than me…LOL.

      steve

  8. per capita silver holdings worldwide has dropped by 90% over the last 100 years! silver is consumed in industrial applications.

    so referring to historical ratios without taking this into account will underestimate the true value of silver.

  9. plus, today, silver is heavily concentrated in a few hands, in a few countryies while 100 years ago, it was quite evenly across th globe.

    so when the hell breaks loose, silver will be the new gold!

    • 1:1 or better judejin, that is what I am talking about…When I look at 1 oz gold and silver rounds side by side, the only difference to me is the color.

      They both come from within the earth. It takes an ass-load of energy to get and refine them.

      Then I look at silvers applications in todays world and the use of it in the destruction of humanity and all we want is at least it’s fair earthly value.

      If we live another 10 years, we will see the true value of it.

  10. So you are saying that in 2001 when silver was worth $3.50 ounce, if you spent $1,000 dollars you could have bought 285 ounces of silver and if you hold for 20 years you could buy a farm.

    I don’t see people in the future selling properties for 200-500 ounces of silver.

    It could become rare but I doubt people will pay through the teeth to get silver.

    Still it could be a good investment, but 10,000% gains against property is just to da moon talk, anyone who listened to that kind of talk over the last 5 years (over investing in buying silver + mining companies) got burn’t bad.

  11. they didn’t take silver out of monetary circulation to make way for tech boom.

    rather, the tech boom after WWII consumed so much silver that it prompted them to take silver out of monetary usage in order to hide the scarcity of silver, or the appreciation of silver, which made it a losing deal to make a silver dollar.

    when 1 ounce of silver far exceeds 1 dollar due to inventory depletion(artificial cappying by US treasury), how could they continue to make 90% silver dollar?

    it is a crime against nature and humanity. a lot of precious silver was wasted and gone forever much like rainforest was cut down to build giganic palaces only to turn the entire country into desert.

    50 year later when oil fields dry up, how can the hundreds of millions of ppl in mideast survive?

    fukushima has the potential to kill the entire pacific or northern hemisphere.

    it’s a horrible thought that most ivy leaguer in the USA are a part of the FED ponzi scheme without knowing it.

    Dean of Austrian Economics, the only economics that explain why central banking is a fraud and gold standard is a must, Murray Rothbard got his BA and PHD from columbia. But when you search for him at Columbia’s website, almost nothing will come up!

    science has made great progress over thousands of years by a few ppl, but average man’s critical thinking hasn’t made any progress. average ppl are just too dumb to tell a lie from truth. a few smart yet evil ppl manipulate their ways to the top and try to control and exploit the whole world and the sheeple. absolutely nothing can stop this from happening again and again!

    i like what ayn rand said about death – when i die, the world ends with me.

    life is meaningless, humanity is meaningless. the universe doesn’t care about how stupid the human race is.

    most ppl are born into this world to be the bottom 99.9%, to suffer, to be exploited by the lucky 0.1%.

    • The earth will not tolerate our shit much longer…I laugh when people think that they are the most important/valued thing on the planet.

      The earth could get rid of mankind in a few seconds…and she just might.

    • “which made it a losing deal to make a silver dollar. ”

      Soon it will be illegal to use silver for barter transactions and they’re going to nationalize the mines, citing a severe shortage for tech applications. just wait til one of these companies like Apple or military contractor can’t get what they need. I’m kind of surprised we’re not seeing this yet.

  12. this is the best analysis of the real chinese gold demand so far!

    everyone should read this:

    http://koosjansen.blogspot.nl/2013/09/sge-physical-delivery-equals-chinese_19.html

  13. for some reason, the website doesn’t allow me to post something that contains a outside link.

    i was trying to post a link to an excellent article on the real chinese gold demand, the best analysis so far.

    but just couldn’t post it!

    • Judejin… just to let you know, my site receives a tremendous amount of spam. I have a spam filter, to keep out spam. Most of the times, it does allow 1-2 links in a comment. For some reason, yours was put in spam. I have been getting a great deal of spam out of Asia with comments several pages long all written in Chinese.

      Maybe the spam filter marks any links from Asia as spam… I don’t know. However, your comment has been published with the link…. sorry.

      By the way… I did read the article… very interesting.

      steve

  14. koosjansen at blogspot just released an excellent analysis on SGE delivery and china’s gold demand.

    i just can’t post the link to it. tried it more than five times!

  15. Not the silver will increase the price… the Dollar and the Euro will go to ZERO…and therefore anyone should change as much paper-money as possible in “hard goods”, for example silver and gold coins… You are absolutely right!

  16. Steve
    I see above people mention investing in farmland- I would be quite hesitant as farming is both credit and energy intensive. If the shtf, who will be able to pay you to rent your land, meanwhile your tax albatross sucks the life out of you. I would like to see Steve’s comments on farms and energy.

    • dudestacker.… I know Marc Faber is big on investing in real estate and farmland. I believe he is selective, but that being said, I see commercial farmland values to decline in the next few years (2-4) due to higher energy costs on top of a declining supply.

      Shale oil in the states cannot be readily replicated in most of the world as the USA has better tight oil geology as well as the roads and infrastructure to PULL IT OFF… for a while. So, I see the shale oil boom not lasting too long.

      As the world wakes up to the popping of the great shale oil boom, things will start to get seriously problematic. This is when it will become more expensive to farm. Furthermore, when the DOLLAR finally dies, say goodbye to Govt Farm Subsides which is keeping a good percentage of our crop to be replanted as the farmers have insurance.

      Commercial farmland will not be a growth investment. At best it might hold its value for a while, but at worst, its a piece of ground that might be too expensive to plant, harvest and process.

      Energy… that’s a good question. While, I believe there will be some energy companies that will make profits and show gains in stock prices, many are being squeezed by higher costs and less profits. Also, the world economy can only afford oil at $120 or less before things fall apart. So, I stay away from energy.

      Silver Mining Stocks…. the reason why I think this sector will do a great deal better even though it may succumb to the same problems as the energy stocks (less quality reserves & higher costs), the silver miners will be producing a monetary metal that will be in high demand when the dollar dies. So they are the exception.

      Of course, my assumption is not 100%… but I base it on good ol common sense. Lastly, silver takes a fraction of the energy to produce an ounce compared to gold.

      steve

      • Of course farmland (with water access) is a fantastic investment. That’s a no-brainer.

        Giant agribusiness is a giant conversion of oil to food. Diesel, fertilizers, pesticides. As this model withers like the rest of industrial society, a higher fraction of food production will have to come from human/animal labor.

        Assuming that all the farms will not be giant FEMA slave plantations, then I think it would be wiser to own a bit of land that food can be grown on with human labor.

        • webster… unless you’re being sarcastic, commercial farmland will not be a good investment in the future. However, smaller farms and plots will be an excellent investment for those do organic farming-gardening.

          and yes, a great deal of the yuppies will be working in farms rather than making big bucks tapping on a computer.

          steve

          • yeah, small farms for small people. If too many more jobs go away I would think a significant number of people must eventually turn to growing food, no?. I already know an underemployed low wage guy who works on a small farm in exchange for food, come to think of it.

            maybe the confusion is you guys above were talking more about paper investments? I’m thinking of an investment as in buy a well that you can drink potable water out of.

    • dude…it doesn’t take much to grow your own food with minimal fuel if you prep your ground correctly…if shtf, millions will suddenly be living the “survival of the fittest”: lifestyle or be dead.

      It will be a possession is 9/10ths of the law thing…and yours to protect.

      dude…ain’t nobody gonna be worried about the tax albatross or bankers and their usury bs.

      My prediction is that they (taxman, bankers, etc.) will all be ripped out of a hole in the ground like their buddy Saddam.

  17. Good words by all!

    And perhaps we should give the nod to the other precious metals as well…At some point any recognizable precious metal will have terrific value as both a savings vehicle and a tangible asset. In order of public acceptance of this we could say gold, silver, platinum, palladium and rhodium would be about right…Almost anyone will recognize the names of the first three so they should set the order of acquisition. What the common herd will not recognize will be palladium and rhodium.

    There are commodities out there that are worth a lot by the ounce already, tantalum comes to mind, but the recognition factor will be low. I would also point out that the commodity is too rare to be messed with by the FED (too small and vital a market) and sadly, that is the factor that protects value against the criminals.

    So for the common man in the chaos of a monetary collapse, the money ‘things’ will be precious metals and probably food, labour, ammunition, and other needful items. Value will, as at present, be defined by the recognition of the greatest percentage of the population.

    Platinum is well under the radar screen for gold and silver bugs but should not IMO be ignored. It too will have its time to shine in the years ahead.

    Best,
    G.

  18. steve,
    the following comment at silverdoctors on your post is much more bullish than i.

    “The supply and demand equation from the beginning of the 20th century is completely different from what it is today. Minimum wage world wide was 1 dime of Ag per day of work (12 hours of labor). The annual world supply of silver will only cover 1 dime per year of work now! Who would give 500 oz of silver for a house? 2 or 3 ounces should buy a small farm! Multiply today’s daily min wage by 365 that will be the price of 1 silver dime. Multiply that by 14 and that should be the MINIMUM price of an ounce of silver. 7.25×365=2,646.25×14=37,047.5 FRN per ounce! This is if all silver mined is used as money. But industry takes 5/7 of all silver mined annually and may not be used as money. How might that change the equation? But, after the fiat system fails no one is going to give a damn about what the price should be in the old paper currencies. If 2 or 3 ounces won’t buy enough of the next currency to buy the house, don’t sell. It’s TPTB trying to cheat us again!!


    one acre of farmerland used to cost 11-15 dollors in 1870s in kansas!

    we have to keep in mind that per capita silver holdings worldwide is 90% less than 1870s!

  19. @judejin

    Excellent point of view…I have no trouble seeing the silver price at millions of dollars per ounce. During the Weimar event (when silver was more highly priced in German marks as a starting point)than now it was about 100 marks per ounce. In two years it was 87 TRILLION marks…As we all keep trying to communicate, it is ounces in hand, not dollar value that one should relate to….This is the hardest single concept for metal bugs to incorporate into their thinking…The public will seldom understand in time and will sell out (as they have the scrap) into a shrinking fiat environment…

    Heck, most metal bugs probably still think in terms of fiat profit…”Silver to da moon!” still means to me “fiat down the toilet”.
    FWIW,
    G.

  20. OOPS

    I meant gold, not silver at those Trillion mark level…Sorry.
    G.

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