How High Will Silver’s Value Increase Compared To Gold During The Next Crash? Check Out These Charts

Many investors believe the value of silver will surge much higher in percentage terms compared to gold during the next financial and economic crash.  I happen to belong to that savvy group of silver investors, and for good reason.  If we look at the charts below, the data proves that silver is certainly the more undervalued precious metal asset.  Thus, it will likely make silver one of the best investment strategies of a lifetime.

While some readers may say that this is just more hype, the fundamentals provide us a pretty clear picture.  That is, if we are able to understand the entire system and how things are likely to unfold.

Before I post these two charts, I want to say a few words about several emails I have received from my readers over the past week.  After I wrote the article, UNLOCKING GOLD’S TRUE VALUE: The Economic Code – Finally Revealed, some readers finally understood that ENERGY is the critical factor in providing value to most goods and services in the world.

When they find out that ENERGY is everything, the LIGHT-BULBS go off and they finally get the vital importance.  It took me years of research before it made sense to me.  Still, the majority of my readers likely just skip over it and continue to see energy as just a part of the economy.

Even mainstream analysts separate the Energy Sector from the Health Care Sector, the Manufacturing Sector or even the Service Industry… so on and so forth.  They look at energy as just a mere segment of the market.  For some strange reason, they believe the Health Care, Manufacturing and Service sectors are powered by Fairies or Elves.  I can assure you, all sectors of the market are run by energy.  Take energy away, and Apple’s products and stock price would get flushed down the toilet.

When precious metals investors finally realize that ENERGY is the KEY to everything, they will no longer worry about gold and silver manipulation, the Federal Reserve FOMC meetings, the One World Government or dozens of other distractions. 

I continue to read and hear about the ONE WORLD GOVERNMENT and how Globalism is going to rule the world.  I would like to kindly remind those reading this article that globalism was a short-term arrangement only possible due to cheap and abundant oil production.  As U.S. and global oil production heads south in earnest over the next 5-10 years, globalism will experience the same fate as the Dinosaur.

Conspiracy theory obsessed Americans in the future will no longer worry about the Global Elite and their One World Currency (for example), but rather if their neighbor is stealing their vegetables from their garden at night.  Basically, fear or worry will move away from GRAND CONSPIRACIES to more practical day-to-day local or regional living situations.

Mark my words on this….

Anyhow, I am glad some readers are finally connecting the dots that energy is the key to everything.

That being said, there has been a lot of chatter over the years in the precious metals community that there is more gold investment in the world than silver.  I actually have stated this a few times myself.  So, I thought it would be a good idea to check this out and to see if it was true.

World Official Gold vs Silver Investment Holdings

If we go by the data from GFMS (Gold Fields Mineral Service), which is now apart of the Thomson Reuters conglomerate, and the CPM Group, total world official gold and silver investment holdings are a lot closer in range than I originally thought.

NOTE:  I decided to use the data from the CPM Group’s 2016 Silver Yearbook because they are the only source that provides an estimated total for silver.

Of course, this data has to be taken with a grain of salt, but it does at least provide us with a decent estimate.

The chart below shows that the total “Official” world investment holdings of gold are 2.25 billion oz versus 2.54 billion oz for silver:

Gold-vs-Silver-Investment-&-Central-Bank-Holdings

So, if we go by the “Official sources”, there is a wee bit more silver investment inventories in the world than gold.  To understand how I arrived at these figures, let’s start with the following table:

World-Gold-Holdings-2011

This was found on Wikipedia, but the source was published by the USGS based on data from the World Gold Council.  Wikipedia also provided updated Central Bank gold holdings as of June 2016.  I then added the additional 5,000 tonnes of gold bar and coin demand from 2012-2015.  Basically, total gold investment in the world is approximately 70,000 metric tons (mt).  This translates to a cool 2.25 billion oz.

According to the CPM Group’s 2016 Silver Yearbook, they estimate total silver bar and coin inventories in the world at 2,539,000,000 oz or 2.54 billion oz.  They break it down to 1.58 billion in silver coins and 961 million oz in silver bars.  This figure looks about right to me, but of course, it’s an estimate.  There could be more silver bullion held privately that we don’t know about, but that could also be true for gold.

Regardless, there is about 290 million oz more silver investment in the world than gold.  Thus, according to these official sources, there is 13% more silver investment inventories than gold.  However, that is not all that much when we compare the value of both.

I arrived at the total values in the chart above by multiplying a gold price of $1,350 and silver price of $20 by their total respective inventories.  As we can see, the total value of gold investment inventories equals $3 trillion versus a measly $50.8 billion in silver.  

So, when the trillions of Dollars of Fed liquidity no longer works, as the monetary crack addicted economy finally crashes, investors fleeing stocks and bonds will finally find out just how little silver investment there is in the world.  The funneling of massive funds into silver will drive up the value much higher than gold.  Thus, $10 billion dollars flowing into the world gold investment market will push the total value up one-third of a percent (0.3%), while that same $10 billion into silver will push up the total value by 16%.  That is, if the price of silver remained the same.

However, there is one more important factor we need to address here.  What about Central Bank gold and silver holdings??  According to the two official sources quoted above, Central Banks hold one hell of a lot more gold than silver (no surprise here):

Gold-vs-Silver-Official-Central-Bank-Holdings

If we trust the estimates by the official sources, Central Banks hold a massive 1+ billion oz of gold compared to 46.8 million oz of silver.  Roughly, Central Banks hold 22 times more gold than silver.  The U.S. Treasury and other (mostly) Western Central Banks unloaded their massive silver stockpiles 50+ years ago, when they (mistakenly) realized silver was becoming way too valuable to be used as a currency and that it’s citizens wouldn’t mind using base metal slugs for trade.

OKAY… Clarification Of the World Gold & Silver Inventories Listed Above & A Few Words For The Grand Conspiracy Skeptics

Let me start with a few words for the Grand Conspiracy Skeptics.  I would imagine many readers rolled their eyes at the information above because “THEY KNOW BETTER.”  Well, maybe they do.  For example, some analysts are stating that the Chinese Govt holds upwards of 30,000 mt of gold… much higher than the official figure.  Furthermore, others believe the U.S. Treasury holds very little of their supposed 8,133 mt of gold reserves.

Sure, this may be true, but this gold had to come from existing investment stocks.  If the Chinese do have a lot more gold, maybe a good portion came from U.S. Treasury stocks or from private investors who still to this day, don’t realize their allocated or unallocated gold was sold or leased right out from underneath them.  This would not change the overall figure of physical gold investment, rather it only changes the amount individual Central Banks or private investors own.

Now, for those individuals who believe in the Grand Conspiracies put forth by Bix Weir and other assorted Gadflies (really don’t mean to disrespectful here) that the world has more like 1-2 million tons of gold floating around, there isn’t much I can say to change your opinion.  You are likely to take that PEARL of a lousy conspiracy to the grave with you.

This is due to the seemingly religious indoctrination of lousy conspiracies such as Yamashita’s gold, and the massive Marcos gold hoard in the Philippines.  I have looked over the documentation and I could see why some folks would believe these fanciful stories.  However, if we go by science, we find that it was impossible to mine that much gold unless we had assistance from space Aliens from galaxies far, far away.

World Gold Production 1493-2014 #2

According to the detailed data put out by the U.S. Bureau of Mines 1930 report and the USGS, the overwhelming majority of cumulative world gold production came since 1900.  Why?  Because we tapped into massive oil reserves containing thousands of energy slaves in each barrel.  As global oil production increased exponentially, so did the mining of gold, silver and just about every other metal.  No magic here… just real science if we allow our brains to absorb facts rather than lousy conspiracy gossip.

While the figures in the chart are not 100% accurate, I would suggest a 10-20% error of accuracy would be reasonable to assume.  Thus, total world gold production of 166,640 mt could be closer to 200,000 mt.  However, there is no way the world is hiding 1-2 million metric tons of gold in some cellar, basement or underground Nazi bunker.

While conspiracies do take place in our world, not everything is a conspiracy.  If we use some logic and reasoning, many lousy conspiracies should be put to DEATH once and for all.  Unfortunately, writing about real and lousy conspiracies is a good way to make a living selling newsletters.  While I have no reservation with an individual making a BUCK (Dollar) discussing more viable conspiracies, I find the peddling of lousy conspiracies distracts people from the real problems at hand.

Okay, enough about gold conspiracies… I could go on forever about this subject matter.  Let’s switch to looking at the actual data shown again in this table:

World-Gold-Holdings-2011

You will notice how much gold is estimated to be held in jewelry (includes religious objects and artwork).  There’s actually more gold held in this category than in both investment and Central Bank holdings.  While jewelry is not an actual investment inventory, a lot of that gold jewelry could come back into the market if the price of gold started to head towards $5-$10,000.

Matter-a-fact, a lot more gold jewelry makes its way back into the market each year because the selling or pawning of gold is worth the owners time and effort compared to silver jewelry:

Global-Gold-Recycled-Jewelry-Supply-vs-Demand-2015

Global-Silver-Recycled-Jewelry-Supply-vs-Demand-2015

According to the sources shown at the bottom of the chart, there was nearly two times more gold jewelry sold back into the market as scrap supply in 2015 (1,000 mt) versus silver jewelry (551 mt).   So, a good percentage of the gold jewelry held by citizens throughout the world could come back into the market if the price or value of gold surged higher.

This would also be true for silver.  However, a lot of silver that was made into jewelry over the years may have been discarded into the thousands upon thousands of landfills in the world due to its insignificant value.  When Americans get into a CLEAN UP MODE at their house, they will likely throw out silver jewelry because it’s just a part of the staggering amount of junk and clutter that accumulates over the years.

On the other hand, if they came across an old gold ring, then of course they would consider taking that down to the pawn shop so they could head to Las Vegas for the weekend for a much needed rest from the RAT RACE.

Regardless, most of the available gold on the planet is still held by citizens throughout the world.  However, upwards of half of the silver is likely gone forever as industrial waste in landfills or still being used in electrical functions in the hundreds of millions of homes, cars and electronics throughout the world.  Very little of this silver will ever be recycled.

The Value Of Silver Will Surge Compared To Gold In The Future

The value of silver will surge much higher relative to gold in the future.  This is due to several factors:

  1. Investment funds moving into silver will push its value up much higher than gold in percentage terms due to its low price.
  2. While there isn’t more gold investment in the world than silver (according to official sources), silver inventories only outweigh gold by 13%.  This is insignificant when we consider its low price or value.
  3. There is 22 times more gold held by Central Banks than silver.  When the mad scramble to own precious metals finally takes place… don’t count on Central Banks to help much with silver supply.
  4. The public will more than likely move into silver rather than gold due to its affordability.  Thus, the masses will have a much more profound impact on the price (or value) of silver than gold

There are several more factors I could list, but these are by far the most important.  Furthermore, I could write several additional articles just on clarifying the official figures in more detail… but it’s more important to understand the overall trend.

Precious metals will be the go to assets due to their ability to store ECONOMIC ENERGY.  The current $250 trillion in global stocks, bonds, real estate and insurance funds are not stores of economic energy… rather they are economic energy IOU’s.  These energy IOU’s worked find (sort of) during the rise of cheap energy production.  However, they will collapse as the opposite takes place.

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81 Comments on "How High Will Silver’s Value Increase Compared To Gold During The Next Crash? Check Out These Charts"

  1. Steve,

    Thanks for answering a question I have been wondering about for a couple of years.

    With those numbers, maybe the guys that are predicting a silver to gold ratio of 5/1 aren’t that far off.

    SteveW

  2. Great article! I definitely agree, but the timing could be now and until after I die!

    The old saying goes that the market remain irrational longer than you can remain solvent.

    Same applies here, except that the price can remain sideways from government subsidizing the price via paper markets.

    So going all in could result in flat or negative returns for a while to come!

  3. “Many investors believe the value of silver will surge much higher in percentage terms than gold during the next financial and economic crash. I happen to belong to that savvy group of silver investors, and for good reason.”

    at the beginning of the year you said silver would reach $50. I’m still tracking that. doesn’t look good.

    • gman,

      While I made silly price trend forecasts 3-4 years ago, I no longer do that. It’s silly to put a number out there.

      steve

        • gman,

          Please tell me you are not one of those “Twitter Readers” who only read a title or a few sentences. Did you read this under the FUTURE MONEY TRENDS title:

          Future Money Trends believes silver could break $50 in 2016 due to three reasons. They put together this short video detailing the reasons why the market could see a breakout in the silver price. Will it happen? That’s a good question.

          While I believe the value of silver will surge in the future, it’s hard to determine the timing of this event.

          gman, again that was a FUTURE MONEY TRENDS title and video in which I was questioning their call of $50 silver. It helps to read the article, ya know.

          steve

          • I recently read an article where Nixon was maligned for getting the USA off the Gold standard. Roosevelt actually got us off the Gold Standard in 1933, however, any FOREIGN NATIONS wishing to redeem our Fiat currency for Gold were appeased.

            In 1971 Nixon actually did us a great favor ending redemption of our Fiat currency for payment in Gold to Foreign Nations. This resulting in a “Free Market” for gold.

          • https://srsroccoreport.com/making-the-case-for-12000-gold-360-silver/

            “That being said, I actually believe the future values of gold and silver could be even more silly and stupid than $12,000 or $360.”

            heh. you might want to stick with $50 this year. $18.56 right now ….

          • gman,

            Yes, I did state those figures based on past Ratios, but there is no D-A-T-E-S. Sure, I’d imagine we are going to see really SILLY prices or values when the financial and economic system crash. When they do rise to high values compared to most other increasingly worthless assets, you make sure to save a nice comment… LOL.

            steve

          • “When they do rise to high values compared to most other increasingly worthless assets, you make sure to save a nice comment”

            I’ll try. but the internet likely will be black by then. see, it’s not that pm’s rise to high values, but that fiat debt currency falls to low values. this will cause failure in existing markets tied to that fiat debt currency. by the time gold/silver rises to 12000/360 you’ll never know, because no-one will be able to post that fact.

          • @gman. over the past century gold rose from the 20ies to almost 2000 and we’re still talking; similarly silver went from its lows around 50 cents (1932) to 50, and the world still turns (and people do not get it). So I see no reason why the metals could not rise again 50 or 100 fold (250 -> 12500; 5 -> 500) or even beyond.

            Holding metals are like a put option against the guaranteed debasement of ALL fiat currencies (and dwindling energy supplies). Time will tell, but do not blame others for your own decisions or their calls – some good, some bad. Some people depend on a living by selling metals (or owning mines), so it is in their interest to always be bullish, even if the official price is heading for the crappers… I believe we are in a long-term bull market fuelled by the debasement of all fiat and (hyper)inflation of debt as shown by a third of all debt trading at negative interest rates. How long they can continue this inflation path is anyone’s guess, but when (not if) their scheme blows up, either hyperinflation or a complete debt implosion will ensue and a new monetary system will be born. To survive this transition one would want to hold some hard assets, as new currencies will be issued. And Steve makes the case that ENERGY is the factor that assures that this will happen. Trading in and out of fizzical PMs NOW is a fools errand IMHO. If one want’s to gamble on PM “prices” short- and mid-term, then the miners are a good battling ground for short-term speculative bets up AND down (e.g. NUGT vs DUST – welcome to the derivatives casino…). GLTU+A

      • The Silver/Gold ratio historically was 16/1 as reflected in our coinage prior to 1933. Actual extraction ratios historically were 14-15/1 until recently. As a result of Silver dropping under $10./oz in 1990 and below $5./oz in 2002, Silver production worldwide has fallen off and has been mostly a byproduct of Bauxite, Copper, Zinc and Gold mining. The result being an extraction ratio today of 9-10/1.

        This ratio may get closer to the historical 15/1 if in the next 5-8 years Silver moves over $100./oz and becomes more profitable to mine. Keep in mind it takes several years to go from exploration to production or to reopen mines.

        At present the 70/1 ratio is very appealing to Silver buffs as it represents a nearly 4 1/2 times undervaluation historically or about 7 times current extraction ratios.

        Keep in ming carrying around a half ounce or ounce Gold coin/bar may be nice, however, trying to buy something for under $50. will present many “change” problems. My average grocery purchase is around $60. Will the grocery clerk have change for my $700. half ounce gold bar/coin? Probably not as many stores today frown on accepting $100. bill for a $10. purchase. In many stores I see signs “No Bills Over $20. Accepted”

        Silver is the only answer for 95% of everyday transactions when projecting a monetary collapse or a stock market disaster.

        Our first official coinage of 1793 was COPPER in the form of Half Cents and Cent coinage. (The Half Cent was needed to make change for the Spanish 1 Real coin valued at twelve and a half cents) It wasn’t until 1794 that Silver coins were issued and not until 1795 did gold coins came into circulation to replace the Continental Paper Currency (Fiat) that was severely devalued (inflated) against the Spanish and British Silver and Gold coinage (hard money) circulating in our original 13 states.

        Today there are over 300 “Societies” in the Western States using Copper Coins produced by private mints to conduct everyday trade. Utah and Oklahoma have made it legal to use Silver and Gold as “Currency”.

        So, back to the drawing board: Copper, Silver and Gold may once again be our “Specie”. HARD Money!

    • I think it’s sad, that so many people still try to measure the worth of gold and silver in currencys.

      THEY ARE COMPETING THINGS! You CAN’T compare competing things!!
      The gain of one is the loss of the other ( in worth not numbers). . . always.

      I love this site but articles like “the case for 12000$ gold and blabla.. . silver ” spread the illusion of beeing rich when gold and silver hit that price, but in fact it’s always just the worth of the currency going down!
      You will be millionare because of inflation nothing else.
      It might be that the Dollar-worth can be taken advantage of (a view percentages, for a short time) until it equaled out completly. . .
      You might cash in your selfmade silver-millions . .but short time after, your bag of cash buys you a bread and a used sock LIKE HISTORY TEACHES US!
      I live in germany . . we still have bills with Billions of Reichsmark printed on in our desks to remember. Do you really want to throw away your longtime store of wealth for something printed out in a stormy economic condition? Dont cash in!!! Never! So don’t waste time to think in currency!

      Why dont you skip the part with converting it to currencys??
      In times of desperation you go up to a house owner of a house you like and just ask him if he would like to sell it for 300 Ounces of Silver. After a view trys someone will be delighted because he wants to try his luck in another country and sell his house for something with real stored wealth to transport and start again on another location. He cant take dollars . . or a ton of bread . .

      Or you go up to a owner of industrial buildings and make him an offer of a view hundered ounces of Silver. He just wants to live and throw away his business in the crash.. . it’s just dead weight and he wants to be with his family.
      After the collapse you own a huge production facility in a bullish world to start business or you wreck it and sell the ground for millions of the new currency. . . to THEN buy what you really want!

      In short terms:
      Compare gold and silver only with other commoditys. Like Houseprices/Silver . .
      Because they store workingpower like silver and gold themselfs..

      Currencys blur the real worth out.
      Trade a store of wealth agains a store of wealth only!!

  4. If you can’t grow cheap energy and you can’t conserve energy…what’s a government to do? How about getting rid of the excess energy consumer? So that those left behind can enjoy their lifestyles with a lot less road traffic. Something to consider. I’m sure there are a couple of Washington think tanks mulling over these ideas and trying to cull the undeserving while preserving the finer things polite society has to offer.

    • petedivine,

      Wittingly or otherwise, TPTB have created already created a system that is destined to result in massive mayhem and the “culling” of billions of the poor and underprivileged. What will bite them in the ass, is that without the working class, nothing will work and there will be none of the ” finer things polite society has to offer.”

      SteveW

      • You certainly have a point. However, oil and cheap energy are coming to the grand finale which will face their hand. I can see those in the know retreating to their enclaves of the blessed…. Fudge the rest of humanity. These people believe in preserving the habitat… Just not humanity. It limits how their planning. However, I am not in the know. They could decide that the Earth will heal given time and limited destruction by mankind.

        • petedivine,

          I agree and the earth WILL heal it self, but the resources are gone forever. No more oil, gold, silver, copper, megamachines, medicines and on and on. The rape and pillage of the planet is OVER. What is left of man will have to re-evolve to a not-so-new way of living. A kinder, gentler way of living in harmony with the environment without the excesses provided by cheap oil and maniacal governments based on it.

          SteveW

  5. It is right, that precious metals are the only safe and real store for working-power.
    But like we see today. It is not about what is actual reality!
    It is about what the person on the street thinks is reality.

    The IMF will offer the world a Systemic-restart with a brandnew (selfprinted) currency seconds after the crash.
    Prepared, stored and ready to be spread.
    And it all starts over again. People are stupid and easily scared.
    The IMF will say “dear world, choose between WW3 and a new worldwide currency ( including the termination of every debt for every person in the world)”
    People will welcome this revolution of a new financial system like a dry sponge water.
    They will cheer like crazy. Because it is something they know just better, newer.
    Like a abused girl chooses abusive men only.

    People have no idea what gold is . . . and why it should be valued higher. They dont see a store of workenergy. They really just see paper with numbers on it and the time is over to meke people smart about sound money.

    It’ll .be . again . . a stupid empty currency withut any worth, but people will worship it as the savior of the world.

    The elite wont be hurt by a reset, because they are finished. They milked the society 200 years to aquire the assets of the world. They have the gold, the silber and own every inch of the earth. So what . . time to start again for another 200years of stealing.

    I think the only gain you can make is trading your silver and gold fast against a panicking persons house in the middle of the impending collapse or you loose the complete worth to the new nextdoor-idiots-currency if you speculate on a new goldbased insane currency or even a world where gold and silver are cash. . .

    Keep the houseprices against gold and silver in sight. Thats all. And dont get to risky. A house is a house.
    One day to much and the gold-silver bubble bursts completly.

  6. BIG JIM IRON WORKER | August 29, 2016 at 5:41 pm | Reply

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    I continued to state that when I
    wore Timberlands my feet would STINK>>>>BAD. He proceeded to
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    stated.

    He continued to explain that the pigs hormones mix with
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    smells like garbage! My feet don’t smell like that. He stated that pig
    and human hormones don’t mix.

    Cow leather boots it always smells like leather until they have served their useful life.

    Corporate boot makers have descended into making you pay premium money for pigs feet!

    Pay the extra money for well designed stitched soles (not liquid nail glued) and long lasting leather workwear.

    You also employ your fellow American!

  7. My friend…I did not even read your article. Knowing its from you I know its BULLISH ALL the way through

    • austin,

      If you do not want to be a positive contributor to this community then fuck off and die.

      Spread your vituperous bullshit somewhere else.

      SteveW

      • SteveW,

        While its nice to see a passionate debate here, let’s try to keep it more professional.

        steve

        • Steve,

          I, too, love a spirited debate on almost any issue, I, and I am sure, the rest of your readers don’t want, nor will tolerate ignorant trolls taking up the space.

          Your tolerance is remarkable, even admirable but the rest of us may not be so forgiving when there are serious issues at stake.

          SteveW

          • SteveW,

            I totally understand where you are going. However, I received a very positive comment from what I believe to be a FOFOA gold follower (I am assuming here). A few articles ago, he left a comment stating the following (not exact):

            “Steve… I thought when I first read your work, you were insane. Now I understand the importance of your research.”

            Again, I am trying to remember what was written, but that was the jest of it. So, by being patient with readers who take more time to understand the ENERGY, many finally figure it out.

            This is also true for our new guest, Austin Ragz. I would imagine if understood the energy, he would understand why I am consistently positive about owning physical gold and silver.

            steve

    • austin,

      Good for you. Thanks for the well thought-out response.

      steve

  8. We currently have the luxury of pointing to the cause as being the globalists and their quest for globalism. The results of their fruits will be our looking towards day-to-day struggles. Just my bloated opinion. Keep your eye on the ball. The elitists, the bloodlines, are the key to freedom. They are, always have been and probably always will be the main problem. Not only would they admit this themselves, but they are damned proud of it, again … in my bloated opinion.

    • Useless Eater,

      I never stated the Global Elite are not a problem. I agree, they have been. However, the rapidly falling EROI on top of declining U.S. and Global Oil Production will destroy wealth indiscriminately. Sure, some wealthy may do better than others… but the majority will LOSE a great deal.

      steve

      • I concur in general. Just attempting to keep the pressure where I think it should be. Too many lifetime’s worth of work must be honored. Even as I am dumpster diving for my last meal, I predict that I will still be laying all of the blame on those who think they rule all. But, that is just me. I have had plenty of practice and, frankly, it just comes naturally to me. Grab and eat a 3-day-old French fry, eat it and give the man the finger. Just seems natural. Someday, I hope y’all will see the world through my eyes. Not a whole lot of gray area in my vision. No voting for the lesser of thousands of evils. Not bewildered by the acceptable level of evil. Knowing contracts and consent (almost) to a fault. No rose colored glasses. Very black and very white. Very little gray area.
        Thanks for replying. Much more comforting than the usual marginalization I usually get.

  9. Just because Bix Weir has imaginary conversations with his god, fully believes aliens are behind everything , thinks Bitcoin will save the world and has sing-a-longs about silver doesn’t make him a lunatic, does it? Should I not buy his books, trinkets and conspiracy newsletter? LOL Well I guess you can’t shame the man for capitalizing on mass mental incapacity.

  10. I’ve got some gold and some silver. Just doing a little math is why I wish I had bought less gold and more silver. If both ever get back to their old highs, gold will gain about 45% while silver gains about 155%.

    Al

  11. seems like a big question for the novice is how should you buy silver?

    • JohnW,

      Find a local Stamp and Coin dealer. Go in and buy Silver Eagles. If he charges you more than $3/eagle premium, find another local dealer or buy online at sdbullion.com ($2,29 premium/eagle but there is a record). The reason to buy in person from a local dealer is you buy with cash and NO SALES RECORD. Then stash/store it yourself. If there is a record Uncle Sam MAY, at some point come and confiscate it. Don’t buy any pm’s that someone else will store for you, if you don’t hold it in your own hand you don’t really own it..

      Also buy pre 1964 US silver coins, dimes and quarters and half dollars, if you can find them, but don’t pay more than $1.50 over spot. Each $100.00 of pre 64 US silver coins is 90% pure silver which has 7.15 ounces of silver (forget about the copper) and will be extremely useful when things settle out after TSHTF because everyone recognizes them and there will be no question of their true value unlike fractional silver rounds which maybe counterfeit.

      Buy as much as you can afford as quickly as you can – the door is about to close.

      I hope you have a whole lot of other preps, food, guns, ammo, a way to guarantee clean water, etc. Gold and silver won’t protect you or feed and water you until the crises is over and life starts again.

      Buy for cash and stash.

      SteveW

    • Companies like APMX, Silvertowne, and local Coin Shops are good sources for Silver in most all forms.

      If you are considering purchasing SLV or GLD ETF’s, do a GOOGLE search on them and read the PROSPECTUS!!! Pay particular attention to pages 9-11 as this confirms the ETF’s do NOT have control of PHYSICAL Metals supposedly backing their ETF’s. Remember all PAPER holdings of ANYTHING are IOU’s!

      If you buy Silver, take PHYSICAL DELIVERY, not promises or IOU’s.

      Do a Google search on COIN SHOWS in your area. They are mostly on weekends and you usually will find 30 or more dealers competing against each other for business in the same room allowing you compare and choose the best deals. Major shows in Long Beach & Baltimore (each 3 times a year) feature 400-600 dealers. Admission is nominal at Long Beach and FREE at Balto.

      My recommendations are US Silver Eagles, carrying a premium of about $3. over spot, 1,5,10 ounce bars usually with a $1.50 premium over spot ( 100oz bars at about 90¢ over) or PRE-1965 Dimes, Quarters and Half Dollars about $1.00 over spot. Half Dollars usually carry a higher premium (25-50¢) more than Dimes or Quarters.

      If we see a nice run on Silver, say $30-$35./oz expect one of two things to happen. The premiums will come down (about 50% less than the above) as hoarders sell into a rising market and there is a glut of Silver. OR, hoarders will refuse to sell thinking the “run” will not stop until $60-100 is reached and premiums for Physical Silver will double or triple.

      I don’t have a crystal ball, however, over the past 9 years, I have seen BOTH happen!

      Someday soon you will not care about how much you paid for your PHYSICAL Silver, but how much you have!

    • JohnW,

      I see some members gave you some advice… all good advice. However, the best advice is to call up several dealers and ask their COMMISSION. Furthermore, most dealers will change you a commission to sell you metal. They don’t tell you this, they just lower the price they pay you.

      I would recommend you give Tom Cloud a call as one of the dealers you get quotes. I am sponsoring Tom on my site as he has some of the best rates in the market. I can tell you stories of how other companies charge HIGH COMMISSIONS. Please stay away from any companies who advertise on the TV or RADIO. They charge the most commissions and sell people over-valued rare coins.

      You can also check out our Webinar which provides a lot of information: https://www.youtube.com/watch?v=fURJTf0F3_s

      steve

  12. Steve, well done article from you. I have been interested in technical things long time before i moved my interests to the financial world. That’s maybe the reason why I understand the energy reason better than other folks.
    Anyway with EROI very high in the past decades people came to the conclusion that energy is always abundant, and even now when peak oil is arriving the don’t get it because we have low energy prices caused by crashing economys.
    Your readers have luck to understand the implications of this first and positioning them ahead of the general public. So keep on with your energy articles I love them.

  13. AlliisChalmers | August 29, 2016 at 8:52 pm | Reply

    How does procuring an asset like Iowa farmland fit into the energy piece? I would think the capacity to grow food to feed hungry people will remain a priority even in an energy-starved world.

    • AC,

      Good Iowa farmland will be a tremendous asset after the crash but realize that it won’t be the same as it is now. You will need a team of work horses and old fashioned plows, disks, harrows, rakes, etc.. There will be no monster John Deers to work it or to put up sillage. So instead of 100’s of acres, I would thing maybe 80 or 100 acres would be the max that a large family could work. Even then maybe half in orchards.

      SteveW

      • “You will need a team of work horses and old fashioned plows, disks, harrows, rakes, etc.. There will be no monster John Deers to work it or to put up sillage.”

        Sounds like Amish farm workers will be in demand.

  14. Excellent article sir,

    I am making an effort to accumulate as much silver and gold bullion as possible ( 6 to1 ratio respectively) and to support that, I am looking at mining stocks.

    Can you recommend a newsletter or other publication geared to mid / upper tier miners, that provides even a small semblance of actionable information?

    Your time and your efforts here are much appreciated…Steve

  15. Steve St. Angelo,

    I have a question for you that I would not hold your feet tro the fire over.

    I have sold off all of my physical gold and only buy physical Silver now. Over the past several years, I’ve bought physical Silver on the up and down. My average Silver buy price is now $15.74 instead of $11.12 per ounce when I started buying Silver on the swings.

    My personal question to you is at what price I should continue to buy physical Silver (at a point that makes good financial sense)? Again, not holding your feet to the fire for whatever prices make since. I’m in physical Silver for the long haul (10 to 20 years). I want this Silver for my retirement or for my Spouse – should I kick off in the meantime.

    I’m not a big stacker (3K/0zs.) but I want my wife who is 17 years younger than I am to make it through the rough times to come. Most of my Silver has some numismatic value also, but I want to prepare her for the rough times sure to come. Again, whatever you suggest, I hold you completely harmless. Can you help me? Thanks.

    James

  16. Steve St. Angelo,
    I have a question for you that I would not hold your feet to the fire over.

    I have sold off all of my physical gold and only buy physical Silver now. Over the past several years, I’ve bought physical Silver on the up and down. My average Silver buy price is now $15.74 instead of $11.12 per ounce when I started buying Silver on the swings.

    My personal question to you is at what price I should continue to buy physical Silver (at a point that makes good financial sense)? Again, not holding your feet to the fire for whatever prices make sence. I’m in physical Silver for the long haul (10 to 20 years). I want this Silver for my retirement or for my Spouse – should I kick off in the meantime.

    I’m not a big stacker (3K/0zs.) but I want my wife who is 17 years younger than I am to make it through the rough times to come. Most of my Silver has some numismatic value also, but I want to prepare her for the rough times sure to come. Again, whatever you suggest, I hold you completely harmless. Can you help me? Thanks.

    James

    • “Most of my Silver has some numismatic value also,…”

      Sell it and get bullion.

      “My personal question to you is at what price I should continue to buy physical Silver (at a point that makes good financial sense)?”

      what’s wrong with buying NOW, if you have excess fiat, above and beyond your needs for what ot buys?

  17. If the price goes high enough, they’ll mine old landfill for the gold/silver.

  18. Steve,

    You are gonna love these pictures of future available energy collapse — painted in oils, so to speak.
    http://www.bloomberg.com/news/articles/2016-08-29/oil-discoveries-at-a-70-year-low-signal-a-supply-shortfall-ahead

    • Reader,

      LOL… yes sir. What a nice chart. I actually spoke about that in my interview with Rory at TheDailyCoin. The world only replaced 10% of the oil it consumed in 2015.

      If we assume the global oil industry produced 25 billion barrels more oil than they replaced in 2015, that was a $1.25 trillion deficit. This is not sustainable.

      steve

  19. Steve: You’ve finally said it: Gold & Silver will rise in the next financial and economic crash. No
    more India, China, production costs, peak oil, treasury printing millions of coins etc. Now for
    silver to rise we need an economic crash. The good old rock and a hard place. Imagine hoping
    for a crash so silver can rise in value? And if the crash you’ve predicted happens, where do I
    spend all this silver I’ve stacked is now the unanswered question.

    • “Steve: You’ve finally said it: Gold & Silver will rise in the next financial and economic crash.”

      The fact is, silver will increase priced in dollars when the price can no longer be set by paper/electronic contracts, primarily on the COMEX. Period.End of story. Fact.
      Excatly when that is no one knows. BUT..people have Wall Street trading experience and have followed the G & S markets for a long time are of the opinion the abilityb to hold the price down is waning, i.e. they are losing their grip…which is why the prices are up significantly this year.

  20. Steve W,

    Thanks for the suggestion and the warning. I do not intend to “sit on” any stock investment at this point. Generating soft currency to purchase and hold the hard is the goal, and doing it with great caution.

    Renting miners has nothing to do with their company or even the price of what their mining, rather, it has everything to do with the masses perception of their value. The definition of volatility could include “see precious metals”. I take nothing for granted.

    Again, thanks for your time…Steve G

  21. Sorry SRSrocco, but your definition is wrong.

    Prices reflect the perception of others; the “value” of a good is totally subjective to what the other thinks it’s worth. You can work hard for hours, using many resources, and yet not be able to find someone to pay a dime for your efforts. That refutes your definition, because 1) your good has economic energy in it, but 2) no one cares. Thus, the only thing that matters – to value, or price – is perception.

    “If we factor in all the energy, in all forms and in all stages, we find that the value of most goods and services comes from energy…. or rather Economic Energy.”

    When you buy a tennis shoe for $50 dollars, you are not buying the production line’s cost, you don’t care about the process behind it; you’re paying for the tennis shoe only.

    The cost of mining gold – or, as you say, the “economic energy” to mine – is a good thing only because, coupled with its scarcity, ensures that is unlikely that the supply of gold will be inflated. But the cost does not influence the price the buyer is willing to pay (he might not have stopped to think about it for a second), although it influences the price the seller is willing to sell, just because nobody wants to expend energy and time for nothing.

    You said that gold and silver are great stores of value because they contain economic energy. But so does a typewriter!, and nobody wants one anymore.

    Whe Mike Maloney said about economic energy he was arguing that money should maintain its value over time, and, by doing so, work as a store of value, thus representing your economic energy. That’s totally different from saying that the money gets its value from economic energy needed to produce it. This conclusion would be is wrong.

    The Austrian School’s definition is 100% correct.

    • Marcelo Lopes,

      You are more than welcome to continue believing that ENERGY has nothing to do with the value. However, stop using electricity, gasoline, diesel or natural gas and you tell me what your life would be like.

      The overwhelming value of most goods and services comes from ALL THE ENERGY in ALL FORMS & ALL STAGES. You can deny it all day long, but it is a FUNDAMENTAL FACT.

      steve

      • Steve,

        With all respect, but I don’t think you got it what I’ve written.

        But let me put in another way, asking you this: How does your price theory explains the fact that an printed 50 dollar bill is more expensive than an ounce of silver extracted from the ground in this moment we are talking?

        (Please don’t say that paper money shouldn’t have value, because we both agree on that. A true price theory should explain even a stupid valuation.)

        The price is always subjectively determined by the individual or by a multitude of individuals. Forget this thing about energy, is just wrong.

    • You’re right Marcelo. SRS should have made the distinction between energy in the physical and the economic way. If it is the first he chooses to use he should have calculated the total amount on energy used and express it in Joules or whatever. Then the comparison arises between two totally different items where it took the same amount of Joules, which I very much doubt will be of the same value. If he took the latter then he would find out that the energy stored in the product would be valued in a different way.
      But let there be no doubt, it takes energy in the physical way – or can be expressed – to make a product or do work.
      Two entirely different worlds, where once again the physical way as in Physics is projected on economy, which has obviously a total overlooked the factor Human Action as in perception of value.

      • I can roll a giant stone with my bare hands from Moscow to Paris, try to sell it, and not get a single dollar on it. On the other hand, I can brilliantly paint a magnificent picture in 10 min and have someone to pay something for it, let’s say $25 on my painting.

        In both cases the price was TOTAL and SOLELY defined by the buyer’s perception. This definition explains sufficiently all possible cases.

        Any other speculation is unnecessary and a misguided attempt to understand this phenomenon – a false insight.

        • Marcelo,

          I have spent two days mulling over your arguments and have come to the conclusion that you don’t understand a “store of economic energy.”

          “The price is always subjectively determined by the individual or by a multitude of individuals. ”

          Absolutely true. What you are missing is that those “individuals …multitudes” are making decisions based on the “worth ” in “energy terms” of the product that they are buying. That giant rock that you rolled from Moscow to Paris was a monumental waste of energy and did not contribute to the user value of the product. It could have been a giant rock from Paris. Absent some other notable distinction it is worth no more than a giant Paris rock and the fact that you wasted a tremendous amount of energy getting to Paris doesn’t effect it’s Paris market value. It is easy to waste energy without benefit. To the purchaser they don’t value the energy (value) of your wasted energy.

          As someone that has absolutely no artistic ability, I can understand how an artist can sell something that has very little energy invested for a disproportionate amount of money because, as a buyer, my evaluation is that it would take me a month of Sundays to create that piece. Art, however, is a significant sign that the enclosing culture has excess economic energy. Energy not needed for fundamental survival endeavors.

          “In both cases the price was TOTAL and SOLELY defined by the buyer’s perception. This definition explains sufficiently all possible cases.”

          Again true, but you miss the fact that buyers decisions are based on the perceived “energy value” of the thing they are buying verses what they are spending. Both of those values are energy values – how long did it take me (human energy hours) to make or collect what I am trading to you for what I perceive how long it would take me (human energy hours) to make or collect what I am trading for. Hence, the disproportionate value of skill, knowledge or monopoly on a precious resource verses simple human labor.

          So while it is true to say “Thus, the only thing that matters – to value, or price – is perception.” It is equally important that you understand that that perception is based on the energy store of value underlying that perception of both the buyer and seller. they are both trying to get more than they invested. They are trying to maximize their energy investment. If I make a widget for one human hour of investment and I can sell or trade it for something that I perceive as a two hour investment – then I have made a GOOD deal, for ME!

          So the”value” buyers perceive is the value of their perception of the energy invested verses the energy they have to spend to get it.

          It is NOT the absolute amount of energy to make the product ,but the BUYER’s perception of the amount of energy to produce the product versus what the Buyer has to trade, the amount of energy the Buyer has invested, to make the deal. The Buyer will make the deal if he feels he is getting more than he has invested.

          Gold and silver are physical representations of invested economic energy, always have, always will be. All things can be evaluated in terms of gold or silver as representations of stored economic energy value.

          So it is not just simply their “TOTAL and SOLELY defined by the buyer’s perception.” but their perception of the economic value – their energy stare of value of what they are paying for what they are getting.

          SteveW

          • What you guys are describing here is in my opinion ‘marginal utility’. If a product is sold, then obviously somebody wanted it and I assume with a purpose. If the product is not sold, it’s a total waste for the seller, or at least should be. And here I suppose the seller did not reckon on this outcome. So yes, affirmative, the buyers perception of value does play an important role as does the economic value of the energy bought to produce the product, but only for the last in the chain producer/buyer. The seller has the option of lowering his price, if there is a demand at that lower level.
            But when the product is not sold at all it’s a utter waste on both physical and economic energy (value).

  22. Coin Dealers do not work on “Commissions”. They work on “mark up”. If I pay $20.65 to stock an Eagle with spot at 18.75, depending on the amount you purchase, I mark up the Eagles to cover my overhead.

    If you buy one, I would mark it up $4.00 over spot. Buy 20, my mark up is $3.20. Buy 500 my mark up would be $3.00, 1000 $2.90. Commissions are for the STOCK market where everything is FIXED (as well as the market itself).

    If you pay by Credit Card, my mark up is slightly higher than check or cash.

    If you wish to sell, there are “Spreads” not commissions. Dealers will tell you up front their buy-sell spreads. Buy one at $2.50 over Spot, sell one at $4.00 over spot. Buy 1000 at $2.60 over Spot, sell 1000 at $2.90 over spot.

    • Dr Charles,

      I gather it’s just a difference of semantics. You say “Mark up”, Tom Cloud who has been selling precious metals for 40 years labels it as a “Commission.” Either way, it’s the same thing. So, I assume when you say “I would mark up”, you must be a precious metal dealer. Nice to know.

      Anyhow, lots of fraud and high commissions going on in our industry… what a shame.

      steve

  23. Good article up until the end when it’s presumed that energy costs will skyrocket. The opposite is happening in places like California where an excess of solar energy is damaging the electrical grid.

    • Jose Gonzalez,

      I didn’t say energy costs were going to skyrocket. Actually, I believe the opposite. We are going to experience the MOTHER OF ALL DEFLATIONS, except for Gold & Silver.

      steve

  24. WHY IS ANTIQUE HALLMARKED SILVER NEVER MENTIONED AS AN INVESTMENT ?
    THE VALUE OF THESE ITEMS FAR EXCEEDS THE SILVER SPOT PRICE.
    I WOULD APPRECIATE FEEDBACK FROM STEVE.

    • Paul,

      There are two components of value to antique hallmarked silver;

      1. Their silver content, and
      2. The rarity of the piece.

      The problem and why no one ever includes them in discussions of collapse scenarios is #2. The rarity value is part of the whole ponzi scheme currency deflation system. When credit markets implode so will all other markets. You will be left with the money value of the object, i.e. the amount of silver, but lose it’s rarity value The same is true for all of the rare collectible coins and all other “art and collectibles”.

      I have a 15th century silver candle reflector that belonged to my mother. It is exquisitely tooled and I just couldn’t bear to part with it fully understanding that if I should ever need to trade it or sell it in a collapse scenario I would probably only get what it is worth in silver.

      If you are worried about the future of the economy, unless it is near and dear to you – sell it and buy bullion.

      The reason most people prefer American eagles (gold & silver) is because of their US hallmark guaranteeing their purity.

      SteveW

  25. Quite interesting. I did not know many of the facts in the charts above. 5/1 silver to gold. Wow. Maybe it would need more than a few years to achieve that. Nevertheless, I would very much like to know more about it. Thanks for the article.

  26. Steve SRS Rocco.

    There will be detractors to your analysis (some may be right in the short term – but I expect not many in the longterm – only time will be the judgement of that). Nothing is certain in volitle markets so you will have to rely on your best analysis AND GUT INSTINCTICS). Follows those 2 and I believe you will do better than most..

    There is no certainty or free lunch. Take all of the free data, weigh it against your intituation and go from there. My belief is that based on the above, you will winm ore than you lose. One caveiot: Don:t gt so gready that you lose sight of your reseach and the GUT iNSTINCTS YOU HAD BEFORE THE FEVER TOOK AHOLD.

    Plans estblished in advance will usually trump plans on the fly.
    .

  27. Yeah duh, what’s the petrodollar about if not the value of energy? The currency varies in “value”, but energy does exactly the same every time it’s used.100 USD oil can be ok in boom tmes, but 30$ can be too much in bad times.
    Again I go back to Dr Kent Moors, who has taught us that energy is the only SOV, store of energy. Kent isn’t just an oil man, but talks about the energy mix, including renewables, nuclear, whatever.
    Right now al the hype is about the price of oil, but energy will be with us as much of a constant as the air we breathe…

  28. Silver and Gold have had a lot lower cost basis in mining than thought. Way back I looked at Silver and concluded that all in costs to mine it was nearly $$29 per oz and therefore rationally the floor would be $30. It went to $13.70 low and now about $18. My analysis was correct for primary miners in Silver, but the premise was wrong for several reasons. 70% of mines have other production that exceed silver production (gold, copper, zinc etc) and therefore could subsidize continued production in silver. Secondly, even Primary silver producers (30% only)could run below cost for a time anyway, with other bi-product mining subsidizing Silver production. So, on average enough subsidy from other mineral production, can make it (marginally) beneficial to continue to produce Silver at about $10 cost, so long as other minerals are able to carry the weight of the overall operations.
    So, the floor instead of being $30, is about $11. With recovery of all minerals getting more expensive to produce, the subsidizing of Silver is ending in some respects. If Silver has to stand its own weight in the real world soon, the we should expect the
    $30 level to reassert itself soon

  29. Sorry for my bad english…

    respect for the ideas from St. St. Angelo at first.
    1) one idea is the cheap energie in oil (or cheap energy generelly), who could disappear, but
    dont’t forget, that we could replace one energy through another, who
    can possibly less cost (not more). So the cascade of energy costs
    must not increase of sure – the future seems to be open for this
    factor. 2) (@ at least, (im a great silver fan), there exist some possibilities, that
    silver could been replaced in some industries through another stuff.)
    3) There exist people who think really, we can get silver “by-the-way” from other stars
    in ten until twenty years.

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