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Silver: The People’s Money

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In my writing a couple of themes occur with regularity: how “fractional-reserve banking” (with purely fiat currencies) is nothing less than serial stealing from the general population; and how gold and silver can protect people from this cycle of theft.

With respect to fractional-reserve banking, the theft is obvious. The bankers print up vast quantities of their paper currencies ‘out of thin air’, at no cost to themselves – but with the full benefit of that money. Thus their own “wealth” increases exponentially, and without the bankers earning a single penny of it. However, by diluting our currencies in this reckless manner they drive down the value of our money – reflected in higher prices (i.e. reduced purchasing power). We get poorer and poorer; they get richer and richer.

Given that we have a corporate propaganda machine which has spent more than forty years trying to disguise this serial stealing, it is no surprise that it often takes a long time for this reality to sink into peoples’ minds. Sadly, even once people understand the stealing which is taking place, they often aren’t able to piece together how precious metals are the “cure” for this chronic condition.

When I speak of precious metals being our salvation from the bankers’ world of debauched paper, for the average person what I mean specifically is that silver is their primary protection from the banksters’ stealing-via-dilution. In referring to silver as “the people’s money” I am not saying anything new here. Rather I am simply reiterating one of the oldest economic truths of our species.

To understand this first requires understanding two more of the most ancient concepts of humanity. To begin with, people must know the answer to the question “what is money?”. Once they have a clear understanding there, it becomes crystal-clear why gold and silver are the best “money” our species has ever known – and the only “good money” in existence today.

Next readers need to understand the historic price ratio between gold and silver, or in other words they need to understand the 5,000 year old price relationship between the Metal of the Sun (gold) and the Metal of the Moon (silver). This historic 15:1 ratio is absolutely reinforced by the fact that this is also the approximate relative proportions of gold and silver in the Earth’s crust. Thus 15:1 is the “natural” price ratio between gold and silver, and over the long term gold and silver prices must revert to that ratio.

Given that 15:1 ratio (and the much greater, current ratio today), this leads to an obvious inference. Gold, by virtue of being less common and thus more valuable is the “money” of the wealthy and governments. Conversely, by virtue of being more plentiful (but still “precious”) silver has always been the Money of the People.

Once these preliminary concepts are understood, readers should be ready to absorb how and why silver can protect the ordinary person from the serial stealing of the bankers. Remembering how the bankers “steal” by diluting the paper (i.e. fiat currencies) we are holding, the obvious solution to that problem is to avoid holding the bankers’ paper.

If we take the fruits of our labours and convert it into silver as quickly as possible, then suddenly the bankers must do most of their stealing from the other paper-holders – not us. And if every ordinary person converted their wealth to silver as quickly as possible, soon the bankers (and the ultra-wealthy for whom the bankers “front”) would have no one to steal from but each other.

People need to divorce their minds from the notion of “buying silver”, and rather simply think of themselves as doing their “saving” with silver rather than with the banksters’ ever more diluted paper. Indeed, the worst thing we can possibly do with our wealth is to deposit it in a bank – since that simply allows the banksters to ratchet-up their “leverage” even further (i.e. steal from us even faster).

Put another way, every dollar which ordinary people convert to silver (or gold) weakens the intensity/effects of this stealing-via-dilution. This also explains the extreme aversion which the bankers have to a “gold standard”, and why they have disseminated millions of pieces of propaganda over recent decades attempting to portray a gold standard as either being archaic or simply “impractical”.

A gold standard is “impractical” indeed if one is a banker because when it comes to the banksters’ efforts to steal-via-dilution, a gold standard functions like an “economic straitjacket”, preventing the banksters from conjuring any “money” out of thin air. With the absolute refusal of our corrupt and servile politicians to “regulate” these financial crime syndicates, a gold standard would impose fiscal/monetary discipline (and sanity) on both bankster and politician alike.

Lacking a gold standard and lacking any financial regulation of these multinational banks, as individuals we have been left with absolutely no recourse but to “insure” our wealth by converting it to silver. Holding silver will not/cannot “fix” our economies by itself. However, with the self-destructive greed of the banksters and the shameless corruption of our political leaders, the destruction of our economies is now inevitable – and we must protect ourselves individually, since we have been abandoned by our own governments.

As it has done for nearly a hundred years, the corporate media defines such behavior as “hoarding”. Strangely, when we (collectively) hold several billion dollars of silver the propaganda machine calls this “hoarding”, yet these same media talking-heads never mention the word “hoarding” when it comes to the $10’s of trillions in paper wealth being hoarded by these ultra-wealthy (ultra-greedy) misers.

As I have demonstrated in numerous previous commentaries, it is the “hollowing out” of our economies through the hoarding of all these $trillions which is one of the primary causes of our imminent economic collapse. In other words, it was bad enough to have the ultra-wealthy steal $trillions of our wealth, but they have compounded that economic harm by refusing to spend their ill-gotten hoards. If the “other 99%” greatly increase their “saving with silver” (or gold), this will also serve to slow down this hollowing-out process, and will at least help to delay our complete economic collapse.

Our economies remain in desperate need of a total overhaul of our entire monetary system, our tax systems, and our labour markets. Given the saturation level of corruption in our governments, it seems likely that most Western nations must also have radical reforms in their political systems as well.

Holding silver solves none of those other problems. At best, it will “buy us the time” to actually fix our broken economies (and broken political systems). At worst, it will make it a little easier to rebuild our societies from the economic “rubble” left behind by the banksters and their political servants.

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gentisle
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written by gentisle, November 10, 2011
Brilliant piece, Jeff. Well done indeed.
Jeff Nielson
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written by Jeff Nielson, November 09, 2011
Thanks for again reminding people about how silver investors are ESPECIALLY persecuted in Europe, Norbull.

It is an OUTRAGE that traitorous Euro politicians can simply IGNORE silver's 5,000 history as "money", and label it a mere "commodity" in order to TAX anyone attempting to protect themselves from the banksters monetary rape.

More precisely, Euro readers are "raping" silver investors a second time with this unjustifiable tax.

Ultimately the banksters are in a no-win scenario. Even "confiscation" doesn't SOLVE their problems, since it does NOTHING to stimulate mine-supply to necessary levels. Only higher prices can do this.

Meanwhile, the banksters (through their manipulative shorting) have created MASSIVE industrial demand. Thus all their manipulations (legal and otherwise) can only DELAY the rise in silver to its fair market value - AND their own bankruptcy...again.
Norbull
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written by Norbull, November 09, 2011
In the UK and Europe VAT has to be paid on silver, but not on gold. The only way around this is not to take delivery but leave your bullion in a vault. Bank vaults need to be avoided, so the only options with limited counter party risk are the likes of James Turk's gold money.com. Gold sovereigns and half sovereigns are available from dealers with little commission as long as you avoid the collector quality coins and stick to bullion grades. I also have a psychological preference for the sovereign..... Although historically it was equal to £1 sterling, it has no value stamped on it, and so I like the idea that at some point it could become the basis of a parallel currency along the lines proposed by Hugo Salinas Price for Mexico.
I also like HSP's ideas on opening up the mints to private gold and silver for minting coins with a percentage charge or seigniorage. That would be one way for the UK to start to replenish it's gold reserves, so foolishly run-down by Gordon Brown when he was Chancellor. (Apparently he's written his memoirs with a forwaed saying he's not an economist.)
As we've observed before, as soon as there's a manipulated drop in the gold or silver price it becomes just about impossible to actually purchase coins or bullion from a dealer at the lower price. Although I haven't tried it myself, I suspect you have a better chance of getting a purchase at the lower prices if using remote non-bank storage like gold money.com.
Jeff Nielson
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written by Jeff Nielson, November 07, 2011
Paxjds, I was TEMPTED to talk about what the price of silver "should be" today. However I decided against it.

With the crazy volatility and even more extreme manipulation, I don't want newer readers/investors coming into the sector with "get rich quick" visions dancing before their eyes.

I've generally stuck with referring to precious metals as "insurance", and touting the miners as the place to go for those who want to add more leverage, potential profit - and risk. Yes, we DO expect to make a profit holding our silver over the long term, but primarily this is just "playing defense".
paxjds
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written by paxjds, November 07, 2011
We, the people of the world need to buy physical gold and silver, not paper proxies such as SLV and GLD. If you cannot hold it and keep it, it is not you gold or silver. SLV and GLD is a paper proxy for the real thing. So if you buy, BUY real Gold and Real Silver.
paxjds
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written by paxjds, November 07, 2011
Jeff, Another very good article.

Per the 15:1 historic ratio of gold/silver, silver should be around $120 an ounce right now. This offers a GREAT opportunity for THE PEOPLE to spend their almost worthless fiat dollars, yen, euro's, etc. on a very undervalued Precious metal in lieu of a wasted investment in a savings, checking, or money market fund. Silver needs to go up about 340% just to catch up with "the gold rush" of the past several years.
While the people of the world watch with fear of an economic collapse caused by the Banksters and Inept political leaders, they can buy some silver as insurance against collapse; and stand to get a much higher investment return over gold for the next several years.
If you can afford both gold and silver, IMHO 5 ounces of silver to 1 oz of gold looks like a good ratio till silver catches up with the historic norm.
Jeff Nielson
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written by Jeff Nielson, November 07, 2011
Thanks for the feedback!

Remember one of the fundamentals which I always stress: the HARDER they push gold and/or silver down, the more UPWARD pressure they generate under them (much like a "spring").

IF the banksters want to continue their recent tactics of EXTREME attacks on these markets, the CONSEQUENCE is inevitable: larger (and more violent) UPWARD spikes in prices.
apberusdisvet
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written by apberusdisvet, November 07, 2011
Jeff: Looking at the Kitco charts today, I see at least 5 attempts by the manipulation/suppression folks to curb the rise; all to no avail. Have we now reached the point where the market will dictate the "real" price of PMs? Somewhat rhetorical question, I know, but it sure seems that events are dictating the markets these days, rather than the other way around. It would appear for various sources that PMs are no longer inching their way from West to East; it's now a full sprint.
Earl
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written by Earl, November 07, 2011
Jeff,

The message never gets old. Just more clear.
I'm more prepared to take advantage of the opportunities "manipulated" price swings present. To "preserve" what little we have saved.

Thanks for the direction.

Earl

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