Saturday, February 5, 2011

We Are At The Cusp of A Depression: Every Working Person Should Be Buying SILVER

The labor force participation rate fell 2/10 of a percent to 63.9%, also a new low, and the lowest level in 25 years. (chart left)

It’s interesting to look at this trend with gold, but it’s absolutely fascinating when you plug in the numbers for silver. Not only may silver outperform gold before this is all over, but silver is more “affordable” to the masses.

Take a look at how many ounces of silver have been needed to buy a median-priced home in the U.S.

In 1970, it took 14,067 ounces of silver to buy a median-priced U.S. home ($23,000). By January 1980, it had dropped all the way to 1,603 ounces, based on silver’s average price that month of $38.80. The ratio bottomed at 1,258 at silver’s record high of $49.45 (London PM Fix) on January 21. (We can argue later how much of that spike was due to the Hunt Brothers hoarding of the metal, but I will point out that gold and silver peaked on the very same day, implying the same forces were influencing both).

The ratio peaked in 1990 at 22,616 due to silver’s average price that year of only $4.06, and was still at 18,365 in July 2006, the pinnacle of the real estate boom. However, look what happened to the ratio in the four years and three months since: it’s dropped 66.1%, to 6,213.

You may think the ratio won’t fall further since it’s already declined 69.2% in the last ten years. But I would point out that it collapsed 88.6% during the 1970s – and that was amid a 170% rise in home values! Only economists on government-laced Kool-Aid could fathom home prices rising that much over the next decade.

All this adds up to one thing: the number of ounces of silver to buy a median-priced home at some point in the near future will likely fall below 2,000. And given the unrelenting abuse to fiat currencies, it’s very possible it could hit a measly 1,000 ounces. Now that’s affordable.

The fine print, of course, is that you actually sell when the silver price is high, and that you pay the tax on the gain from another source. But I would argue that even a modest budget could come up with a few extra ounces to offset the tax bill.

Think silver is too volatile to use as a savings vehicle? The price fluctuates, no doubt, but ask yourself this: if you were to put ten grand into a savings account and another ten into silver, which asset will have more purchasing power five years from now? Even with the savings account earning interest, you’d be able to purchase much more with the stash of silver when you go to spend the proceeds.

NEW Buffalo/Indian Head Nickel Art Coin 1 TROY OZ .999 SILVER BULLION

Doug Casey is insistent real estate hasn’t bottomed because we’re on the cusp of a depression. I’m convinced the silver price won’t be stopping when it hits $50. If we’re right about these trends, that million-dollar vacation home you spotted on Nag's Head five years ago could be had for less than 2,000 ounces of silver.

Vacation home, here I come.
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  1. "Not only may silver outperform gold before this is all over"

    so you wanna sell it BEFORE the melt down?
    brilliant plan.........

  2. Don't sell it, but TRADE IT. Trade it for a house, boat, factory asset. NOBODY said to SELL IT!

  3. stupid article.. People don't have money to buy silver. Even if they did they cannot eat it. This is nothing more than an advertisement to sell silver preying on fear..

  4. outperfom only make sense when you have relalized the profit, otherwise it's only an accounting profit and not real!
    and wow, another brilliant plan, to buy a boat for the coming depression.....

  5. Amazes me of the stupid people that post here, especially when a commodity article appears. stupid 1;34 and his ridiculous "can't eat it" phrase just shows you how dumb people really are. If you have $30 for a 4 hamburger special with fries and shakes, the dumb poster who eats fiat currency will be wincing next year, just like they have been, for the past 10. Mindless twat .

  6. Anything that can help you, DO NOT DO IT! Keep currency until it goes to zero, its better. When it hits bottom insert in mouth, chew, then swallow.

  7. Please nobody buy silver. If you keep buying then I have to pay higher prices. Just keep your paper money, and I'll take care of the silver.

  8. <---- 403 oz / silver, +tax return & bonus check @ the end of this month = XXXX.00 @ $31.50/oz = 300 oz / silver grand total 703 oz, next year 100 acres with 3 bedroom 2 bath will be $122,000.00, silver by then @ $315 / oz = free house and a new bass boat. :) and sheep rider a few posts above me will be eating FEMA snack out on the playground with his kids. FKNA :)

  9. doesn't "rise" in value-keeps it's value while paper declines. store of value. easily sold as desired for paper to use to buy whatever is wanted so yes with 1 extra step can be eaten.
    in the 20's an oz of gold would buy a nice suit, today an oz of gold will buy a nice suit, however a paper 30$ spot will not buy you a nice suit today like in the 20's. so the question is is the plan to devalue the doller for real..or not, investigate the matter and decide

  10. The promotion of buying gold and silver for little people of the middle class as a promise
    to provide them economic security and give hope that they can protect themselves as individuals ,as an escape route from the developing Ponzi financial debt crisis on the coat tails of the gold holding elite , is designed ,or has the effect of splitting the people ,preventing them from uniting as Americans to fight the ruling elite in the common interest.

  11. 12:29

    Say what ?

    That's like saying the ruling elite will grant you the right to keep and bear arms so you won't unite t

    o fight us in the common interest.

    Yeah right

    We got gold, we got silver, we got paper, we got guns, we got guts and we have booze and ammo too

    I don't think these elitests know exactly who the hell they are dealing with - these are not uneducated, fat, lazy third world

    Lastly; You can be the elite of the elite; but you know what? You ain;y gonna live one freakin' day longer than me. You still need water to survive and when the super cycles turn into supernovas as described in the above article; their gold hoardes will do them no good. No sir - what comes around gors around my friend and we are coming into the age of self sufficiency - those that can adapt, grow, buildm repair and live off nothing will be the ones to survive - those who are totally dependant on usury are doomed

    Like I said - what goes around

    Is coming around


  12. I doubt anybody will trade you a house for silver. If the fiat currency totally collapses then there will be no order. There won't be a title to anything, nothing will be recognized because there will be no government.

    The guy with the house will be too busy trying to shoot people with lead that try to break into his house or steal his food. If you have the money buy the land first, then the guns and food and water, then the silver if you have a surplus after all that. Get solar panels, get generators, get a well if you can. Put a fence all around your property. Then have family and friends living around you and even with you. That's your only real shot if you truly believe fiat will collapse entirely, because if it does we've hit doomsday.

    Personally I think anybody that got gold 5 years ago is in the best spot right now. Gold is far more likely to get you a house, it would take something like 10,000 oz of silver to get a house probably. But maybe 20 oz of gold.


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