Erratic?

They have been all over the place lately.

I know they opened that EFT (ETF?) is this going to be a permanent situation?

It's been between 13 to 15 over and over again.

I've only been paying attention this year, so how's it been in previous years?

Up lately due to concerns about the excessive printing of money for the war. Down lately due to concerns that the prices are overstated and that the investing population (baby boomers) will begin to cease pumping money into and supporting potentially overstated prices....
Nuts ! ,,, I say more so than in the past.

Previous years? Rather flat.

Silver prices have been very consistent sofar
(chart in euro added -)

http://www.tradesignalonline.com/content.a....asp&id=1975732

Silver and gold are emotional commodoties and as such are usually irregular. Especially when viewed in a short term window. They are dangerous for the short term investor who is going to try to get in low and sell quickly at a peak. Long term, they're safe and sound.

Another thing to factor in evaluating gold and silver fluctuations, they hit a 26 yr high on Friday. Emotionally a lot of short term investors then sell the metal, causing prices to go down. This is called a correction and often happens right after peaks in prices occur. Sometimes with gold these corrections can cause 10% fluctuations in the price from the high. And even a greater percentage with silver. Long term investors could care less about this, it is the short termers that start getting nervous.

There are very powerful forces pushing down the price of silver. But there are fundamental forces which are pushing it higher. This is causing the high volatility and it just might get much worse before it gets better. Eventually both these forces will weaken and silver will become more placid again but it will likely be at a higher price. This may not happen for many years though until there is some sort of balance restored between supply and demand. It's also within the realm of possibility that silver can break out of historical pricing patterns and be appreciated for the rare and necessary metal that it is. Where gold exists in huge stockpiles there are no such hordes of silver. It's improbable either metal can ever again be used as currency so there is simply no reason that pricing needs to reflect historical trends.

One thing to remember is there are still many silver mines around the world, just as gold, but most of them have slackened on production lately. And the last large horde of silver was dispersed from the US gov't. Now, although there is no longer one large horde out there, that silver is still there in a lot of places and if need-be from market demand it will re-enter the system and drive prices back down to a more reasonable spot. Or if the prices stay so high as to merit, the active silver mines (and maybe some unactive ones) will once again increase production until it is no longer highly profitable for them.

This is just a good example of supply and demand, and the fear of a failing dollar.

My thoughts, prices will hit around $18 an ounce within the year, and eventually drop to about $10 by mid 2007. In the long run, as said before, the long-term guys who got in at the 4-7 dollar an ounce, should be happy either way they look at it.

I could be mistaken, but I believe there are almost no pure silver mines in the world outside Idaho and perhaps Nevada. Most silver produced today is a byproduct of gold or copper mining as these minerals are most often found in deposits together. Also don't forget that a lot of silver has been consumed, never to be seen again, unlike gold where pretty much all the metal mined since the beginning of time is still somewhere above ground.

Gold and silver are both up slightly this morning.

I can't say for sure but I thought there were still some major silver mines in South America in the Bolivia area. And this is some information from the Ying mine in China.

Recent work on the Ying Property has defined a high-grade Silver-Lead-Zinc underground mineral Resource in veins averaging 0.42 meters (m) thick. The Resource was established by channel sampling of new underground tunnels, and underground drilling. Mineralization is hosted in a set of quartz-carbonate veins crosscutting Precambrian age mafic and felsic gneisses.

The Update Report is based on the Resource estimate calculated a year ago in Chris Broili's April 18, 2005 NI 43-101 Technical Report. (the "2005 Report"), where five veins on the Ying property were reported to have a Measured and Indicated Resource of 420,453 tonnes averaging 0.42 m wide with an average grade of 1,393 gram/tonne ("g/t") silver ("Ag"), 32.76% lead ("Pb"), 9.99% zinc ("Zn"). The contained metals for the Measured and Indicated Resource are 18.8 million ounces of Ag, 137,730 tonnes of Pb, and 42,004 tonnes of Zn. The Inferred Resource is 495,205 tonnes also averaging 0.42 m wide, with a grade of 1,539 g/t Ag, 35.01% Pb, 9.56% Zn. This Inferred Resource contains 24.5 million ounces of Ag, 173,394 tonnes of Pb, and 47,323 tonnes of Zn. Of the 28,957m of tunnels completed since August 2004, about 14,000m are mining development tunnels. As a result, within 2 months of Found receiving the mining permit, preliminary production could start from over 20 initial stopes that have been developed at the 518m elevation ("L") and 480m L for S14 and S6 veins, 490m L and 460m L for S2 and S2E veins, 534m L, 570m L, 610m L, and 640m L for S16W, S16W1, and S16E veins, 600m L for S7 vein, 570m L and 640m L for S8 vein.

The custom milling during 2005 of 40,711 tonnes of diluted by-product ore extracted from exploration and development tunnels indicates that Ag, Pb, and Zn metals can be easily recovered from Ying Project ore. The Pb-Ag and Zn concentrate produced satisfies smelter requirements. Milling tests have also confirmed the economic viability of using off-site flotation mills to treat diluted ore.

Concentrate sale contracts have been signed with several lead and zinc smelters on terms of delivery at mine site against cash advanced. The payable prices for lead and silver metal in lead-silver concentrate are 76% and 75% of spot prices, respectively, quoted on the Shanghai Metal Exchange ("SME") on the delivery date.

This is just one mine in China, there are others, plus you have to remember the mines in the US still have millions of tons left as well. I know we use a good deal of silver for developing film and such, but there is still much more to be taken from the earth, more than enough to keep a shortage from appearing anytime soon. I can't say there will never be a shortage, but in our lifetimes, probably not.

Another useful bit of information....I know it's long, but bear with me.

Overall mine production registered a 4-percent increase, to 634.4 Moz. In 2004, silver generated at primary mines increased by 9 percent, to reach 188.5 Moz, representing 30 percent of global silver production. The higher output at primary mines accounts for the overall mine production increase in 2004. Mexico, Peru, Australia, China and Poland were the top five silver mining countries in 2004 (see chart below).



Top 20 Silver Producing Countries in 2004
(millions of ounces)
1. Mexico 99.2
2. Peru 98.4
3. Australia 71.9
4. China 63.8
5. Poland 43.8
6. Chile 42.8
7. Canada 40.6
8. United States 40.2
9. Russia 37.9
10. Kazakhstan 20.6
11. Bolivia 13.1
12. Sweden 9.4
13. Indonesia 8.6
14. Morocco 6.3
15. Argentina 5.0
16. Turkey 3.7
17. South Africa 3.2
18. Iran 2.6
19. Japan 2.4
20. India 2.1





Supply of silver from above-ground stocks decreased by a dramatic 39.8 Moz to 202.3 Moz. Net government sales fell by 30 percent, to 61.7 Moz in 2004. The share of total supply accounted for by government sales fell from 10 percent in 2003, to 7 percent last year. The fall in government sales was almost exclusively led by a decline in the amount of silver released from Chinese official stocks. Chinese official sales totaled an estimated 34 Moz in 2004, compared to 61.7 Moz in 2003. The fact that Chinese sales declined this much in spite of the higher silver price may be an indication that government stockpiles are no longer abundant. The table below shows the contribution made by each component of above-ground stock supply in 2003 and 2004.




Supply from Above-Ground Stocks
(Million ounces) 2003 2004
Bullion
Implied Net Disinvestment -8.7 -42.5
Producer Hedging -21.0 2.0
Net Government Sales 88.2 61.7
Sub-total Bullion 58.5 21.2
Scrap 183.6 181.1
Total 242.1 202.3




World Silver Supply and Demand

To document these and other market fundamentals, each year the Silver Institute works with GFMS Limited, of London, a leading research company, to prepare and publish an annual report of worldwide silver supply and demand trends, with special emphasis on key markets and regions. This annual survey also includes current information on prices and leasing rates, mine production, investment and fabrication.



To learn more about the general production and uses of silver, please see our Production and Uses pages. For articles related to supply and demand, see the Silver News archives' subject index.




World Silver Supply and Demand
(in millions of ounces)
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Supply
Mine Production 483.0 491.0 520.7 544.0 548.5 587.3 611.8 607.4 611.2 634.4
Net Government Sales 25.3 18.9 -- 40.6 93.1 75.2 71.7 54.9 88.2 61.7
Old Silver Scrap 162.9 158.3 169.3 193.9 181.2 180.4 182.4 187.1 183.6 181.1
Producer Hedging 7.5 -- 68.1 6.5 -- -- 18.9 -- -- 2.0
Implied Net Disinvestment 89.9 142.8 85.5 44.0 61.1 88.5 -- 14.1 -- --
Total Supply 768.6 811.1 843.6 829.1 883.9 931.4 884.8 863.5 883.1 879.2

Demand
Fabrication
Industrial Applications 295.7 297.7 320.8 316.4 339.2 375.4 336.3 340.1 350.5 367.1
Photography 209.9 210.1 217.4 225.4 227.9 218.3 213.1 204.3 192.9 181.0
Jewelry & Silverware 236.9 263.7 274.3 259.4 271.7 278.2 287.1 262.7 274.2 247.5
Coins & Medals 26.1 25.2 30.4 27.8 29.2 32.1 30.5 31.6 35.8 41.1
Total Fabrication 768.6 796.8 842.9 829.1 867.9 904.0 867.0 838.7 853.4 836.7
Net Government Purchases -- -- 0.7 -- -- -- -- -- -- --
Producer De-Hedging -- 14.3 -- -- 16.0 27.4 -- 24.8 21.0 --
Implied Net Investment -- -- -- -- -- -- 17.8 -- 8.7 42.5
Total Demand 768.6 811.1 843.6 829.1 883.9 931.4 884.8 863.5 883.1 879.2

Silver Price
(London US$/oz)
5.197 5.199 4.897 5.544 5.220 4.951 4.370 4.599 4.879 6.658

SOURCE: World Silver Survey 2005

Indeed, there aren't many pure silver mines, in fact, like what jtryka said, silver is usually a byproduct. Also don't forget, even if you were to find "pure silver", it's often found in the form of silver sulfide, and to refine it as well as the strict enviroment costs imposed by many governments adds to the cost.

As silver is an excellent electricity conductor as well as it's major demand from the chemical industries, there is no reason why prices will drop back rapidly any time soon.

I'm not going to agree with the fact that we can find "easy" gold these days, like alluvium gold unless we exploit untouched areas such as Alaska. I have been to a mine where it's just solid rocks and a ridicious amount of TNTs are used daily to blast these rocks. Amount of gold in this particular mine is just a mere 0.6 grams per tonne! Yet this mine still operates because of the strong demand of gold at the moment.

Vfox, I have to disagree with you on one thing. While having a guranteed reserve of some massive amount of silver is one thing and demands from the consumers, you didn't factor in the mining operations cost!.

The main reason why the prices increased is because the mining sectors get VERY hard by the oil prices. Think about it, what do trucks that transport rocks run on? Those consume a lot more fuel that your average car or a Hummer!!! Imagine how many barrels of fuel a mining companies use daily. Your refuelling bill doesn't even count compare to what such companies deal with.

In the mining sector, having to calculate the cost of mining operations and to be able to guarantee minimum amount of metals is a major factor in the stocks market. If you happen to calculate it wrong - investors aren't going to be too pleased, and that mining company will be in serious financial troubles. The recent Beaconfield gold mine accident in Australia too will be costly for the mining company as not only did the operations of the mine stopped, but as well as to factor in the compensation figures if they are to be held reliable.

As well as, cheap precious metal prices is never good for a mining company either. Australian precious metal companies have seen their stock prices plunging by some insane 5% if I remember correctly after prices of metal lowered last week.

Don't forget, if you refuse to pay enough to the mining companies for their operations, where do new supplies of raw metals pop out from? Recycle? But from where can you get a major supply of unwanted metals for recycling?

VFox;

This is some very interesting information but the simple fact remains that at the pricing structure for silver that has been in effect for decades there has been much more consumption than production. Most mining would be increased at least slightly at higher silver prices but in many cases very little or no increase would result. Demand is extremely price inelastic for this commodity. Most uses involve only trace amounts so a many fold increase in silver cost would have almost no effect on the price of a product so no decrease in demand. This would leave manufacturers running around looking for the metal at any price.

Huge amounts of silver came out of the earth starting back in the 1880's but much of this has been consumed or fabricated into objects that are not available for industrial use except at much higher prices. We are headed to a day of reckoning in silver and it will require higher prices a some point to balance supply and demand. Human nature is such that the timing of this and even the nature is unforseeable but we cannot indefinitely consume far more of a material than we produce.

It's interesting that the 18 million ounce reserves in the Chinese mine which will be extracted over many years is only enough to bridge the gap between consumption and demand for a little more than one year.

You guys are right on that aspect, I didn't take into account the mining costs. As for the chinese mine, it's just one of several in operation in china, and around the world, if that chart I posted would have stayed in better shape I could have explained in a little easier, but basically, supply has met demand so far.

I'm just really optimistic about the whole thing . I can't imagine silver breaking $20 an ounce anytime soon, or even staying as high as it is right now for very long. But, point taken guys, I stand corrected.

Up 56¢ this morning, you may have to put the bib on for your crow meal

You may well be right, but I'm still betting you aren't.

Hah, I'd hope not....but, not the first time I've had to eat some crow hehe.

I like the relationship to fuel cost the most.
Fuel up, Mining costs up, Metals price up.
Fuel down, Mining costs down,,etc....
Doesn't really matter where or how many mines there are,,, heck assume the planet was made of silver,, relationship above is the current driver in my book. Ag prices will mellow and regress to it's new mean in tandem with oil.

Don't forget the prices of TNT as gxseries was mentioning. Another product of the pretroleum market isn't it? Or do they use the fertilizer kind now? Meh, I got nothin lol.

Even then manufacture and transport is still affected by fuel prices. And they add diesel to the ammonium nitrate to get the explosive. Just can't get away from petroleum.

What about the new corn based alcohol fuels? lol Blow away 120 tons of rock with THE POWER OF CORN!

I have a co-worker who can clear rooms and probably take out a mountain side.

I think you guys are reading too much into the fuel/other cost issue. Those are the types of factors that will determine the cost of operating a mine, and whether the mine will stay open. The price of silver and other metals are set by the market, pure supply and demand. If the cost of fuel etc. increases the mining cost to say, $4.50/oz. the mines aren't going to start selling silver for $5, they will sell it for $13 or whatever the current market price is. If the cost rises to $15/oz. and the market price is $11, then the mine ceases operations until digging the metal becomes profitable again. What you guys are describing would be fine if you are talking about retail products (like say a mining company also produces silverware), in that case, the retail product is no longer a commodity, and the producer has more control over the price. This is absolutely not true for commodities by definition.

Of course my example mine is simplistic, assuming it is a pure silver mine (usually not true). Even your Chinese mine I would classify as a lead mine, with silver as a byproduct, so the prices of all the metals would be included in a decision to close a mine. Most mining companies don't want to even deal with the silver though. Look at Silver Wheaton (NYSE:SLW). They've built their entire business based on buying silver production as a byproduct from other mines (gold, copper, lead) as those miners don't want to deal with it. They make a nice profit just buying the silver from those mines, refining and selling it. Very interesting business model.

Not too sure why fuel isn't a major factor in any mining operations. Last year according a particular gold mine that I went, to extract 0.6 grams of gold from a tonne of rock was quoted as approximately 8USD. An ounce of gold? Maybe 220USD or so. The real trouble only comes when gold prices go near that figure (apperently pushing it down to 400USD will cause that particular mine to suspend it's operations) or the major factor that causes the mining operations to push it's prices is the fuel costs.

Again, that figure is only for a particular type of mine that I have been to. Indeed there are still a fair amount of gold mine in the world, but there are plenty of security / safety issues globally.

The real trouble geologists face these days is to be able to guarantee to the bank and the stock market the amount of reserve metals a mine is likely to contain. Again, thanks to the ever complex world of geology, there aren't too many mines that are identicial content wise with its metal content and it's reserves. Most mines that are open to investors and bank loans have to be served on basis by basis case.

If it is too little, a bank is not willing to finance or loan much of the required money. If it's overestimated, investors demand answers of why this occured. A terrible story for the geologists really And unfortunately, that is one area I am studying at the moment

Indeed it is a cruel world. In order to determine what a mine has, you have to hire an avination company to take reconissinian / aerial photos, satelliete images, and these are not your normal type of photos, as they have several types of filters to reflect the types of minerals inside the rocks. And to confirm what is inside the rocks, you take several drill cores... shove all those data into a computer and work out the data...

And that's already your mininum cost factor!

Lemme look for the pictures of a mine that I have been to... the scale of the mining operation is amazing...

I think we agree, but I just want to emphasize that the price of fuel, geologists, etc. do NOT impact the price the mine received for its gold, only whether it can operate profitably given world gold prices. If a mine sees it's fuel costs rise $10/oz., it can't suddenly say to the market, we want $750/oz because our costs went up, even though the world spot price is $740. If a mine did that, they would sell exactly ZERO ounces, since all buyers would just pay $740 on the world market any buy it from other mines. Mine operators have no pricing power in this regard. If you're making jewelry, you can do that, since you are selling to a retail market, but when you're selling a commodity you just can't, since the gold that comes up from your hole in the ground is exactly the same as the gold that comes from everyone else's hole in the ground. Increasing costs only determine a mines profits, and whether or not it will continue operating.

Wow. I haven't checked silver prices in almost two weeks and I see $12 an ounce! My quest to finish the SAE UNC set is on again.

The mine operators are the ones who hold ultimate pricing authority. Commodity markets are like middleware, they exist for speculators, were invented by, and serve the financial markets and finance companies. If demand strips thier ability to buy from existing sources, then they are forced to go the producers of the metals to get more,,, and these producers will set the price according to opex (gas, etc.) and thier desired margin.
Presently the commodity markets (and associated marketing) are doing a good job holding prices at a higher level than desired by most mine operators.... so they are happy to sell thier goods at rates greatly exceeding thier minimum margin levels. The delta between this minimum margin level and present spot price is the bubble......
...... the popping sound will indicate that the law of regression to the mean (in this case, the minimum price at which "Mine operators" will sell) has begun and the winners in the commodity game are removing thier money from the table and us po' coin people who help sustain el' bubblo'rancho....

Although I wouldn't mind seeing 4 dollars an ounce again...I use silver in metal working as well as collecting coins. I don't want it to drop too far that people who got in high, will horde it until the "bubble" bellows out again. Like I said before, I can't imagine 20 an ounce, but I can see 10 an ounce as being a stable price. Not to high, nor to low....the happy medium right? Like I said, optamistic.

And as I've been saying for years, it's just metal.

I find it wildly entertaining that folks who couldn't identify the two largest asset bubbles in the history of man are so quick to judge the current run up in metals as a bubble. These are the same folks saying Pets.com was a bargain at 60x sales even though the company's only asset was a sock puppet. They are the ones still saying there is no real estate bubble even though you have to be a millionaire to even consider buying a home in California, and even though 40% (40%!!!) of new home are purchased with adjustable rate mortgages or no money down mortgages! This is worse than the stock market in 1929, at least then the speculators had to put down 10% margin, buy a house and it takes nothing out of your pocket!

Now, assuming a 3% annual rate of inflation over the last 20 years, the dollar has lost 45% of it's purchasing power. Silver at $12.40 today is roughly $6.86 in 1986 dollars, or slightly above where it was in 1986 (the 1985 average price for the year was $6.13, the 1986 average was $5.47). What we've seen in the run to $12 is the reversion to the mean! Gold is even worse if you can believe it. In 1986 dollars, the current price of $645 is equal to $357 in 1986, which is $10 below the average price of $367 for that entire year! Again, where is the bubble when after all this run-up we are trading right where we were in 1986! By your logic, there must also be a bubble in cars, and airline tickets and gasoline and every other component of the CPI since they are so much higher in nominal dollars (but they are still exactly where they were in 1986 when adjusted for inflation!). When silver hits $50 and gold hits $1500, and everyone and their brother is rushing in to buy gold and silver, then we've hit the bubble stage. Until then, in my opinion this is just a correction in a bull market that has years of life left in it.

That's why I'm holding onto my silver. Eventually the silver price will get to where it should be along with gold. Even at $12 an ounce silver is still "cheap" to me.

I find this entire thread great reading, and this post in particular to be excellent in the thought provoking area. Thanks everyone. Keep it up

Wow,, good stuff.

Agreed housing currently is very inflated,, heck, even Greenspan said so,,, he hasn't said anything in months and comes out and warns about housing. Very similar to his warning regarding tech stocks 4-5 months before they popped.
Although he said cooling would be regional, I think it will be a tad cooler everywhere..... anyone besides me noticed more "for sale" signs around the neighborhood, I do, and I live in an area expected to see another 10% increase in home values.

Agreed, ARM's and liberal lending could act as a catalyst and could put even more homes on the market. Number of ARM's out there is crazy.

Given the pop occurs at MS70.
Didn't mean to directly relate the metals bubble to the current MS69 Ultra Cameo
Housing bubble,,, simply wanted to point out that when a sellers desired profit margin is exceeded by the current buying price, that there exists a gap which can readily dissipate. This gap can exist in any retail item, or commodity which is used to generate retail items.... trick is to acknowledge it, see it, quantify it, and play with it in an informed state. The gap does exist in the metals market, it is much less significant than gaps in other areas, but she's there. If mine opex continues to go up, then the gap narrows and we can smile, if it goes down then the gap widens and the risk increases. If I had to guess, I'd say the metals market is about AU50.

Oh yeah,, re. the comment about bubble in gasoline. There is concern within the market that this exists also. In fact the gap I spoke of above is somewhat significant and recognized by many players in the market. The gap has put a lot of regular commodity players on the sideline (as they don't like the risk of potentially quickly falling prices) and we have seen market corrections aimed at bringing them back into the game.... not sure it's worked.

Just think about countries like Brazil that are 80-100% gasoline independant. Grain fuels and hydro-electric. Granted, they have far less cars and alot more rural areas, so the transition wasn't too bad for them. Prices to me as far as gas is concerned have finally moved towards a more realistic price based on the rest of the worlds costs. But I don't see the bubble showing much movement in our neck-o-da woods as far as gas is concerned. Little up, little down. To me, it will drop a little more and stabalize relating to the "eco-friendly" vehicles. Just as silver, gold, platinum, and palladium will eventually drop a little from demand fluctuations, and eventually stabalize for a little longer. Ah, optamism!


also, these may not be true "bubble" reactions, but it's a term that can easily give you the basic idea of whats going on, in my opinion. But if you got another term, I'd be glad to use it...bubble sounds too much like talking about candy lol.

It is a pity that the financial system is set up such that we look at the price of precious metals through the prism of $/€ rather than the other way around. I think it would be more healthy (though admittedly not as convenient) for us to look the value of currency as "such and such" amount of gold/silver.

Instead of saying silver is X number of dollars an ounce today, we would say .Xoz of silver equals a dollar today.

That would make sense if (say 1 oz of) silver or gold had some non-volatile value. Do they? I don't think so ... We just need to keep in mind that the price of a commodity can go up and down, and so do "prices" of currencies.

Christian

The problem with that is that most people just suck at decimals (i.e. $1=0.00153 oz. gold, or 0.07905 oz. silver). Dealing with whole numbers is much easier for folks, and it also vividly illustrates which has true value and which is just a convenient way to spend value.

Hm, what would be the "true value" of a certain quantity of silver, gold, copper, etc.? If metal prices go up in terms of pretty much every currency, it may for example be attractive to exploit sources that before would have been too expensive, which would result in additional supply ...

Christian

In fact, that's exactly the way I see it. The rises in gold and silver prices are driven solely by inflation of the world's worthless fiat currencies. Gold and silver are a means of preserving the value of one's wealth in the face of the inherent instability of a paper-backed-by-winks-and-snickers currency.

I predict that some country, most likely China, will soon establish a precious metals currency. Once that happens, all nations will have to follow suit or lose trade. Politicians hate the idea of precious metal money because they can't control their subjects by inflating the money supply at will when the money is a tangible commodity.

I hate politicians, which is why I would love to see a return to precious metal money.

That I see real trouble with. Geologists estimate that there is around 19x19x19m^3 or 6859m^3 of gold worldwide. And if you are to divide that up with 6 billion people for everyone having a fair share, if I didn't do my calculations wrong, everyone has a share of just 1.14cm^3 of gold, which is around 1.5g(??? - Burks help me check!!! I fail chemistry!) of gold for everyone So if you have an ounce, well have that in mind that 20 other people didn't have the opporunity to buy them.

If your math is correct then I have enough gold for 1,200 people!

Sorry, but I can't see what you mean. Geologists estimate....what geologists and are they estimating known and unmined deposits of gold or what? Here's one bit of trivia I've always been impressed with:
THE TOTAL AMOUNT OF GOLD MINED, TO DATE, IN THE U.S. WILL MAKE A CUBE MEASURING A LITTLE MORE THAN 50 FEET ON EACH SIDE.
ONE CUBIC FOOT OF GOLD WOULD WEIGH APPROX 14 HUNDRED POUNDS OR 1464.83 TROY OUNCES.

Excuse the caps, that's the way the document I saved was formatted. To the point, that's over 183 million ounces mined here since gold was first discovered and the US has never been a big gold producing country compared to some others. The way your point was framed sounds as though it was formulated as a means of presenting the argument that a return to gold money would be a nightmare in terms of "social justice".

Gold has been money for most of the history of mankind except for the past 100 years or so. That past hundred years has seen the rise of collectivist governments which slaughtered hundreds of millions of their own subjects. I'd prefer to see governments reined in by cutting off their access to financial power, which has always been fiat money.

Gold money is the property of the bearers, not of the government which coined it. Fiat money s the property of the issuing government and only has value by virtue of legal tender laws. This gave 20th century governments unprecedented power over the lives and domestic economies of their subjects. Those governments used that power badly in almost every case.

In the 19th century, travelers could spend their gold and silver coins anywhere they went. The precious metal coins were viewed as portable property and gave ordinary people economic power independent of their governments. When money is the property of citizens, governments lack the power they crave. I'd rather have it that way.

I can see the old concepts still working with silver, as it doesn't change in price more than a few cents at a time, but gold may be too hard to pinpoint at a single cost to make a usable coin from it. Think about all the changes made in the 1800's to coinage in the US to adjust weights to reflect current market values.

I suppose if the government came in and placed a price floor on the cost of precious metals then they could even make a $100 platinum coin or something of the sort. But they make way too much money on their current gold investments to do something that self destructive.

In my opinion things will not revert to the old silver/gold standards, and our current coins will be made of cheaper and cheaper metals. Just remember it costs the government nearly/over a cent to make a cent, we should all soon expect an aluminum/steel cent in the 2009 design remakes. Maybe even sooner.

For those in other countries that already have cheap alloy or aluminum coins, how do you all feel about them? Personally, I think an aluminum cent would look really nice, but being basically worthless I don't know how I feel about using them lol.

Nice stated, I've never thought of it in that light.

Perhaps I might have been seriously mistaken about the 19 cubic meter, as USGS says it's 21 cubic meter.

Link: http://minerals.usgs.gov/west/factfaq.shtml

Ok, got info that 1cm^3 of gold is around 19.3grams.

But note, a scale of 21 cubic meter will fit in a football stadium easily. Even so, that doesn't change the scale of gold distributed among 6 billion people - just 1.54cm^3, 29.79grams per person.

Back in 1930s, world population was just a mere 2 billion. Has the amount of gold found / mined ever since has tripled against what was found for milleniums? Perhaps yes with all of the technology that we have, but costs have going up as most of the easy gold, found as alluvium gold have been mined out, as we are looking into blasting solid basaltic rocks just to mine gold out.

Can the production rate of gold go faster than the world population growth rate? Unless that can be achieved, I don't see how we can deal with the situation of "everyone is entitled to just an ounce of gold". And you know how small an ounce of gold is if I said that is all you are entitled to!!!

If I remember right, some European money changers allow you to exchange bullions for currencies - that I will have Ageka to confirm it.

Historically several countries belonged to the Latin Union
Belgium, France, Switzerland,Italy
They standardised on a 20 Francs gold coin with 5.8 gram of pure gold content in the mix of the coin
In Belgium moneychangers will still change into gold with a mere 2% spread on the bid and ask
They buy from people walking into the exchange and sell inventory to the people wanting to buy what is available
Favourites are the 20 francs and the one ounce coins being mainly Krugers, Eagles and Nuggets

Right now the american eagle has following bid ask

Eagle (50 $)
502.50 Euro
510.50 Euro


http://www.gold4ex.be/servlet/javaparser.c...st_or_new&lg=nl

Due to this cheap availability of buying and selling German and French are coming here
France now has a tax on gold and in Germany the spreads are high
I am not aware of moneychangers in any other country trading gold with a 2% spread

You might be interested to know that all the changes in coinage standards you refer to in the 1800s were made to silver coins. The standards of gold coins were changed once, in 1834 to adjust the ratio of silver to gold from 15:1 to 16:1, and once changed the standards for gold coins remained constant until 1933.



Well, it seems to me you are missing some important concepts in monetary theory, namely the velocity of money. Even if the supply of gold did not grow as quickly as population, an increase or decrease in the velocity of money would be the safety value to prevent inflation or deflation in the economy. Unfortunately, most modern economists have only lived under a fiat currency regime and thus take for granted that inflation is a natural economic state, which it most certainly is not.



I must admit I find this statement quite disturbing. No one is "entitled" to anything, rather gold represents an honest form of money which people must earn. It is not a gift from the all-powerful government to bestow on people equally. The problem is that you are on a fiat mindset, where government is the source of money, and thus creates it and bestows it on those it deems worthy, whether throuhg contract, taxes or welfare. But that paper is also created at a much faster rate than the rate of economic growth, thus creating inflation, a hidden tax, or more appropriately a hidden method of government theft from the most productive citizens. As 28Plain said, this is a way for the government to hold absolute power, since that can create fiat money with a printing press and some cotton-linen fiber, but they simply can't creat gold, despite the hundreds of years of effort made by alchemists across the world.

Chinese have been permitted to own gold for the last 5-6 years now, and the government capitalizes on it by selling very large quantities of gold. I myself would like to buy one of the 1 Kilo Pandas, but they are minted in small numbers and are eagerly sought. So far I have not managed to find anything larger than a 12 Oz coin