The price of silver popped above $20/oz (USD) last night. Woo-hoo! Silver is “rallying”, and happy days are here again. Really? How soon we forget.
Look at the chart above. Can anyone see a rally?
In the spring of 2011; the price of silver was pushing $50/oz, and that price was still just a fraction of any reasonable, fair-market value. Then we had the Great Take-Down. The price of silver was smashed all the way down to the $20/oz level by the middle of 2013, in a series of massive (and illegal) plunges in the bankers’ paper-silver market.
At that point, the $20/oz level became the floor for the silver market, for a full year, until the middle of 2014, when the bankers began steadily grinding the price of silver (and gold) lower again. Now we have the price of silver finally (and suspiciously) returning to that previous bottom, and we have most people calling this a rally.
The price of silver is now only 40% of its previous peak. It has now barely recovered to its 2013/2014 floor. But this just frames the issue in terms of the bankers’ phony/fraudulent paper markets. We also have the real world, for those readers who choose to dwell there.
In the real world, a fair-market price for silver would be somewhere around $1,000/oz, today. The metrics for that number were explained in a previous commentary. For almost all of our history, workers have been paid for their labours in silver. Over all those centuries, the “average wage” was roughly one ounce of silver per week.
If we consider the “average wage” today to be somewhere around $50,000/year (roughly $1,000/week) then that directly translates into a paper price for silver of $1,000/oz. While few other commentators have embraced that four-digit number, any/all respected commentators in this sector are still advocating a three-digit price for silver.
If we take even the lowest three-digit number, $100, this still puts the current price of silver at only a ludicrous fraction of its current, fair-market value. If we go back even three years in time, to when silver had first been crashed to the $20/oz level, would anyone at that time have considered it a “rally” to see the price of silver (back) at the $20/oz-mark? Of course not. But grind the price down to $13/oz, and hold it there for a few months, and suddenly most people are excited that silver is priced at $20/oz.
This is a classic example of how the bankers (and their media sycophants) have completely altered our perception of reality, just by manipulating their phony, meaningless, and illegal paper prices for various goods. To understand the absurdity of this paradigm, we need to step back further (and further back in time), to when we had a rational and legitimate price structure, and a legitimate monetary system in our world.
Back when we had a legitimate monetary system, the world was “priced” in terms of gold and silver: hard assets – and real money. How many ounces of silver for that piece of furniture? How many ounces of gold for that piece of real estate. That is reality: a world where we exchange hard assets for hard assets.
Then the banking Crime Syndicate was handed control of our monetary system, by governments which were (at that time) merely weak-willed and cowardly, rather than being totally corrupt as they are today. Now the bankers have completely altered our perception of reality.
For the first time in all of human history, the world was/is priced in terms of paper – worthless paper. How many (worthless) scraps of paper for that piece of furniture? How many (worthless) scraps of paper for that piece of real estate? The questions have no meaning/relevance, because the paper has no value. It is pure economic insanity. Yet, for almost all of us, this is now “normal.”
By simply manipulating the (phony) paper price of anything, to any level – and then holding it there – the bankers are now capable of convincing/deceiving us into believing that this phony, paper price is the “value” of that particular hard asset. Complete and utter nonsense.
You cannot express “value” in terms of worthless paper. It is an oxymoron. How many Monopoly dollars for that piece of furniture? How many Monopoly dollars for that piece of real estate? Try paying for something with the paper “currency” from a board game, and people will laugh at you. Yet if we offer to pay for a hard asset with the equally worthless currency of the bankers, suddenly the worthless paper becomes acceptable. Even more absurdly, that phony price we pay in worthless currency for the good is equated with being its value.
It is only in world of legitimate markets (and legitimate currency) where price = value. Where either our markets or our currency loses its legitimacy, price no longer equals value, indeed the phony, paper price loses all relevance.
Price is not a “fundamental” of any market. In legitimate markets, price becomes a derivative of fundamentals, and from this was born the pseudo-science known as “technical analysis”. Proving that this is a pseudo-science, virtually none of these T/A Jockeys even understand that price is not a market fundamental. Rob our markets of legitimacy, and prices become completely meaningless, and consequently technical analysis also loses any/all legitimacy.
The real world is a world of value, not a world of “prices”. With our markets bereft of all legitimacy, this means that (paper) prices have no validity and thus these paper price-levels have no meaning. It is only in such a fantasy world where in one year (2014) a $20/oz price for silver is a disappointing bottom, but just a couple of years later (2016), the same number is considered to be an exciting peak.
The value of silver has not changed at all over the past three years. However, our perception of price has literally changed 180 degrees over this period of time. This alone should be enough to convince rational readers that their thinking has been altered via the constant brainwashing of the Corporate media.
The fact that silver is now priced at $20/oz (USD), i.e. $20 per ounce in the most-worthless of all of these paper currencies is not a cause for celebration. It is merely evidence of an ongoing crime. Yet the bankers (and the media drones) hype these phony, fraudulent, meaningless prices, and even most commentators in this sector immediately hop onto the Rally Bandwagon.
Readers of these commentaries laugh at how easily the Zombie majority is herded and programmed by the vacuous propaganda of the mainstream media and the lies of our puppet politicians. Well wake up! Apparently it is not much harder to herd-and-program the supposedly Aware Minority.
Here is a multiple choice question, to see if any readers are paying attention. In the spring of 2011; the price of silver was nearly $50/oz, and was still drastically undervalued at that (paper) price. Is today’s $20/oz price for silver:
a) a “rally”?
b) a crime?
It is only in the markets of purely paper assets (which have no intrinsic value), where price alone is indicative of a rally. In the real world; our determination of whether a particular market/sector is rallying is determined by fundamentals. Remember what they are?
For example, as has been explained in previous commentaries, the actual, full cost of production for an ounce of gold is now somewhere between $1,500/oz (USD) and $2,000/oz for the industry as a whole. At under $1,400/oz, we are not even at a break-even price for the sector. Look at the junior miners. Many/most of these companies are barely clinging to life. That is not a rally.
And the silver sector is even worse. Three quarters of our mined silver comes from “byproduct production”, i.e. the mining of other metals. The cost of silver is so ridiculously low that “silver mining” barely exists. For 4,000+ years, when we had a legitimate price for silver (and a legitimate gold/silver price ratio), the vast majority of all silver production came from silver mines.
(Click on image to enlarge)
The silver mining industry was exterminated when the price of silver was taken to a 600-year low at the end of the 1980’s. In real dollars it has never recovered. It would take a price somewhere above $50/oz for silver (and sustained for many years) to rebuild the silver mining industry to the point where we once again obtained most of our silver from silver mines. Then, and only then, would it be rational to start talking about a real “rally” in this sector.
The price of gold is still below the cost of production. The gold/silver price ratio is still close to 70:1, not 15:1, despite silver’s sudden pop over $20. It is nothing less than delusional to speak of current, phony prices as being indicative of a rally.
One thousand dollars per ounce for silver: that is the real, rational world. Twenty dollars an ounce for silver: that is the phony/fraudulent world of the bankers. Readers must choose which world they want to live in. You can’t live in both of them.
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