Hi Ho Silver, Away!

You don’t have to be The Lone Ranger, wear a mask, or even ride a horse, to appreciate the value of SILVER. Silver has been used and valued around the world for thousands of years – and is becoming increasingly “dear”. “Rein” in whatever you can get hold of – before the price of silver starts to run away.

If SILVER is your “horse”, you should ride, ride, ride.

The Lone Ranger actually said “Hi Yo Silver!” That doesn’t sound as good (to me) as “Hi Ho Silver!” – which was a song by Jim Diamond. Sleeping Beauty’s Seven Dwarfs also sang “Hi Ho! Hi Ho! It’s off to work we go! “Yo” means “I” in Spanish – and is not used as much as in English (where people say “Yo, W’a’s up?). “Hi I” sounds “lame”! Lame horses are usually shot (dead) – so I’d rather say “Hi Ho” (which also is more appropriate for anyone “prostituting” themselves for “money” – or an “investment”).

Every day SILVER does NOT rise (significantly) in “price” is another opportunity to buy “more for less” with the intent of eventually being able to exchange “less for more”. Don’t let “sidekicks” (or “wild horses”) keep you away – or leave you kicking yourself for not getting whatever you still can (while you still can).

“Tonto” means “fool” in Spanish. “Who was the masked man?” Tonto claimed that “Kemo sabe” meant “trusted scout”. In Spanish, “Quien sabe” means “Who knows?” The Lone Ranger was played by two different actors during the time it was on air. James Bond has been played by many more! So have many other famous characters – and not just in movies, television, and on Halloween. Just look at how many people (like to) wear football jerseys on game days with someone else’s name on the back – or underwear and other articles of clothing that they paid (rather than were paid) to “advertise”. People like to “pretend” lots of things – including about their finances.

Most “investments” aren’t. Not only that, many people don’t even understand the concept. They are just hoping to “make a quick buck”. There is nothing wrong with that – but it is not “investing”. Day trading is not investing; neither is “flipping” a house (or in most cases even buying a house or commercial property). Investing is a lot like planting a tree – which you have to wait for it to bear fruit and can’t uproot it every time you are hungry or expect to bear fruit more than once if you don’t take care of it. If you have a goose that lays golden eggs, killing it is the worst thing you can do.

The “spot” price of an once of gold is currently over $1,100. The price of an once of silver is around $20. The cost to acquire either is expected to go up. WAY up! Both metals are increasingly being promoted as “hedges” against the “inevitable collapse” of the (“U.S.”) Federal Reserve Note – and all other fiat currencies around the world.

If you buy gold or silver, you’ll have to decide whether to take possession (of coins or bullion) and store it yourself or to leave it in a depository – and hope you can get it if you need to. The latter is sort of like owning stock. You can buy and sell on the phone (or online) – but there are fees involved. Unless you are bartering at a pawn shop or with someone who will take what you offer, you’re going to need a “broker” (which is exactly what you might be) for most transactions – and most people won’t want to deal with you unless you buy in bulk (and have a contract to keep buying).

Don’t want to wait? $16 trillion of gold, silver, and other precious metals are traded on a daily basis in the foreign exchange market – sometimes called ForEx, but never 4X (which looks like 4 times) or XXXX (which looks like it could have quadruple the sexual content, represent 2 women, or be double “Dos Equis” – 2 Mexican beers).

After prices REALLY start to go up, those with commodities may be able to make “fair value exchanges” (of a little gold or silver for a house or whatever else they desire). If they can sell the idea of additional future appreciation, those exchanging precious metals can probably also get additional cash out of any deal – if they are willing to take it instead of something with actual inherent value (like sex, women, or beer).

Which is a better “value” – a gold medal or a silver bullet?

Ribbons and medals are usually “worthless“ (on the open “market”) – even though they are sometimes admired, “coveted”, and (as Napoleon Bonaparte and others have exploited) those serving in the military may be willing to fight, and die, for them.

Bullets are becoming harder to get – since they offer those who have them “protection”. Guns rarely kill people; bullets do. “Gun control” is being able to hit what you are aiming at. While I cannot offer you any silver bullets, I aim to share some information that may help educate, entertain, and assist you in better understanding and making decisions regarding the turbulent times we live in.

First, let’s “define” a few terms. When dealing with money, finances, and transactions, terms are usually more important than either “actual” cost(s) or relative (perceived) value(s).

Terms are the details, provisions, and conditions of an agreement or arrangement.

Costs are what is paid. They are expenses (or expenditures) – and sometimes “expensive”.

Value is relative, subjective, and often perceived more than “actual”. In an exchange, worth is established by what one person will accept from another Supply and demand (alone) do NOT necessarily determine value – but they often influence it.

Gifts are given freely – and are not always reciprocated. People like to give; and people like to get – especially something for nothing. But trade (of some kind) is more common.

Barter is the exchange of goods, services, or information – for something considered of similar value (in the “market”).

A resource is basically anything that is useful or needed – especially as a supply or support for something else.

A commodity is essentially anything (tangible) of perceived value that can be owned, controlled, bought, and sold. It most commonly applies to agricultural and mining products. I’m not sure if it would include “intellectual property” or not. I think the most precious “commodity” is not gems, metals, oil, gas, coal, wood, fiber, or even food, but water. Clean fresh water is essential for survival. Almost all other commodities are not – yet people will usually pay far more for even a little bit of any of the others than they will for water.

An economy re-presents the allocation, distribution, and circulation of resources perceived as “scarce”, valuable, and in demand. Almost all economies today rely on money – usually in the form of fiat paper currency.

Before paper, plastic (credit and debit cards), and electronic transfers of digits, money was whatever commodity was considered of most value at the time: gold, silver, shells, salt, beans, beads, cigarettes, animals, and even women. While diamonds, rubies, pearls, copper, steel, weapons, drugs, alcohol, and all sorts of other things have long been exchanged, desired, and considered of value, I’m not sure if any were ever used as “money”. There is a huge “market” for sex, but no matter how many bodily fluids are exchanged (for something else or not), it does not qualify as money – neither do eggs, semen, blood, organs, or body tissues – even though all are increasingly sold (as are babies – and modern day slaves).

Coins (and other tokens) are not as popular as they once were. They are heavier and harder to carry around than paper in one’s wallet or checkbook. Most coins in circulation are also no longer made out of gold, silver, copper, nickel, or enough of any other metal to be considered of much value. This may soon change. It is a lot easier to exchange (gold and silver) coins than it is to exchange wheelbarrows full of paper currency (as has happened more than once before in a variety of places around the globe). There is not a lot of “inflation” or other financial problems (other than robbery) when coins made out of anything with inherent value are used.

Gold is the most malleable metal. Silver is the most conductive. Silver is used in every electronic device – radios, televisions, computers, cell phone, refrigerators, fans, cars, and anything else you can think of. Silver is used for air and water filtration – and for all sorts of medical applications (like stopping bleeding and treating infections). There is less silver on this planet than gold – and it has more uses.

There may come a time when silver is worth more than gold. Even if it doesn’t come close, silver is a better buy than gold. If offers a better potential return than gold for the same amount invested and is easier to exchange.

It is estimated that there may only be about 10 years left of silver to mine out of the ground. Most silver mining in the future will be from e-waste recycling. China has already started doing this. When the market price of silver gets a little higher, you will see this in the U.S. as well. It is predicted to be a “major growth industry”.

Both China and India have huge populations – that will increasingly demand many of the “amenities” we take for granted (starting with clean water – followed by refrigeration, air conditioning, and most of our electronic gadgets). Even with technological advances, silver will be in increasingly high demand – with an increasingly diminishing supply available.

Only about 5% of silver produced is reserved for “investment” purposes. This includes national “reserves”. Most of the silver dug out of the ground is “consumed” commercially in various industrial uses – and then thrown away into landfill where it is much harder to extract from whatever else its mixed with than it was originally digging it out of rocks deep in the earth. At some point, in the not too distant future, those who possess silver may be able to exchange it for MUCH more than they purchased it.

I would not be surprised if China demanded (and received) a large(r) share for its population – and then later had a “population reduction”.

What’s the U.S population? I don’t know, but this is a census year. Unlike ten years ago, instead of actually even attempting to count everyone, statistical sampling and various algorithms are favored – meaning that, like fiat currency, our population (and subsequent changes in Congressional representation and flow of funds) will be whatever the “Administration” tells us – with nothing to back it.

China has the world’s largest population – and the word’s fastest trains. China likes silver and China likes coal. Warren Buffet is often considered one of the world’s “savviest” and “successful” investors. He has been buying silver for YEARS – on a contract with a price of only about $4 an once! His largest purchase of ANYTHING EVER was fairly recent. It was a railroad. Not just any train line – but one that carries coal. The tracks he now owns connect Mexico and Canada.

At least part of almost everything used in the United States today is made in China. Whatever China does financially will have economic “repercussions” in the United States. China is investing in silver. Are you? There are at least three things China does not have a lot of – that the U.S. (still does). The first is an “open society. The second is women (to marry). A preference for male children in a one-child policy has resulted in a major “wife shortage”. The third is water – especially to drink.

In many countries water is sold for more per gallon than gasoline – both of which are almost always cost MUCH more than in the U.S. Water tables have dropped significantly and pollution has tainted much of what was an incredibly abundant supply, but the United States still has more (clean fresh) water than many places in the world – including China.

U.S. “national” waters generally refer to the sea (up to 200 miles odd shore), yet last year, a bill was submitted in Congress that would have “federalized” ALL water in the country – even on private property. It did not pass – but that does not mean that something similar will not be proposed again. Either way, prices charged for water in the U.S. will rise a lot more than sea levels (no matter how many glaciers melt).

During the “Great Depression” of the 1930s, gold was “nationalized” and anything over 5-ounces was made illegal to own. This did not change until 1967. Possession was treated like “controlled substances” are today – punishable by imprisonment. This is unlikely to happen again -for either gold or silver. Before their gold was “confiscated” in the 1930s, people were paid full market value for what was taken from them. The U.S. government cannot afford to do that today even if it wanted to – and while the use of force may be employed for many things, national confiscation of assets would actually be “counterproductive” in our current “economic climate”.

Silver is a “better buy” and a “better bet” than many other options. Among the most important “investments” in life are health and relationships. A healthy relationship is best. People with partners often tend to do better financially as well as emotionally – but a lot depends upon who they “marry”. There are a lot of Chinese looking for partners. That could be a “silver lining” for some people. No matter what you do, invest well. Please invest a moment in your relationship with me; post a comment.

© 2010 – 2011, Oren Pardes. All rights reserved.

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