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maplesilverbug
14th November 2010, 03:10
What If You Were Paid in Silver? (http://www.dailyfinance.com/story/streetwise/dow-11000-worth-less-now-than-2001/19713059/)
Charles Hugh Smith

In the early decades of the 20th century, my wife's grandfather was paid with a single gold coin.
Just as a thought-experiment, let's say we worked in a silver mine and were paid in silver rather than U.S. dollars.

How would our pay just since July 1, 2010, compare with other investments such as gold, the S&P 500 and agricultural commodities?
The following chart answers that.


http://www.blogcdn.com/www.dailyfinance.com/media/2010/11/silver11-10.gif


Yes, the S&P 500 has soared 19% in nominal terms since July 1. But when priced in silver, stocks have lost a staggering 33% of their value in that period.
When priced in silver, the U.S. dollar, undermined by the Federal Reserve's latest round of quantitative easing (QE2), has lost a stupefying 56% of its
purchasing power value in just a few months.

Agricultural commodities have held their own when priced in silver, declining less than 1%.

The point of this exercise is to show that "value" and "price" are relative. What matters is not nominal prices but what your money and portfolio returned in
inflation-adjusted terms -- and what your money can buy in the real world. This is why purchasing power is a far more important measure of value than nominal prices.

What is Truth?
14th November 2010, 21:05
I don't understand, how can silver be down 1% and gold down 25% since July? Do you mean that with the falling dollar silver and gold haven't kept up with its decline? If the dollar lost 56% of its purchasing power in recent months how come prices don't reflect that?

Gino
14th November 2010, 22:10
I don't understand, how can silver be down 1% and gold down 25% since July? Do you mean that with the falling dollar silver and gold haven't kept up with its decline? If the dollar lost 56% of its purchasing power in recent months how come prices don't reflect that?

I think it is Agricultural Commodities that are down 1%

maplesilverbug
14th November 2010, 22:42
I don't understand, how can silver be down 1% and gold down 25% since July? Do you mean that with the falling dollar silver and gold haven't kept up with its decline? If the dollar lost 56% of its purchasing power in recent months how come prices don't reflect that?

All those things in that chart are relative to silver.
Thus, being paid in silver, since July gold is now 25% CHEAPER; US$ is 56% CHEAPER; etc.

The "ag" is not silver, it's 'agriculture' commodities (presumably the index as a whole).

What is Truth?
15th November 2010, 19:11
All those things in that chart are relative to silver.
Thus, being paid in silver, since July gold is now 25% CHEAPER; US$ is 56% CHEAPER; etc.

The "ag" is not silver, it's 'agriculture' commodities (presumably the index as a whole).

O.K., now I understand. Thanks.

valerb
15th November 2010, 20:23
What If You Were Paid in Silver? (http://www.dailyfinance.com/story/streetwise/dow-11000-worth-less-now-than-2001/19713059/)
Charles Hugh Smith

In the early decades of the 20th century, my wife's grandfather was paid with a single gold coin.
Just as a thought-experiment, let's say we worked in a silver mine and were paid in silver rather than U.S. dollars.

How would our pay just since July 1, 2010, compare with other investments such as gold, the S&P 500 and agricultural commodities?
The following chart answers that.


http://www.blogcdn.com/www.dailyfinance.com/media/2010/11/silver11-10.gif


Yes, the S&P 500 has soared 19% in nominal terms since July 1. But when priced in silver, stocks have lost a staggering 33% of their value in that period.
When priced in silver, the U.S. dollar, undermined by the Federal Reserve's latest round of quantitative easing (QE2), has lost a stupefying 56% of its
purchasing power value in just a few months.

Agricultural commodities have held their own when priced in silver, declining less than 1%.

The point of this exercise is to show that "value" and "price" are relative. What matters is not nominal prices but what your money and portfolio returned in
inflation-adjusted terms -- and what your money can buy in the real world. This is why purchasing power is a far more important measure of value than nominal prices.

Why pick Silver for this exercise, why not some stock that has exploded by 800% and everything, including Silver is in the toilet. I don't see the point!!

maplesilverbug
15th November 2010, 21:19
Why pick Silver for this exercise, why not some stock that has exploded by 800% and everything, including Silver is in the toilet. I don't see the point!!

I cannot cure your blindness.

valerb
15th November 2010, 23:13
I cannot cure your blindness.

That entire line is a crock. Since when do we base our investments on four months of history. How did we look the previous four months? How about all of the 80's and 90's when Silver was flat on it's ass?

Everyone knows that when your portfolio increases in value, so does your purchasing power. It doesn't matter if it's in stocks, bonds, Gold, Silver or cans of Chili. To say the dollar is down 56% because of QE2 is retarded. To say Silver is up for any other reason than speculation is just that, speculation. That's like saying Silver took a big step back wards from last week, because of QE2.

maplesilverbug
16th November 2010, 01:56
I cannot cure your curmudgeonness.

valerb
16th November 2010, 02:13
I cannot cure your curmudgeonness.

You can't cure anything, if your going to take lessons from the ROGER.

maplesilverbug
16th November 2010, 02:19
One cannot cure perception.

http://www.starwars.com/img/kids/do/crafts/f20090402/final.jpg

valerb
16th November 2010, 02:29
One cannot cure perception.

http://www.starwars.com/img/kids/do/crafts/f20090402/final.jpg


Roger, I knew it was you all along. You hijacked Maples login!