Silver goes ballistic and shakes the financial system

[axj]

I do have one question for those that know more though. I've read an opinion that the price always returns to the mean, but what term is the mean calculated over?

Probably the mean gold-silver price ratio, since with the current levels of inflation the prices need to be higher for both over time just to keep the value.

And that is not accounting for factors that increase prices even more than just keeping up with inflation, such as increased industrial demand for silver or the increased stockpiling of gold by central banks.

On the other side of the equation, the prices of both seem to have been suppressed for a long time - probably to make fiat currencies and the financial system look more stable than they are. Especially a large rise in the price of gold has always been interpreted as signifying financial and currency instability.

 

[daddycat]

Q: (Odyssey) On the money issue, would it be a good idea to invest in silver or gold?

A: Partly, but what about "needful things"?

Q: (KJN) So we should spend it on things we need now, versus spending it on gold or putting in a bank or that kind of thing?

A: Mostly. Money will soon be worthless, ownership will survive awhile longer.

I think most of us are not past the point of needing to spend on needful things.

There's also this perspective of silver falling back to the $50s.

But I also like Jeffrey Christian, and he’s telling me, wait a minute, $50 is this area where silver can’t stay for more than an extended period of time.

...

So the longer that silver stays at prices where it makes sense to mine more, it makes sense to recycle more, it makes sense to use less in fabricated products, and it makes sense to take profits if you’re an investor, the longer it stays up there, the greater the probability that the price will come down.

And that’s why we say, look, the price of silver, the price of anything can spike to anything. But staying there is another story. So we saw in 1979, the price went from Silver run from $5 to $50. And Two days later or a month later, it was $35. That month that it hit $50 for five minutes, the average price was like $35.

And for the full year, 1980, it was $20. 2011, Given the price spiked to $50, and it stayed up there for about 20 minutes. And within five days, it was $32 an ounce. And then it fell to $15 within five years. So that’s the economics. It’s not theories, it’s economic realities. What does it cost to produce an ounce of silver from mines or from scrap? And what does it cost to use it? And what does that do to the price of my the price of my products. At what point do people stop buying mirrors?

Gold And Silver Hit New Highs—Here’s What Eventually Stops The Rally | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero

www.zerohedge.com