As I sat pondering the topic at hand, predictions in the year of 2012, I stood amazed that the economy, as bad as it is, hasn’t become a lot worse.
As I write this, silver sits at $27.81 per ounce. In 2011, the spot price of silver rose to a high of $49.51 in April, and since then has slowly decreased during the rest of the year.
Economically this is more than just an anomaly. The spot price of silver shows how many FRNs (Federal Reserve Notes) are needed to buy one ounce of silver. Silver is the standard in this equation, not dollars. One ounce of silver will always be worth one ounce of silver, whereas the value of the dollar is constantly fluctuating.
We have a dollar that is not guaranteed by anything. Up until 1933, the dollar was on the gold standard. Until 1971 other governments could still convert dollars to gold. After that, the dollar has been based on only one thing " our trust in the United States Government. How much do YOU have faith in our Government, really?
Our government (through the Federal Reserve) creates money out of thin air in two ways " fractional banking and the printing press. Fractional banking allows banks to loan out much more money than they actually have in their possession, essentially creating money where none exists. Then they can loan money on the money loaned, spiraling the amount of “phantom money” out of control ad infinitum. Secondly, to make things even worse, the Federal Reserve authorizes the printing of additional dollars whenever they deem it necessary.
Couple this with the fact that there isn’t any Government currency in the world backed by gold, brings me to the astonishment that silver is as low as it is. It just doesn’t make sense.
It’s not rocket science to understand that the more we have of something the less each one is worth. Since silver cannot be manipulated in this same way, it makes me wonder how silver can stay this low. IT JUST CAN’T.
I recommend people divest their interest in dollars and invest in precious metals, silver in particular as it is obviously undervalued. Start building a community of businesses that will accept real money (silver and gold) in trade. When the economy collapses, and it will (no government has survived once it devalued their currency by not having it backed by a precious metal), we need to be prepared.
Make 2012 your year of preparedness: You can opt out of the Federal Reserve by refusing to use their notes as much as possible. In this way, you will also be prepared in a way most Americans won’t by having a method of trading (when we will need a wheelbarrow full of FRNs to buy a loaf a bread, as has happened in the 1920’s in the Weimar Republic and most recently in Zimbabwe).
Karen Emery
President
DelValley Silver
www.delvalleysilver.com