This is a 650 year graph of silver prices in terms of 1998 dollars (blue line) and silver/gold ratio (gold line) from 1344 to 2004. (To have a clearer view of the graph, you can go to http://goldinfo.net/silver600.html
At first glance, it will seem that the price of silver is going down. But take note that this all the prices u see on the graph is in terms of 1998 dollars. What does this mean? I'll provide my 2-cents.
In 1477, the price was $806 (806 "1998" dollars). Ever since the "peak" back then that you see on the chart, the price of silver in 1998 dollars has been declining steadily. Take another point in time, say the year 1998 when the price was $5 (5 "1998" dollars - I can't really see very clearly since the chart is so small, but let's take it as $5)
Now, if you live in 1998, you can take $5 and go buy an ounce of silver for $5. Suppose you decide to travel back in time to the year 1477. You bring along your $5 with you and approach a silver seller back there. Will he sell his silver to you for $5? DEFINITELY NOT! Not with your "1998" $5 note! He will demand $806 "1998" notes from you! Even if back then, silver priced in "1477" note is $1, he will not sell his silver to you for your $5 "1998" note.
So what do we see here. The dollar has lost so much purchasing power between 1477 and 1998. A silver seller back in 1477 will demand more than 160x of the dollar that you use in 1998. This chart does not show that silver is falling in value, but rather, it is showing that the dollar is falling in value.
Dude, are you fucking stupid? The US Dollar would not exist for over 300 years after 1477.
ReplyDeletestop it with the effing this and that .. are you a teenager?
DeleteWhat are you talking about? Which part of "in terms of 1998 dollars" don't u understand???
ReplyDeleteIf I had been buying up gold instead of saving my money in a bank, I would be a very wealthy man right now.
ReplyDeleteEr...
ReplyDeleteIf you had to pay $806 1998dollars for silver in 1477, isn't that because silver in those days was more expensive?
The 1998dollar is simply worth what a 1998dollar is worth. QED it has only one value.
For further insight, the opening of the later German and Peruvian mines had the effect of flooding Europe with silver, which caused the price of silver to fall (not rise), as it shows in the graph.
best wishes