Informed readers understand that the
mainstream media, owned by
a
handful of gigantic corporations
, is constantly bombarding us with
propaganda, mythology, and disinformation. Some of this brainwashing is easily
noted because it is very recent and/or plainly absurd. However, most of us will
have absorbed large quantities of this mythology unknowingly, simply because we
have been bombarded with this brainwashing (literally) every day of our lives.
One important aspect of this brainwashing
is the mythology surrounding the concepts of price and value. For most people,
these words are synonymous, even though they refer to two, distinct concepts.
Price is the simpler of the two concepts. It merely refers to what a particular
vendor or service-provider charges for their good/service.
Value is an entirely distinct concept.
Value is the metric we use to compute what something is actually worth. At this
point, most readers will begin to glean the difference between these two
concepts. Just because a merchant charges $50 as the price for a particular
good does not mean that this good has a
value
of $50. As consumers, we understand that it is not uncommon for merchants to
over-charge for their goods, meaning that the price exceeds the value.
Conversely (although much less common) we
also encounter situations where the price of a particular good is less than its
actual value. Perhaps the merchant is distressed, i.e. going out of business,
or is simply having a “sale” on their merchandise. In such situations where
value exceeds price, we classify such transactions as “a bargain” – we obtained
more purchasing power than we expected from the fiat currency in our wallets.
Now that we have clearly distinguished the
concepts of price and value we can address the brainwashing. How and why have
the bankers (and their media mouthpieces) managed to get most people to equate
price with value, most of the time? The “how” is the easier dimension to
address. In perfectly functioning free-and-open markets (something which has
never existed in the real world) price does equal value.
In perfect markets, no merchant can
over-charge for their products because in “perfect markets” consumers have
perfect information. If one merchant charges excessively for his/her products,
consumers with perfect information simply move on to a shop which prices its
products fairly (i.e. price = value). Similarly, in perfect markets where
merchants also have perfect information, they would never under-price their
products, so once again price = value. (Note that in our “perfect markets” we
assume that merchants never seek to undercut each other by discounting their
goods.)
Here we see the origins of the mythology.
In theory, price could/should/does equal value. The bankers and their media
sycophants simply
pretend that we
have perfect markets – even though such markets could never exist in the real
world – and thus is born the myth that price = value.
Why do the bankers consider it so important
to brainwash us with this mythology? Here we have multiple motives at work. At
the top of the list is market manipulation. Informed readers know that the
bankers
manipulate
most of our markets
most of the time. Indeed, the Big Banks have already
been caught and/or convicted of
conspiring
to serially manipulate
many of our most-important markets – with gold and
silver markets being two of the most-obvious examples.
However, in a world where the Sheep have
been brainwashed to believe that price = value, the concept of price
manipulation cannot even exist. If price supposedly equals value, then no
matter how high or low the price, manipulation cannot exist. Where price is
assumed to equal value,
any price is
deemed to be a correct/legitimate price. Thus we see one, prime motive for this
branch of brainwashing: to cover up the serial price/market manipulations of
the
One Bank
.
Arguably, there is an even bigger motive
for indoctrinating us with the mythology that price = value. It is found in the
worthless,
fiat currencies
we carry in our wallets. Why is it vitally important to the
One Bank that the Sheep accept the mythology that price = value with respect to
our paper fiat currencies?
Very simply, if the Sheep automatically
assume that price = value then those Sheep will never ponder the question “what
is the actual
value of this fiat
currency?” The Sheep never ask this question, because they assume they already
know the answer: the value of the currency is the same as its price (i.e.
exchange rate). It is only in a world where the Sheep understand that price and
value are separate concepts where the bankers would have to worry about those
Sheep even beginning to ponder the worthlessness of these fiat currencies.
Putting this all together, we now see why
price/value brainwashing has been a top priority of the One Bank, for more than
a century. It is only through reinforcing this delusion that the One Bank can
continue to perpetrate its serial manipulation of our markets. If we properly
understood the concept of value, we would automatically see through the
manipulation of most markets, because we would notice the discrepancy between
price and value.
If we properly understood the concept of
value, we would long ago have rejected the fraudulent fiat currencies foisted
upon us by our
corrupt
central banks
because we would immediately comprehend that these fiat
currencies have no value. In a world which clearly understood the distinction
between price and value,
the One Bank could
not continue to exist
.
The constant, massive crimes it commits in
manipulating our markets would become transparent. The fraud that the central
banks and Big Banks perpetrate in conning us into using their worthless paper
currencies would become transparent. Of all the lies which have been drilled
into our minds, the mythology that price = value may be the single,
most-important myth to the banking crime syndicate.
Now that we have established that there is
no inherent connection between price and value, and now that we have established
how/why we have been programmed with this brainwashing, we can finally address
the title to this piece. What is the real value of precious metals?
It is a very simple question, yet thanks to
the One Bank, it is now almost impossible to answer that question. For more
than a hundred years; we have absorbed the mythology that price = value. For
more than a hundred years; our markets have been constantly manipulated –
perverting the relative price levels of virtually all the goods and services in
our economies to historic extremes.
A century ago; answering the question “what
is the value of precious metals?” would have still been an elementary
proposition, because the differential between price and value had not yet been
skewed to absurd extremes. For example, little more than a century ago the
gold/silver price ratio was still at a rational level – approximately 20:1.
We know that number was relatively
legitimate because the
gold/silver
price ratio
is the most-established, most well-known price relationship in
the history of our species: 15:1. The legitimacy of this price ratio is beyond
any possible argument for two reasons. To begin with, the gold/silver
price ratio (15:1) is an almost perfect
match for the gold/silver
supply
ratio (17:1), the relative occurrence of the two elements in the Earth’s crust.
The second reason why we can be absolutely
certain of the legitimacy of the historic gold/silver price ratio is that it
endured for more than 4,000 years – until the One Bank began its malevolent
campaign to destroy that price ratio as a first step in demonetizing silver.
What is the mythology constantly fed to us by the bankers to explain/justify
the ultra-fraudulent, modern gold/silver price ratio (currently around 70:1)?
Silver
is no longer a monetary metal. It is now an “industrial metal.”
Pure brainwashing. In most of the world
(outside the Corrupt West), silver is universally regarded as
money: a store of value that most of the
world’s population still uses to store (and protect) their wealth. The fact
that silver also has a plethora of very important industrial applications
cannot make silver less valuable. It can only make it
more valuable.
The bankers’ propaganda is perverse. The
fact that silver is now an “industrial metal” (while still also being money)
makes silver more precious than ever, thus the historic price ratio should have
shrunk to less than 15:1 rather than exploded upward to the current,
ultra-fraudulent levels we have seen for an entire century.
Unfortunately, being able to price gold in
relation to silver (and vice versa) helps us very little – in a world where all
other prices for goods/services have also been perverted to extreme
differentials versus their actual value. Given this reality, where do we even
begin in attempting to determine the value of gold and silver in relation to
other goods?
There is no simple way to answer this. The value of any good is supposed to be
determined in accordance with its supply/demand fundamentals. However, the One
Bank has severed the connection between price and fundamentals in most of our
markets. In this pseudo-reality, not only does price have no connection to
value, but we have been deprived of all objective reference points in
determining value as a function of supply and demand.
What is the real value of precious metals?
Today, this is a question which can only be answered in negative terms: the
real value of gold and silver has no connection at all to the
paper
prices
for gold and silver, and no connection at all to the paper prices
for other goods.
The reaction of most readers to this
elementary conclusion will be “so what?” What must be understood is that rejecting
the bankers’ paper prices for all goods and all services as being fraudulent
and irrelevant is an important step in changing this paradigm of fraud. It is
only once we recognize that we can never estimate value of terms of the
bankers’ paper prices (and the paper itself) that we reach an epiphany. We
determine the real value of precious metals and the real value of all goods and
services
in relation to each other.
What is the real value of an ounce of gold?
What is the real value of a house? What is the real value of a tennis ball? We
cannot answer that question in terms of “dollars”, because
our dollars have no value.
How many tennis balls can we obtain for an
ounce of silver? How many ounces of gold must we spend to buy a house? Pricing
hard assets in terms of other hard assets. It is only once humanity begins to
ask (and answer) such questions again that we can return to a world of sanity,
where price and value are at least similar, if not synonymous. It is only in
such a sane world where accurate estimates of value once again become feasible.
What is the value of any good or service? We
can
never answer any such question as
a function of dollars. We can only answer such questions as a function of real
money, i.e. gold and silver.
What is the real value of precious metals
today? We cannot possibly produce a rational answer to that question, in an
irrational world which prices everything in terms of scraps of worthless paper.
We can never estimate value as a function of something that has no value.
It is only when we completely reject the
concept of “dollars” as being nothing but more banker fraud and we begin to
price items of value in terms of
other
items of value
that humanity can re-learn the concept of value – and then
begin to attach rational prices to the goods and services produced by our
societies.
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Jeff Nielson is co-founder and managing partner of Bullion Bulls Canada; a website which provides precious metals commentary, economic analysis, and mining information to readers and investors. Jeff originally came to the precious metals sector as an investor around the middle of last decade, but with a background in economics and law, he soon decided this was where he wanted to make the focus of his career. His website is www.bullionbullscanada.com.
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The views and opinions expressed in this material are those of the author as of the publication date, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.