Let's start this by looking at the historic value of silver. How will silver actually be valued if the whole world returns to using gold and silver as I expect it to eventually? Sure, it may go up a lot in terms of dollars, but won't everything else just cost that much more, too? No. No! I expect silver's rise in value to far outpace every other asset, and every other commodity you can buy. As proof, And given the ongoing supply/demand deficit and shortage, as reported by the two industry reports, I expect silver's value to far exceed the historic value. There are several ways to evaluate silver's historic value.
The first is to look at what silver could buy, and to look at what wages were in terms of silver. I have written that a day's wage, in silver, for skilled labor, about 100 years ago, ranged from being a silver dime as one man reported, a silver quarter during the great depression in the 1930's, or as much as a silver dollar. Henry Ford paid his workers, what was considered a very excessive $5.00 a day. In silver, at .72 oz. per silver dollar, that was 3.6 oz. of silver per day.
But remember, that was an extremely high and very unusual wage. It was made possible by the very high productivity of the assembly line, and little government regulations or taxes. If silver returns to historic norms, it will be an ounce of silver, or less, for a day's wage. Due to scarcity of silver, it may well be more like less than a 1/10th of an ounce of silver per day. Or perhaps, a silver dime for two weeks of labor!
The reason is that the U.S. has well over 100 million workers, yet the world has about 250 million oz. of silver in known inventories! If 1/10th of an ounce of silver is a day's wage of $100, then an ounce of silver would be $1000/oz. The other historic value was the gold to silver ratio. One ounce of gold was the same value as about 10 to 15 ounces of silver. Again, due to silver's scarcity today, that ratio will certainly deserve to be exceeded, to at least 5 ounces of silver to one ounce of gold. Thus, silver will be valued at about 1/5th of $1000, or $200, assuming that gold is fairly valued at $1000. But, if gold should really be valued at about $5,000 per ounce, then silver will be about $1000/oz.
In both of these examples, this does not mean the price of a gallon of milk would shoot up to
$400 per gallon. I would expect that milk prices would remain the same, at $4.00 per gallon. If milk rises to $40/gallon, and if consumer prices rise by a factor of ten, then increase the "future value" price for silver also by a factor of ten, so that silver would be $10,000/oz, and 1/10 th of an ounce of silver would be $1000, so that a 1/10 of an ounce of silver would be able to buy the things you'd buy today with a day's wage.
And if you truly believe that an economy would be run more efficiently, as I do, without all the fraud of the dollar negatively affecting things, then you should assume, as I do, that a day's wage of silver (however small of an amount that would be) should help the average consumer to be able to buy more than a day's wage of fiat money can buy today.
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