Silver And The Fall of Rome
While highly valuable as a component in many electronics today, silver’s biggest legacy may be its long history as money throughout human history… and no example stands out more than the Roman Denarius. The Roman Denarius, a silver coin, was introduced in 211 BC and served as the backbone of the Roman economy for several centuries. Silver was the metal of choice when it came to Roman money. T he silver Denarius was widely used across the vast Roman Empire for trade, wages, and everyday transactions. For several centuries, the Roman Republic thrived, enjoying a long period of practically no inflation because they used sound money – pure gold and silver. However, this stability was not to last… Assuming the mantle of Roman Emperor in 284, Diocletian made the decision to split the Roman Empire into four territories. As the empire expanded, facing escalating debts and military expenses, Diocletian started the debasement of the Denarius. They diluted its silver content with less valuable metals, aiming to extend the empire’s silver reserves. Initially subtle, this debasement seemed effective, but it escalated as the financial strain on the empire worsened. The Denarius, once 90-95% pure during Caesar Augustus’s time, plummeting to as low as 30% by the 3rd century AD. This drastic debasement led to rampant inflation, eroding the Denarius’s purchasing power and causing prices everywhere to soar. The Roman populace lost faith in the currency, and the once-thriving Roman economy began to falter. The debasement of the Denarius was not the sole cause of the fall of the Roman Empire, but it played a significant role in its decline. The erosion of the Denarius’ value, the once high purity coin became essentially a token, undermined the economic stability of the empire, leading to social unrest, a decline in trade, and a weakened military. The story of the Denarius serves as a stark reminder of the consequences of fiscal mismanagement and the importance of maintaining the integrity of a currency. Courtesy of GoldSilver
Why do we buy gold and silver?
Article courtesy of David MelvillReal money specialist / “Goud- en silwerspesialis”
The Fuzzy Concept of Saving for Retirement
Saving for retirement is that fuzzy concept that exists in the back-corridors of your mind when you are young. You hear “older” people talk about it; some with fondness and excitement, while others with some fear and trepidation. As you start your professional career, maybe start a family, and even buy a home, the concept starts to become less fuzzy. But still, its realism and importance do not quite crystalise for years to come. But then, suddenly, after the “optimum retirement saving years” are in the review mirror, many find themselves with perfectly clear vision in which retirement is now in sharp focus. It’s alarming to realise suddenly that you are over 50, with no retirement savings, and only 144 monthly paychecks left to save or invest for 200 months of retirement. But beyond the fear and the maths, what about the camouflaged components; what about the things that you should budget for which may have never crossed your mind? For example, budgeting to visit your kids and grandkids overseas. There is a good chance that your grandchildren will not be living in South Africa by the time they grow up. How about the high cost of eating well? Food quality is decreasing, chronic diseases due to poor quality of food are on the increase, and eating well and nutritious foods will become out of reach for many. How about housing expenses, which don’t retire when you do? Having a fully paid-off property is only half of the victory. The point I want to make is this: it is an interesting exercise to think of buying silver and gold as a supplementary strategy for saving or investing for retirement. My clients have often expressed confidence and delight in the number of ounces of gold and silver they have relative to what they require to retire. So, how much gold do you need to retire? A sensible and unique way of looking at retirement would be in ounces of gold relative to total income. For example, a family with a monthly income of R38 000 earns around one 1 oz. gold Krugerrand per month. Since they live on this income, the cost of living for a month is the same as the cost of a gold Krugerrand. Someone earning R70 000 per month would thus be earning two gold Krugerrands, and someone who earns R130 000 per month four gold Krugerrands. What about silver? Currently, an ounce of gold calculated in rands can buy around 60 ounces of silver. If your monthly income is R38 000 per month, this would represent a one-month retirement package of 60 ounces of silver. Every time an investor acquires even a fractional amount of gold, they have (relative to their earnings and standard of living) bought a few day-unit of retirement. Every time an investor acquires a few ounces of silver, similarly, they have purchased a few days’ worth of retirement. What an interesting and more honest way of keeping track of your future retirement prospects by using sound money! Article courtesy of Silver-Sphere
The Gold Rush: 1980 vs Today
We’re excited to share an excerpt from The Great Gold and Silver Rush of the 21st Century, the latest book by Mike Maloney. In this chapter, Mike uses data to draw a compelling comparison between the gold rush of the 1980s and today’s landscape. With several large banks, like JP Morgan, forecasting gold could reach record highs in 2024, we wanted to provide some data on what a real bull run on gold could look like… “Adding it all Up” So now let’s add it all up to try to estimate just how much currency could come chasing gold and silver in the Great Gold and Silver Rush of the 21st Century. Versus 1980, today we also have: It’s actually impossible to accurately add all of this up. It really doesn’t matter if there are 18 times more people who can buy gold and silver… what matters is how many people will buy gold and silver. It really doesn’t matter that there’s 55 times more currency in the world… what matters is that almost all of the newly created currency went to people who were already well off… people who have significant assets to protect and therefore have an investor’s mindset. These are the people who will seek the safety of gold and silver in the next crisis, driving their prices to unimaginable heights. Now, as I said before, I don’t want to double count anything or anyone here, so to make this easier I’m just going to lump currency, credit, assets under management, millionaires, billionaires, people with an investor’s mindset, and people with significant assets to protect all together and then pick a number as best I can. Let’s say that there’s probably 50 times more currency available today for investment in gold than in 1980. Yet the amount of available gold in the world has only about doubled, so that’s 25 times more currency per ounce. Then, to that 25 times more currency per ounce we must add the speed of light news and market dynamics, and that gold and silver are Giffen goods that create more demand as the price rises, and the fact that their price responds positively to war, geopolitical crises, economic crises, and just about anything else that causes human anxiety… and you can still only get a tiny little inkling of just how big this thing is going to be. If the bull market of the ’70s drove gold up 25 times and silver up 41 times with only 1/25th the amount of the currency per ounce chasing them, and then you add fear to the mix, just what do you think will happen this time around? I’m not cold-hearted. Yes, I’m concerned for the plight of the average worker, the average citizen, and the average investor in the crisis I see coming. They are the ones who will end up taking the punishment for our immoral monetary system. I’m sorry for them, and I’m trying to help… that’s why I wrote this book. But please… somebody pinch me because I must be dreaming. I mean, I’m a precious metals investor, and this is just too good to be true. Isn’t it? I’ve gone over this hundreds of times and I keep on coming to the same conclusion; no, it’s not too good to be true… it’s exactly true, or even better. But remember, price means nothing… value is everything. I believe that for every ounce of gold and silver you own today you are going to be able to buy many, many times more stocks, bonds, real estate, businesses, and just about anything else you want or need. One day precious metals are going to amaze everyone. Make sure you come back and reread this chapter once gold goes soaring past $3,000… $5,000… $10,000… per ounce and never looks back. Because the Great Gold and Silver Rush of the 21st-Century is absolutely going to take your breath away.” Article courtesy of GoldSilver
Tanzania Establishing Gold Reserves
Yet another country wants gold. On Monday (Sept. 25), the Bank of Tanzania (BoT) announced it is buying gold from domestic sources to establish its own reserves. Tanzania Minister for Finance Dr. Mwigulu Nchemba announced plans to establish a national gold reserve during the 2023–24 budget presentation. “The bank is therefore purchasing gold from domestic miners and traders, in Tanzanian shillings,” according to a statement released by the Bank of Tanzania (BoT). Last week, BoT Governor Emmanuel Tutuba said the central bank plans to buy 6 tons of gold from small, mid-scale, and large miners in the country. To date, the central bank has purchased 418kg of gold. Tutuba said gold purchases would help diversify the country’s foreign exchange reserve and reduce reliance on a single currency. That single currency is the US dollar. According to Zawya.com, “Tanzania just like other economies, has been adversely affected by a decision by America’s Federal Reserve to embark on aggressive rate hikes as a measure to fight domestic inflation in the US economy.” The Tanzania shilling recently hit an all-time low against the dollar. Tutuba said diversification would help safeguard Tanzania’s wealth against currency devaluation or economic stability caused by global shocks. “Now for the first time, we have both a gold and dollar reserve. Previously, we only had the US dollar as a foreign exchange reserve,” he said. According to GlobalData, Tanzania ranked as the world’s 22nd-largest producer of gold in 2022. The country accounts for about 1% of total global gold production. In 2022, the country produced about 60 tons of gold. The Bank of Tanzania is one of many central banks that are turning to gold to diversify their reserves and minimize dependence on the dollar. Even with Turkey’s initiating large gold sales earlier this year, net central bank gold purchases totaled 387 tons through the first half of 2023. That was the highest first-half total since the World Gold Council started compiling quarterly data in 2000. This continued the trend of increasing gold reserves we saw last year. Total central bank gold buying in 2022 came in at 1,136 tons. It was the highest level of net purchases on record dating back to 1950, including since the suspension of dollar convertibility into gold in 1971. It was the 13th straight year of net central bank gold purchases. Article courtesy of GoldSilver
