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Intrinsic Value of Silver and Gold

By: Jason Hommel, Silver Stock Report

-- Posted 4 February, 2009 | | Source:

(It's probably higher than you think.)

Silver Stock Report

One man emailed me to express his dismay that his friend said that Gold has no intrinsic value; that it's value is only a "perceived" value.  Well, no surprise, that's what they teach people in college these days.

For over 6000 years, men have been able to perceive the value of gold.  Some, on the other hand, must be taught why gold is special, maybe because they have no gold.

Gold may have no intrinsic value, if men have no need of any luxury items, if men have no need of a store of value, if men have no need for any long term planning, if men have no need to protect their wealth from the confiscation of governments, or if men have no need to protect their wealth from badly managed companies that are in debt, if men have no need for a form of wealth that is compact and light weight for the value, and does not spoil, not easily forged or faked, and is easily bought and sold for low fees, and is widely recognized the world over.

In fact, many of those are properties intrinsic to gold, and not other metals, except silver.

It's absolutely true that I would not need silver or gold if I had all my current and future needs fulfilled.  But it is impossible to fulfill future needs today; by definition, the future comes in the future.  And so, as long as I have any uncertainty about my future needs, then gold is a good substitute to have in the here and now, because I can reliably use it for my future needs.

The beauty of gold is that it is a pure luxury item.  Most of the people in the world do not have the luxury for long term planning for future needs.  Most of the world, living in poverty, must generally work all day long just to satisfy their basic needs for the day. 

The beauty of gold is that it is a pure luxury item.  Given that it is a luxury, the price can rise extremely high, and nobody can ever get hurt by a high price, since it is a luxury.  A high price raises the value of all  of the gold that exists, and creates capital, increases wealth, and improves standards of living all over the world.

But a low price of gold is deadly.  A low price hurts the entire world.  It removes from the world the ability to use gold as a store of value, a low price has destroyed the store of value that gold should have represented.  A low price destroys the entire industry of gold mining, from which we also get byproduct metal production, such as silver, copper, zinc, lead and a host of other vital and necessary metals.

But a low current price makes silver and gold even better stores of value for the future, as low prices don't last forever.

Silver has over 10,000 different and vital industrial uses.  Nothing is used in as many different applications as silver, except for oil.  But oil cannot be used as money, like silver, because oil is 1000 times as heavy and bulky as silver, for an equivalent value. 

Nobody is going to buy 100 barrels of oil and have them delivered to their house, to be stored on their front lawn, at $40/barrel, to store $4000.  But nearly anyone can easily buy and store 300 ounces of silver, at $15/oz. to store $4500.

So silver and gold are not only vital to long term planning, but they are extremely convenient!

The real beauty of silver is that it has intrinsic properties that are superior to gold, so that in some applications, silver would be used in preference to gold, even if the two were the same price!  Silver is more electrically conductive than gold, and more reflective, and a greater conductor of heat.

The real beauty of silver is that since it is a vital industrial commodity, and has been consumed by industry, it has become scarce, and should outperform gold as a store of value in the future, which is the primary reason that people should want silver and gold.

The real beauty of silver is that so few men desire silver as a store of value today, so that when that begins to change, the value will increase dramatically, and the value will rise exponentially, and create so much wealth for so many men who have the capacity to think and plan for the future.  And it is good for society for such men to be rewarded!

Silver is often not perceived as if it is as good as gold, because it is heavier than gold, for an equivalent dollarized value, given the price ratio of about 75:1.  However, since so few old men (as old men these days often have so much of the money) are willing to do the work of lifting silver, that's exactly why you should take the pains to do so.  Or, if you are younger, at least try to convince your parents to store silver, as you can do the work for them.

Some Christians seriously wonder if Christians should be concerned about the future, after all, there is a Bible verse of the words of Jesus that says,

    Matthew 6:31 Therefore do not worry and be anxious, saying, What are we going to have to eat? or, What are we going to have to drink? or, What are we going to have to wear?

    32 For the Gentiles (heathen) wish for and crave and diligently seek all these things, and your heavenly Father knows well that you need them all.

    33 But seek (aim at and strive after) first of all His kingdom and His righteousness (His way of doing and being right), and then all these things taken together will be given you besides.

    34 So do not worry or be anxious about tomorrow, for tomorrow will have worries and anxieties of its own. Sufficient for each day is its own trouble.

It's been my experience that those people who are overly concerned about food and clothing, and who wish for, crave, and diligently seek out such obsessions as food and clothing, are the kind of people who end up spending the most on food and clothing, and thus, they end up not saving as much.  One of the first things that debt and credit counselors tell people is to avoid those designer clothes and Star bucks Coffees, so that you can save money, so that you won't worry so much about your financial future.

Proverbs 23:20-21  Do not join those who drink too much wine or gorge themselves on meat, for drunkards and gluttons become poor, and drowsiness clothes them in rags.

And of course, the best way to not be so anxious about the future is to have a nice store of value for the future.  Gold and silver, as luxury items, represent self denial in the here and now, and thus, they represent "self-control", which is one of the fruits of the Holy Spirit.  Silver and Gold are the creations of God, given by God to men for our effective use.  If the elements didn't exist, or if they existed in different relative abundance, I'd be preaching about the effective virtues of storing up some copper and/or platinum or palladium or rhodium.

As Christians, I believe we, of all people, ought to plan for the future the most, because we are commanded to seek first the heavenly kingdom, the future reign of Christ.  Imagine your future self to be wiser, more under the authority of Jesus Christ, more capable of doing good, with Christ living in you with more power and authority.  That's who you are giving to, when you save for your future self, when you have begun to conform yourself to Kingdom principles.  You will leave for your future self an inheritance, and you will end up leaving good things for your Children's Children.  That is the opposite way of the world, which is to leave to their future unpayable debts and obligations, because they spent it all on the pleasures and instant gratifications of today and yesterday.

Those who care not for the future, or the future resurrection, are mocked by Paul, who said that if there was no future resurrection, then we should live for the day, and consume it all today, with no care at all for the future.

1 Corinthians 15:32 If after the manner of men I have fought with beasts at Ephesus, what advantageth it me, if the dead rise not? let us eat and drink; for to morrow we die.

Again, those who do not plan for the future are mocked by Jesus.

Luke 14:28  For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it?

It is elementary to basic human nature to want to plan for the future; it's part of what God expects us to do.  Even the animals can plan for the future, and we are told to consider their ways.

Proverbs 6:6   You lazy people can learn by watching the ant
7   Which having no guide, overseer, or ruler,
8   Provideth her meat in the summer, and gathereth her food in the harvest.

Proverbs 30: 24   On this earth four things are small but very wise:
25   the ants are a people not strong, yet they prepare their meat in the summer;

So, plan for your future, save for the future, store up things for the future.

Deuteronomy 28:8  The LORD shall command the blessing upon thee in thy storehouses, and in all that thou settest thine hand unto; and he shall bless thee in the land which the LORD thy God giveth thee.

Proverbs 21:20  Be sensible and store up precious treasures-- don't waste them like a fool.

Many well meaning Christians have castigated me over the years, as they misapply verses such as these:

1 Timothy 6:9  People who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge men into ruin and destruction.

But I similarly warn against such things. 

Many men who desire "riches" excessively and obsessively, tend to try to take shortcuts.  They ignore all the intrinsic properties of silver and gold, and instead, try to trust paper promises of futures contracts for silver and gold instead.  But they fall into a trap; they get margin calls and lose everything.  Or margin is raised as prices move up and then get caught in a temporary downswing in the metal prices that they cannot afford.

Those who trust in futures contracts are not trusting God's provision of gold and silver; instead, they are trusting the promises of men.  They are not taking responsibility for their own wealth; instead, they try to take control of the wealth of other men, and that kind of covetousness backfires on them.

Men who trusted in a storage program lost $60 million.


I rail against futures contracts continually.

I Don't Trade Futures April 4, 2008
The Moral Failures of the Paper Longs Jan 22, 2003

Recently some people misunderstood what I wrote, and thought I lost money in futures.
No, I have never traded futures.

It's the LOVE of money that is the root of all evil, or the LUST, or covetousness that is the destroyer of men.  The love, appreciation, respect, and knowledge of the nature of money, of what money is, and what money can do, is not the root of all evil. 

Ayn Rand wrote the greatest speech I have ever read on the moral nobility of "making money", and how "money is the root of all good".  It's a excerpt from the novel, Atlas Shrugged.

Ayn wisely concludes:  "Until and unless you discover that money is the root of all good, you ask for your own destruction.  When money ceases to be the tool by which men deal with one another, then men become the tools of men. Blood, whips and guns--or dollars. Take your choice--there is no other--and your time is running out."

The challenge for me as a Christian, is that Ayn's Character's rant seems to have been written specifically against a common mis-translation from the Bible says that the "love of money is the root of all evil", from 1 Timothy 6:10.

1 Timothy 6:10 For the love [or LUST] of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.

Since I preach on what the Bible says about money, and how to make money, many people ask me about this verse, (or, perversely, they accuse me with it) as it seems to contradict my teachings. So, I looked up the word for "love" in that verse in a concordance, and there is one Greek word that is translated as "love of money", that could also be translated "avarice" or "covetousness"!  What does avarice mean?

Pronunciation: 'a-v&-r&s, 'av-r&s
Function: noun
Etymology: Middle English, from Old French, from Latin avaritia, from avarus avaricious, from avEre to crave -- more at AVID
: excessive or insatiable desire for wealth or gain : GREEDINESS, CUPIDITY

Therefore, it is a terrible mis-translation to translate the verse as "love of money".  It would be far more accurate to say the "lust for money" is the root of all evil. Aren't love, and lust, two different things?  Of course!

For some of our further essays related to this topic of the nature of money, see:

  1. The Great Harlot of Rev 17-18 is Jerusalem, & what that means. 10-02
  2. Gold and Silver in Bible Prophecy 12-01
  3. Bible Verses on how to Manage Money 11-05
  4. The Use of Paper Money Violates All of the Ten Commandments July 2, 2006
  5. The Stumbling Block of their Iniquity April 9, 2008

Do you love God?  God says to use Honest Weights and Measures in commerce.  We are trying our best, both to use them, and make them available to others for their good use.  Will you follow our attempts to obey God?

We don't mean to imply that obedience always brings immediate rewards.  It does not. In the Bible, even Joseph and Daniel were thrown into prison for a time, before being made second in command to entire kingdoms.

We now have for offer, at auction, with reserve prices, the most silver we have ever offered:

Please check our auctions at M-Th, Sat nights around 7PM Pacific.


    Jason Hommel

    -- Posted 4 February, 2009 | |

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