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.
Article by Jeff Nielson, Sprott Money