“We heard some credible-sounding guy on YouTube today predicting that the U.S. will be back on the Gold Standard in 2020. Do you think he’s drawing a rather long bow? If he’s right, even if it’s later than 2020, what do you think would happen to the silver price?” D.R.
P.B.’s answer (with some further reflections added):
How does he know and what makes him think that it will be by 2020? Beware the self-promoter whose only real purpose is to sell his wares – either gold, investment advice or status as a prognosticator. There is nothing wrong with what he/she is doing, it is just that the primary motivation may be other than just giving useful information.
And what does he mean by ‘the Gold Standard’? Most people mean that paper money will be backed by Gold. That is not a Gold Standard.
This is not just pedantry. Paper money that is backed by Gold is usually still irredeemable, which means that you will never be able to get your hands on it and are still left holding bits of paper.
ONLY Gold Bonds (Keith Weiner) can transition us to Gold. Everything else involves the complete collapse of fiat.
When we do return to a Gold Standard, then only the market can determine the correct price of silver – i.e. the Gold to silver ratio. I don’t think that historical precedents give any useful clues.
Anything that I wrote down would be a guess and you can guess as well as I can :)
Bear in mind that the ratio will change dramatically as the market changes. At first, there will be a mass movement of people; such is standard for a collapsing civilization. At that point, silver is very cheap because it is so hard (heavy and bulky) to carry.
Later, as marketplaces (production of surplus goods) begin to function again, then a growing level of stability will happen and people will begin to settle. At that point, silver (more useful in the marketplace) will be in high demand and will be very expensive.
After those two events, then the Gold to silver ratio will probably become more stable.
That leads to the two great trades of the future.
The buying of silver (with gold) when the great migration begins and the selling of silver (for gold) when the population begins to settle again.
It is interesting to note that, at least in the above scenario, the degree of social stability and the price of silver move in the same direction.
P.S. I do note that date predictions by Gold prognosticators are so far off that by the time the event doesn’t happen you can’t remember who gave you the bum steer.