Friday, April 11, 2008

Wiemer, Germany Gold and Silver Prices 1919 - 1923

German Mark prices of Silver and Gold went from:

Silver 12 / Gold 170 in January 1919 to
Silver 543,750,000,000 / Gold 87,000,000,000,000 in Nov. 30, 1923.

(The numbers were taken from an article at Le Metropole Cafe a number of years ago.)

The biggest gains were in the last year of that period. The complete set of numbers can be seen at an older post in this column at Wiemar, Germany Gold and Silver Prices. The big payoffs come by buying the beginning of any bull market and riding it all the way to the very end. The period near the end provides the biggest percentage gains. This works for all bull markets in all parts of the world since markets are made of humans and human nature has not changed in thousands of years.

If you do buy the beginning and ride it all the way to the end, you will beat about 90-95% of "professional" "money" managers, since they are humans also. The "professionals" can not, will not, or have a problem going against the crowd at the beginning of bull markets. Plus they simply do not understand Austrian economics, and the difference between money, currencies and tokens. Thus, "professionals" are easy to beat if you can go against the crowd. Heck, the Amex's HUI index of gold and silver shares are up up about 800% in about 7 years.

Will all the "professionals" out there that are up about 800% in about 7 years please stand up to be counted?


[Bernanke] "and Greenspan together will probably bring [about] the end of the Federal Reserve," - Jim Rogers - Rogers first made a name for himself with The Quantum Fund, a hedge fund that’s often described as the first real global investment fund, which he and partner George Soros founded in 1970. Over the next decade, Quantum gained 4,200%, while the Standard & Poor’s 500 Index climbed about 50%.


The US is in worse fundamental economic / financial shape than it was before 1930, the start of the Great Depression. Since it looks like the US Treasury and the Fed are going to do more of what caused the problem to delay the results of the problem, only making the final results worse, here is some food for thought:
Closing the Collapse Gap

New "money" pump being built for the Fed:

"It'll work. It has to work. WE WANT IT TO WORK!" - a government financial official in Atlas Shrugged.

It is going to be interesting to see how close to Wiemer, Germany hyperinflation the US Treasury and the Fed get.


Anonymous said...

The numbers demonstrate that the gold / silver ratio is about 16, when gold and silver are perceived as money, which is their true nature. The reason why the ratio is 52 today, and specially silver is dirt cheap, is because the public perception of the monetary metals distorted by years of propaganda. This ratio will approach 16 once the inflation really starts to kick in in the not to distant future.
BTW, the gold price jumps by a factor of 13 from Oct 16 to oct 23 1923, and the gold silver ratio falls to 160 in the same time span, so there is a factor of 10 wrong somewhere.

Anonymous said...

The numbers tell an interesting story, which is that the ratio of gold and silver was 16 back in the Weimar days, which means gold and silver had their historical ratio when perceived as monetary metals.