Replies to post #5801 on iShares Silver Trust (SLV)

[12thman]

It's not so much that silver is going to $500, it's that the dollar is going lower and lower in relation to silver. It's all relative. I wouldn't dare short silver, gold, or even most stocks with today's CPI. QE3-10 are all but guaranteed in my opinion.

[xero90]

CPI Adjusted Gold Price of $1,753

http://www.munknee.com/2011/01/true-inflation-adjusted-rate-means-gold-should-be-at-5467/

Let’s examine a brief history of the Gold Price relative to U.S. inflation. The Gold Price peaked in January 1980 at $850 per ounce but this peak was very brief… Probably a better reference point for the market top is the average price during 1980 as a whole. This was $615/oz. Since then, the Gold Price has increased only 125%. Over the same timespan, however, the government’s most widely quoted inflation gauge, the Consumer Price Index (CPI), has increased 185%. Therefore, if the Gold Price had increased as much as the CPI, it would be selling for $1753/oz today… but the official inflation figures might not be the real story.
ShadowStats Alternative Gold Price of $5,467 to $7,000



Using alternative inflation figures calculated by ShadowStats.com, consumer prices have soared an astounding 789% since 1980, which means that the inflation- adjusted Gold Price would be $5,467/oz.
Substantiation For ShadowStat Inflation Data

Interestingly, if we look at the market bottoms for gold – 1970 and 2001 – instead of the market tops, the ShadowStats data seem to provide a much more accurate inflation gauge than the CPI. For example, in January 1970 – before gold’s 10-year bull run – the price of gold was just $35/oz. Thirty-one years later – after soaring to more than $800 an ounce in 1980 – the big bear market in gold bottomed out at $256/oz. – and the average price for 2001 was $271/oz. Therefore, during this 31-year period – through gold’s full bull and bear market cycle – the Gold Price advanced 674%. Over the same timeframe, the ShadowStats inflation measure advanced a nearly identical 688%. By contrast, the CPI increased only 370% during this period. In other words, the cumulative CPI readings from 1970 to 2001 failed to account for all the inflation indicated by the rising Gold Price. The ShadowStats figures, on the other hand, were pretty much bang on target.