In a recent interview on Liberty and Finance, Austrian economist Phil Low of The Bitter Draft podcast presented a compelling vision of a post-financial-crash world where silver could see unprecedented gains in purchasing power. Drawing on his understanding of sound money principles, Low outlined a scenario where a breakdown of trust in fiat currency could catapult silver to the forefront of economic activity.
Low began by suggesting a potentially radical outcome if the current credit system loses trust. "If the credit is not trusted, we could see silver outperform anything we've ever dreamed of in our lives," Low stated, setting the stage for a discussion on the unique attributes of silver in a monetary reset.
He elaborated on a hypothetical scenario where, even with a return to a 15-to-1 silver-to-gold ratio, the purchasing power of silver could far exceed historical norms. Referencing the 1920s when two 90% silver quarters could buy a steak dinner with wine and a tip in Manhattan, Low proposed that in a future scenario with significantly less available silver, even coins with a much lower silver content (e.g., 10%) could command the same purchasing power. "That silver will be so unbelievably valuable that the price of a Manhattan...will be 50 cents, and but the coins will only be 10% silver instead of 90% silver," he explained.
However, Low tempered this prediction, emphasizing its dependence on the speed and extent to which trustworthy credit returns after a potential crash. "I would say temper your expectations on this particular claim, but if it happens, you know, jump in, enjoy the ride," he advised viewers.
The discussion also touched on the inherent conflict between a return to sound money and the desire of those in power to maintain control. The host raised concerns about the convenience of credit being weaponized for social control, where access could be contingent on compliance with certain behaviors. "They lose control over when people are free to live their lives as they see fit using sound money," it was noted, highlighting the fundamental tension between individual financial freedom and centralized authority.
Phil Low's conversation on Liberty and Finance offers a thought-provoking perspective on the potential future of silver and the broader monetary landscape. While acknowledging the uncertainties, his analysis underscores the intrinsic value of precious metals and the fundamental shifts that could occur if trust in the current financial system erodes. His insights serve as a crucial contribution to the ongoing dialogue about sound money and financial preparedness in an increasingly complex world.