The Price of Silver in 1979 & 1980 vs. 2013 & 2014

The Price of Silver in 1979.

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The price of silver is lower today than it was in December 1979. The United States is engaged in geopolitical disputes with Russia and Iran today as in 1979.

The Lowest Cost. Period.

Today’s silver price was lower than the average price of silver in 1980

The Similarities Between the Carter and Obama Eras in Geo-Politics and the Price of Silver

United States Conflict with Iran and Russia in 1979 and 1980

Live Silver Price

During 1979 and 1980 Democratic President Jimmy Carter was trying to figure out how to free the hostages that were taken in November 1979 at the U.S. Embassy in Tehran, Iran. Other than a failed rescue mission in April 1980, not much was done to free the hostages. The hostages were to remain in captivity until January 20 of 1981, the date of Ronald Reagan’s inauguration.

A month after U.S. hostages were taken in Iran, Russia invaded Afghanistan. Jimmy Carter’s response to this naked aggression was to boycott the 1980 Summer Olympics held in Moscow, Russia.

The late 1970’s and early 1980’s were an era of gas lines and double digit price inflation as consumer prices rose so swiftly that grocery stores hired “price changers” whose sole task was to mark the inventory higher. Pink Floyd’s bleak double album “The Wall” was released in November, 1979 and topped the charts during a time when it looked like United States was falling and had seen its better days.

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The Price of Silver in 1979 and 1980

The price of silver traded between $20 and $25 per ounce in December 1979 and averaged $20.63 per ounce in 1980*. In the late 1970’s and early 1980’s the primary uses of silver were for photography, jewelry, silverware and investment, which was limited to the west as India was a very poor third world country and post Mao Zedong China was a Communist economic backwater.

United States Conflict with Iran and Russia in 2013 and 2014

Fast forward to 2013 and 2014. In late August 2013 Democratic President Barak Obama was preoccupied with a situation in Syria and was urging military action against that state. In 1979 Syria and Iran formed a strategic alliance still in effect, so any confrontation with Syria was bound to involve Iran, whom the west had been trying for years to slow their nuclear development. Military action against Syria was put on hold in September 2013 when the President failed to gain allied and Congressional support for the action.

In February 2013 the Winter Olympic Games were held in Sochi, Russia. The United States attended the games and finished fourth in gold medals won, while Russia took the most gold and total medals. Shortly after the Olympics, Russia made its intentions clear that it would like to regain the territory of Crimea. In March a referendum was held asking whether Ukraine’s Crimea region should join Russia or become an independent state. The Crimeans voted to join Russia and Russia annexed Crimea shortly thereafter. The United States refused to recognize the new Crimean state and has placed sanctions on Russia.

The Price of Silver in 2013 and 2014

The price of silver traded between $19 and $24.50 per ounce from August 2013 to March 2014. The price of silver today is slightly under $20 per ounce. Today silver is primarily used in industry (electronics and photovoltaics for solar energy), jewelry and investment (coins, medals and bars). Less silver is used today for silverware and photography than in the late 1970’s early 1980’s, but the industrial and investment demand have more than made up for the decline in silverware and photography demand. Unlike in the late ’70’s early ’80’s, India and China today are large consumers of silver.

The charts below show the prices of new homes, gas, groceries, gold and silver in 1979-1980 and compare those prices to today’s. You’ll note dramatic price increases except in silver. Indeed, the average price of silver in 1980 was higher than the price of silver yesterday!

Other than silver, can you think of anything that is useful that is cheaper today than it was in 1980?

the price of gold has increased more than inflation

1980 price of silver is higher than the 2014 price of silver

Silver is 10% lower today than the average price of silver in 1980

Inflation Data Sources:

1979 & 1980 prices of stamps, gas, eggs and milk from ’70’s Flashback
February 2014 prices of gas, eggs and milk from the U.S. Bureau of Labor Statistics
1979 & 1980 average prices of gold per ounce from the National Mining Association
1979 & 1980 average prices of silver per ounce from the the U.S. Geological Survey
1979, 1980 & 2013 average cost of a new home from the U.S. Census
Price of Gold and Silver as of March 24 from Kitco

Gold started 1979 around $230 an ounce, finished the year at $625 and hit a then all time high of $850.00 in 1980. Gold hit an all time high of $1923 an ounce in April 2011.

Silver started 1979 around $6 an ounce, reached $25.50 an ounce by the end of 1979 and hit an all time high of nearly $50.00 an ounce in 1980. In April 2011 silver reached a price of $49.51

1979 Gold and Silver Charts Courtesy of Nick Laird:

the price of silver in 1979Capturegold1979

*while gold and silver had been rising sharply at the end of the 1970’s due to double digit inflation, the price of silver got a boost from the Hunt Brothers who were purchasing massive amounts of silver in the small silver market. That two brothers could impact the price of silver highlights how small the silver market was (and still is) and how price sensitive it was and will be to a spike in physical demand. For more on the Hunt Brothers and their silver adventure see “Silver Thursday”

The Hunt Brothers were stopped, but could the U.S. stop China or Russia from cornering the tiny silver market?

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Further Reading:

Silver Thursday- The Day The Hunt Brothers Went Bust

India and Silver

China and Silver

Smaulgld Silver Buying Guide

The Gold Silver Price Ratio and the Silver/Gold Sales Ratio

12 Ways Silver is Different than Gold

Live Silver Price

Silver and Gold Price Manipulation – Suspected

Silver and Gold Manipulation – Actual

In 1964 550 Million Ounces of Silver Were Used At The United States Mint

Silver Supply and Demand

Try this inflation calculator from the U.S. Bureau of Labor Statistics

Royal Canadian Mint

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