Inflation-Adjusted Silver Price Charts

(These will soon be outdated!)

Silver Stock Report

by Jason Hommel, May 18, 2008

As you may know, I'm not big on charts.  I don't like charts, since most charts don't tell the full story of how much money they have printed up, and will continue to print up in the future.  But inflation-adjusted charts can give a more accurate picture than nominal dollar charts.  Furthermore, since inflation is escalating rapidly, any charts made end up having to be re-adjusted as inflation continues.  However, a very brilliant programmer, named Shelby Moore, who programmed to surpass my specifications, has figured out a way to use google's api to create continuously adjusted inflation adjusted charts (these are not those, not yet).

A nominal chart is just the numbers, and shows that silver hit a high of $50/oz. in 1980.  But that's not really accurate, since the dollar is not an accurate measure.  Since 1980, when M3 was $1.8 trillion, there has been a lot of inflation, and there's two ways to adjust for that inflation.

The first way to adjust for inflation is through the government's CPI index, or "Consumer Price Index" which is the "official" inflation rate, but this excludes things like housing, food, and energy, which "nobody needs", and it used hedonic adjustments, and other sorts of lies, and thus severely undercounts inflation.  That's the first chart that shows silver peaked at $128/oz. in 1980 as measured in 2008 CPI adjusted dollars.

Another way to adjust is by looking at M3, which shows a measure of money creation inflation, which the government stopped reporting in the spring of 2006 when M3 was $10.3 trillion.  A private company continues to keep track, and now says that M3 is at $14 trillion, and increasing by about 20% per year now.  That's the second, SGS chart that shows that silve peaked at $365/oz. in 1980, as measured in 2008 SGS adjusted dollars.
The other important adjustment that charts need is that they need to be log adjusted, rather than linear.  This way, they show similar rates of change in the slope of the rises, so that you can compare growth rates. 

These are good charts, but I believe we can expect Shelby to make even better ones soon.

These charts show a better picture than I've seen elsewhere.  Silver is cheap, and has hardly moved up yet at all!  Don't even think about taking profits yet.

If you can't see the charts for some reason, visit


    Jason Hommel

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