This page has been archived and commenting is disabled.
Gold/Silver Ratio: Silver Going Higher?
A topic we covered extensively in the past makes a second appearance, this time courtesy of Abigail Doolittle and The Weekly Peak, whose weekly musings focus on the much fabled ratio between the price of gold and silver. Some observations:
- 323 B.C. – The ratio stood at 12.5 upon the death of Alexander the Great.
- Roman Empire – The ratio was set at 12.
- 12th to 17th Century – The ratio was around 12.
- End of 19th Century – The nearly universal, fixed ratio of 15 came to a close with the end of the bi-metallism era and England’s attempt to demonetize silver and conceivably because the country had little of the precious metal.
- 1980 – At the time of the last great surge in gold and silver, the ratio stood at 17.
- 1991 – When silver hit its lows, the ratio peaked at 100.
- 2003 - 2007 – This part of the bull market in silver caused the ratio to drop to 45 from 80.
- 2008 – The ratio rose back to 80 on the Great Recession.
Much more in the full report below.
Gold/Silver Ratio: Silver Going Higher? (pdf)
»
- 19562 reads
- Printer-friendly version
- Send to friend
- advertisements -
I'm going to be heading around my city next week buying silver Maples (I like them better then Eagles) from all of the coin dealers in town. I'll try to clean them out, and at the very least stoke some demand. I'm going to participate big-time in bank run on 12/7.
i wonder what is the supply pool and premiums out there?
I'll be interested to find out too. I bought 50 1989 sealed (in plastic from the mint) 1 oz. Maples for $2 over spot last week. I'd like to find a good local shop to buy and sell from. this one seemed good until I tried to take them up on Mint Direct 1 oz gold Maples at $40 over (which they offered on Friday) but on Monday said were $55 over.
All my xmas presents will be silver coin this year.
Within the last week, the dealer I have purchased from raised silver eagle premiums. Previously they were spot + $2. Currently they are spot +$2.60. The maple leafs and phils premium is unchanged. This tells me there is demand for the eagles or supplies are getting tight.
The premium should rise solely based on the price volatility. The more volatile the price is the easier it is for a dealer to get pinched on his inventory. The dealer covers this risk with a bigger spread.
Perhaps. But premium on bar, rounds, etc has not changed, only the eagles. Perhaps eagles are his biggest business (largest inventory).
Last purchase of my Silver Eagles (roll of 20), the premium was $3.00 over spot at my local coin shop. About 6.5%.
...
My take (FWIW, which is not much) is that yes, sure the Au/Ag ratio is high. And it will likely to come down. But, my hunch is that we will come down to say 25 or 30 to one. I think that in the end, that FOFOA is right, that the wealth preservation feature of gold will win out in the end, and that the bulk of anyone who has enough money should be in gold.
I am NOT saying do not buy silver!!! I am saying: buy both!
as we continue to consume silver, and therefore consume the metal with the highest thermal and electrical conductivity, we will have an increasing need for this metal until the human with the final ounce will be able to trade it for a barge full of gold.
silver consumption, not oil consumption, has been the proxy for technological advancement. an appropriately poetic reality for 'real money'.
this shit was made in a star, and we are running out.
markets becoming rational, as aapl fills landfills, will eventually equate to a silver price in scientific notation.
may we all be around to see it.
Actually, it was made when a star went nova.
Actually it was made when God created it.
um...gold is sufficiently conductive to substitute for silver
Carbon consumption is an even better proxy for technological advancement. Carbon was also made in a star. Does that mean that one should store one's wealth in Carbon?
How 'bout we let some common sense reign here and cut the foolishness:
Sorry to have to dumb it down like that, but sometimes things get out of hand.
Ah, see ... there's the tiny flaw in your selection process. The PhD geniuses that run the currency system -- Bernanke, Geithner, Summers, Greenspan et al -- will tell you that it should be plentiful ... so plentiful, in fact, that they have now been running their printing machines red hot for decades attempting to create more and more.
So, maybe carbon should be chosen instead of gold?
Absolutely!
Gold is the ultimate store of wealth precisely because it has no other uses.
If one looks at a historical graph of Au/Ag , one can see clearly that the ratio was very stable until Ag started being used in industrial applications. How can Ag be a store of wealth when a big chunk of it dissapears in all sorts of end products that are not themselves store of wealth? Gold has always held its value over the long term, not Silver : that's precisely the feature that someone who wants to preserve his wealth is looking for.
Gold is store of wealth. Silver is partly store of wealth, partly an industrial commodity. I have no idea what the Au/Ag will do in the future if there is a collapse of the fiat system. Will it go up, will it go down, no idea. But history shows that if I want to preserve my wealth Gold will be the least risky asset of them all to do so. Silver is more speculative.
The US Mint raised their price to their dealers by about 40 cents per ounce on Silver American Eagles. That is why the price jump from $2 to $2.60.
This month I interviewed Andrew Schiff from Euro Pacific Capital.
A high school business teacher, I use Andrew and Peter's book in my classes.
We discussed the book and more...
Link to the interview:
http://thevictoryreport.org/2010/11/19/andrew-schiff-interview/
~MV
Big Silver Stashes Bitchez!
http://www.youtube.com/watch?v=Ygy6GBUZ-X0
bought a tube this weekend.
http://silvergoldbull.com/s/
10 to 1
What were the PHYSICAL SUPPLY ratios throughout history, I wonder?
About the same, as silver was not really used in any form of industry until the 1800's with the development of photography.
600 years gold/silver ratio
http://goldinfo.net/silver600.html
And here is a must read paper on
Wages, Prices, and Living Standards
in China, Japan, and Europe, 1738-1925
measured in grams of silver !
http://www.iisg.nl/hpw/papers/allen-et-al.pdf
Enjoy!
great link, thanks!
Very interesting; thank you.
F-E, Silver to gold ratio found naturally in the earths crust is roughly 17:1
max keiser baby bring JPMorgan bank down..
buy silver just to F with them.
I buy 90% silver US coins..they have a nice ring
and for those who never had them it's what
the founding fathers said was money not fiat.
++ I agree US junk silver is a great buy, low spreads, and recognized everywhere. Get to know your local coin guy, they can be your friend. P.S. if your local gas station started taking US silver for trade at it's present value, fiat would be finished in a week!
Getting to know the dealer matters. I got sold some silver eagles and rounds 94 cents over spot and 60 cents over spot this past week.
using your charm no doubt
and boy does she have charm. I'll sell her some eagles at spot any day. Too bad we don't really have any here at Kitco, although we tell people we do
Is it just me or does it look like the head has just been completed and the right shoulder looks like it is beginning its formation in the next gold head and shoulders? Not that technical analysis matters any more, but it looks pretty obvious is technical fundamentals of the past are any indication of the next upswing in gold.
Oh yeah, Crash JP Morgan Buy Silver - www.youtube.com/shakedownr3volution
Yes, the potential is there if 1400 holds on the up side over the next few days it will increase in likelihood. 1320 is the line in the sand. Ok now you guys can junk me.
I left my Halloween TSA costume at home, so I will not be able to touch your junk at this time without fear of legal prosecution. Maybe tomorrow.
Thats ok Dick, I only like women. And look, 1 junk. The last time I got into this every junk was worth 10 cents lower in Silver.We started at 27 and now at 26.9. Working again. I should have 17 more by 4pm. :-)
Mr. Sinclair said this LIKE '79,(KWN) he is expecting a Major breakout, on ANY news, like the Off to the races kind.
The Parbolic type we have been proceeding to.
When you see $100/$300.00 swings in one day.............
It's 1352 at the moment
Silver is more abundant than gold bitchez.
On the contrary,I have a modest stack of 10kgs of silver.
I really don't bother what is the ratio as long as there is QE-1,2,...inf
Current above ground supply of silver is far less than gold.
JLee, I read on a thread yesterday that there were about the below amounts of worldwide above ground supply:
Au: 6 billion oz (I have seen this amount various times)
Ag: 3 billion oz (seems reasonable, but I have only seen this one time)
u want scarcity look at Platinum.
Ag 750Moz/yr, Au round 80ish, Pt sub 5Moz
For now the Trend is Down, in just about every asset class!
Min 20% folks, then we will reassess!
I'm continually amazed by the utter lack of fundamental knowledge sometimes. Making a blanket statement that "the trend is down, min 20%" marks you as just another brainless troll.
Again I implore you, read Harvey Organ every night. The silver Comex is broken and is slowly unravelling. OI in the Dec10 contract is extraordinarily high for 11/18. There is a serious possibility that a market failure is imminent. Can the Evil Empire cause a swoon and buy themselves more time? Of course they can. However, the situation on the silver Comex must be closely watched for the next few weeks.
I look forward to Harvey's blog every night and appreciate his analysis and numbers crunching which at times can be mind-numbing.
Turd,
OT, but just wanted to jump in and thank you for the work you're doing on your blog. Been having some trouble signing in as a follower, but wanted to let you know I have been there a couple of times a day since you started.
Thanks for helping me to understand a little better the why's behind the whats. Please keep it up.
Colonel
He posted that on Wed.
Gold close: $1354.10
Silver close: $27.35
Nice work Sir.
Thank you for noticing.
Well, I think the OI in the Dec10 contract is quite normal. It was around 51905 on Nov 18. But if you go back to look at the OI in the Dec09, the reading was around 60169 on Nov 18, 2009. OI in the Dec09 contract decreased rapidly later and stood at 3998 on Nov 30 2009. It's hard to say the silver comex is broken for the moment...
Silver is more abundant than gold bitchez.
On the contrary,I have a modest stack of 10kgs of silver.
I really don't bother what is the ratio as long as there is QE-1,2,...inf
I've read that the geological ratio is about 17.5 : 1.Seems like a logical area for the price to converge, eventually.
323 B.C. Robo, could we get a yearly chart from antiquity to 2010?
The 'Crash JP Morgan Buy Silver' campaign is in the early stages. It needs to go from an online movement to a main stream movement. Stickers, posters, etc. I may even be out Back Friday spreading the good word.
I am advertising this campaign on my car. Just my back window now, but the sides of my care will soon be covered.
You can see the rear window of my car here - http://www.youtube.com/shakedownr3volution#p/a/u/0/_qD-BRDYDkc
That is Sweet!
Much thanks. Wait until my car side panels are completed. I will show it off when it is done next week.
Kick ass! How did you have that printed?
Went to a sign shop. Don't want to publish the national chain's name at this time as they are not paying me commission to promote them. HAHA.
It's a vinyl perforated view so you can see through the window.
Why use vehicle graphics?I put about 20K on my car a year minimally and travel all up and down the east coast. Mainly throuh from Ohio through KY, TN, Carolinas, GA, FL, and southeastern coast in general.
It's worth the effort along with loading up on Silver.
did you pay for the signs in silver???
How about Dec 10 being El Dia Del Plata-the day everyone in America buys one oz.of silver? Also there was a run on silver at local coin shops last week(Pasadena, Ca).
tulving, is sold out of every form of silver, as we blog
One of my favourites from the viral 'Crash JPM' videos (this one from Greece):
Eat Skata, JP Morgan!
Of course premiums were much lower during the Roman Empire, when APMEX was known as APME-10.
very funny +1.
Silver bitchez! get your physical delivery on! pledge at StandForDelivery dot COM!
FWIW, a good friend of mine bought 500 oz today. Only the second person I've been able to convince to do so in the last ten years. Yeah, some bubble this is.
some bubble...i wont even think about it, as long as even Warren Buffett doenst consider gold as an investment...
may be its just America...i bet is different in the rest of the World...they have been around the block..
Still, too many people don't know where to begin to buy physical gold or silver. So next time you buy, bring a friend.
Got a credit Card?....the 1 kilo bars are very nice.
http://www.store.firstmajestic.com/products.aspx?cat=4
This week's playlist hits hard. It is also a little longer than usual :) I know you can click ahead but I recommend playing it thru start to finish, it makes the track at the end all the more impactful.
isthmus crypticus (a playlist): http://www.youtube.com/view_play_list?p=598FDBCC54AD4860
ps: my main assumption given a few (quite pleasant, really) conversations with folks who don't really like/get what i'm doing here, is that folks who junk these things are asking "what does ZH have to do with electronic music?"
my answer would be that reading the site with some of these tunes in the background enhances the experience of both. there really is a synergy there, try it sometime :)
Sort of like Dark Side of the Moon and the Wizard of Oz? ;)
http://www.ingsoc.com/waters/info/oz.html
I'll be listening this weekend...
If you want to really blow your mind this weekend listen to Echoes on Meddle.
Thanks for the tunes, Steak, my Friday is considerably more tolerable for the playlist.
I dig the work Steak. Usually a see a half dozen or more tracks that I recognize in your lists, and discovering the new ones is just as fun. Listening at work makes structural design vastly more entertaining as well.
Infinite thanks, not to be too cheezy but music in general has had such a positive impact on my life, but even if it brings a lil extra smile to someone's day the positive karma kompounds. Drop me a link or 2 to some of your personal favorite tracks sometime. really the best stuff that ends up on these playlists are what folks send to me.
CD: *gratzi* :)
and traderjoe's example of musical synergy was spot on, loved it
Check out KUVO.org (jazz) -- "The Oasis in the City", especially Friday night to Sunday evening.
Plus everything is better with music. Hell I can live without money, I can't live without music.
Synergeticness.
there r only 2 forms of "real money"....Gold & Silver...
D. ebt
C. oupon
C. urrency
R. esistance
fuck all bankers and their debt coupon currencies....
++
Aren't comparisons to 2000 years ago kind of silly when silver now has a lot of industrial uses that affect supply/demand? 2000 years ago I assume the only significant use of silver was as money and jewelry.
...it's about as silly as comparing 2000 year old political ideologies, war strategies, religion, sex, cuisine, art, music, transportation, commerce, sports, corruption, science, architecture, and commentary.
I guess the Captain ain't so damn Obvious...
You are quick, sir! Congrats.
Did you forget vampire, werewolf, phantasm and undead killing implements?
Oké, I'm one big silver Bull but there is some history missing in your conclussion Tyler.
Silver was in much shorter supply in the 19 hundreds and at the begining of the 2Oth century.
Somebody who had 4 oz of silver for examply was pretty well off. That was about 1 year in salary worth.
But in that era, the mining capacities where not the once we have today.
It was actually the building of the Hoover Dam that was the foundation of more economic viable mining.
The gas powered drills where first used there.
After the construction, miners had seen the potential of these drills as before that time, miners used axe picks.
Because of this mining exploded.
And because of that, gold and silver mines supplied a much bigger supply pushing the price way lower.
But because of these mining techniques, these mines that existed in the 19th century are now long gone.
And it's the lack of new finds that has been pushing prices up these last few decades and also the industrial demand.
We will get the same ratios back, but to do the math, you need to include the industrial use and the rise in population and the distribution of wealth in your math.
You are not factoring the bling factor of my shiny new silver grill
But wouldn't the mining techniques be used for both gold and silver? Meaning production improvements should be equal thus the ratio remain the same.
Comstock Lode.
SD,
It's called Supply & Demand.
The Suppply is limited, the need is far greater than what can be provided.
Very few PURE siver mines are out there.Most Silver is a by product of other mining processes.
Thats why SLW kicks ass, they have NO mines, and hedge WAY forward with the miners for the silver they get while mining for other commodities.(you know, like when Gold mines Hedged ahead, NO MORE).
Also another thing about pure silver mines.
They indeed hardly exist.
Mostly the silver is a extra product from copper or zinc mines. Silver is not their main goal. and whatever they find they sell because it costs a bit more then copper or zinc.
In some copper mines, it is known to happen that they ignore the silver vains because it's not 100% in the mining interests to go for the silver and make extra costs for it. The main goals is copper or zinc.
Another thing is that the cost of mining silver isn't that clear because of it.
In the total package divided by the costs to mine copper or zinc, the cost to mine 1 oz silver is about 4,8$
BUT
If they would be mining purely FOR the silver.
That cost would be arround the same price to mine gold. +- 600$
Now THAT would increase the price of silver A LOT
First Majestic Silver or Alexco Resources,or even United Mining Group are all better silver plays than SLW...mucho torque.
Good points. One thing I find fascinating when it comes to increased production levels that originally stem from advances made in (in this case drilling) technology is that while short term production ramps, it drains the supply at an equally increased rate. So the more we get out now, the less there will be later. This is obvious, but I felt I would bring it up.
That's actually the best and only conclussion that one should keep in mind.
But after decades of minening, there is no more taking the low hanging fruits.
Like oil, like gold, like everything the mining get more labour intensive and expensive.
Also, those mines only still exist in countries with low to very low wages because else it wouldn't be affordable anymore to mine.
But the deeper you need to go, the more technology you need to use. And low paying countries tend to have lower education levels that don't permit the developpement of these kinds of mines without the interference of expensive engineers from the west.
Whatever. Every commodity will keep on rising because of it.
The only hard thing to do when investing in it is pick the one that will rise the fastest.
Costs $8 to mine an ounce of silver.
I'm pretty sure people were making more than $5 a year back then. You sure you didn't mean "daily" salary?
that damned white van again...
Why are people assuming that silver has to go up vs. gold go down? Don't get me wrong, I like gold and hold a significant portion in my portfolio. It's just that I never it argued that gold must come down or a least meet in the middle.
Just the ratio returns to mean it has nothing to do with gold retracting more that silver increases in value more rapidly.
yikes is right, and not just with respect to gold/silver - try the same logic w/ gold/oil, gold/sugar, etc.
ratios have two variables, and a *lot* of folks have an emotional binding to their metal of choice being the more stable of the two.
FWIW, i like metals (hard assets) a lot, i just trust math more.
M2 up to nearly $8.5 Trillion. JP Morgan's $1.5 Trillion short bet is as good as any money printing and what the leverage implications to the silver price may be is beyond my comprehension. M2 is at least 10 Trillion when accounting for money yet to be printed, just for this mob. What HSBC has to unwind can be added to the pool as well. Both PM's can only go up but to what extent the silver price goes up when JP's and HSBC's positions unwinds, is in the lap of the speculator and in mine, deliverable at a 1:1 ratio only.
Watch out above!
Reccomendation, buy (what ever you want).
Gold going lower?
Not in terms of dollars but in terms of silver.
I am bullish on silver since it seems to be going up. However, silver is a commodity and if commodities come under pressure, expect silver to do the same. Gold is a little different. It is held by central banks and by definition, manipulated. Personally, I horde gold but paper trade silver.
I like Silver and I'm accumulating it, but I don't think these comparisons with the historical ratio mean much. The smaller numbers are from distant times in history, and near-term support is at 45.
I like Silver because I imagine billions of global savers who have lost confidence in the USD as a value store and who cannot afford substantial Gold at current prices hence are pushed into Silver.
Primary reason for Slvr holdings, is scarcity.
There is FAR more Gld available than Phys Slvr.
And we all know what heepens when the supply is not close to demand.
Of ALL the current metals, Slvr is likely the least priced, and by far the most valuable LONG term.(cost now, to 2013-2015).
You snag a 100oz bar at $2800.00, and it goes to just a $100.00, you just made a killing.
Historical analysis means little these days. You'd be better off consulting a tarot card reader.
just bought a bunch of 1oz coins for x-mas stocking stuffers. It's my "Peace on Earth and Goodwill Towards Men" gesture for the Holiday Season and it beats the hell out of going to the mall. Christmas shopping is done.
Here is the outline for The Global Bankster-Run Day. The Plan: Go to your local bank, near bank, shadow bank, or credit union on Tuesday, Dec 7th, 2010 and simply withdraw and remove all of your funds in cash or certified money drafts also work well (payable to yourself)…. and vote for some real change upstairs.
Even if it costs you an overpriced $18 service fee – it will feel so good to know you are taking a stance about how you feel about another decade, or two…, of no jobs / no-growth / no interest. Say no more… demand your money back, and let us all together hit ‘em where it hurts them most. Cash-on-hand, or Tier 1 capital reserve ratios of 10% that then allow 33x leverage is a new Bankster’s problem, and so too shall the reverse be true – for a lethal 10% combination knockout punch on cash reserves.
The New Demonstration Model is No Violent Protests, No Blood, No Death, or Destruction, Not Even A Peep.
Time is now. Time to make your actions heard by your central banksters, by now voting much differently, and by moving your capitalistic feet, by creating, inducing, and promoting an old fashioned “Run on the Banks”, but this time and day of our choosing.
The Ruling Elite will have one too many structural and incremental problems to contain at all once, and thus the ruling elite will be overwhelmed with a lack of fiscal, budgetary, and monetary power to contain the blow out spreads – and will lose the ultimate control over the Dow’s 0% interest rates and limitless share buy backs, and taxpayer’s QE money printing, which along with non-regulation of TBTFs which is now the main problem holding us all back from regeneration – and your next, great paying job.
By us withdrawing all of our hard earned after-tax savings, all at once, on Dec 7th, we can together help ourselves start real economic change. Plan to Make it Happen.
First goal (within 30 days), remove old Bankers from power – including the power elite ruling class (Oligarch) from holding complete, yet un-democratic, monetary control and ultimately the power presently being used to suppress the nation’s economic future as it at the same time, holds its very own people in a semi-permanent state of economic/collateral hostage taking.
Second, replace these globally-linked Banksters, now as non-globally-linked and a new source for local lending (incl. institutions), and thus create newly formed local lending Co-operatives (Co-Op’s) designed in a manner that rewards incentives to lend and invest, and to pay fair market interest rates for savings formation and accumulation.
Time to serve people and their small businesses on December 7, 2010.
Heads Up,
ContraMan
www.contramanfund.com
And Benjie will just print some more, along with some "harsh new laws" and there goes your "lets hurt the banks" campaign! Sorry, does not really work that way, eventually the system will collapse, we all know that, what's best for us is to be ready to pick up the pieces and do better! And helping others to help themselves is not a bad idea either! Otherwise we will be just the same people we so dearly want to see DEAD!
Although I own both PMs, physically and paper, it seems to me there is a LOT of OPTIMISM as to the short and long term direction of the PMs, just too much Optimism, I have to be, at least short term, on the "other" side! Sorry folks!
Good luck.
you are doing a good deed helping our brothers at JPM...
Anyone know of a good PM shop in the Austin to Waco, TX area?
I've been buying from APMEX.com for some time and like them but would like to support a local dealer if the price is right.
Austin Rare Coins on Mopac
GOld at 2500/ Silver at $147 oz
Gold at 5000/ Silver at $294 oz
Gold at 10,000/Silver at $588 oz
From the link below:
"Solar power is generated in PV technology when a silicon wafer converts incoming photons of light into electrical current, Cockerill said. Silver helps collect electrons for the current and transports them out of the module for use as power. A typical solar panel has about 20 grams of silver, he said. This is around two-thirds of a troy ounce.
“Silver fabrication will grow as the (solar-energy) market grows,” Rannestad said.
CPM Group estimates that 2010 use of silver in solar cells will be 64 million ounces, up from 20.9 million in 2009. Rannestad looks for 15% compounded annual growth from 2009 to 2019, with the amount of silver used for solar cells forecast to rise to 84.5 million ounces over the next 10 years."
http://www.kitco.com/reports/KitcoNews20101119AS_silver.html
Silver is the metal of the future. Historical ratios are meaningless.
JFC, 64 MOzt? That's crawling up on 10% of production...
Suddenly we are finding uses for this thing beyond lower cost jewelry
" I have to be, at least short term, on the "other" side! Sorry folks!"
Why do you HAVE to be trading the stock on the other side, if you think it's bullish overall. I am certain you are able to find better opportunities out there than to short this overall "bullish trend". Sounds like BS to me.
Not much time left to decide which side of the fence you are on, really.
This being true for all things in our lives really.
But I say Silver, this time around, A and FOA notwithstanding. They might just have been the biggest head-fake in history, brilliantly played out, stretched, two wise old men, helping the world against their master's best interests.
Anonymous whistleblowers. But it is artfully done and the basic premise, couched in such awesome languaging, is irresistible.
Maybe it was a siren song.
Just a strong gut feeling based re-alignment of a long admired view of the A/AOA/FOFOA group and Freegold.
ORI
http://aadivaahan.wordpress.com
ORI,
I am a big fan of FOFOA, but since I do not KNOW what will happen in the future I choose to hold reasonable amounts of Au, Ag and some Pt as well. Diversification!
Physical silver may indeed be the better short-ish term speculation vs. gold.
But, I hold a lot more $ value in gold than silver because it seems to be the BEST wealth preserver throughout history!
Diversification between Au/Ag is a good choice DoChen. I switched mostly to Ag.
Like I said, it just felt like decision time. :-)
Good luck mate. December is around the corner and the can that has been kicked andkicked and kicked now looks like it's about to explode!
ORI
THIS IS NOT VERY COMPLICATED!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
The old natural ratios were based on annual production of gold and silver.
Currently, the annual production of gold is about 2,500 tons and silver about 25,000 tons. The ratio should be and it will be around 1:10 no matter how much you try to complicate it.
appreciating a good long-term graph as much as anyone, you indicate that production cost is the only variable.
where does variation in demand come into your formula? photography *was* a large consumer of silver. apparently solar (from a few posts up) cells are a 'new' consumer. monetary use (barter/hoarding) acts as a consumptive force as well, although like a housing bubble, the liquidity of 'stored' metals can change very quickly.
i don't think the demand variable can be safely ignored in pursuit of simplicity.
forget the industrial demand! it is now all about monetary demand. Silver is going back to the basics as thousand of years of human history prove. DO YOU EVEN GET WHAT IS COMING! There will be a collapse of world financial system. Do you have enough common sense to anticipate how people will react? The first thing they will do is to figure out what hundreds of generations of their predecessors did when they had the same problem!!!!
no argument there, but your original thesis is that it was simple, gold to silver is 10:1 to *produce*...
ask the gold rich, but very dead Kurds escaping Iran over the winter mountains how much their gold was worth when they froze/starved to death clutching it.
demand and context are a critical part of the equation, and your energetic post trivialized that reality.
while i may be wary of large-scale manipulation by our respective gubmints, i am very much a hard-asset proponent.
you may have been incomplete in your thought, but i do not believe you were at all wrong.
cheers
"Yogi Dewan, founding partner of wealth manager Hassium Asset Management, on what advice he would give to his clients on bubbles. He says gold's current price is absolutely crazy and it would be the first asset class to be hit if the recovery holds. Some bonds still represent a good investment and he would advise caution on China."
http://video.ft.com/v/677520168001/Steer-clear-of-gold?utm_source=twitterfeed&utm_medium=twitter
trust Zionists on their Zionist lying media and you will end up a slave
Would help if you actually knew who the Zionists were. Jerk off.
Who the hell is Yogi Dewan? Nice handle AND a gold douche. If the "recovery holds"? Buy bonds? LMAO.
It is probably the biggest IF in the history of the world. Entertainment comes in many forms.
What happens when everyone realizes that the silver ingots or gold bricks are worth a lot of money and all other asset classes are succumbing to a black hole debt spiral? Are the gold bricks or silver ingots worth anything? Peak Theory fails to realize that the printing press has conjured up more artificial value than precious metals. Why are precious metals worth so much? I know because there is only a limited amount / supply in the world and the Central Banks cannot print gold / silver. But consider the scarcity argument in Real Estate: "They cannot create any more land." Hmmm... I believe this false myth has been the undoing of the banks, and especially property owners in Japan and California. So why is the gold brick in the corner worth more than the clay brick? Because people think it is?
Have you ever wondered why the ancient civilizations (Mayans, Chinese, Eygptians, etc.) all considered Gold to have great value? They did not have contact or even knowledge of one another, so did they all pick Gold?
"Gold is money and nothing else" ~ JP Morgan, testifying to Congress, 1913.
good point! The pyramids (the three great pyramids) are the best proof our human race was aided
Wow, is that a verifiable quote?
the Mayan civilization wasn't ancient. It reached its pinnacle maybe a century prior to Columbus.
That said, pussies come to men who have lots of shiny things
The role of gold-
“In effect, there is nothing inherently wrong with fiat money, provided we get perfect authority and godlike intelligence for kings.” - Aristotle (384 BC - 322 BC)
I'm as much of a precious metals bug as the next guy, but when are you people going to realize that the actual value of gold or silver doesn't actually go up or down. What we are witnessing is the rapid decline in fiat currency value. Just like when you are on a ship and it starts to sink, the land in front of you looks a lot higher, but in reality it never changed. You did. This price of gold and silver everyone is so fixated on is simply the SPECULATIVE value of it. Because everything else but real money, i.e. gold and silver, is going down like the titanic, everyone is rushing to dry land. All this fuss over buying gold is a good start, but the whole market needs to change. As Michael Kreiger said on the Keiser Report a few days ago, the market should accept whatever medium is demanded by the people. If it is gold, let it be gold, if it is silver, let it be silver, if it is paper, let it be paper, but all must be exchangeable for eachother and all should be viable forms of payment. This is what is really needed: soverignty put back into the hands of the people and not in the hands of the bankers. Banks should act like a utility, serving only the needs of the people and accepting a fair wage for doing so. That doesn't sound so bad to me. Then again, I'm not a banker.
you do not account for the years of persistent gold and silver suppression, especially silver. The markets have to correct the prices first before the prices reflect real value of fiat money.
As Michael Kreiger said on the Keiser Report a few days ago, the market should accept whatever medium is demanded by the people. If it is gold, let it be gold, if it is silver, let it be silver, if it is paper, let it be paper, but all must be exchangeable for eachother and all should be viable forms of payment.
Fine, except that of course paper is not money and would never be acceptable as such to anyone. You can have paper receipts for money, which if they are honest and trustworthy receipts, not fraudulent "fractional-reserve receipts", might be acceptable to some participants.
We need to be careful here. Paradoxically, one of the reasons gold is a good form of money is because its useless. Think about it, because it has no significant industrial uses, it just piles up. In fact, 95% of the gold ever mined is still in human possession. This means it preserves its value indefintely, the key property of a reserve money. Jewelry is just a more aesthetic and enjoyable form of bullion.
From antiquity to the 1950's, silver operated the same way, except there are 17 times as much silver as gold in the earth's crust. So the price of silver is about 17 times less.
You would think that because photographic film has disappeared, silver would be even less of a commodity, and more of a metallic reserve. But other medical and industrial uses have been developed that are consuming virtually all the silver production. The amount in vaults has been slowly depleting over the last 30 years until there is just a fraction left. Even central banks have gotten rid of their silver.
I'm saying that silver has been demonetized, and it may never come back. It is now a full fledged commodity. Of course, if some people think its money, then for them it is money. But for it to continue tracking with gold, everybody must think its money.
Clearly, silver in vaults is in short supply, and the new mine production is consumed by industry, and a lot of people still think its money, all of which point to a rapid rise in price, probably out stripping gold in the short term. Even Hugo Salinas Price has lobbied Mexico to issue silver coins in an attempt to return his country to sound money.
But here's the rub. A gold standard in a computerized world will not need actual gold or silver coins. The exchange of gold for paper money can be done by the cash register in your grocery store without difficulty. Silver became money because gold coins big enough not to get lost, carried too much value. Equivalent chunks of silver could be used for all kinds of small scale purchases. But the modern version of a gold standard could exchange millligrams in milliseconds without actually having the gold present. Just as an example, BullionVault sells allocated gold in 1 gram increments, or about 43 dollars. In a sense computers obviate the traditional role for silver coins. (BTW: Jim Rickards pointed out the these properties of a computerized gold standard.)
In that case, silver gold ratio would not have any meaning; it would be apples to oranges.
DISCLOSURE: I have a pretty big pile of silver bullion, but I am prepared to sell if these things appear to be coming.
>>> DISCLOSURE: I have a pretty big pile of silver bullion, but I am prepared to sell if these things appear to be coming.
you seem to be glued too much to the Zionist media to be prepared for what is coming!!!! You sound like a lot of the suckers who make posts everywhere how much they bought or sold after the fact! Anybody who cites the names of Zionist shills like Jim Rickards, Hugo Salinas Price is a sucker. All it takes is to come to a simple conclusion that there is nothing else left to preserve wealth except gold and silver because thousands of of years of human history say so and not Zionist shills, everything else is Zionist noise on their lying Zionist media.
FWIW, you can dump the whole zionist schtick (yeah, my choice of words was intentional) and still have a valid point.
globally replace 'zionist' with 'greedy bastards' and you'll probably have a more receptive audience.
they (whoever the hell they are) are definitely telling us what they they want us to believe, when they want us to believe it, and betting that we will believe it. so far, they're ahead in the game.
i, for one, am not playing anymore. join me. disengage.
if you want to work on your stereotypes then watch this video from start to finish
http://www.erichufschmid.net/MasqueradeParty_Part_3.wmv
work on my stereotypes? and this would be useful, how?
a good message relies on neither race, gender, or culture.
and the guy with the microphone *always* has an agenda.
your writing seems to include a lot of extraneous stuff around generally rational points - not sure its always worth sifting.
(i'll probably watch the link, but hardly to reinforce any stereotypes i may be trying to temper...)
tnx
We do not meet, shake hands, enter contracts with abstractions or stereotypes. It is true that some sorta-identifiable "groups" have greater than average tendency to <insert any attribute>. But that is irrelevant. Why? Because each individual deserves to be treated in accordance with their own behavior, period. Anything else is unethical and unjust. Anyone who prejudges and treats specific individuals on the basis of averages is unethical and unjust. Some people just never realize this simple observation... because they want their "guide to behavior" to be vastly simpler than reality allows.
i would say that the entire market of today is a contract with an abstraction, and that very abstraction is the part that enables the grand-theft we're currently witnessing. i don't believe you argue this thought.
i absolutely agree with your premise that to judge anyone on anything other than their individual merit is unjust and unethical. it seemed that your point above was to reinforce the contrary - race distinction and stereotypes. i fear i mis-read your meaning, but i can't apologize for that considering how it was stated.
i would assert that we are built to learn from our own experiences, and stereotypes are a natural and often effective manifestation of that effect. too bad the MSM teases us into their grasp and game with perpetual and pervasive division forming snippits of that sort.
apologies if i mis-read your intent. i am a firm believer in a meritocracy - regardless the source.
I guess most replies are to disagree. So maybe it wasn't obvious, but I was basically supporting and elaborating your message, not contradicting it. Sorry that wasn't clear.
The problem is, abstractions are not existents (except as mental configurations in the brain of those who hold them). So even though virtually everyone appears to have "contracts with abstractions", in fact they cannot. To claim we do have "contracts with abstractions" is identical to claiming we can have a contract with SantaClaus, the ToothFairy or any non-existent [fiction]. I mean, the entire notion is literally insane.
Yet, we both know that a court will not entertain any "contract with the ToothFairy", but it will entertain a "contract with Microsoft". In fact, this is absurd, and as you point out, is largely to explain why the predator class loves this particular scam. I have explained this phenomenon over the years by comparing the current system with "the old days" (say, 100~200 years ago) where customers walked into a store with a six shooter in his holster and usually dealt directly with the owner of the store. No store owner in his right mind would defraud his customers, because he knows he would eat lead in short order. Today, however, if we are screwed by Microsoft or McDonalds, exactly who screwed us? Exactly how can we find out? Exactly how can we kick his butt or extract justice? We can't.
This is also one reason the predator class decided to move away from real, physical individual leaders (kings, queens, emporers and such). They are too easy to identify and take revenge upon for transgressions. So, if you are a predator, setting up massively vague, dispersed, abstract, fictional entities is perfect. Nobody can figure out who is responsible for screwing them over, and nobody knows exactly who deserves to die. Of course the correct answer to the later question is "all of them"... just like someone who has been shafted by the mafia has a perfect right to "take out" the boss, his thugs, his accountants and his errand boys - because they all know they are part of the abuse. This is also parallel to the notion that someone driving a getaway car is resposible for murder if his partners in the bank murder someone. Sadly, in the current context, this means that millions of americans deserve to die for supporting the current predators-that-be, who have made unmistakably clear they are utterly unethical, corrupt predators and destroyers of honesty, ethics, justice, liberty and individualism. Being part of an "abstract system" that is bent on enslavement and destruction (and overt violation of its own charter and oaths) cannot be forgiven.
To return to the question of abstractions. I have said many times that 99.9999% of humans are literally, clinically, technically insane today. I do not jest or exaggerate. After all, how many adults understand that "government does not exist", even though it is an obvious fact? This is made even more obvious by the fact that long standing fundamental law calls all organizations (government, corporations, societies, clubs, etc) "fictitious entities". That is a correct identification, assuming we ignore the fact that "entity" and "fiction" contradict each other (which provides another clue how screwed up humans are).
The problem you point out I sometimes call "the SantaClaus problem". Because kids take the "SantaClaus" idea seriously (treat that idea or concept as valid and non-fictional), that idea controls their thinking, their behavior and their actions. That's why they are awake and alert and energetic at 5am to 6am on xmas morning, but impossible to wake before 10am on any other day of the year. If an adult of 18 or 28 or 38 or 58 believes in the SantaClaus fiction, a psychologist would correctly designate them as insane. Yet today, most adults believe in even more absurd fictions, like "government" for instance. Most adults know the acronym DBA ("doing business as"), as in "John [and Mary] Smith DBA DonutPlanet". They understand that John Smith [and Mary Smith] is/are [an] individual human[s] who make and sell donuts in stores topped with "DonutPlanet" signs. Presumably most adults understand that "DonutPlanet" is just a name, not a real "entity", but "John Smith" is, [as is "Mary Smith"]. However, most adults appear to literally lose their minds when it comes to bigger fictions like Microsoft, WalMart, government of the USSA, etc. In fact, they act as if these terms refer to "super-entities" that are even more real and important than they are. This explains why they allow themselves to be endlessly lied-to, stolen-from, abused, forced, prohibited, defrauded and enslaved. To be sure, some modest percentage believe or suspect "something funny going on here", but the seeming "abstract" nature of the scam confuses and thereby disables almost everyone... which explains why people have watched the predators-that-be become more and more monumentally brazen in their atrocities and criminalities.
So yeah, you are totally "on to" a very important issue, one that unfortunately humans are now incapable of identifying and/or understanding and/or de-habituating. In fact, I call this much-too-strong tendency of humans to "trust their ideas/concepts" the "fatal flaw in human consciousness". Throughout millions of years of history, animals and then humans have formed the ideas/concepts in their brains through observation of reality. When they saw many [real, physical] instances of some kind of entity, or some kind of phenomenon, they created an idea/concept in their brain to collect them together and identify their similarities. Any human who ignored his ideas/concepts would die long before he/she reached reproductive age... when he/she walked over the edge of a cliff, or walked up to a viscious predator, or ignored the hiss of a snake, or any of endless examples. Thus humans habituated "trust your ideas/concepts" for damn good reason. However, in the world today, carefully and diabolically crafted, pre-created, pre-packaged ideas/concepts are jammed into the human brain by parents, friends, school, church, media, etc. Any content those ideas/concepts have is simply implanted in the form of other words, phrases, sound-bites, media-bites... NOT in the form of first-hand observation and first-hand thinking and inference. Yet humans retain the evolved and habituated mandate "trust your ideas/concepts"... and act upon the endless absurd fallacies jammed into those ideas/concepts. Thus, literally, clinically and technically... most humans today are quite thoroughly insane.
Just look at the example that started our conversation! I mean, really! How much intelligence or thought does it require to understand that "the way every individual should be treated and evaluated should depend on the way he/she behaves, not on the basis of some group you decide they "belong to"? I mean, really! Did it ever occur to these morons that a single individual might belong to hundreds, if not thousands of "categories" or "stereotypes"? I mean, really! Let's assume we put someone in front of us and ask "what are they?". One moron might say, "they're a woman". Another might notice, "they're a black". Another might say, "I know her, she's a NASA geek". Another might add, "yeah, she's a rocket scientist". Another might add, "she is a Catholic". Another might say, "she's a mean basketball player". Another might say, "she's a tall person". Another might say, "she's a babe". Another might say, "she's a Mercedes owner".
And we could play this game for a year straight without exhausting all the stereotypes she fits into. So, how do these morons expect to decide the question "how should she be treated?". On the basis of which of the thousands of stereotypes she belongs to? How much absurdity does it take before humans realize they are totally freaking insane? Personally, I find it difficult to believe these morons have not asked themselves this (and many other) questions that immediately explode the entire basis for their way of seeing and thinking about the world. If I am right, they are purposeful jerks and scumbags. If they literally have not noticed how insane they are... well... maybe that's just more evidence of how strong is the "fatal flaw in human consciousness". But instead of pointing these things out to everyone in 1st grade, 2nd grade, 3rd grade, 4th grade... in the critique of their PhD thesis, humans just keep repeating the endless stupidities in ever more obscene and egregious ways every year.
Humans need to wake up, and get real.
"Thus, literally, clinically and technically... most humans today are quite thoroughly insane."
i'm glad we agree. i couldn't agree more. with virtually all of what you wrote.
i pictured Einstein's "5 blind men and the elephant" when you covered stereo-types. nicely put.
add to your thoughts the idea that the target of the stereotype is actually dynamically changing. heh. e.g. the recent debate surrounding the old famous movie director who raped the thirteen-year old 20+ years back. same guy now vs then?
you'd enjoy dan ariely's "predictably irrational" if you haven't already.
as far as "getting real", maybe it would be better if we could simply admit what you've written above is by-and-large true, and stop building mega-social-structures that deny that reality. i don't think this will ever happen because i think the PTB rather enjoy holding the leash.
humans don't scale very well. the gunslinger at the store is long gone when we have one SEC that represents the interests of millions of parties and trillions of dollars. are we friggin nutzo to even dignify the idea that's plausible/possible? yet, there it is... heh.
give me the revolver anyday...
lastly, ZH can eat you alive (suck dry your time and energy), but, that you took the time to commit your extensive thoughts was great and the time that took is appreciated. at least by this reader.
be well.
+1
Always enjoy your posts, honestann.
Yes, thanks for being so generous with your time & thoughts
hmm. history tells a different story. for several thousand years tribes have been fighting over water rights, trade routes & tribute. start with the Sumerians. what's changed?