The Persistent Plague of the Gold and Silver Price Illusion

A few weeks ago, financial analysts stated that gold: silver price ratios were at record highs at 125:1 and still continue to state that they were at 114:1 just a few days ago. To debunk these myths, let’s look at the price of 1-ounce gold and silver American eagles. Currently, physical gold is $1909 per ounce for lots of less than ten gold American Eagles and silver is $25.91 per ounce for lots of less than one hundred silver American Eagles. These prices produce a physical gold: physical silver price ratio of 74:1. This ratio, while still high, is nowhere near the ratio of 114:1 quoted just a couple of days ago by a prominent analyst. The 114:1 gold: silver price ratio was derived from the irrelevant paper derivative gold and silver prices of $1735 an ounce and $15.24 an ounce.

 

Paper prices are completely irrelevant in the determination of these prices, because as I’ve explained in prior podcasts, if you can’t buy the real item at anywhere near that price, what is the point of quoting those prices and ratios as the “existing condition” in the gold and silver markets? If you saw a house listed at $530,000 in many different digital platforms, consequently went to an open house and checked it out, and was told by the owner that the price was $750,000, would you not be furious for the owner having wasted your time and asking him why he would then list the home at $530,000? Though this scenario is exactly what is happening in the quoted prices of paper derivative gold and silver by every talking head on financial shows all over the world and the much higher prices for physical gold and silver you will discover were you to buy real gold and silver from bullion dealers, every analyst in the world quotes the wrong gold/silver price ratios and wrong gold/silver price performance. Though there may be another analyst actually quoting gold/silver price ratios and performance based upon real physical prices instead of spot prices, if there is another one, I have not yet encountered him or her. Of course, there are plenty of others that mention the difference between physical and paper prices, but curiously enough, all still seem to be quoting the paper prices when referencing year-to-date performance and price ratios.

 

What is further astounding is that some analysts that I have seen rail against the fraud in the gold and silver futures market pricing platform for years are the very people quoting these fraudulent gold and silver price ratios, which I think is byproduct of the massive erosion of critical thinking in our society today, thanks to the parabolic rise of social media and the parabolic decline of real education in schools, which I discussed, for those who may be interested in hearing more about this topic, in the link at the bottom of this article. This same deficiency of logic and misinformation also extends to all the best and worst performer lists in commodities every year, as the annual percentage yields are always based upon paper derivative prices and not real physical prices.  For example, gold spot prices started the year at about $1,515 an ounce and at the start of this year, the premiums on 1-oz gold American Eagles were not nearly as high as they are at the current time due to the global shortage of physical supply that exists now. Back then, the premiums were about $35 to $45, so you could have purchased an American Eagle for about $1,550 per coin. The current price, for less than 20-ounces of gold as I quoted above is $1,909, so the gain on physical gold prices, as it pertains to the American Eagle is 23%. If you listen to CNBC, Reuters, Bloomberg or read The Economist, Fortune, and the Wall Street Journal, they would all quote the annual gain in gold based upon irrelevant gold spot prices and tell you the yield as of last week was less than half of what I just stated, at 11%.

 

If someone told you that gold will protect your savings and amidst the Q1 2020 global stock market crisis, it increased 11% over the first four months of the year, that’s a pretty decent yield so maybe I better listen to these people that are telling me to buy physical gold to protect me against the second phase of this global financial market crisis that is going to cause much more chaos and social upheaval than governments artificially and unnecessarily imposed around the world due to this viral pandemic (by the way, I have been one that’s been warning of the coming great social upheaval that will be unlike anything any one of us has ever witnessed in our lifetime for years now, and much more urgently since August 2019 on my news site). However, if someone informed you that the reported 11% year-to-date yield on gold was a lie, and that the real year-to-date yield was 23%, your ears may perk up just a little bit more and you may be a lot more interested to learn why the yield on gold has been so solid this year. However, keep seeking to be “educated” through the same mass media forums as everyone else like the ones I named above and you will never learn the truth.

 

Furthermore, the same misinformation has been spread about silver’s annual year-to-date yield thus far as well. Earlier this week, I saw a news channel report silver’s year to date performance as abysmal at -17%. Combine that with other erroneous reporting that the gold: silver ratio is 114:1 and every person would likely think, “Silver prices will never come back and silver is a dead asset that one should never own.” However, were one have been buying physical silver all along, then one would understand that given the prices of 1-oz silver American Eagles per ounce, for lots of less than 100 ounces, of $25.91 now and the price at the start of the year of about $22 per ounce for lots of less than 100 ounces, then prices have dropped about 15% versus the reported 17%. At first glance, one may think this is not a big enough difference in the yield of spot and real physical silver to justify considering the purchase of physical silver, but one can never make decisions in a vacuum as one has to understand not only where markets have been and where they currently are, but one has to understand where they are going as well. And if you understood this entire picture, again never reported on by the mass media, your decisions about silver might radically change as well. In addition, if this is information of which you were unaware before you read this article, then please keep abreast of the coming launch of my complete 20 course online academy, skwealthacademy, which you can do by subscribing to my skwealthacademy podcast channel. This type of information is only the very tip of the iceberg regarding all the information I have crammed into the 20 course I will be releasing, so please ensure that you check my news sites for information about my academy launch.

 

Other recent skwealthacademy content:

The Erosion of Critical Thinking and the Battle for Your Mind

Why a Segmented Pandemic Strategy Was the Best Unutilized Response by Any Global Leader

Sneak Peek at skwealthacademy Patron Only Content

The Latest CME Reports Show that Bankers are Hemorrhaging Physical Silver

 

Upcoming, yet unreleased skwealthacademy content:

The Real Reasons Behind the Global Pandemic Lockdown

 

To view a podcast version of the above article, please click on the below image:

the persistent gold and silver price illusion

 

Thanks to my growing community of patrons around the world as you are much appreciated!  If you are a patron, you have heard me speak about issues such as the ones in this article for years now to keep all your strategies sharp and on point to survive the second phase of this global market meltdown. You can continue to expect to receive exclusive high value content in the future from me as well. To learn about the exclusive financial analytical content and other bonus podcast content provided to skwealthacademy patrons, please click here. Lastly, I publish loads of content available only on my news sites and nowhere else and always publish all articles first on my news sites, usually a day or two prior to when they are published here. To view all content when first published, please ensure that you bookmark my news site here and subscribe to my YouTube channel here