There are going to be people that get upset at what I’m about say. To that, I say, it is not important. What is important is the truth. Not how many subscriptions a person sells, which I’m not selling anything, or how much product a person sells based on fear or love. It is about truth and only truth matters.
Silver was demonetized in 1873 and has not been currency since that year. It was removed from our coinage over a fear of hoarding the silver and driving up cost of coin production. There were probably other factors that went into the decision but I do not know what those other factors could be. Anyone outside the room where the decision was ultimately made is being less than honest. With silver being demonetized in 1873 and then removed from circulation altogether in 1965 the gold / silver ratio no longer matters. What matters are the uses of silver, the amount of physical silver available to bring to market and the market demand – the fundamentals. Unfortunately, in today’s world of rigged markets, paper illusions of wealth and digital blips that people accept as being something of value, fundamentals no longer have an impact on the assigned price of anything, much less precious metals like silver and gold. Value is becoming as meaningless a word as gold/silver ratio. The word value used to hold tremendous weight. This, sadly, is no longer the case, people are only concerned with the price – price is not an items value.
I bring this up since the current gold / silver ratio is making the rounds once again throughout the blogosphere. With the ratio being at 25 year highs people are touting this as having some type of meaning to the value of silver. It doesn’t. The acquisition cost of silver is as low as it is probably going to go. While some would argue that the price needs to fill a gap from the 2015 silver chart and until it does new highs for silver are impossible to reach, we say fill the gap already and let’s move on!
For whatever reason, every time gold has been worth more than 80x silver, it has marked a great historical buy opportunity for silver. It has meant silver has been cheap.
We pointed this out the three previous times the gold/silver ratio hit 80. And silver rallied all three times. It always has. And those rallies were decent, from the low/mid $16s to the low/mid $17s.
But now? The gold/silver ratio hit an eye-watering 86.71 yesterday, a 25-year-high. And silver is fumbling around near $14 even.
We don’t overthink the gold/silver ratio. The chance to buy silver at a proportional 25-year low vs. gold – at levels presenting an opportunity unavailable at any point since 1993 – AND a nominal double-digit percentage discount to its recent ‘buy low’ prices (all three of which, again, saw nice rallies from the low/mid $16s)? Source – GoldSilver
None of this has any impact on wether Samsung needs silver or the solar industry needs silver or any of the other of hundreds of industries need silver. These companies and industries will continue to acquire silver regardless of cost and never, ever consult the gold / silver ratio before making a purchase.
Silver is needed in industry, jewelry and investment and until there is an alternative found this need will not change.
Therefore, we at The Daily Coin love silver, love the silver story and do our best to share the story. We believe, for ourselves, that holding some silver makes sense with the mining industry failing to discover new sources we believe it is only a matter of time before silver becomes as valuable as gold. This does not mean we support the idea of the gold / silver ratio having any weight, I am simply stating the acquisition cost to procure an ounce of silver is going to rise dramatically and supersede the price of gold and lots of other commodities as well. I’m still in favor of the DJIA market / silver ratio. I believe that once silver begins to move to higher ground this ratio will come into play and we will see silver moving in ways that will be unprecedented in history. Got physical silver in your possession?
