QUOTE(chrischin @ Dec 25 2011, 10:25 AM)
Hi guys, Merry Christmas and a Happy New YEar to all ...
I wanna discuss the Gold Silver Ratio with you all,
I always hear / read that historically gold to silver ratio has been 12:1 / 15:1 etc and etc.
Jonathan's in his book Why gold, why silver says, "for the first 2000 years the average gold silver ratio has been 12 to 1".
I am not sure what he meant by "the first 2000 years".
Looking up at wikipedia, this is what i got -
The gold/silver ratio is often analyzed by traders, investors and buyers.[4] In Roman times, the ratio was set at one to 12 or 12.5.[5] In 1792, the gold/silver ratio was fixed by law in the United States at 1:15,[6] which meant that one troy ounce of gold would buy 15 troy ounces of silver; a ratio of 1:15.5 was enacted in France in 1803.[7] The average gold/silver ratio during the 20th century, however, was 1:47.[U][SIZE=7][8] The lower the ratio/number, the more expensive silver is compared to gold. Conversely the higher the ratio/number, the cheaper silver is compared to gold.
So, in today's time, what ratio should i be looking at (without taking into consideration the amount of silver above ground) to determine if silver is cheap or expensive in relation to gold.
PS : IS this the appropriate place to discuss this here or in the Gold thread? I very much prefer to do most of my discussion here in the silver thread - which i refer to as my home for precious metal (although i am more bias towards gold).
PSS : an article related to the above
http://seekingalpha.com/article/298288-gol...ing-opportunityHi chrischin,
Well, the simple way to know the ratio now is by looking at kitcosilver.com page, they have a ratio calculation which shows that now, silver is 5
Personally, I consider myself graduating from silver to gold (as gold is referred to as big brother, AND it's more expensive, NOT because it is better or more chance of profiting etc...) Although from one glance, silver is surely way below the original ratio and it should correct itself ONE DAY, the problem is, nobody knows when the ONE DAY will be. Many expert predict it will be sometime soon, as in next year to the next 10 years. It's like predicting the market price of silver, nothing is firm, although silver is getting rarer, the price is being suppressed to make it economically viable to buy and use by country like china to product goods at affordable price.
Anyway, In short, look at kitco page and you see silver gold ratio to be 55 to 1. silver is cheap compared to some period in the past. But there are occasion when only gold is accepted as currency while silver is like worthless metal.
We are all betting on silver ratio shrinking to normal level, which will be 12 to 1, but will that day come? nobody knows. Is that day a good omen? maybe not. If one day, industry found a replacement metal for silver, they may allow silver price to self adjust, but if there is no longer a demand for it as industrial metal, will the price drop further down to a ratio of 100 to 1? No body will question gold as Money/Currency, most of us here are pushing people to believe in silver, but how successful it will become a PM in high demand like gold, we will never know.
chef
PS I just approached a small gold shop (not those old china man shop, this shop run by 30 year old manager) about selling silver bars, no customer, low turn over, and yet, told me they have no space for silver.
PPS What I'm saying is, at the CURRENT market, gold is easily traded, convert back to cash. While silver although has great potential in the future, are not liquid enough for short term investor.
Dec 6 2011, 05:54 PM
Quote
0.0598sec
0.40
7 queries
GZIP Disabled