Global Currency Reset, Amero, The Gold Silver Ratio and $150 Silver

gold rallyThere are a number of reasons that silver should revert to the long term historical mean but the two primary ones are the fact that geologically in the earth’s crust there are fifteen parts of silver to every one part of gold.
The other reason is that silver is used in many industrial, technological, medical applications today and since the Industrial Revolution a huge amount of silver has been used up.
It is for this reason that we are more bullish on silver than on gold in terms of price. We continue to believe that silver will surpass its inflation adjusted high of $150/oz in the coming years.


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From Goldcore:

Today’s AM fix was USD 1,226.50, EUR 902.50 and GBP 747.37 per ounce.
Yesterday’s AM fix was USD 1,237.50, EUR 907.92 and GBP 754.44 per ounce.

Gold fell $6.50 or 0.52% Yesterday, closing at $1,232.30/oz. Silver slipped $0.30 or 1.49% closing at $19.87/oz. Platinum dropped $3.01, or 0.2%, to $1,409.74/oz and palladium rose $3 or 0.4%, to $738.25/oz.


Gold Silver Ratio – 1960-Today

Gold edged down in London for the second day ahead of the release of the U.S. Federal Open Market Committee minutes. Strong support is at $1,180/oz which could turn into a double bottom and resistance is at $1,250/oz and $1,270/oz.

FXStreet.com’s Dale Pinkert interviewed Research Director, Mark O’Byrne on Monday about the current state of the gold and silver markets, the history of paper currencies, a global currency reset, the amero currency, the gold silver ratio and silver rising to $150/oz in the coming years.

Another topic looked at was bail-ins by banks of individual creditors becoming one of the most under appreciated risks of our time and noting Poland’s recent government confiscation of pensions.


Silver in U.S. Dollars, 5 Year- (Bloomberg)

They discuss how the gold silver ratio throughout history has been 15:1. Today it is at over 60:1 (see chart) and GoldCore believe it will revert to the mean.

There are a number of reasons that silver should revert to the long term historical mean but the two primary ones are the fact that geologically in the earth’s crust there are fifteen parts of silver to every one part of gold.

The other reason is that silver is used in many industrial, technological, medical applications today and since the Industrial Revolution a huge amount of silver has been used up.

Silver in U.S. Dollars, from 1970 – (Bloomberg)

It is for this reason that we are more bullish on silver than on gold in terms of price. We continue to believe that silver will surpass its inflation adjusted high of $150/oz in the coming years.

It was noted how international storage of coins and bars is becoming a popular diversification for U.S. citizens in Zurich, Singapore and Hong Kong.

Dale asked some good questions and had a great expression that we had not heard before “Don’t wait to buy gold and silver. Buy gold and silver and wait.”

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Comments

  1. @Doc: The phrase “Don’t wait to buy gold and silver. Buy gold and silver and wait”, I believe, was coined by Ted Butler.  Ted was one of my earliest reads when I started out in PMs.  If memory serves, I have used that particular phrase in my commentaries here on your website.

  2. I know people are paid to do accurate analyses of the gold and silver markets, but when it comes to prices fundamentals don’t seem to matter anymore.  Supply and demand don’t matter.  The ratio of the metals in the earth’s crust doesn’t matter.  Industrial usage doesn’t matter.  What matters is where the masters behind the price manipulation will take the prices.  At least we can still buy physical gold and silver today.  When the manipulation stops and the prices are allowed to be set in a free market, we may not be able to buy it at any price.

    • Agreed on all counts.  The days of manipulation are clearly numbered.  We may not know what that number is but we do know it exists.  These relentless paper price smashes are having 2 effects.  The first is the desired one of keeping gold and silver prices lower such that the value of the fiat currencies are supported to the extent possible.  Governments very much desire this as it shows them and their policies to be working… when they are not.  If they cannot BE good, then they are quite willing to settle for LOOKING good.  Second, is the unintended consequence of suppressed prices and that is Asian buying of every bit of gold that is up for sale.  This now seems to be turning towards silver as well as gold.  It is likely that the amount of gold available is insufficient to meet the current, let alone the increasing future, demand so gold buyers could well be looking at silver as a viable substitute to fill their demand for hard assets.
       
      PS – Thanks @Doc and the crew at SD for getting the system back to good health.  I haven’t been able to get on here for 2+ days and a dedicated stacker without their daily SD fix is, indeed, a sorry sight!  During that time, I could read the site but not log in or reply.  Instead of a login screen, all I would get was a blank white page.  A couple of times, I got a message that read “The Silver Doctors web site has declined to show this page”.  This looked a LOT like a response to the typical hack-job DOS attack.  Hopefully, that has been rejected and we can continue to read great info and discuss it here.  :-)
       

    • @ED_B I know what you mean I was going crazy yesterday and when I woke up this morning the first thing I did, was, to check on the site but it was still down, Aaaaaaaaaaaaa god I’m so glad it’s up now. I even missed Zman. Lol Keep Stacking

    • Agreed, and we will not change what is happening without a civil war.

    • @Marchas45
       
      Lol, Charlie… now THAT was a sign of absolute desperation!  ;-)
       

  3. The ratio out of the ground is about 9.5 to 1 due to years of consumption. In terms of dollars spent, it’s 1 to 1.

    • If 10x more silver is produced, effectively 1/5th the value of gold production, and roughly 1/3 of that silver is added to above ground reserves vs 100% in the case of gold…gold above ground is being added to 15x faster than silver in fiat terms.
      Perhaps this is the new 1:15 ratio to look for?

      Eric Sprott likes to say that these ratios are bound to end in a shortage of silver. But for now, it’s not. Either stock piles are still holding up, or demand fails to outpace supply. And this after a long decade of supposedly unnaturally low prices?
      Silver miners are not making money, just about break even. What is a fair profit margin for a miner in a market that’s doing well? 50% of sales? That brings us a $40 fair value for silver. 90% profit after all costs deducted would mean $200 silver. 

      Could it be that production costs of silver have simply not kept up with inflation? Mining equipment gets bigger and more efficient. Chemicals to extract metals are improved continuously.
      So what if inflation dealt us a x4 card over the past 20 years or so. Silver production costs may have only doubled.
      Gold is unneeded and above ground quite abundant, but silver is cheap to dig up and demand is not able to get a seemingly barely stockpiled metal to get in trouble.
      I’d like to see 20x purchasing power in real estate compared to current silver price.  But is that reasonable? Only imaginable when a really epic shortage arises. And this seems to be very unlikely unless we can convince a huge new generations of stackers to go wild, and set even higher expectations for themselves, before they exit their positions. We need someone to buy our silver when we are exiting, after all. And in the pas 3 years we’ve been proven utterly incapable of finding the bottoms of the stock piles. We seem unable to force this market into shortage. Someone else will need to do it for us, or this is going to be a very long wait.

    • @Mikey Riley
      Mining ratio running ~8.9:1 (falling)
      Reserves Ratio is  ~10.4:1 (falling)
      This bodes well for Silver to grow much faster during any run up, or “recovery” lol
       
      Source: http://www.usdebtclock.org/gold-precious-metals.html
       

  4. On a lighter note…if anyone is curious or considering purchasing some of the new 2014 Australian Kookabura Horse Privy coins I highly recommend them. I picked up a few today and they are beautiful. They carry a bit of a premium but with a mintage of only 80,000 that’s to be expected. 

    • Why not the 500,000 regular ones? Already sold out at Perth (how early do you want a 2014 to sell out?) and they consistently build premium.

      A nice privy for me might be the Lunar II. Cheaper than the 300,000 ones, by a wide margin. And it’s the joint largest one ounce coin at 45+mm. I might pick up a roll of Horse privy Lion or whatever it’ll be. 

  5. The only way to drive up prices is to force a squeeze and actually tell the world of all other countries to do the same. Let the people of the world demand real money. Have just for one month the whole worlds people buy all the silver an gold they can with just a couple  stipulations. No toilet paper transactions an no body can sell that is the average person. Only companies an mines can sell. I think we be over $100 easy by the end of the month. COULD IT WORK?????????????Thoughts??????????????

    • COULD IT WORK? Yes.
      The trick is getting everyone to buy and buy and buy all at once. Like we did that one week or day in, what was it, 2013?
      I forget now, but it did have a measurable impact. The time the hot chicks all got together and asked everyone to buy…
      Wynter-Benton Group? Was that it?

      No, that was 2 different events. 1 was started by SBSS (Chris Duane)
      The other was Wynter-Benton predicting market moves.

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