Silver vs Gold (5/5/08)

As you can tell I am very bullish on silver.
I am too early on alot of my investments so bear with me.
The laws of supply and demand win out over anything. Fundamentals are stronger than anything that a government can do beyond confiscation.
The siomplist and most basic fact is there is more gold on this earth than silver.
20 years ago this was not true. Silver has become more of an industrial commodity than it used to be.
In the past 20 years more silver has been consumed and not reclaimed than the sum of the previous 2000 years.
This is due to the computer age.
On a per capita basis, the comparison between gold and silver in dollar terms is that there is approximately $700 worth of gold above ground for every person on this earth. There is $2.70 worth of silver per person.
You decide for yourself how many investors are aware of this and which item has the best chance for dramatic upward revaluation.
Todays price ratio is 862/16.6 = 51.9 gold to silver ratio.
The physical per capita ratio 700/2.7 = 260 ratio.
This means that the law of supply is going to swing in favor of silver soon as industrial and 3rd world countries become more affluent and the demand for silver will drive the price up more. Inflation will drive gold up along with silver just like the gas prices. So silver on this correction is the time to be accumulating more.
Even if the silver to gold physical swings to 100 ratio and gold stays the same that puts silver at $43 4 per ounce.

Happy hunting for those silver stocks.


Comments
Post a comment









Remember personal info?


Note: All comments are submitted to the site editors for approval before being published.






Assigned to category: precious metals
« Gold and Silver Tidbits (5/2/08) | Main | Top Ten Reasons to Own Silver #1 (5/6/08) »