Global Currency Crisis & Gold – What’s Really Going to Happen in 2011 – 2012

Following on from the first 2 parts in this series: Whats really going to happen in 2010 Whats going to happen in 2010/2011 – part II Another great writer and analyst makes it into our categories section, Bob Chapman of Global research with a seminal must read piece outlining the road ahead towards a new [...]

The Silver Price & It’s Ratio With Gold

The Price of Silver

Before you buy Silver you should understand that the spot silver price can be volatile, as it fluctuates between industrial usage and a permanent store of value.

At times this can cause wide-ranging valuations in the market, creating volatility.  Silver often tracks the gold price due to store of value demands, although the ratio can vary.

The Gold/Silver Ratio

The gold/silver ratio is often analyzed by traders and investors and buyers.

Gold / Silver ratio

More Gold / Silver ratio charts here

The ratio was fixed by law in the United States at 1:15, 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.

While the average gold/silver ratio during the 20th century was 1:47,  recent research from Deutsche Bank shows that the gold/silver ratio averaged around 12x (hovering between 10x & 15x) in the Middle Ages.

Furthermore, Newton fixed the gold/silver ratio to 15.5x from 1700 till 1873, and as far back as ancient Greece,  the existing gold versus silver mines varied between 10x and 13.5x.

The laws of physics and history tell us that this MUST revert to the mean, and is currently in fact doing so, having dropped from over 60:1 in 2009, to 38:1 as of April 2011.

We have absolutely no doubt whatsoever that the Gold/Silver ratio will fall much lower before this ends, and that the price will soar first through $60 Silver, and then on and way higher.

“We have quite literally “bet the house on it” in fact, sold property in 2005, and gone “all-in” Gold & Silver back in 2008, and have never slept more soundly.”

Historic real silver prices

We think that you should consider very carefully, if you have not already done so: