The Longest Record Broken: Gold/Silver Ratio Hits Highest in Over 5,000 Years

azerogo

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The most amazing record broken was not in the stock market, however. It was the long-standing record in what’s perhaps the longest-running price series in financial history: the gold/silver ratio (i.e. the price of one ounce of gold in terms of ounces of silver). Monday’s market sent that price to a record high – the highest level in over 5,000 years.

 
I think it's implying people are seeing silver as a better bet than gold for the first time.
 
Buffett has said some very interesting things about gold over the years. One in particular resonates with me:

All of the gold in the world would make a giant cube, the sides of which would be 68 feet long. Imagine you owned that! You could walk around it and look at it and marvel at its splendour.

Well what if, instead, for the same amount of money you could have:
- All of the agricultural land in the USA with all that it produces
- The seven biggest corporates in the world (e.g. Exxon Mobile, Apple, etc)
- $1 trillion dollars in cash for your ‘walking around money’

Which would you prefer?
 
Silver is in high demand as they have started to use it a lot in manufacturing now for things like chips for iphones and in the technology industry a lot - other medical devices too. People usually associate it with jewellery and that is still true but it's sky rocketing at the moment because of manufacturing reasons.
 
I think it's implying people are seeing silver as a better bet than gold for the first time.
It's saying the opposite, no?
As in it now takes more silver than ever before to buy gold?

What does this signal, if anything?
Just that there's been a massive sell off of precious metals, and silver prices have fallen more than gold.
The ratio's last spike was December 2008...

it's sky rocketing at the moment
Silver has dropped 33% in the last month.
 
A lot of things are dropping over the last month? China is not manufacturing much at the moment.
 

Not only that but there are several factors that play into the projected rise of silver prices, many of which don’t have anything to do with gold:
  1. In a Precious Metal Bull Market, Silver Outshines Gold. During the bull market of 1970–80, silver gained 3,105% and gold gained 2,328%. Again between 2008–2011, silver gained a whopping 448% compared with gold’s 166%.3

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2. Global Demand for Silver Is Growing. The demand is increasing worldwide but China and India are particularly silver hungry. In the year 2000, China’s silver demand was less than 50 million ounces. In 2016, the demand had risen to over 200 million ounces!
3. Global Supply of Silver Is Shrinking. While demand is growing, the supply of silver is doing the opposite. Government stockpiles of silver topped 170 million ounces in 1996, and in 2015 they weighed in at under 50 million ounces. In addition to that, after a fall in the price of silver in 2011, silver mining was cut dramatically. Today, there is considerably less silver being mined than there was a decade ago.




 
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Silver?

Google Nelson Bunker Hunt before you do
I would only be throwing a 'few bob' not a billion!
Am I right in thinking that guy didn't diversify in the end? He put all his eggs in the one silver basket?
 
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The price of the paper derivative of silver for example SLV and physical silver is starting to decouple. This is important.
I phoned Goldcore in Ireland and they had no 1oz coins left as demand is so strong. The European mint is asking for a massive 40% premium over spot, where its normally 14%. I doubt they have any coins left either.
If the spot price of the paper derivative falls further this could push the premium of physical silver even higher.
 
Which would you prefer?

All the land, money and gold in the world is next to worthless without a productive workforce of billions to sustaining its value over the long term.
Maybe its time to reconsider the value of labour relative to other factors?
 
Gold prices soared yesterday. Gold always does better in a crash as silver is linked to industry. This crisis will be very short lived as China are now beginning to see light a the end of the tunnel. It will be over before we know it and the factories up and running.
 
Silver hit 20 dollars yesterday it's highest level in ages, its catching the gold tail wind, it's highly volatile asset though so not for the faint hearted. It's indicating though that we need to start thinking about inflation which many analysts are now talking about. With the massive government stimulus and central bank money printing its going to finally show up in higher prices. Already evidence of this in the hospitality sector once it opens fully. Also the era of a very strong dollar may be ending a bit like the early 2000s .
 
Buffett has said some very interesting things about gold over the years. One in particular resonates with me:

All of the gold in the world would make a giant cube, the sides of which would be 68 feet long. Imagine you owned that! You could walk around it and look at it and marvel at its splendour.

Well what if, instead, for the same amount of money you could have:
- All of the agricultural land in the USA with all that it produces
- The seven biggest corporates in the world (e.g. Exxon Mobile, Apple, etc)
- $1 trillion dollars in cash for your ‘walking around money’


Which would you prefer?

In other words, have assets that are capable of producing a return while you own them. Even with negative ECB interest rates, I can earn 0.01% from my cash. With gold I get nothing until I sell it.

Steven
www.bluewaterfp.ie
 
In other words, have assets that are capable of producing a return while you own them. Even with negative ECB interest rates, I can earn 0.01% from my cash. With gold I get nothing until I sell it.

0.01% is your reward for handing control of your money to a bank who can lend as they please. Banks have failed, as us Irish should well know. Last time depositors were lucky enough to get bailed out at the expense of other taxpayers, but the ECB have said any similar future crisis will involve "bail-ins", as happened in Cyprus.

If you consider 0.01% adequate reward for that risk - fair enough. The bad news is pension cash funds are already paying negative interest along with personal deposits in several Eurozone countries.

Equities and bonds again involve giving your money to somebody with no guarantee of getting it back.

Gold and silver are comparable with a 50 euro note, which yields no return. The problem with the 50 euro note is the ECB can produce billions more at the touch of a button, which they have been doing throughout the COVID situation.
 
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