When panic and fear dominate financial markets, gold and silver both tend to rapidly rise in price. We witnessed this during the last financial crisis, and it is starting to happen again… In this article, I would like to elaborate on why I believe that silver represents a historic investment opportunity right now.
…The price of gold is sitting at around $1,236 a [troy] ounce…[and] silver…at just $16.16… That means that the price of gold is currently…[almost 76] times higher than the price of silver. For the ratio between gold and silver to be this high is truly unusual…
- there is only about 17 times as much silver as there is gold in the Earth’s crust and,
- currently, silver is being mined at about an 11 to 1 ratio to gold.
so it makes sense that throughout history gold has typically sold at about a 15 to 1 ratio to silver.
During the years to come, I do believe that gold will multiply in price but I am also convinced that the price of silver will go up much, much faster. As they both skyrocket in price, the price ratio between gold and silver will shift very quickly from 76 to 1 in the direction of 15 to 1. Perhaps we may never even get all the way back to 15 to 1, but if we even got to 40 to 1 or 30 to 1, what that would mean for silver would be history making.
Let us also keep in mind that unlike gold, silver is constantly being used up in thousands of different industrial applications. According to Jeff Nielson “over the past quarter century, more silver-based patents have been created than with any other metal on the planet…meaning that in many of its commercial applications it is used in only trace amounts…Because such tiny quantities are economically impractical to recycle, unlike gold, the stockpiles of silver are disappearing …as the only way to fulfill their strong demand. Even if the world could somehow avoid the great financial turmoil that has already begun, the truth is that eventually a great demand crunch for silver would come just based on how much of it we are steadily consuming.
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At…[just over] 16 dollars a [troy] ounce right now, silver is ridiculously undervalued ….I believe that the price of silver will eventually go over $100 a [troy] ounce in the mid to long term and when that happens those that got in today will be exceedingly happy with their returns. Others are projecting even greater gains. [The aforementioned being said, however,] …you have got to be ready for a rollercoaster ride if you get into precious metals so, if you can’t handle the ups and downs, you should probably avoid them altogether.
Disclosure: The original article, written by Michael Snyder (theeconomiccollapseblog.com), was edited ([ ]) and abridged (…) by the editorial team at munKNEE.com (Your Key to Making Money!) to provide you with a fast and easy read.
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You have no doubt read countless articles on the price of gold costing x dollars per “troy ounce” or perhaps just x dollars per “ounce” but the difference between the two measurements is significant. For that matter, what’s the difference between a 24 karat gold ring and an 18 karat gold ring? Let me explain.