Historical Gold to Silver Ratio
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you can cherry pick any timeframe to suit the narrative.
a few thoughts in response
- Mar 2020 was a black swan event and is an outlier outside of expected norms
- this reinforces my point made earlier - in times of crises, gold is greater than silver
- yes 31% drop from Mar 2020, but also ~316% gain from 2011 to Mar 2020, and a ~186% gain 2011 to today LOL
- I started stacking in 2011, and arguably I've done better with a gold heavy stack compared with someone who started the same time as me, but was silver heavy. GSR around 86 now vs in the 30s back in 2011. E.g. my 1oz of gold was worth 30oz of silver, now it's worth 86oz of silver while the silver guy still only has 30oz of silver. My stack is almost 3x more valuable in silver oz terms!! Again, cherry picking a timeframe to suit my point of view
- do you think in the future there will be more or less uncertainty in geopolitics, the economy, in society, etc and decide whether that environment is more favourable to gold or silver (answer in my opinion is gold)
- had you relied on historical GSR, before 2020, GSR was topping out in the 80s, how could anyone know it was going up to over 100? Say you swapped gold for silver when it was 80, you would have missed the Mar 2020 top. Now that it's sitting at 86oz, you're back to square one and have gone nowhere (cherry picking a timeframe again)
- the clear trend from 2011 to today is an uptrend in GSR
edit to add
Interesting the reported government sales was quite high. having said that, can you outlast the government's stockpiles, holding out for the day when they finally deplete and silver is allowed to appreciate in price without suppression by said stockpile sales? you don't know how much they have and how long they can sell into the market for
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You may have confused alor's comment for mine?
Either way, I'll respond to what you've said relating to my comments. There is no doubt that Gold or any other investment can, and has, performed better than silver. But will it over the timeline I've set for my goals? That's yet to be determined.
What I can say is that I don't stack silver purely for monetary investment. I stack to withdraw my retirement savings from the system and hold it in a highly liquid tangible asset. Sure, Gold also does that for me, and I own enough to be satisfied, but when you have a mining ratio of 7:1 and a price ratio of 86:1 or above, buying gold makes zero sense to me. My stack has been acquired at a ratio between 80-120:1. Buying silver and trading it for Gold at a lower ratio is a better move, but even then I'd have to give it some heavy consideration. Either way, holding silver with a long-term outlook at these ratios puts me in a better position and provides more opportunity than buying Gold, and that has influenced my decision to be heavy on silver at this time. One day holding more Gold may make sense but that day is yet to come.
The historic ratios at the start of this thread are relevant to the scarcity of both metals. Just because we have a government hellbent on intervening to distort the price of Silver (and Gold), doesn't mean the natural and mining ratio aren't significant, they absolutely are. And yes, I do believe over a long enough time frame with the deficits we're seeing in the silver market that the stockpiles of Silver will eventually run out. Several years ago, I calculated that due to lack of significant discoveries of silver deposits and the depletion of long-standing mines (particularly in Mexico), we'll see a real silver shortage between the years 2028-2032.
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Yeh I was responding to alor regarding the 31% drop vs the hundreds of percent gain in GSR over different timeframes
And also responding to yours about government stockpile sales
The 7:1 mining supply ratio has also been put forward as another reason why silver should be worth more, which has also yet to eventuate. Other supply and demand factors are at play and either metals’ abundance in the earths crust hasn’t played a part for a long time in determining price
And also responding to yours about government stockpile sales
The 7:1 mining supply ratio has also been put forward as another reason why silver should be worth more, which has also yet to eventuate. Other supply and demand factors are at play and either metals’ abundance in the earths crust hasn’t played a part for a long time in determining price
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If you remove aboveground stockpiles as a factor, then abundance and mine output play the most important role. This should be analysed and considered first above all, then stockpiles should be factored in and assessed to make a determination.
It appears we agree on most things but differ on the belief that aboveground stockpiles won't play a significant role in the mid and long-term.
There's so much I consider when looking at the silver market and the longevity of these undisclosed stockpiles:
Mine supply - Several of the largest mines in Mexico which have the annual output of 4-5 smaller mines are set to deplete their reserves by 2028. Last time I checked, Mexico was the largest silver producing country in the world, so that will drastically affect supply.
- Investment into exploration and new discoveries have been low over the years due to environmental red tape and low silver price. It takes up to 10 years from discovery to mining the first ounce out of the ground, so lack of investment translates to significant lag in mine supply once the price does jump to levels that incentivises exploration.
- Silver is largely found closer to the surface, unlike gold which is found deeper within the earth's crust. All the easy to mine silver already has a mine on it.
Peak Silver - based upon geographic surveys, mining output and declining efficiency, we're set to reach peak Silver Mining in 2030. Not only that, but we're set to reach peak Copper, Lead and zinc mining by 2028-2032. The majority of Silver mining being a byproduct of mining these base metals and gold, then peak Copper, Lead, zinc and Gold also means less silver production by default.
China - There's a reason why China stopped exporting silver over a decade ago. There's also a reason why China has removed the ban on PM's and encouraged its citizens to buy Gold and a
Silver. If silver was so abundant, such strategic moves wouldn't be necessary.
Demand - As so many have predicted, the increase of demand from the industrial side has accelerated, all while mine supply has declined. Although investment demand is still important, silver doesn't need it to increase. But if it were to increase, that would just put additional pressure on a market that's already seeing significant 200+ Moz deficits.
India in the month of February imported the entire global mine supply for that month. Demand is accelerating, and once the price let's go, investment demand is going to cause some serious pain.
I don't just blindly believe aboveground reserves/stockpiles will dry up, I've made a calculated assessment to determine that it's an inevitability... And it may come sooner than we expect. The two things that may stand in the way of stacking silver is a major decline in demand (possibly due to population collapse) and silver being seen as a strategic metal and governments making private ownership illegal. Beyond this, I don't think anything will stand in the way of silver.
Silver being easier to mine should explain some of the reason for the lower price, regardless of its abundance ratio in the ground, if it is indeed less effort to extract than for gold
As for China not exporting it, could just be because they manufacture nearly all the world's solar panels and so they use it instead of exporting it
I may be wrong but I'm pretty sure the mining process, or at least the extraction from ore is more complicated than it is for gold. Silver just appears more frequently in the earth's crust.
You're right that China uses their silver for manufacturing. But it's not a matter of them just consuming more silver than they produce, they actually put a ban on exports. And not only did they ban exports, they lifted the ban of private ownership and encouraged (still do) their citizens to buy Gold and Silver. They've even gone a step further to sell it major banks! I think it's a strategic play to eventually ban private ownership again when the time is right. That way their citizens stack the gold and silver for them and most of it will become immediately accessible without the cost of storage along the way. It's a pretty smart play if you ask me.
But the point is, banning exports and lifting a ban on private ownership at the same time is worth paying attention to. It affirms the importance of both metals and how they'll play a role in our future.
So in theory it should be tied to mining costs, which rise with inflation (fuel, machinery ... etc).
I still think silver prices are artificially held low via the paper market.
Absolutely. AISC's essentially create a floor in the silver price from a mine supply perspective. But because Silver's mined mostly as a byproduct, the AISC have been diluted significantly by applying byproduct credits. Companies will calculate the cost of all metals mined and assign values to each metal that appear more favourable to shareholders and investors. It's hard to get a good gauge of what silver would really cost to mine if it was targeted due to a shortage. Keith Neumeyer claims to have a 100% silver mine and mentioned in an interview that it's AISC were $28 USD.
As far as paper manipulation goes, any long-term price suppression would be impossible with a real physical shortage. It's the undisclosed stockpiles behind the real suppression. If Comex intervention occured when there was a 200Moz deficit, new markets would naturally form and the Comex would lose all control over price discovery. Paper manipulation is just a psychological tool used to compliment and extend the ability to suppress the price with physical silver.
One could argue that if demand is always being met, then is the market technically manipulated? I think it's all about intent. If the plan is to use stockpiles and intervene in the market to suppress the price, then that's a managed market if I've ever seen one. Silver is like the reverse diamond market IMO... Completely controlled.
Silver Users Association SUA, which industrie has such a, most of them are supply side based
Governments give protections for Industrial Users, to keep the price low, to punish speculators, eh they did not have the expiry date
the basic commodity is out of touch with many surrounding reality in price
Silver could never be used to back a reserve currency by itself or with king daddy Gold. It would have to be completely removed from it's role as a commodity and that would never happen. It may be included in a basket of commodities like what BRICS was proposing but I still don't see silver having a place at the table.
I'm intrigued by these treasury certificates
I've never seen those before. I'm not even sure if they're legit, but I am sure the optimism for Silver and Gold in that video is on the extreme side and I tend to ignore all of that talk. Could you imagine how much shit would need to hit the fan for Gold and Silver to be valued like that in today's market? $17,750 US Silver? Lol I would be so fkn rich.
I'm intrigued by these treasury certificates
I've never seen those before. I'm not even sure if they're legit, but I am sure the optimism for Silver and Gold in that video is on the extreme side and I tend to ignore all of that talk. Could you imagine how much shit would need to hit the fan for Gold and Silver to be valued like that in today's market? $17,750 US Silver? Lol I would be so fkn rich.US DEBT increase is 1T a 100 days, so in a year, debt is balloon to 5T a year.
well on the opposite drive away from USD is the trading in other than the dollar, for the first year is just 250B in USD terms.
It will quaduple the next year with BRICS+ to 1T next year, and 4T the next year and 16T the following year target.
so the will meet around only in 3+ years, where there is no longer USD to be borrowed, since the rest of the world is driven further away from dollar usage.
inflation would be massive like in Wiemar
well on the opposite drive away from USD is the trading in other than the dollar, for the first year is just 250B in USD terms.
It will quaduple the next year with BRICS+ to 1T next year, and 4T the next year and 16T the following year target.
so the will meet around only in 3+ years, where there is no longer USD to be borrowed, since the rest of the world is driven further away from dollar usage.
inflation would be massive like in Wiemar