I still wait for a silver expert to come and write a Guest Post on the case for buying silver. I do not know silver well. I like gold better, but I hold about twice as many ounces of silver as I do of gold and platinum combined.
I have seen a very few, but they are there, at Zero Hedge make a case that the price of silver could actually go HIGHER than gold. I believe those who say that are basing that on fundamentals (usage of silver is higher than what is being mined, etc.).
While I plead for a silver expert to come and write here, Zero Hedge contributor "sskid" sent me the below links to YouTube videos which basically critique FOFOA's Guest Post's (author "costata") column on silver not long ago. There are eight of these, at the moment, I have only watched one (the first). I post the first five, the rest are there at YouTube right along these. To watch them all would require over two hours... That is one reason why I need an expert to step and write a cogent article on silver!
All the videos in the series are narrated by BrotherJohnF, who I do not know.
18:16
I am certainly not an expert on silver either, having read a few bits here and there.
ReplyDeleteEssentially the argument people make for silver relates to its wide usage in industrial applications, which means it arguably plays a more important role in the industrialized world than gold.
I read the above-ground stocks of silver are dwarfed by that of gold (cannot recall the numbers); I also have the feeling I have read it is not possible to increase the mining output of silver, at least in the short-term.
The supply of silver is tight and getting increasingly tighter: COMEX inventory is down something like 65% in the past 2 years.
Although there is a long-running average silver:gold ratio of 5:1, the complete lack of alternatives to silver in industrial processes means it will continue to be bought regardless of the price out of sheer necessity.
This looming supply crunch is why some people say silver is likely to soar in price vis-a-vis gold. I recall I mentioned it before on your blog that 5:1 will be where some such people estimate the ratio will end up, but there are also those that think it will go higher still.
That long-running average silver:gold price ratio should read 1:50
ReplyDeletebrother john's underlying assumptions are based upon the bible. That may be fine for a lifestyle choice but not for investing IMHO. He also fails to recognize that gas, bread and liquor will also be sky high if silver hits 500 bucks.
ReplyDeleteI enjoy his vids but take them with a large grain of salt.
I am by no means any expert on silver but I'm a huge fan of it for several reasons:
ReplyDelete1- if it comes down to using PMs as currency (if say after paper fiat repudiation), silver will be the small change currency - you can't pay for a loaf of bread with a gold eagle without getting some silver in change.
2- silver is more widely circulated due to its lower cost. A prepper that wants to spend $1,000 on hedging against a fiat paper repudiation can get about 30 silver ounces but only 2/3rds of an ounce of gold.
3- silver has industrial uses where gold is now mainly a hedge tool.
4- I believe the Constitution lists both gold and silver, the ratio between the two (15:1 or 16:1), and the grains per coin - thus we have had a bi-metalic history and have knowledge on how to use both silver and gold at the same time.
5- Due to it's lower cost (relative to gold) and many more ounces in above-ground circulation, it is obtainable by a greater number of people - meaning, if you think about the total ounces of gold versus the world population, very few would/could have any.
Thus, I think silver will have a roll to play when (not if) currencies will have to return to gold/silver backing to regain the confidence of the people using paper money.
The Navigator
Follow Up
ReplyDeleteKing World News tends to interview PM traders. This past week an interview with Bill Fleckenstein was asked about Gold v Silver - well worth listening to, I thought.
http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/7/6_Bill_Fleckenstein_files/Bill%20Fleckenstein%207%3A6%3A2011.mp3
Minute 7 starts the discussion of gold v. silver. Still, I hope rather than know re gold v silver.
The Navigator