2012 Silver Crash?

Gold and silver are two very different metals. Apples to oranges as they say. Hence, I advise against correlating a ratio of gold to silver prices. The value of gold should in no way have a bearing on the cost of silver. The days of affordable silver coinage will soon be upon us again, especially once the Euro collapses as a currency. Gone will be the days of outrageously priced $35 silver dollars. The days of $6 or $7 Morgans and $8 ASE's will soon be back!

 

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It sounds like you're saying silver doesn't have any role as a store of value. This seems a bit extreme.

 

This is a difficult topic to discuss impartially due to personal biases.

 

In regards to a currency collapse it doesn't have a role. When people are covering their assets they will run first towards other currencies then gold.

 

I wish you all would stop your time-wasting hypothetical, analytical ridiculous nonsense which results in absolutely no guarantee of what will happen in the future. Instead, just let me know if it's time to sell or not.

 

I think $1000 silver is more likely then $7 silver but i don't think ether is vary likly any time soon. I think we are in a "dollar" bubble and anything will go up against the dollar in the long run.

 

I think a ratio of 20:1 makes since. I think silver is way under valued compared to gold.

 

I feel confident that as time goes on Silver will increase at an increasing rate, and Gold will increase at a decreasing rate, if not decrease until the ratio is more in-tune with historical trends. ie. 1/20th silver to gold ratio. 14% of the market is in jewelry, and silver is becomming more fashionable than gold. Also wanted to mention that people in europe are not idiots. We see their world crumbling from T.V. They see it in real person. Do you believe they already haven't started to make these adjustments?

 

Problem is people get the notion that if currency collapses' that they can walk into your local grocery store with silver coins and go about the buisness. If you followed what happened in Russia early 90s that is rarely the case currency will still be used or worse you end up with rations. Heck if that where the case just load up on silver plated coins you think your store clerk will be able to tell the difference .

 

You have to go back quite a ways to see that 20:1, and times may have changed irreparably in the last 20 years. http://goldprice.org/gold-silver-ratio.html

 

The only reason there was a price ratio between silver & gold in the past was when governments said there was a ratio. This hasn't existed in the world since 1971. So don't fool yourself into believing that silver will follow whatever gold is doing. Those charts prove it.

 

/agreed. If there are not governments dictating a set ratio, they can float. The price history since these two have been removed from coinage and allowed to float has seemed to show a much greater than 16:1 desirability ratio. Sorry, I simply feel they are two separate markets, and no real reason any kind of ratio has to maintained between them.

I fully agree that 16:1 or 12:1 is probably a fair estimate as to relative rarity in the earth, rarity cannot dictate a price ratio. If it did, platinum, palladium, and many other metals would be $10,000 an ounce or more today given today's gold prices.

 

Very fair statements. But how much of the gold spikes is because of mass marketing targeted towards India? The london hawks swooped in on the "Indian Fundamental Gold Belief," at the same time that JPM was shorting more silver than phsyically existed in the world.

 

This is very true, this is why we can have $1,800 gold and $7 silver in the coming months. I see the collapse starting to happen now and will rejoice when I can finally buy 90% silver coins for only 6x face just like the old days instead of this ridiculous 22-24x face that I see now for them.

 

silver will hit $60 within the next 13 months

 

Why does it matter, when you can instead buy copy coins that will "make your collection" just as "perfect"? :devil:

 

What evidence, other than maybe in daydreaming of cheap coins, do you see that the "collapse" is starting to happen?

 

Howdy all,

I concur with Clint. The gold/silver ratio, while dissed by some, is still followed by enough that it matters. I've been following it for years and while it's sitting at 51-1, it was up near 90 - 1 a few years back and historical ratios are between 20 and 15 -1. Geez, at peak in 1980, it was 17 - 1. It may never get back that low again, but I think a 50 - 1 ratio is much closer to equilibrium than not.

Now, will gold and silver crash? I can't see either. Since 2001 and the start of this bull run, every time gold has corrected, it has been both less severe AND for a shorter duration, than everyone predicted including the charts and technical analysis. It's like there is some huge support out there that always steps in and starts buying when 'it goes on sale'. I trace this to the breadth of the demand for gold (and in some of these cases silver as a poor man's gold) that we've seen from all over the world. Cripes, you have the institutional investors adding gold to their portfolios to help dampen down the volatility of the market; you have momentum investors climbing on the trend; you have various sovereign CB's bolstering their national reserves and/or diversifying their treasury away from greenbacks [how many dollars do you want to hold as a trading partner before you want something else]; the chinese citizenry now being allowed to own gold, india, survivalists, individual investors wanting a store of value, or perhaps a security blanket, if you will. This is what I mean by breadth of demand and it continually serves as a floor below the POG. Silver is touted as exclusively an industrial metal reacting to the world economic situation. That's true. Ah, but to some, it's also a poor man's substitute for gold. And to others, it's a speculation type play.

I could see silver going to 25 but not staying and not for long. And I really don't care what the POS does. I just bought a roll of ASEs for 718 but remember buying a roll (also from Paul Sims) for 90 (both prices include S&H).

peace,

rono

 

As a silver investor, the problem with following the simplistic and nonexistent gold/silver ratio is that you are following the fundamentals that drive gold and not the fundamentals that drive silver. They are not the same. Silver may be a better investment than gold at the moment but you will have no way of knowing this because you are looking at the gold price. If you are going to invest in silver, then like any investment, you really need to do your homework. Silver could be $15 by the end of the year, it could be $75. The nonexistent gold/silver ratio won't tell you this.

If there was such a thing as the gold/silver ratio, then it would hold that people buying gold could look at silver prices for and indication where gold is headed. How many gold investors do this?

 

Caught this interesting episode on 60 minutes lastnight regarding India and Gold. It should be noted that one of these ladies is a representative of MFOG from London.


You have to go to this youtube link (embedded) http://www.youtube.com/watch?v=sUr2E4dfs0Y

[video=youtube;sUr2E4dfs0Y]http://www.youtube.com/watch?v=sUr2E4dfs0Y[/video]