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<p>[QUOTE=&quot;InfleXion, post: 1304454, member: 29012&quot;]I&#039;m not so sure about this. The dollar index could go to 150 but if all other currencies in the world are being debased it still might not buy as much gold as it does today. The Japanase, the British, the Swiss, the Chinese, they&#039;ve all done their own versions of QE this year. I guess it depends what you are referring to as the absolute number.&nbsp; </p><p><br /></p><p><br /></p><p>&nbsp;The price of silver is set on the COMEX paper market, so as far as I can tell it is regulated by the CME Group which solely has the power to raise or lower margin requirements which have impacted the price of silver more than anything else this year. The only evidence I have seen that the CFTC (government) is doing anything to regulate the CME Group (or at least the markets that they self regulate), aside from the ongoing investigation into silver manipulation which is still languishing along after years now, is that they are finally ready to implement position limits (maximum bets on paper contracts). However, there will be exceptions to this, and the position limits that will go into effect 60 days after the word &#039;swap&#039; is defined as per the recent CFTC vote will only be effective for the current month (called a &#039;spot month&#039;), meaning that position limits will not be in effect on futures contracts for future months which impact the current price just as much as the current month, at least not until they have roughly a year to analyze the impact of position limits on the &#039;spot month&#039;.&nbsp; </p><p><br /></p><p>As for why silver is not priced at its historic ratios, well, I think we can erase physical supply and demand from the picture. Eric Sprott has stated that 50 to 70 ounces of physical silver is being sold for every 1 ounce of gold. This means that as much if not more money is buying up silver as compared to gold since the G/S ratio is roughly 50 to 1. If physical supply and demand were the only factor, then silver should be priced much higher since it is not only commanding more buying than gold, but it is also much more rare above ground (7 billion oz gold available vs. less than 600 million oz silver available). In spite of the fact that more silver is mined per year than gold, the supply/demand dynamics for silver are at a lower ratio since silver is used up and unrecoverable in many applications (notably nano-silver), where as once gold is mined it is merely moved around but never actually goes away. </p><p><br /></p><p>So then the only logical reason for today&#039;s pricing is due to the paper markets, which trade 1 billion oz of paper silver contracts every single day, more than a year&#039;s worth of mine production which was 735 million oz last year. This means that the supply/demand dynamics in the silver market are weighted (365 [days] * 1 billion) to (1 [year] * 735 million) for paper vs. physical. To do the math to find out how much of the physical market accounts for the actual price I would take 735 million [physical] / (365 billion + 735 million) [total] = 735,000,000 / 365,735,000,000 = 0.002 which is only 2/10ths of one percent of the total market volume.</p><p><br /></p><p>I suppose one could argue that mine production is not the same as the physical market volume, but the above ground available supply is less than a year&#039;s worth of mining anyway. So in that case the percentage would be even smaller. Sure you could throw investment silver into that and probably bump it up, but even then it would still be maybe 2% at best which is staggering in and of itself. Even if it was 50%, that&#039;s not a real market.[/QUOTE]</p><p><br /></p>

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