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<p>[QUOTE=&quot;Droidicus, post: 425916, member: 15422&quot;]There are three different types of people who buy precious metals. There is the collector who buys for the shear joy of owning it, the investor who expects to make a profit or uses it as a hedge against inflation, and the paranoid who believe that the end of the civilized world is coming where precious metal will again be the predominant money of the land.</p><p><br /></p><p>I, and I believe most rational people, discount the third as not completely reasonable. Even if it were to happen, we would all have MUCH bigger things to worry about, and having a stash of silver or gold may quickly become a liability rather then an asset. As for investing, physical and paper silver are very similar. Both have pros and cons of course, with physical metal you need to transport and store a potentially large amount of metal for anything other then very minor investing, while with paper you pay fees for transactions and actions on the accounts but you don&#039;t have to even think about transportation and physical security concerns for your investment.</p><p><br /></p><p><br /></p><p>&nbsp;As for the gold/silver ratio, here is a graph of the silver price and gold/silver ratio since 1970:</p><p>&nbsp;<img src="http://www.gold-eagle.com/charts/GSR-SM.gif" class="bbCodeImage wysiwygImage" alt="" unselectable="on" /></p><p><br /></p><p>&nbsp;As you can see the ratio varies quite a bit, and looking at this I would say that anywhere between 50 and 80 is the norm for the past 25 years, with the value being higher in times of higher inflationary risk, and lower otherwise.</p><p>&nbsp;</p><p>I really think that right now the discrepancy between physical and paper silver is an artifact of the rapid drop in price. There are defiantly still places where you can obtain silver near spot, but as you already stated there are a lot of mostly smaller time operations and people who don&#039;t want to take a loss. Unfortunately taking a loss is a definite possibility when maintaining a large inventory of material that has a variable price. If they think that the value of the metal will go up then they are more then welcome to maintain a set price (this is known as a “limit” in financial situations), the value may go up to this point or just as easily go further down. I say... Suck it up and get on with it or you will be left behind very quickly.</p><p><br /></p><p>~Droid[/QUOTE]</p><p><br /></p>

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