Either way it is correcting to where it should naturally be rather than the artificial number i is now.
Do you have any evidence that what you are saying is anything but myth? In the first place, there is no "natural" ratio between any two commodities traded in a free market. In the second place, the much respected ratio of 16:1 or thereabouts has only existed when enforced by government fiat. Otherwise, when you examine history, you will find various ratios at various times and places in history. I know a lot of internet authors with little or know training in economics or history continue to repeat the story of the gold/silver ratio, but they are just plagerizing each other and perpetuating the myth.
I honestly think that in the far future the Silver:Gold ratio will be 2:3, where 3 oz of gold will be worth 2 oz of silver.
The closest thing to evidence is today's market =) Maybe the perception of this historic ratio is a factor behind the shift, but either way it's heading that direction. Supply and demand is a big factor. Gold demand just isn't there because only rich people need gold, and everybody else has had their wealth diminished through a devalued dollar, inflation, and high unemployment.
Yes... silver is about 7 times rarer than gold: "In fact, above ground refined silver is about 4 to 5 times as rare as above ground refined gold and possibly up to 7 times as rare in available form." Hey... that's not my quote.. google it yourself and you'll get page after page "silver rarer than gold".
But once silver is above ground, refined, it is rare in available form because it is reactive and gold is not under the normal conditions at the surface of the earth. But add the silver in combined form with other elements, and the total amount of silver is multiple times higher. The only reason I could see even being aware of the ratio is if one wishes to trade gold for silver or visa versa. I certainly would not base any buying or selling either based on the ratio, or any ratio it has been in the past. IMO. Jim
This US History of 16:1 Gold/Silver Raito. In 1837, Congress established a relationship between silver and gold at the ratio of 16 to 1 (meaning that 16 ounces of silver were to be equal in value to one ounce of gold). During the war years of the 1860s, little silver was mined and the open market price rose sharply. Miners stopped selling their silver to the government and instead found buyers from the ranks of jewelers and other users of the product. In 1873, reacting to market realities, the Grant administration demonetized silver, leaving gold as the sole standard of the nation's currency. Silver became simply another commodity whose value would be set by supply and demand. There was little reaction to this move initially and certainly no outrage. However, following the Panic of 1873, a severe depression descended upon the country, reviving interest in the monetization of silver. Pressure was exerted from two sources – Miners and Farmers. The early 1880s saw the return of farm prosperity and the resulting decline of interest in the silver coinage issue. However, hard time hit again in 1887, prompting renewed demands from farmers and miners to reinstitute the coinage of silver at the old 16:1 ratio. Read more at - http://www.u-s-history.com/pages/h763.html After Grant's demonetized of silver, the 16:1 slogan appeared in many political camaigns. The Danester
Just a little more good news on the Silver front. "Silver has always had quite a big chunk of demand which is price-insensitive in the short to medium term," said Philip Klapwijk, executive chairman of metals research and consultancy GFMS, which is expecting industrial demand for silver to hit a record this year. "It is a net clear winner from new technology in the last 10 to 15 years. It obviously lost ground in photography, but more than made it up in industrial uses," he told Reuters. A versatile metal, silver is used in jewellery, water purification, photography as well as solar panels, flat-screen television sets, computers and mobile phones. Link to article on Reuters: http://uk.reuters.com/article/2011/04/26/uk-silver-demand-idUKLNE73P04020110426
from:http://uk.reuters.com/article/2011/04/26/uk-silver-demand-idUKLNE73P04020110426 At the first of the year, silver was at approx $30/oz. , so 8% increase over the whole 2011 due to increased industrial demand would be $2.40 on top of the $30 then, so it would appear to have little or no effect on the current silver price, and already figured into the price. So while one could base their expectations for silver on other factors, I would not expect industrial uses to support possible increases in the current prices. IMO. Jim
Ah here we go bumping years old threads. Looking back at when silver outperformed gold. Yes I think I said that right, when silver was better than gold
