Gold/Silver Ratio

Historically, it 15:1. But what has changed to get the ratio so out of whack? That, I'd love to know.

This article talks a bit about the historic ratio and how its changed in recent history.

http://www.rapidtrends.com/silver-to-gold-ratio/

I can remember them days as well, I can also recall that people still had the old wireless with valves in them.
We even had silver coinage in our pockets and thought nothing of it.
Since then there has been an explosion of electronic devices solar power and many other industrial uses of silver.
Silver is now not only a PM but is an essential metal in industry and as such the demand for golds little sister is growing all the time.
Gold has some industrial use but not to the same extent that silver does and IMHO the gold silver ratio is reflecting this higher demand for silver industrially and will continue to do so until someone finds a substitute for it.

I just read an interesting article over on miningweekly.com by Henry Lazenby discussing the discovery of "mega" gold deposits in Mexico that very well may change the economics of modern gold production.

Currently, the average cost world wide to produce one troy ounce of gold is $649.00 USD. However, if Mexico can exploit its new-found deposits (projected to come online in 2017), it's abundance of cheap yet highly skilled mining labor could bring the production cost per ounce of gold down to an amazing $325.00 USD!

In some ways, it's reasonable to assume the lowest sustainable price for gold can be no lower than it's current production cost. Thus, high average gold production costs create a high "minimum" gold price. Of course, the opposite is true if costs come down.

While Mexico faces considerable political risk and potentially some interference from the ongoing drug war, it's not unreasonable that Mexico may influence an era of more affordable wholesale gold in the near future.

This may very well impact the gold/silver ratio, but it's anyone's guess how this will translate to the retail PM market. Thoughts?

We can thank Roosevelt and Nixon for that, as well as the FRB for printing and printing backed by nothing.

That is excellent advice Fredd! Platinum is under priced so now is the time to grab some.

It's like musical chairs. Fun and games for quite awhile with 50 players and 49 chairs, even for the few that slowly get bumped (little or no inflation).

Less fun when the game goes faster (moderate inflation).

No fun at all when there are 25 chairs for 50 players (hyper inflation).

Lol, Fredd! How about the ultimate in hyperinflation... 50 people, 1 chair, and 1 BIG knife.



No, I haven't read any of Paul's books but have read and listened to a number of his speeches and comments in congress. I agree with Ron Paul much of the time.

As to Nixon... he made plenty of mistakes but he was in a very tough spot re gold. At that time, only the US dollar was pegged to gold. Other countries sometimes pegged their currency to the US dollar, in effect being pegged to gold, once removed. Still, it is an impossible situation to have your currency pegged to gold while one or more of your major trading partners is / are not pegged to gold. They can demand your gold but you can't demand theirs. If this is allowed to continue, pretty soon, they have all of your gold (which is hard to replace) and you have all of their paper (which is easily printed). Hmmm... not good and even Nixon realized that. I've read a lot of criticism of Nixon for this but no valid alternatives proposed. I suppose that we could have gone to an international dollar and a domestic dollar, with the i-dollar not backed by gold but the d-dollar backed by gold. To work, it would not be possible to convert one to the other. Didn't South Africa have a dual currency like this at some point? If so, do they still have it?

I was a LOT less happy with Nixon's wage and price control experiment. Even though I was just a young man at the time, I thought that this was really dumb. It, of course, flopped Big-Time.