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 Replies: 8 / Views: 2,926 |
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Valued Member
Australia
73 Posts |
OK; so lets look at it this way; in the past gold as a currency to back fiat money had a value and so did silver.
Thus these to precious metals traded at a particular ratio , but today fiat currency is not backed by precious metals ; but rather the integrity of your local politician ! ! !
what have gold and silver got in common ? = answer : not much !
today; to say the silver / gold ratio is 85 to one is pointless. Gold has a place and silver has a place. Can silver take the place of gold ? = NO WAY. Can Gold take the place of Silver = no way...
Gold has a place as presentation metal , silver is used in industry. there is not enough gold on planet earth to do everything silver does now within industry.
Has anyone heard of ascorbic acid ? well it is vitamin C ! ! ! Now it is essential to good health and you get it from oranges ; but has anyone heard of the mangoes to oranges ratio ? Both are a great source of vit C but no one compares them. Why not compare platinum to copper ?
The answer is simple , no one ever published that ratio before. To compare modern gold to modern silver usage is like betting on the inner of a car race 25 years ago compared to today.
Silver has its very important roles in society and so does gold but they do not cross correlate.
Is platinum under priced ? maybe not ! ! ! The reason is their is only a very limited market for platinum, in reality platinum does not do a huge amount for society overall.
Silver is almost essential to many real life applications and that says it is undervalued ! Gold is simply gold ; it has real world applications on planet Earth but could sort of get along without it . . .
All I am trying to say is gold is mainly a store of wealth = gold is money and mainly money and silver is not !
In about 300 or 400 years silver and gold are going to no longer be precious metals they will be both strategic national assets. Simply at todays rate both these metals will be needed to be stockpiled for the future.
But that is long into the future and the y society evolves their is no idea of what will be created in the mean time.
Plastics were invented about 150 years ago, but not till around world war two did plastics take off. Today plastics are a part of much of your life and their is no idea if some similar invention will replace gold and silver ! ! !
There is not enough platinum to do anything mass scale and meaningful with , silver is abundant and has many usages. Gold is simply seen as a store of wealth ! ! !
No one has any compunctions about the applications of silver, but if you said gold would replace and do all silvers society applications almost everyone would almost fall over in a fit of anxiety.
Simply gold is stackable and silver is poor trash simply because no mere mortal can stack enough silver to make a meaningful contribution of price.
But gold will always have a special place since its use in jewelry and for its artistic appeal.
Remember you do not have to agree with me ; but if your banking on the gold to silver ratio , then you have already lost ! ! !
You would be better to compare the ascorbic ratio of vitamin C and compare oranges and mangoes ...
But the old obsolete ratio is gone; the same as a 1975 Daytona 500 race car driver hoping he could win in today's world ; its a nice dream but its not going to happen ! ! !
Better you compare platinum to copper , LOL ;)
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Pillar of the Community
United States
4333 Posts |
Agreed, the G/S price ratio is a joke.
When I listen to LED ZEPPELIN...so do my neighbors...
Roll hunting since '77
Dirt fishing since '72
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Pillar of the Community
United States
3343 Posts |
In ancient times the gold to silver ratio was 1:20. But then more silver was discovered.
And good money chases out bad.
"Two minutes ago I would have sold my chances for a tired dime." Fred Astaire
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Valued Member
Australia
491 Posts |
Back in the dark ages before Australia floated the AU$ it was equal to the US$.
Cost of silver in AU$ will soon be the same cost as US$ for gold per oz. lol
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Bedrock of the Community
United States
36746 Posts |
Silver is one giant bargain right now. Those that take advantage of it will be smiling later.
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Pillar of the Community
 Canada
5394 Posts |
The ratios and rational behind them are today , totally irrelevant.
You will go Bat ..... crazy and be broke if you try to rationalize the irrational.
Silver should be about ten bucks an ounce shortly in USD and gold heading south of
a 1000 USD .
All the currencies are getting drilled right , as investors perceive the safe haven is the Greenback .
Go figure ...... like I said being rational will make you both broke and nuts!
Don't try to fight markets which are totally emotional .
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Pillar of the Community
United States
4333 Posts |
Quote:
Silver should be about ten bucks an ounce shortly in USD and gold heading south of
a 1000 USD . The paper price, you're correct. When I listen to LED ZEPPELIN...so do my neighbors...
Roll hunting since '77
Dirt fishing since '72
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Bedrock of the Community
Australia
21788 Posts |
In ancient times, the silver/gold ratio was around 15/1.
When my avatar coin was in circulation, the ratio had fallen to around 8/1.
No paper money then!
When the World came off the Gold standard in the early 1930's, the fiat dollar price of gold was fixed at $35 /oz.
Although not fixed to the price of gold, the silver price in 1931 tanked at $5 per ounce, (silver/gold ratio 7/1) Around two years earlier silver had been around $10 per ounce, and gold fixed at $28 /oz. (silver/gold ratio 2.8/1)
What does that mean for us now?
Basically, not much. Perhaps the World at that time, had more use for silver, in relation to gold.
What is important, is that you must research the current markets, before making a decision to change your PM holdings.
Edited by sel_69l
03/13/2020 9:02 pm
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Pillar of the Community
Canada
3692 Posts |
"But gold will always have a special place since its use in jewelry and for its artistic appeal."
And... no jewellery is made of silver? One can make the argument that either metal is better for jewellery manufacturing, and it depends on a lot of things which I won't go into, but the bottom line is that it all comes down to price, always. The typical jewellery customer is very demanding and unforgiving because of the amount of money on the table and the skepticism due to ignorance. If the public wants to pay less, they always have options, and those options get debased the less money they want to spend. Obviously a jeweler isn't going to GIVE AWAY his/her precious and scarce work materials just to make a single sale. If your work is undervalued then so is your reputation as a jeweller, and I think that applies to most trades.
I used to say that gold is money, but not anymore. Why: because gold is not currency. It assumes that position because of everything intrinsic to gold (the rarity, the way that people value it, etc). Mostly, gold is valued so high because there are relics and priceless objects that people do not want to melt because of historical significance, therefore that gold never sees the market for hundreds if not thousands of years. King Tut, death masks, Celtic pieces, Roman pieces, Etruscan pieces, et cetera, and scepters, crowns, millions of rings, necklaces, et cetera, that people value because it belonged to their great-whoever.
Why fret over the ratio at all? Both metals have zero monetary function. Try spending silver or gold even today, you just can't. Those historical ratios were based on conquests and supply. There's no return to those fixed ratios.
And I hope you weren't comparing the PRICE of two commodities to the HEALTH BENEFITS of others. That metric does not work. Nobody is hoarding/buying/selling/trading absorbic acid in the fear that oranges will go extinct or something, come on. That ratio is advertised on kitco to spike demand for silver, nothing else.
"Silver is almost essential to many real life applications and that says it is undervalued ! Gold is simply gold ; it has real world applications on planet Earth but could sort of get along without it . . ."
So if one can compare a cart of groceries (needed to live but affordable) to a pair of famous basketball shoes (can do without it and super pricy)... Do you think groceries ought to cost more and pricy running shoes should be a dime a dozen? Which of the two do you see people lining up for blocks? During good times, the shoes, and during bad times, the food market. I see your point but it's wrong. Some industries get bullied by the masses and get beat down in price over the bottom line, or these products are just so abundant that it's actually better for business to sell them in bulk.
But you're right, there's no sensical reason for us to still measure that obsolete ratio.
Edited by Libertad
03/25/2020 5:35 pm
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Replies: 8 / Views: 2,926 |
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Posted 02/29/2020 4:07 pm
