Why have I been promoting silver MORE than gold???
I've had quite a few people comment to me about my blog. They find it quite informative and it's helped them in their quest to invest in metals. But a common question to me has been: "Why do I talk up and promote silver more than gold"? The answer is quite simple.
Both silver and gold are used for jewelry, so let's take that use off the table. Both silver and gold are bought by investors either in paper form or actual coins, rounds, and bullion. So let's take that use off of the table.
That leaves what we call "Industrial" usage. Both silver and gold are used for industrial uses. But because of gold's reputation for wealth, the price of gold has always been more than that of silver. "Hard to believe once you realize that silver is actually a rarer metal than gold". While gold is used in electronics, it doesn't compare to how much silver is used in electronics. The same with most all industrial uses. Gold is used industrially, but silver is used much more.
OK; so why am I promoting silver? Well; when you consider that because silver's price is so much lower than gold; almost 65:1 ratio, you realize that MORE silver will be used for industrial purposes than gold. Silver is a better electrical conductor than gold. Because of the low price, the majority of silver used in industrial uses will end up in land fills because it's not cost effective to reclaim it. Just about ALL of the gold that has ever been produced is still available for distribution. The same can't be said for silver. Then top all this off with the fact that silver is a rarer metal than gold, and you realize the potential for silver to explode.
Traditional Silver to Gold ratio prices have been in the 16-20:1 range. That means that today's gold price of $1246 an ounce means that silver SHOULD be $62 - $77 an ounce. But the markets are being manipulated. But eventually, that will all catch up. Because silver has so many more industrial uses than gold. Silver and gold are mined and they are also recycled. 70% of the silver produced each year is mined. The other 30% is recycled. Almost 70% of silver uses is for industrial uses and jewelry. That means the recycling amount is just enough to cover investments, coins, bullion, and other private demand. Well, industrial uses are picking up. Solar panel and even medical uses. SEE THE YOUTUBE VIDEO BELOW.
So my theory is that while once the manipulation is rectified and prices start going back up; Gold will go up, but silver will go up at a higher percentage. Will the ratio get back to 16-20:1? I don't think so. Not for a while. But I do believe that it could easily get back to 30-40:1. Even at that ratio, when gold hit $1900 an ounce, silver SHOULD have been in the $50 - $60 range. Once gold gets past $2,000 an ounce, silver will totally go off the charts. Then, it will get back to the 20:1 ratio. Gold will only be used for jewelry and investments. It will be too expensive for most industrial purposes. It's like an old building in New York City. Sometimes it's actually worth MORE to tear it down and make the property a parking lot. The higher gold goes, the LESS industrial use it will have. Remember; electricity doesn't know the difference between gold and silver. Why spend more on gold connections when silver is cheaper and a better conductor? Why; because up til now, gold was more plentiful.
So that's why I promote silver over gold. There's less silver. Silver has many more uses. Silver is WAY under valued. Most silver will never be reclaimed, so it will become even rarer. And it's uses keep growing. View the video below. CYA:SE
Both silver and gold are used for jewelry, so let's take that use off the table. Both silver and gold are bought by investors either in paper form or actual coins, rounds, and bullion. So let's take that use off of the table.
That leaves what we call "Industrial" usage. Both silver and gold are used for industrial uses. But because of gold's reputation for wealth, the price of gold has always been more than that of silver. "Hard to believe once you realize that silver is actually a rarer metal than gold". While gold is used in electronics, it doesn't compare to how much silver is used in electronics. The same with most all industrial uses. Gold is used industrially, but silver is used much more.
OK; so why am I promoting silver? Well; when you consider that because silver's price is so much lower than gold; almost 65:1 ratio, you realize that MORE silver will be used for industrial purposes than gold. Silver is a better electrical conductor than gold. Because of the low price, the majority of silver used in industrial uses will end up in land fills because it's not cost effective to reclaim it. Just about ALL of the gold that has ever been produced is still available for distribution. The same can't be said for silver. Then top all this off with the fact that silver is a rarer metal than gold, and you realize the potential for silver to explode.
Traditional Silver to Gold ratio prices have been in the 16-20:1 range. That means that today's gold price of $1246 an ounce means that silver SHOULD be $62 - $77 an ounce. But the markets are being manipulated. But eventually, that will all catch up. Because silver has so many more industrial uses than gold. Silver and gold are mined and they are also recycled. 70% of the silver produced each year is mined. The other 30% is recycled. Almost 70% of silver uses is for industrial uses and jewelry. That means the recycling amount is just enough to cover investments, coins, bullion, and other private demand. Well, industrial uses are picking up. Solar panel and even medical uses. SEE THE YOUTUBE VIDEO BELOW.
So my theory is that while once the manipulation is rectified and prices start going back up; Gold will go up, but silver will go up at a higher percentage. Will the ratio get back to 16-20:1? I don't think so. Not for a while. But I do believe that it could easily get back to 30-40:1. Even at that ratio, when gold hit $1900 an ounce, silver SHOULD have been in the $50 - $60 range. Once gold gets past $2,000 an ounce, silver will totally go off the charts. Then, it will get back to the 20:1 ratio. Gold will only be used for jewelry and investments. It will be too expensive for most industrial purposes. It's like an old building in New York City. Sometimes it's actually worth MORE to tear it down and make the property a parking lot. The higher gold goes, the LESS industrial use it will have. Remember; electricity doesn't know the difference between gold and silver. Why spend more on gold connections when silver is cheaper and a better conductor? Why; because up til now, gold was more plentiful.
So that's why I promote silver over gold. There's less silver. Silver has many more uses. Silver is WAY under valued. Most silver will never be reclaimed, so it will become even rarer. And it's uses keep growing. View the video below. CYA:SE
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