Topic: Silver undervalued or gold overvalued? - page 3. (Read 10135 times)
In answer to the original question, I don't believe there's anything magical about historical ratios of gold and silver prices. There are strong cultural reasons to believe that both metals will continue to be valuable but cultural ties to historical price ratios are probably much weaker in a lot of places. There seems to be a resurgence of interest in Islamic banking though which does operate on a fixed ratio of gold and silver prices from what I understand.
I will *never* touch silver again because of the Hunt brothers debacle. It will happen again.
The Hunt brothers attempted to use margin. This was their weak point.
Nowadays, the world's silver inventories are being depleted by people actually buying real, tangible silver, paying in full, and physically removing it from the market. There's no singular target to go after anymore. A sudden change in COMEX rules won't stop folks from continuing to buy from their coin shops. And the internet is informing everyone of the true fundamentals. Even the Chinese are becoming eager buyers of silver.
The suppression of the price of silver will be the end of the global bankers.
It's wrong that they've been able to keep their ponzi scheme afloat for so long. But it seems clear to me that a change is imminent.
I bought at $15 and had to sell at $7
Never again!
Never again!
Better strategy would have been to buy more silver when the price went low rather than selling at a loss, but when you need the money you need the money though I guess.
but shouldnt the euro have sunk lower faster than usd, particularly since it is supporting multiple failing economies?
Last I read the Eurozone if it wanted to support Spain, Italy, Greece and all the other FAILs it would need to "Create" 1 trillion dollars. That amount is literally for every single country to be a-ok. (No matter cause Greece has already done a partial default.)
USA has 14.7 trillion debt and climbing. We have just hit 100% GPD to Debt ratio which is what some economist consider the "tipping point".
(for comparison I think Greece was 160%)
but shouldnt the euro have sunk lower faster than usd, particularly since it is supporting multiple failing economies?
this may be a stupid question (i am certainly not an economist)... but, if USD is overvalued, then why is the exchange rate with the euro roughly the same as it was a few years ago? (it was @ 1.5 USD>Euro and it now exchanges @ 1.4) wouldnt an overvalued dollar trade at a better rate (ie 1 usd>1 euro) especially with the euro supporting the failing economies of greece, ireland, etc?
or am i completely missing something here?
The Euro is in the shitter too because of all the bullshit with Spain, Italy, Greece and all the "bad" countries in the Eurozone. So if both go down both stay equal.
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why? i want to here from anyone that feels that precious medals are undervalued....i seriously would love to be able to justify buying in right now, but the market seems waaaaay overvalued to me.
I believe that precious metals are currently undervalued. More to the point, I believe that the US dollar is currently overvalued (which is the same thing).
The bull market in commodities in general, and PMs in particular, is driven by fundamentals relating to the US dollar, specifically US monetary policy. The fundamentals have not changed. If anything, they are accelerating.
As long as the Fed continues injecting liquidity (read: inflation) into the economy through quantitative easing, bailouts, and other programs, whilst simultaneously keeping interest rates artificially low, the USD is going to continue to undergo currency devaluation.
The bull market in PMs in the 70s correlated very strongly to the stagflation of the period. The bull market in PMs only ended when they brought Volcker in as Fed chairman who raised interest rates to 20%. I don't see the current bull market in precious metals ending until/unless we see a similar rise in interest rates.
this may be a stupid question (i am certainly not an economist)... but, if USD is overvalued, then why is the exchange rate with the euro roughly the same as it was a few years ago? (it was @ 1.5 USD>Euro and it now exchanges @ 1.4) wouldnt an overvalued dollar trade at a better rate (ie 1 usd>1 euro) especially with the euro supporting the failing economies of greece, ireland, etc?
or am i completely missing something here?
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why? i want to here from anyone that feels that precious medals are undervalued....i seriously would love to be able to justify buying in right now, but the market seems waaaaay overvalued to me.
I believe that precious metals are currently undervalued. More to the point, I believe that the US dollar is currently overvalued (which is the same thing).
The bull market in commodities in general, and PMs in particular, is driven by fundamentals relating to the US dollar, specifically US monetary policy. The fundamentals have not changed. If anything, they are accelerating.
As long as the Fed continues injecting liquidity (read: inflation) into the economy through quantitative easing, bailouts, and other programs, whilst simultaneously keeping interest rates artificially low, the USD is going to continue to undergo currency devaluation.
The bull market in PMs in the 70s correlated very strongly to the stagflation of the period. The bull market in PMs only ended when they brought Volcker in as Fed chairman who raised interest rates to 20%. I don't see the current bull market in precious metals ending until/unless we see a similar rise in interest rates.
Agreed. They keep pumping the dollar , commodities keep going up up and away. Look at the dollar index it is so low even before the debt talks.
Hey thanks for that link to wikipedia, proves my point even more!
The gold-silver ratio hasn't been 15-to-1 for over 100 years according to that chart.
The gold-silver ratio hasn't been 15-to-1 for over 100 years according to that chart.
Who cares about the ratio? If you invest in silver you are setting yourself up to be Hunt'ed!
How can ANYONE compete against massive industries that need silver? Silver is the best conductor of electricity. It not like the 80s when there was no electronics. Silver is every where now, Biomedical (silver kills bacteria), electronics, even xray film is silver. There is a limited supply and we are eating through it (industries) quite rapidly. Gold on the other hand gets mined and put in a vault so we know it is still there not being consumed. I understand the whole thing that happened with silver before but I do not see anyone large enough to compete with corporations that need it for their gear.
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why? i want to here from anyone that feels that precious medals are undervalued....i seriously would love to be able to justify buying in right now, but the market seems waaaaay overvalued to me.
I believe that precious metals are currently undervalued. More to the point, I believe that the US dollar is currently overvalued (which is the same thing).
The bull market in commodities in general, and PMs in particular, is driven by fundamentals relating to the US dollar, specifically US monetary policy. The fundamentals have not changed. If anything, they are accelerating.
As long as the Fed continues injecting liquidity (read: inflation) into the economy through quantitative easing, bailouts, and other programs, whilst simultaneously keeping interest rates artificially low, the USD is going to continue to undergo currency devaluation.
The bull market in PMs in the 70s correlated very strongly to the stagflation of the period. The bull market in PMs only ended when they brought Volcker in as Fed chairman who raised interest rates to 20%. I don't see the current bull market in precious metals ending until/unless we see a similar rise in interest rates.
The poll is missing an option:
Silver is seriously undervalued while gold is slightly undervalued.
In my opinion, this is the correct scenario.
Silver is seriously undervalued while gold is slightly undervalued.
In my opinion, this is the correct scenario.
why? i want to hear from anyone that feels that precious medals are undervalued....i seriously would love to be able to justify buying in right now, but the market seems waaaaay overvalued to me.
http://en.wikipedia.org/wiki/Silver_Thursday
http://en.wikipedia.org/wiki/Nelson_Bunker_Hunt
http://en.wikipedia.org/wiki/Cornering_the_market#1970s:_The_Hunt_brothers_and_the_silver_market
http://en.wikipedia.org/wiki/Silver_as_an_investment
I bought at $15 and had to sell at $7
Never again!
http://en.wikipedia.org/wiki/Nelson_Bunker_Hunt
http://en.wikipedia.org/wiki/Cornering_the_market#1970s:_The_Hunt_brothers_and_the_silver_market
http://en.wikipedia.org/wiki/Silver_as_an_investment
I bought at $15 and had to sell at $7
Never again!
“The Hunts Tried to Corner the Silver Market” Myth
https://meltdown2011.wordpress.com/2008/08/20/the-hunts-tried-to-corner-the-silver-market-myth/
"Is it too much to ask, if you buy a car from a guy, and you pay him the cash and he signs over the title, that you might get the car? This, ladies and gentlemen, is all the Hunts ever asked. They did not ever “corner” the silver market. All they asked was for the bullion dealers to keep their promises, and deliver."
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Who cares about the ratio?
Well, that IS the topic of the thread...
The poll is missing an option:
Silver is seriously undervalued while gold is slightly undervalued.
In my opinion, this is the correct scenario.
Silver is seriously undervalued while gold is slightly undervalued.
In my opinion, this is the correct scenario.
i think both are overvalued as is platinum and palladium. as much as id love to buy into precious metals, i think they are in a bubble right now...prices got driven up during and after the housing/banking crash from a influx of new investors...
Hey thanks for that link to wikipedia, proves my point even more!
The gold-silver ratio hasn't been 15-to-1 for over 100 years according to that chart.
The gold-silver ratio hasn't been 15-to-1 for over 100 years according to that chart.
Who cares about the ratio? If you invest in silver you are setting yourself up to be Hunt'ed!
Hey thanks for that link to wikipedia, proves my point even more!
Year Silver price (yearly cum. avg.[8])
US$/ozt Gold price (yearly cum. avg.[9])
US$/ozt Gold/silver
ratio
1840 1.29 20 15.5
1900 0.64 20 31.9
1920 0.65 20 31.6
1940 0.34 33 97.3
1960 0.91 35 38.6
1970 1.63 35 22.0
1980 16.39 612 37.4
1990 4.06 383 94.3
2000 4.95 279 56.4
2005 7.31 444 60.8
2009 14.67 972 66.3
2010 20.19 1225 60.7
2011 (cum. thru 19 May) 39.22 1510 38.5
The gold-silver ratio hasn't been 15-to-1 for over 100 years according to that chart.
Year Silver price (yearly cum. avg.[8])
US$/ozt Gold price (yearly cum. avg.[9])
US$/ozt Gold/silver
ratio
1840 1.29 20 15.5
1900 0.64 20 31.9
1920 0.65 20 31.6
1940 0.34 33 97.3
1960 0.91 35 38.6
1970 1.63 35 22.0
1980 16.39 612 37.4
1990 4.06 383 94.3
2000 4.95 279 56.4
2005 7.31 444 60.8
2009 14.67 972 66.3
2010 20.19 1225 60.7
2011 (cum. thru 19 May) 39.22 1510 38.5
The gold-silver ratio hasn't been 15-to-1 for over 100 years according to that chart.
I will *never* touch silver again because of the Hunt brothers debacle. It will happen again.
Hi Smalleyster, what happened with silver? are you talking Physical or Paper Contracts?
Thanks!
15x is not the historical ratio, at least not for quite a while.
Here is the last 20 years of the gold-silver ratio:
Here is the last 20 years of the gold-silver ratio:
The last 20 years doesn't undo the last 200 though. Bubbles have been known to last longer from time to time.
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