In my old age, I think in terms of equations using deductive logic.
James Flynn said connecting the dots is the key to better understanding.
So if we want to "guess" where silver might go, let's look at some dots, and try and connect them.
1) What we are seeing is sort of an historical rise in silver, but so far it just seems to mostly be following gold, BUT as we all know there is an underlying supply and demand shortfall variable that was not true in the last two parabolic crises to $50.
So if the range traditionally has been 40 to 80, gold to silver ratio, one might think silver should move to the lower end of that range.
2) $50 in 1980 is equivalent to $180 today.
3) The gold silver ratio in the earth is about 16 to19 that of gold, and much of the silver has been used up, while almost all of the gold is still here.
4) While high gold prices will allow many new gold mines, that is not true of silver. Most of the good silver deposits have been found, and while gold is found all the way to depth, silver is found mostly near the surface, and as we all know is 70 percent a by product of gold, copper and zinc mining.
5) Silver has a strong industrial base which is not true of gold.
6) While it is the central banks buying gold, it is the average person buying silver. Almost anyone can walk into a coin shop and buy an oz of silver for 50 bucks.
7) There was little retail.speculation of silver until recently, as seen by the over 100 to one ratio of gold to silver (now about 80 to 1), and now speculation is becoming a major event.
So when you connect all those dots, it looks like silver has a ways to go?
AI Overview
$100 in 1980 is equivalent to approximately $390 in today's money, which means you would need about $390 today to have the same purchasing power as $100 did in 1980. This is due to a cumulative inflation rate of about 290% since 1980. |
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