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Gold/Mining/Energy : Silver prices -- Ignore unavailable to you. Want to Upgrade?

To: David R. Schaller who wrote (813)	3/1/1998 9:32:00 PM
From: philv	Read Replies (1) \| Respond to of 8010

Thanks for your reply Dave. I find little to disagree with in your post. It is comforting to know, however, that the traditional ratio between gold & silver is much higher than it is now. Since the HUNTs attempt to corner the Silver market, silver has fallen in bad times. I recall ordinary folks selling all their old silver coins etc. for fantastic profits at that time. The POS has not recovered since then. Could I be correct in surmising that at that time, suddenly much silver was put into the vaults, silver which had been accumulating in various forms for many decades, and the subsequent volume has taken until now to be used up? Phil

To: David R. Schaller who wrote (813)	3/3/1998 9:01:00 PM
From: Ray Hughes	Respond to of 8010

David, if you go back to Victorian Great Britain you will find that gold money was scarce, high priced and, therefore, not circulating well. Result - the common person was hard pressed, for a useful currency, to buy goods so business was stymied. Victoria wanted to provide a "commoner's" currency to facilitate trade. She commissioned Sir Isac Newton to determine the appropriate ratio at which silver should be monetized vs gold. Old Isac tried to determine the natural relative values of gold and silver reasoning the the "natural" state was the (no pun) solid state solution of gold in silver known as "Electrum." This alloy was mined historically around Crete, if memory serves me, and hence was named by the Greeks for the goddess Electra. (We find much gold ore today that bears a large quantity of silver and hence the "by-product" silver from gold mines.) If a miner produced a unit of Electrum (one ounce of fine gold in about 15.7 ounces of fine silver) costing one unit of cost, then the producer could reason gold cost about 16 times as much as silver cost. That is the origin of the gold/silver ratio as Victoria established Sterling money and, incidentally, why many mines are called the 16-to-1. IMO there is no validity to the gold/silver ratio today. Silver is bound to move on the basis of its own fundamentals (bullish) and gold on its own (bearish). Ray Hughes