Silver will be gold on steroids!
BY MILES FRANKLIN
THEDAILYCOIN.ORG
JUNE 25, 2018
Rather than write on a planned topic, I received at least 20 e-mails yesterday on the same subject so had to switch gears. The e-mails were all panicky because an analyst who works in the precious metals industry suggested that silver will not perform as gold will in the coming reset. I feel the need to address this because I believe it is faulty analysis and may have motivation behind it. I will not name the analyst but can be easily discerned.
In an interview it was said that during the Weimar experience, gold performed extremely well but silver lagged. It is for this reason they suggested not to pay attention to the current out of whack silver to gold ratio north of 80-1 and it will not narrow. This is just wrong for so many reasons. First, the ratio of silver to gold worldwide at the time was roughly 15-1. Silver was priced at $1.385 per ounce while gold was at $20.67 per ounce in dollar terms. This 15-1 ratio was much closer to the ratio of silver versus gold in the Earth’s crust and extracted via mining. Silver actually exists at a ratio of slightly less than 10-1 versus gold, this is what I call “God’s ratio”.
Back in 1923, most of the world held at this ratio, if it was true that gold vastly outperformed silver in reichmarks, this would mean the ratio of value for gold versus silver was moving higher. If this were to have occurred, there would have immediately been arbitrage where gold would have flooded in to Germany while it would have been emptied of all silver over the 15-1 ratio. Yes it would have been clunky and slower than in today’s world but it would have occurred nonetheless. As a side note, the analyst claimed a 160-1 silver to gold ratio prior to the German hyperinflation and the same ratio afterwards which would mean silver and gold moved in lockstep. At that time with a 15-1 ratio worldwide, ALL silver would have been drained via arbitrage from Germany! To suggest this happened and silver that would have been undervalued versus gold and was not arbitraged out of Germany is simply false. Think of it this way, you could swap one gold ounce for 160 silver ounces in Germany, ship the silver out to America or elsewhere and then re swap for 10 times more gold than you started with …this most assuredly did not happen.
The Rest…HERE
