All ratios are important. With two cycle engines, the ratio between oil and gas is important. In roofing, the ratio of inches of climb per foot of roof is important. A friend has a metal roof which has too low a ratio, the snow won’t run off correctly, and his roof is full of problems. All sorts of ratios are quoted daily by the media. Percent of divorces as a ratio of marriages, and ratios of all kinds are common in the world. For centuries, the ratio of gold to silver has been anywhere from 15 to 1 to 16 to 1. In 1980, the ratio was 16 to 1, with gold at $850 and silver $54. Gold is now higher than it was at its peak in 1980 by about $15. Silver, if the ratio were 16 to 1, would be $54, rather than its current $15.36. Silver should be $38.77 higher than it is now. Silver should be 2.5 times higher than it is now!
This column will be short, because the bargain price of silver just cannot remain forever. It just cannot. Silver at around $15.50 is a huge bargain. Never has there been a bigger bargain that silver at the $15 range. A client called me yesterday, (Wednesday), who had been buying not from me 100%, but from a coin dealer in his neighborhood. The guy quoted him a price for Silver Eagles at $3 higher than mine. He bought a thousand from me and saved $3000. His coin shop guy said he was paying $3 more than I was charging for Silver Eagles. I confirmed them for him at the $3 lower price, and he will get them. For months I have heard rumors of silver being scarce, but it never has been for me. Maybe silver will become scarce, and if it does, the ratio will increase drastically. You can tell if it is becoming hard to get by simply dividing the spot price of gold by the spot price of silver. Simple!
If you’ve got the storage space, get silver before the ratio gets lower, and it will. It’s funny how sometimes things are so plain and obvious that they hit you in the face. Gold is higher than it was in 1980, and silver is a fraction of its price in 1980. I know all about Bunker Hunt’s trying to corner the world’s silver supply, which drove it up with gold following. I read the book, saw the movie, and heard the song. But just look at history for thousands of years, with the ratio being 15 or 16 to 1, and be convinced. Silver is a huge bargain right now.
Incidentally, my son David’s phone number is first on the web site, and mine is second. Sometimes we will go out to lunch or do errands and forward our numbers to each other so no one has to wait or call back. I am going to take a vacation for a week or so in the near future, and I will forward my calls to him. If he does the same, he will forward his calls to me. Works out OK, so don’t be alarmed if you call me and get him, or the reverse.
The Hag Lost! Isn’t that great? If only Ron Paul had the ability to speak and exude as Huckabee, he’d do much better. Bill Clinton said of Huckabee that, “He can give a speech and tell a joke like no other candidate.” True. I gave Paul another $100 last week, but after his lackluster 1 hour performance on CNN last week, I am not so sure he can make it, Damn. Can’t someone build a fire under him? Give him a gallon of coffee before he goes on the radio or TV? Have a great weekend.