Everyone loves a bargain, no matter where one finds it. A local restaurant we love has wines at 25% off on Wednesday nights, and we often go there to get a bottle of wine we like, even though at 25% off, we could still buy it at a fourth of that at a liquor store, even with a 25% discount. The restaurant markups on wine are literally unbelievable. (Before I go further, if you watch Imus on RFD TV in mornings, the running news on the bottom of the screen every minute or so has a blurb which is so hilarious that I laugh myself silly. Try it.)
Now about bargains. It happens to be silver. Silver is so cheap, even at close to $20 an ounce, that it is almost ridiculous. $20 for an ounce of silver? As months pass, you will realize that I am correct. As I write this on Wednesday morning, the ratio between silver and gold is down to 49.8 to 1. A week ago it was 52 to 1, meaning that in just a week, silver has gone up 3% further than gold. It will eventually return to its 16 to 1 ratio, meaning that if it were 16 to 1 today, silver would be $59.82, rather than $19.17. It will happen. A couple of years ago, the ratio was 77 to 1, meaning that in just a couple of years, silver has gone up 30% further than gold. The trend will continue, and I’d bet my life on it.
The disadvantages of silver are two. (1) The ’spread’ is much larger than on gold, meaning that you will have to see a larger increase before you break even. (2) It requires a lot of storage space. A 100 oz Englehard bar is 5 3/4″ X 2 3/4,” and 1 inch thick. Lot of space for $2,000 worth of silver, compared to gold, and I admit it. Silver is heavy, and that’s why I don’t like ’bags,’ even though they are cheaper. When you sell the ’bags’ you get a lot less than with other silver products. Always get the most silver for the least dollars, and currently it is 100 oz bars in lots of five @ 22 cents over spot.
Silver has often been called “The poor man’s gold,” just like palladium has been called “The poor man’s platinum.” Silver is actually far cheaper than it can be mined for in America and for that matter in most of the world. The backward nations such as Mexico and South American nations with cheap labor, are the ones producing silver with no EPA or other restrictions. A year from now, with silver at maybe $40 or a lot more, you will realize that at under $20 an ounce, it is a literal steal.
Sell your gold and buy silver? ABSOLUTELY NO. Why? Because even though my son and I charge no commission for sells if you bought it from us, there’s still the shipping that’s on you, and you are selling the gold at the ’bid’ price, and buying the silver at the ’ask’ price, plus you are going to pay a commission when you buy the silver. The difference makes it not an economical idea. Just use silver as a buying guide. Look people, the demand for silver is unprecedented, and for good reason. More and more people realize that it is a huge bargain.
The good old US government has lived up to its reputation once again. They were warned in December that the demand for Silver Eagles would be extremely strong, but they ignored the warning, and kept up their old ways, paying no attention to learned sources, such as the company who sells the silver to the firm which makes the blanks from which the Silver Eagles are made. “Ho Hum,” was the mint’s response to the warning. The maker of the blanks last week received an order for 2 million blanks from the Mint, and it can’t turn them out nearly fast enough. The silver has to be bought, blanks have to be made, sent to West Point New York, examined, and then made into Silver Eagles. The Mint won’t sell them till it has a million on hand, so Silver Eagles might be hard to come by for a while. Yes we do have them, but not in mint boxes. We have plenty of 100 ounce bars, A-Mark Rounds, and 10 ounce bars, and for a couple of weeks anyway, Silver Eagles.
As years pass, silver will become so popular, and in such great demand, that the 16 t0 1 ratio will be easily attained. Mark my words. Daily, to prove the point of silver being the poor man’s gold, I get many many orders for the minimum of 100 ounces of silver. Why? Because everyone isn’t rich, but a lot of not-so-rich people are smart enough to know a bargain when they see it, and that is SILVER!