Silver, has become a hot item for Colorado Gold. Why has silver become so popular? Probably, because compared to gold, it is sort of “cheap,” since the ratio is 90.69 to one. In other words, one ounce of gold, will buy, the price equivalent of 90.69 ounces of silver. Since the historic ratio between the two precious metals, has always been 16 to 1, this makes silver a bargain, compared to gold. A U.S. silver dime, has or had anyway, if you can find one, .07234 ounce of silver in it, or in todays’ dollars, $1.36. Just imagine that, if you please! A U.S. silver dime, which were billions in circulation, I am sure, now would be worth $1.36.
A U.S. quarter, has or had, .18084 ounce of silver in it, meaning that by today’s dollar, it would be worth $3.41. A half dollar has or had, .36169 of silver in it, or by today’s dollar, a 50-cent piece is worth $6.82. What’s point of this? The law of supply and demand, is at work here. Since the last silver coin was made in 1964, or 58 years ago, they’ve all been bought up, and to invest in U.S. silver coins would be foolish, since if you found a silver dime, you would undoubtedly have to pay not $1.32, but maybe $4 or $5, since the antique value (supply and demand) would take place.
There’s a couple of other problems with U.S. silver coinage also. First of all, if you try to barter with them, most people would never believe that the coin was silver! “What do you mean, a ‘silver’ coin? I’ve never heard of a silver dime or quarter. You must be making that up.” Or maybe, “Well, if it is silver, how much silver is in it?” After you have convinced them, it is silver, you have no idea of how much silver is in it. It’s far better to barter with a coin or bar that has its weight and purity on it. As far as antiquity, look at this:
The last Ford Model T was made in 1927, and sold for $275. Today, a restored one would go for a hundred times that. Millions were made, but few are left. My 1941 Plymouth truck, which is restored, sold for $400 new, and I am certain I could get a hundred times what it sold for new. They were only made for three years. I’ve thought about selling it, and converting it into gold, which is a lot more compact, and doesn’t require storage, license and insurance. I’ve had a lot of fun with it though.
Is there a shortage of silver? No, and here’s the number of metric tons of silver is produced each year by three nations. U.S. produces 1,000 tons, Mexico, 5,600 tons, and China 3,400 tons. I am sure that most silver in coins and bars, must come from Mexico, if not from the U.S , but so what? It is silver that we will barter with, sell at a profit, or whatever, and if it has a U.S. label, it will be easy to dispose of, if it ever becomes necessary. Since the supply of silver is OK, consider the varieties of silver available. A one-ounce U.S. Silver Eagle, .999 pure coin, happens to be $11.15 over spot, the delay is less than other coins, since the U.S. Silver Eagle, is made by the U.S. Mint at West Point, New York, and the employees are unionized. As if the fact that they are made by the totally inefficient U.S. government, weren’t bad enough, without throwing in the unionized employees.
10-ounce ‘buffalo’ silver bars, the equivalent of ten, once-ounce coins, are only $3.61 per ounce over spot, per ounce, and the one-ounce silver “Buffalos,” which is hugely popular, is $7.49 over spot. I love them, but they are twice as expensive per ounce, as the 10-ounce bar, and both have the buffalo on them. Our mint in Indiana is working 24/7, and doing the best they can for both. I did a 110 – 10-ounce order for a gal recently, and the delay wasn’t too bad. You might consider it, or maybe the Canadian Silver Maple Leaf, which is $5.62 over spot, and I think has pretty short wait time. Ask my kids, and they can tell you, or will find out which has the shortest delay.
As far as the current silver-gold ratio is concerned, just think of the storage thing. One ounce of gold, takes one ninetieth the space of 91 ounces of silver. Those 110 – ten-ounce silver bars took a lot of effort for the U.P.S. driver to lug it into my house! He had to use a hand truck.
Here’s another way to show that you must save in precious metals: An ounce of gold today, would buy 62 Model T’s in 1927, and even then, with gold at $20.67 per ounce, it would take 13.3 ounces of gold to buy a Model T, so even then, saving in gold and silver, made sense. Ever drive a model T Ford? I have, and there’s no comparison to driving even a stick shift car or truck today. It’s no wonder that the “T” was replaced with the model “A” which was made from 1928 through 1931, and the model “A”, restored, will bring in more than a “T,” restored, since they are driven like a stick shift car or truck today, or at least almost. I had a 1931 Ford model “A” truck, and I used it a lot for my theatres, (1963-1971). Tough old truck, but not very fast!
Will the gold-silver ratio ever return to 16 to 1? No one knows what will happen tomorrow, or ten minutes from now, and if it did, it might not make much difference. If gold went down to that ratio, it would be $106.85, and that’s impossible, and if silver did the same, it would be $1.17 an ounce, and I think that also to be impossible. Save in both, but at least have a good supply of silver to bargain with. don@coloradogold.com,