Ever wonder why gold is so much more expensive than silver? Gold is virtually indestructible, since a thousand year old gold coin, can be plucked out of the ocean, and it will look exactly like it did a thousand years previously. Gold will not tarnish, and all the gold ever mined, is probably still in existence! It has always been scarce, difficult to find its ore, and regardless of the price, it will still be expensive, because it will always be scarce. As an example, in 2006, 2370 tons of gold were produced, in 2005, 2380 tons, in 2023 3250 tons, and in 2024, 3300 tons of gold were produced. There is no way that all the gold mines in the world, could possibly produce enough to meet the demand, and therefore it is expensive, scarce, universally in demand, and its supply can never be enough.
Price
Price determines the value of anything. The price of gold and silver, antiques, admissions, new things, real estate, water, electricity, gas, coal, vegetables, meat, and literally, the price of an item determines its value, scarcity, and of course desirability. The historic price of silver, in relationship to gold, has been about 16 to 1, for hundreds of years. In other words, an ounce of gold would equal 16 ounces of silver. By the price of today’s gold of $3,300 per ounce, silver should be pried at $206 per ounce! Will that ratio ever again be equaled? It was 16 to I briefly, in the mid 1970’s, when Bunker Hunt attempted to corner the world’s silver supply, buying huge amounts of it. Hunt thought that if he could control the world’s supply of silver, he could dictate its price. I met Bunker Hunt, and was helping to count his silver in Phoenix. He was a big, tall, beefy guy, who was very friendly. He failed to corner the world’s supply of silver, and it bankrupted him.
Before I go any further, gold is ‘sound money,’ as opposed to government money created by governments around the world, at one time or another, and being made of various metals, wood bark, cigarettes, paper promises, or what have you, but all of which can be produced by governments to pay bills created by politicians in all of history, and in all nations. There is no limit as to how much ‘unsound money’ can be created, and will be created, in any government anywhere, The U.S. dollar has been no exception, having lost over 95% of its value in the last hundred years. It looks the same, but will buy 95% less. This is known as ‘inflation,’ and is perhaps one of the greatest lies ever spoken by governments, when they tells its citizens that its’ created money is sound, dependable, trustworthy, and safe to save with. THE U.S. DOLLAR IS A VERY UNSOUND METHOD OF SAVING FOR ONE’S FUTURE. Enough of that, at least for a while!
Silver, as opposed to gold, will tarnish, is used commercially in various forms and for various reasons. Silver destroys germs, and is used to germ-proof hospitals, and it is said that a small amount of silver in a gallon of germ laden water will cleanse it fairly quickly. Silver is also a very good conductor of electricity, and silver impregnated power cables and solar collectors, are everywhere and in constant need. Various types of photography use silver, and it is also beautiful. Silver requires mining, as does gold, but silver mines are not as scarce as are gold mines. Silver is usually a small part of gold ore, and it is produced in the milling process. Gold ore, when mined, is rarely seen with a naked eye, it is so well impregnated into its ore. It must be milled, in order to have any gold visible, and the other 99.9% of the ore, is piled in millions of tons of ‘Tailings,’ outside of any gold ore mill. In Silverton Colorado, there is an intact gold mill, which can be toured, and outside, are a million tons of mill tailings produced by a hundred years of milling gold ore. Gold ore with visible traces of gold, are called “High Grade,” and are so scarce that they command a very high price.
Please do not denigrate silver! While silver in the ground, is far more plentiful than gold, it is still a precious metal, and has been for well over a thousand years. Probably 99% of all sound money was begun as silver, which were used as coinage to make markets payable and buyable in sound money. As various monies became unsound, silver was dropped, and base metals used, which happened in the U.S., when sound 90% pure silver dimes, quarters, and halves were abandoned in 1964. No one knows what will happen ten minute from now. The hundreds of ‘money managers,’ who con millions into trusting them to handle their funds, know nothing about the futures either! They guess, based on previous records, as you could do too, if you examine the ratio of gold to silver throughout history, which for a thousand years, was 16 to 1, as I mentioned in an above paragraph. Do you think silver should be 16 to 1, or 90 to 1, as it was Saturday when I wrote this?
I have ample supplies of both, so I could care less, but one thing’s for sure: I do not save in unsound money, made with paper, base metals, or empty promises by the Federal Reserve, Donald Trump, or politicians. Incidentally, Trump’s savings are in real estate, golf courses, and various other investments, some of which have performed hideously, such as in Atlantic City, New Jersey, for one. Gold and silver are controlled by no government, price controls, IRS, or market conditions, especially gold. You decide, but for a measly 1%, we will have it delivered to you, where it can just sit there, unceremoniously, in all its glitter and beauty, till it is sold or passed on to any choice you may have!
Don Stott- don@coloradogold.com 970-249-4646