Silver Surpasses 40:1

[beauanderos]

Not sure if this will draw media attention, nor even if it's a number important to anyone, but seems to me that a snowball effect is occuring as the ratio plummets. No telling where it could stop

[Rodebaugh]

Good eye man. Indeed it has.

Still in the silver lane for me.....for now.

[Mossy]

What's a good place to check the ratio?

[beauanderos]

What's a good place to check the ratio?

kitco, even though I despise Jon Nadler and I hate to see his name even peripherally at the top of the contributing authors.

[aristobolus]

Unto 15 : 1 !

[hejira11]

Not sure if this will draw media attention, nor even if it's a number important to anyone, but seems to me that a snowball effect is occuring as the ratio plummets. No telling where it could stop

I was told I should get out of the silver market when we hit this Silver:Gold ratio. I am not going anywhere. But does anyone know the rationale that would have inspired this...if any. The man hat gave me this advice has passed away.

thanks.

[beauanderos]

Not sure if this will draw media attention, nor even if it's a number important to anyone, but seems to me that a snowball effect is occuring as the ratio plummets. No telling where it could stop

I was told I should get out of the silver market when we hit this Silver:Gold ratio. I am not going anywhere. But does anyone know the rationale that would have inspired this...if any. The man hat gave me this advice has passed away.

thanks.

He would be basing that rationale on normalcy bias, the tendency to view the potential for various events to occur based on your most recent experience. If, within his lifetime, the "normal" gold to silver ratio was closer to 55:1 (or even higher) and only a few times had it approached or passed 40:1, then he would be betting that mean reversion, the tendency of a price to "revert" to normal after overextending to high or low side, would soon come into play. He wouldn't have meant to get out of precious metals, he would have meant take your profits from silver and place them back into gold (or another seemingly underpriced hard asset). If even just one individual feels this way, you can be sure 100,000 others do as well, and trading on a technical basis perhaps 40:1 would trigger alot of such trades. It may prove to be temporary resistance. There's always the threat of a trend reversal when too many people pile on one side of a trade, just when you are feeling most euphoric the rug gets pulled from under you. I feel, however, that technical trading is of little use in our present circumstances. In order to be reliable, tech analysis must present an overview of trading within a free market (which we do not have) and have the foundation of the stability of a stable fiat currency in the milieu in which your are based (not one that is depreciating more rapidly daily). That's just my opinion, by no means am I any kind of skilled professional trader, that's just my gut impression based upon a bit of reading I've done through the years. The other problem with tech analysis is that those reading the charts can jigger them to their advantage as well. JPMorgan traders can look at a chart, predict a breakout, and then slam it back down again when in an unfettered marketplace it would have shot skyward. But just let them continue to try that when, soon, all the physical silver has dried up. Hope I don't die now.

[hejira11]

Beauanderous, I think you nailed it. If this ratio signals a sell off, it will certainly signal me to buy more!


Thanks for your insight.

[hejira11]

Hope I don't die now.

Me Either!!!!

[Mossy]

(CENSORED), even though I despise Jon Nadler and I hate to see his name even peripherally at the top of the contributing authors.

There. I took him off the post I stumbled on this:
http://goldprice.org/gold-silver-ratio.html

Simple chart, no math needed.

[henrysmedford]

http://en.wikipedia.org/wiki/Silver_as_an_investment

[zyll]

Personally I will begin transferring my silver position into gold when the ratio drops to 20:1. I predict that the Au/Ag ratio will go to 10:1 at least, perhaps even more in the blowoff. I am also looking for the median price of a home to fall to 500 oz of silver as another indicator that it is time to move my position weighting. Right now my Au/Ag position is about 2.33:1. My goal was 2:1 so I am buying silver. As the Au/Ag ratio drops, I will make more swaps into gold to keep that 2:1 ratio.

[Mossy]

I was told I should get out of the silver market when we hit this Silver:Gold ratio. I am not going anywhere. But does anyone know the rationale that would have inspired this...if any. The man hat gave me this advice has passed away. thanks.

http://goldprice.org/gold-silver-ratio.html

Go down to the 36 year chart. Since 84, silver has shot up every time it hit 40:1. Question to consider: Will it be different this time? Why?

The majority opinion seems to be that the ratio will continue to fall. I don't have enough silver to worry about it, and don't plan to swap my gold for silver unless/until I need "small change" in a post crash economy. Silver is just to darn heavy to carry anywhere.

[HelloMeteor]

I was told I should get out of the silver market when we hit this Silver:Gold ratio. I am not going anywhere. But does anyone know the rationale that would have inspired this...if any. The man hat gave me this advice has passed away. thanks.

http://goldprice.org/gold-silver-ratio.html

Go down to the 36 year chart. Since 84, silver has shot up every time it hit 40:1. Question to consider: Will it be different this time? Why?

The majority opinion seems to be that the ratio will continue to fall. I don't have enough silver to worry about it, and don't plan to swap my gold for silver unless/until I need "small change" in a post crash economy. Silver is just to darn heavy to carry anywhere.

You must be looking at a different chart. This chart shows no such thing.

[Delawhere Jack]

[Lemon Thrower]

here is a link to a very comprehensive article about silver and the GSR. Basically, for most of human history, silver traded at a ratio of 12-16. Its is only about 17.5 times more abundant in the Earth's crust, and gold is more abundant above ground these days.

http://the-moneychanger.com/articles_files/mmm_files/silver_files/silver_will_outperform.php

the GSR made a breakout to the downside about a weak ago when it fell below 42. the breakout indicates that its more likley to continue in that direction and to accelerate its pace.

if you read FOFOA, then you know there are some compelling reasons to also own gold. When the GSR hits 20, I'm trading out of silver into gold. I have already started to do that in baby steps.

[Lemon Thrower]

here is a link to a very comprehensive article about silver and the GSR. Basically, for most of human history, silver traded at a ratio of 12-16. Its is only about 17.5 times more abundant in the Earth's crust, and gold is more abundant above ground these days.

http://the-moneychanger.com/articles_files/mmm_files/silver_files/silver_will_outperform.php

the GSR made a breakout to the downside about a weak ago when it fell below 42. the breakout indicates that its more likley to continue in that direction and to accelerate its pace.

if you read FOFOA, then you know there are some compelling reasons to also own gold. When the GSR hits 20, I'm trading out of silver into gold. I have already started to do that in baby steps.

GSR=39.42 right now.

http://www.bloomberg.com/apps/quote?ticker=.GDLSLVR:IND

[beauanderos]

Wow, guys! Thanks for all the links posted to this thread. I don't have time right now (headed to work) but I'll sure make an effort to read them so I can have a more informed opinion. One of my bigger concerns was staying under the radar, which leads me to favor hoarding silver over gold. I do still have loads of fractional gold, even though I dumped my ounces. Good luck to both camps, I'm sure neither will suffer.

[Copper Catcher]

Yesterday I was at an antique mall and scored a hand full of silver dimes for $2.00 each as well as a 10 oz silver bar at $365.00...

[Lemon Thrower]

there is a lot of historical support for a ratio as low as 16 to 1. There are a lot of arguments for a lower ratio, but below 16 is relatively new ground. We shall see.

the franklin sanders article has a lot of historical information. i don't know about all of his ideas, but he has collected a lot of historical info in one place which is nice.

[IdahoCopper]

Something to keep in mind about the ratio. For every whole number the ratio decreases, the actual price of silver must significantly increase more each time. For example:

Gold:::::::::::: Silver::: Ag to Au Ratio::: Increase
$10,000.00::: $500.00::: 20:1:::
$10,000.00::: $526.32::: 19:1::: $26.32
$10,000.00::: $555.56::: 18:1::: $29.24
$10,000.00::: $588.24::: 17:1::: $32.68
$10,000.00::: $625.00::: 16:1::: $36.76
$10,000.00::: $666.67::: 15:1::: $41.67
$10,000.00::: $714.29::: 14:1::: $47.62
$10,000.00::: $769.23::: 13:1::: $54.95
$10,000.00::: $833.33::: 12:1::: $64.10
$10,000.00::: $909.09::: 11:1::: $75.76
$10,000.00::: $1,000.00::: 10:1::: $90.91
$10,000.00::: $1,111.11::: 9:1::: $111.11
$10,000.00::: $1,250.00::: 8:1::: $138.89
$10,000.00::: $1,428.57::: 7:1::: $178.57
$10,000.00::: $1,666.67::: 6:1::: $238.10
$10,000.00::: $2,000.00::: 5:1::: $333.33
$10,000.00::: $2,500.00::: 4:1::: $500.00
$10,000.00::: $3,333.33::: 3:1::: $833.33
$10,000.00::: $5,000.00::: 2:1::: $1,666.67
$10,000.00::: $10,000.00::: 1:1::: $5,000.00


This means that the speed of decrease of the ratio will significantly slow, the lower the ratio becomes. At some point, probably between 25:1 and 20:1, it makes sense to exchange Ag for Au.

[beauanderos]

Something to keep in mind about the ratio. For every whole number the ratio decreases, the actual price of silver must significantly increase more each time. For example:

Gold:::::::::::: Silver::: Ag to Au Ratio::: Increase
$10,000.00::: $500.00::: 20:1:::
$10,000.00::: $526.32::: 19:1::: $26.32
$10,000.00::: $555.56::: 18:1::: $29.24
$10,000.00::: $588.24::: 17:1::: $32.68
$10,000.00::: $625.00::: 16:1::: $36.76
$10,000.00::: $666.67::: 15:1::: $41.67
$10,000.00::: $714.29::: 14:1::: $47.62
$10,000.00::: $769.23::: 13:1::: $54.95
$10,000.00::: $833.33::: 12:1::: $64.10
$10,000.00::: $909.09::: 11:1::: $75.76
$10,000.00::: $1,000.00::: 10:1::: $90.91
$10,000.00::: $1,111.11::: 9:1::: $111.11
$10,000.00::: $1,250.00::: 8:1::: $138.89
$10,000.00::: $1,428.57::: 7:1::: $178.57
$10,000.00::: $1,666.67::: 6:1::: $238.10
$10,000.00::: $2,000.00::: 5:1::: $333.33
$10,000.00::: $2,500.00::: 4:1::: $500.00
$10,000.00::: $3,333.33::: 3:1::: $833.33
$10,000.00::: $5,000.00::: 2:1::: $1,666.67
$10,000.00::: $10,000.00::: 1:1::: $5,000.00


This means that the speed of decrease of the ratio will significantly slow, the lower the ratio becomes. At some point, probably between 25:1 and 20:1, it makes sense to exchange Ag for Au.

Your premise may prove right at some point, but I think it more likely, in the short term at least, that the price rise of silver, and a commensurate drop in the ratio, will accelerate, not slow.

[Lemon Thrower]

Something to keep in mind about the ratio. For every whole number the ratio decreases, the actual price of silver must significantly increase more each time. For example:

Gold:::::::::::: Silver::: Ag to Au Ratio::: Increase
$10,000.00::: $500.00::: 20:1:::
$10,000.00::: $526.32::: 19:1::: $26.32
$10,000.00::: $555.56::: 18:1::: $29.24
$10,000.00::: $588.24::: 17:1::: $32.68
$10,000.00::: $625.00::: 16:1::: $36.76
$10,000.00::: $666.67::: 15:1::: $41.67
$10,000.00::: $714.29::: 14:1::: $47.62
$10,000.00::: $769.23::: 13:1::: $54.95
$10,000.00::: $833.33::: 12:1::: $64.10
$10,000.00::: $909.09::: 11:1::: $75.76
$10,000.00::: $1,000.00::: 10:1::: $90.91
$10,000.00::: $1,111.11::: 9:1::: $111.11
$10,000.00::: $1,250.00::: 8:1::: $138.89
$10,000.00::: $1,428.57::: 7:1::: $178.57
$10,000.00::: $1,666.67::: 6:1::: $238.10
$10,000.00::: $2,000.00::: 5:1::: $333.33
$10,000.00::: $2,500.00::: 4:1::: $500.00
$10,000.00::: $3,333.33::: 3:1::: $833.33
$10,000.00::: $5,000.00::: 2:1::: $1,666.67
$10,000.00::: $10,000.00::: 1:1::: $5,000.00


This means that the speed of decrease of the ratio will significantly slow, the lower the ratio becomes. At some point, probably between 25:1 and 20:1, it makes sense to exchange Ag for Au.

you are correct.

to go from 80:1 to 79:1 requires a change of 1/79th.

to go from 40:1 to 39:1 requires a change of 1/39th, which is twice as much as 1/79th.

[Lemon Thrower]

bump

[henrysmedford]

bump

I must be getting old I had to look up bump. From Wikipedia-- To bump a thread on an internet forum is to post a reply to it purely in order to raise the thread's profile. This will typically return it to the top of the list of active threads. The term "to push-up" a thread is also used to describe this type of action. It has been suggested that "bump" is an acronym of "bring up my post"------http://en.wikipedia.org/wiki/Bump_(Internet)