About Gold & Silver

Studying the price history of gold and silver is fascinating. For over a hundred years the value of an ounce of gold was $20 and an ounce of silver $1. Silver historically has a ratio of 20:1 to gold, so eventually it should match that again - meaning the price should increase. At today's gold prices, we should expect that silver would be priced around $80 per ounce. There are various theories on why this is not the case including demand and industry fluctuations, the US leaving the gold standard and market manipulation. No one can be certain why the historic ratio is out of whack but we can infer that the ratio should correct back to historical averages. On the other hand, gold has historically equaled the DJIA. If this were to become reality again, either gold will skyrocket or the Dow will crash. In either case, I think holding a mix is a better option because of diversification and to have flexibility if you do need to purchase things in the future using these assets. It will take a strong person to lug a heavy bag of silver into a store to buy a nice TV. Why not just hand the cashier an ounce of gold instead? This was standard practice 100 years ago in the United States. Empires dating back to Egypt, Greece and Rome all traded in silver and gold coins. This was a time tested practice. Fiat currency systems are a rather new invention and don't have a good track record economically. Recent failures in the fiat experiment were witnessed in Zimbabwe and Germany to name a few. Because the historical significance of gold and silver is so proven, I recommend that everyone should own some as an investment and safety net.