silver-coin-investor.com / By Dr. Jeff Lewis / December 27, 2012
Gold and silver have a 6000 year history for their use as a currency, and until the last century, the price of gold and silver maintained a healthy valuation ratio of 1 ounce of gold to every 15 ounces of silver. This purchasing power ratio is strengthened by the fact that there are 17 ounces of silver for every 1 ounce of gold in the earth’s crust, although physical silver stocks have dwindled, as the metal is used in a wide variety of industrial applications.
Gold And Silver Prices: Historic Purchasing Power
It has long been said that an ounce of gold will buy a custom tailored man’s suit. In the 1930s, an ounce of gold cost $35, and a suit was nearly the same price. When you look at gold prices today, gold trades for $1150 and a custom suit does as well. Even thousands of years ago, the best clothing cost one ounce of gold, or 15 ounces of silver. Gold and silver prices are intrinsically tied together; however, manipulation in the price has made silver trade at an artificially low ratio to gold.