Silver For The People - The Forums

Been listening for a short time since I found Brother John, but have been of the same mind/philosophy for a while.


The Silver/Gold ratio is currently just under 60:1. I know the old ratio was 16:1 when we were on the gold standard, but I don't think that applies much today. The high was at or above 80:1, and the low was in the 20's:1.

My topic of discussion/question is two parts: For those who have silver, but not gold(because of price or whatever reason), what ratio do you think would be a good time to trade silver for gold to diversify some?
(I'd love to wait until the ratio got close to 20:1, but will it get there?)

And what are your predictions for the future of the silver/gold ratio?





PS: Many Thanks & Cudos to Brother John!! Thank you for "Sifting Through the BS" for all of us who don't have the time/energy/resources/etc.!!

I would round in at about 40, probably swapping just 40 or 80 oz. At 30 I would do quite a bit more. At 20 I might do as much as half. At 10r probably 3/4. At 1 everything.

Conversely, I sold a maple at about 58, and would swap again at about 68.

(07-06-2012 04:17 PM)tinfoilhatdude Wrote: [ -> ]Been listening for a short time since I found Brother John, but have been of the same mind/philosophy for a while.


The Silver/Gold ratio is currently just under 60:1. I know the old ratio was 16:1 when we were on the gold standard, but I don't think that applies much today. The high was at or above 80:1, and the low was in the 20's:1.

My topic of discussion/question is two parts: For those who have silver, but not gold(because of price or whatever reason), what ratio do you think would be a good time to trade silver for gold to diversify some?
(I'd love to wait until the ratio got close to 20:1, but will it get there?)

And what are your predictions for the future of the silver/gold ratio?





PS: Many Thanks & Cudos to Brother John!! Thank you for "Sifting Through the BS" for all of us who don't have the time/energy/resources/etc.!!

Last year, the ratio reached nearly 30. I think it will do so again next year....possibly the end of this year.

My advice would to be stack silver at this ratio...and trade for a bit of gold at 20:1....a bit more should the ratio break below 20:1.

Of course if you don't have a substantial stack....I wouldn't bother with a ratio trade at all, but rather would use the ratio as a tracking device to establish good entry points for one or the other....depending on what the ratio is telling you. If you gots da' cash to stack....then you have the ability to just buy it outright. If the ratio drops....you can stop trading fiats for silver and trade it for gold. That is, in essence.....the purest ratio trade available to the open minded and aware person (trading paper promissory notes with no intrinsic value...for physical metal that required labor to bring it from the earth's crust)

I don't believe ratio trading is a worthwhile maneuver unless you are dumping 500 oz's or more to capitalize on large swings in the ratio. That is what's called "growing your stack". I don't plan on dumping a large chunk until it reaches 20:1....then another even larger chunk at 10:1. Until that scenerio plays out....stacking under the "KISS" mantra is what's best imo.

The best blueprint for ratio trading is to do such maneuvers with a portion of your stack....as a diversification tool, considering stackers are often times 'not-so' diversified with involvement in other asset classes. To keep your "eggs lively" vs. stagnation from non-action...the ratio trading puts some 'risk' into the mix and turns your stack into a generator....should you desire to put it to work for you and do more than sit in your basement safe and collect dust.

Warren Buffett has it wrong. Precious metals can produce returns...and gains. The ratio trade is such a scenerio, whereby timing properly can provide for growth.

If your stack is already built....the ratio trading should definitely be on your "to do list". If you're new to the game and still stacking....then stacking in general at these bargain prices should be your priority.

Become your own bank..."Stash n Stockpile Weapons of Stack Construction!"

I'm 100% silver and have said I would swap an undetermined amount at 20:1. However, I'm not sure I can hand over a 20 roll of eagles for an ounce of gold or a 100oz bar for 5 ounces of gold.

Quote:Some analysts state that silver and gold bull markets have a tendency to run about 20 years. Some entities have stated that, at current rates of consumption, we will run out of silver in 17 years. “If” this is true, silver may not see another bear - just one last raging bull.

If this scenario plays out what will the ratio be? I really want gold but I don't think I'll ever allow it.

(07-08-2012 09:25 AM)PM Montner Wrote: [ -> ]I'm 100% silver and have said I would swap an undetermined amount at 20:1. However, I'm not sure I can hand over a 20 roll of eagles for an ounce of gold or a 100oz bar for 5 ounces of gold.

Quote:Some analysts state that silver and gold bull markets have a tendency to run about 20 years. Some entities have stated that, at current rates of consumption, we will run out of silver in 17 years. “If” this is true, silver may not see another bear - just one last raging bull.

If this scenario plays out what will the ratio be? I really want gold but I don't think I'll ever allow it.

To be honest...I'm thinking it won't matter. If it gets bad enough...the distinction will be an afterthought...unless gold is providing for a capital flight and a conversion post-destination is secured.

I must admit...after recently finishing Adam Fergusson's book...the prospect looking on in close proximity may not be all that pleasant for the prepared...and the stackers. People have less discipline and integrity, with honor like people throughout time that have been under the unhealthful thumb of the banking cartels.

Stay tight and be cool...

The future is looking like a rocky road.

Either #79 or #47 should do fine...and it's another variant of the KISS methodology. Jesse Livermore alluded to this often....no need to get cute in a bull market. Patience in general will be beneficial and perhaps rewarding.

(07-06-2012 04:43 PM)harbl_the_cat Wrote: [ -> ]I would round in at about 40, probably swapping just 40 or 80 oz. At 30 I would do quite a bit more. At 20 I might do as much as half. At 10r probably 3/4. At 1 everything.

Conversely, I sold a maple at about 58, and would swap again at about 68.

I'm close to your train of thought. I've got about 1/4 set aside if the ratio drops to 40:1. And would keep trading as it dropped.


However, if the money printers start printing, gold and silver will both rise. My assumption is that since silver is more volitile, it would move higher as a percentage than gold, thereby decreasing the ratio, and allowing a better trade environment.

But this is only an assumption, and I have no actual technical background to base my assumption on.

(07-08-2012 02:12 AM)AgShaman Wrote: [ -> ]Last year, the ratio reached nearly 30. I think it will do so again next year....possibly the end of this year.

My advice would to be stack silver at this ratio...and trade for a bit of gold at 20:1....a bit more should the ratio break below 20:1.

Of course if you don't have a substantial stack....I wouldn't bother with a ratio trade at all, but rather would use the ratio as a tracking device to establish good entry points for one or the other....depending on what the ratio is telling you. If you gots da' cash to stack....then you have the ability to just buy it outright. If the ratio drops....you can stop trading fiats for silver and trade it for gold. That is, in essence.....the purest ratio trade available to the open minded and aware person (trading paper promissory notes with no intrinsic value...for physical metal that required labor to bring it from the earth's crust)

I don't believe ratio trading is a worthwhile maneuver unless you are dumping 500 oz's or more to capitalize on large swings in the ratio. That is what's called "growing your stack". I don't plan on dumping a large chunk until it reaches 20:1....then another even larger chunk at 10:1. Until that scenerio plays out....stacking under the "KISS" mantra is what's best imo.

The best blueprint for ratio trading is to do such maneuvers with a portion of your stack....as a diversification tool, considering stackers are often times 'not-so' diversified with involvement in other asset classes. To keep your "eggs lively" vs. stagnation from non-action...the ratio trading puts some 'risk' into the mix and turns your stack into a generator....should you desire to put it to work for you and do more than sit in your basement safe and collect dust.

Warren Buffett has it wrong. Precious metals can produce returns...and gains. The ratio trade is such a scenerio, whereby timing properly can provide for growth.

If your stack is already built....the ratio trading should definitely be on your "to do list". If you're new to the game and still stacking....then stacking in general at these bargain prices should be your priority.

Become your own bank..."Stash n Stockpile Weapons of Stack Construction!"

I was hoping for a ratio closer to 30, but my concern was will it make it to that point.

I was never able to buy gold because of price. I try not to buy fractional gold because of the markup. I sold 75% or more of my silver at $42.50/oz., only because I was not able to get back to my stack in time to sell at $48/oz. I've been buying back at $30/oz and under(originally started buying at $12/oz). $30/oz and up is hard for me to swallow.

I've got a bigger stack now than when I started, but I'll only be able to continue to add to it substantially as long as it's under $30. I may still add junk silver at any price below $40, but in much smaller amounts.

I don't invest in paper. You can take a guess as to what my other "hard assets" are by my screen name, and I feel very comfortable with that "stack".

So, my portfolio needs to be diversified, and I'd like to just add gold at these prices, but I'm just not able to financially. I had the incling to start trading for gold at a low ratio, and trade back to silver at a high ratio to grow my stack. I'm just not as "in tune" to this strategy as I am with silver alone, and I am in PM's for the longs.

(07-08-2012 09:25 AM)PM Montner Wrote: [ -> ]I'm 100% silver and have said I would swap an undetermined amount at 20:1. However, I'm not sure I can hand over a 20 roll of eagles for an ounce of gold or a 100oz bar for 5 ounces of gold.

Quote:Some analysts state that silver and gold bull markets have a tendency to run about 20 years. Some entities have stated that, at current rates of consumption, we will run out of silver in 17 years. “If” this is true, silver may not see another bear - just one last raging bull.

If this scenario plays out what will the ratio be? I really want gold but I don't think I'll ever allow it.

I've heard the same analysis about silver AND copper, as well as oil on a different time scale. I've been buying bricks of copper, and hoarding pre-1982 US pennies hoping this turns true.

HOWEVER, I am sort of skeptical of this analysis. Oil replenishes itself, and I am fairly certain silver and copper will either be found in new places; or because of higher prices(as with oil), newer technology in mining and exploration will make new sources economically feasable.

I'd like to think that my family(and yours), could become the Rothschilds of the future due to scarcity and inherited silver caches; but I'm inclined to lean conservatively. Of course, once these "fringe" analysis are confirmed, physical silver will be the new gold, and possibly "could" theoretically outpace gold.

(07-08-2012 07:57 PM)AgShaman Wrote: [ -> ]

(07-08-2012 09:25 AM)PM Montner Wrote: [ -> ]I'm 100% silver and have said I would swap an undetermined amount at 20:1. However, I'm not sure I can hand over a 20 roll of eagles for an ounce of gold or a 100oz bar for 5 ounces of gold.

Quote:Some analysts state that silver and gold bull markets have a tendency to run about 20 years. Some entities have stated that, at current rates of consumption, we will run out of silver in 17 years. “If” this is true, silver may not see another bear - just one last raging bull.

If this scenario plays out what will the ratio be? I really want gold but I don't think I'll ever allow it.

To be honest...I'm thinking it won't matter. If it gets bad enough...

The future is looking like a rocky road.

Which brings to mind another question. Let's assume apocolyptic perportions. Say silver jumps to a radical $1,000/oz. Will it really matter? I mean, who has $1,000 to pay per oz. when the economic tragedies are so dire as to cause $1,000/oz. silver?


Edit: Whoops, almost forgot why I was stacking in the first place......

(07-09-2012 12:55 PM)tinfoilhatdude Wrote: [ -> ]

(07-08-2012 09:25 AM)PM Montner Wrote: [ -> ]I'm 100% silver and have said I would swap an undetermined amount at 20:1. However, I'm not sure I can hand over a 20 roll of eagles for an ounce of gold or a 100oz bar for 5 ounces of gold.

Quote:Some analysts state that silver and gold bull markets have a tendency to run about 20 years. Some entities have stated that, at current rates of consumption, we will run out of silver in 17 years. “If” this is true, silver may not see another bear - just one last raging bull.

If this scenario plays out what will the ratio be? I really want gold but I don't think I'll ever allow it.

I've heard the same analysis about silver AND copper, as well as oil on a different time scale. I've been buying bricks of copper, and hoarding pre-1982 US pennies hoping this turns true.

HOWEVER, I am sort of skeptical of this analysis. Oil replenishes itself, and I am fairly certain silver and copper will either be found in new places; or because of higher prices(as with oil), newer technology in mining and exploration will make new sources economically feasable.

I'd like to think that my family(and yours), could become the Rothschilds of the future due to scarcity and inherited silver caches; but I'm inclined to lean conservatively. Of course, once these "fringe" analysis are confirmed, physical silver will be the new gold, and possibly "could" theoretically outpace gold.

New silver deposits will be discovered but a falling energy return on investment and likely remote locations will make them more expensive to extract. And I don't foresee the development of new mining technologies that sidestep the use of oil and heavy equipment to process increasingly lower-grade ores.
But what if Russia and China discover massive deposits and continue the price suppression schemes of the West? What if the US declares silver a strategic asset and we revisit a 1933 scenario?
Silver is an investment that, like all investments, has risks. However, at the current price I believe the rewards far outweigh the risks.

(07-09-2012 11:28 PM)PM Montner Wrote: [ -> ]New silver deposits will be discovered but a falling energy return on investment and likely remote locations will make them more expensive to extract. And I don't foresee the development of new mining technologies that sidestep the use of oil and heavy equipment to process increasingly lower-grade ores.
But what if Russia and China discover massive deposits and continue the price suppression schemes of the West? What if the US declares silver a strategic asset and we revisit a 1933 scenario?
Silver is an investment that, like all investments, has risks. However, at the current price I believe the rewards far outweigh the risks.

True, the risks I see are not being able to get cash for silver when it climbs, because no one will have any. But then, that is exactly why I would want silver instead of fiat. Or the digital currency is installed, but that would seem to be the mark of the beast, rfid chips and such, so once again, that's why I stack.

If they can crash the price of silver, you haven't lost anything unless you sell, but that's what they would want, you have basically given them your cash. But if you don't sell, you have a hard asset regardless, so once again, that's why I stack.

I look at silver the same way as oil. The oil sands were always way too expensive to develop; now billion dollar pipelines and huge operations can develop this because of the high oil price.

I equate silver to this exact scenario, regardless of a crash or not. The demand will only increase for tech gadgets and such, and as the third world develops, they will want their creature comforts just like we do. Therefore price will increase to the point where it will be economically feasable to develop these deposits.


I like your theory of China and Russia declaring new massive deposits to crush the price, I hadn't thought of that. Also, the NDAA, and the Executive Order from earlier allowing confiscation of private assets is always now a possibility. I don't believe they will pay market price for your silver like they did in 1933 with gold. They'll just take it. But essentially, that is what they are doing now with dollars, just behind the curtains. If that happens, price won't matter because no one will legally be able to give you cash for it.

If this happens, they won't get mine until I'm cold anyway, so that's null in my view.



But back to the ratio, all these scenarios(accept new deposits) seem bullish for the silver gold ratio, and at the extreme bull end(of price), would seem it would better serve to sell a portion for dollars instead of trade for gold to realize giant profits if cash is still a feasable currency? What's your take?

Quote:But back to the ratio, all these scenarios(accept new deposits) seem bullish for the silver gold ratio, and at the extreme bull end(of price), would seem it would better serve to sell a portion for dollars instead of trade for gold to realize giant profits if cash is still a feasable currency? What's your take?

I'm not sure I understand the question. I convert every FRN I can get my hands on into physical silver. This, above all else, is what I believe will bring the most profit in the next 20 years.
A short and to the point article on the declining EROI and its potential effect on the silver price.
http://www.silverdoctors.com/the-good-ne...d-news-is/

My topic of discussion/question is two parts: For those who have silver, but not gold(because of price or whatever reason), what ratio do you think would be a good time to trade silver for gold to diversify some?
(I'd love to wait until the ratio got close to 20:1, but will it get there?)

And what are your predictions for the future of the silver/gold ratio?

---------------------------------------------------------------------

Ratio's, percentages & price are all important to me. I believe you have to watch all three! Everyone should decide for themselves at what % (within their portfolio's) they are comfortable with the allocations of their investments and invest & re-allocate accordingly. As a whole, my portfolio of investments are something like 1/3 Stocks, 1/3 Liquid Assets (Cash, etc. for the short term), 1/3 hard assets (primarily longer term hard assets; physical gold, silver, agriculture, land, etc.). Whenever anything gets a little ahead of itself in terms of percentage, I will do some reallocation of assets just to keep them in balance.

However, within each one of the three areas of the portfolio, I also try to allot a certain % to the individual assets. For example, within the area of the longer term assets, I have about a 70/30% allocation of silver to gold (in terms of notional $ value). So if silver today is 58:1 to gold and in a few months it all of a sudden is trading at 30:1, I would definitely be allocating some of my silver to gold for the sake of re-balancing. If in 6 months it went back to a 58:1, I would probably swap some of the gold for silver. This helps to maximize better my longer term investments. I typically am not a "trader" with the long-term investments except for when there are these huge swings. They are not that common but do represent how silver is the more volitile PM. Everyone has to decide their own point of trade.

For simplistic purposes, suppose someone bought today at:
Total %
1oz. gold(@ $1,600/oz) = $1,600 (=60.0150oz. of ag) 37.50%
100oz. of silver(@ $26.66/oz)= 2,666 (=1.6625oz. of au) 62.50%
--------
Total is $ 4,266
======
As you can see the ratio is 60:1


Suppose 6 months latter the prices move to:

1oz. gold(@ $2000/oz)-NICE!! 25% = $2,000 (=30.00oz. of ag)-23%
100oz. silver (@ $66.66/oz)-NICER!! = 6,666 (=3.33 oz. of au) -77%
-------
$ 8,666
======

Silver has moved to a ratio of 30:1

Probably before it even got to this point, I would have opted to have re-allocated some of the silver for gold. In this example, one could sell just 30oz. of silver and purchase 1oz. of gold. It's like getting gold on sale for 1/2 off.

That would be one sweet trade!!

Another thing one can do, if they have some "dry powder", is to just outright purchase the asset that is undervalued to the rest of the other assets within the portfolio. Decide for yourself what % you want within your entire portfolio and re-balance it accordingly when needed.

tinfoilhatdude,

well, considering that Silver is currently mined at a ratio anywhere from 7:1 to 10:1 would suggest that somewhere in there should be the trading ratio to be of a fair value.
I for one do consider the trade/purchase gold vs. silver vs. gold, depending on what seems oversold/overbought. I am watching the relative price of these metals and sink money into the one that is most over sold at the time. Of course one wants to consider the GS ratio too. Altho the metals trade coupled to about 80%, there are times when one is the steal over the other. That's what makes my day. So eventually I am trading some metal back and forth to rake a little profit yet never have to get out of the metals, just in case if SHTF. And yes, you guessed it, SILVER is currently the steal... (MEGA BANG for the Buck)

keep stackin

[/quote]
Which brings to mind another question. Let's assume apocolyptic perportions. Say silver jumps to a radical $1,000/oz. Will it really matter? I mean, who has $1,000 to pay per oz. when the economic tragedies are so dire as to cause $1,000/oz. silver?


Edit: Whoops, almost forgot why I was stacking in the first place......
[/quote]

Gold is at 1600 and people don't bat an eyelash. That is why it good to have fractional silver. $1000 an oz is a good start!