Silver vs. Gold and Oil
The question on a lot of investors minds is where to put their hard earned money, on silver, gold or oil.
The historic ratio has stood at 16 ounces of silver to 1 ounce of gold.
Today that ratio is at 48-1.
In 1980 it took 1.5 barrels of oil to buy an ounce of silver.
Today it takes 5.3 ounces of silver to buy a barrel of oil.
Silver has been completely erased as a form of money by governments and banks.
Gold is still looked upon as a form of money but not as a favorable one amongst governments and central banks.
Silver has become an industrial commodity. It stands in the ranks of base metals. This perception is held by many. This perception of silver was born within the last century and it didn’t happen by accident. In 1947 an organization formed called the SUA (Silver User’s Association). No other commodity has garnered the respect to have its own User’s Association. The SUA formed from major U.S companies whose desire was to keep the silver price low in order to keep the cost of their production down. Today the SUA uses 80% of the silver produced in the U.S. With the help of government and central banks silver was completely demonetized and became what the SUA wanted, a cheap metal.
The one problem that arose from this, is that to keep the price of silver low, government inventories had to continuously sell into the market to meet demand. Now these government stockpiles are near their end.
The SUA petitioned the SEC to stop the silver ETF from trading. Why?
Because the SUA has successfully turned silver into an industrial commodity and the last thing they want to see is silver begin to gain it’s rightful place again. As a form of money. The silver ETF makes it easy for anyone to invest and with a 100% gain on the year, silver is starting to be an attractive place to invest paper dollars into.
Silver is undervalued compared to gold and oil. Silver should be trading around $40 to be historically in line with gold and oil and this doesn’t even take into account silver’s present day scarcity.
Silver was brought down sharp and hard 10 days ago but already it has almost recovered it’s losses. Look for $20 silver just around the corner.
