I want to talk about the current (roughly 84 to 1) price ratio difference between silver and gold. In other words, it currently takes roughly 84 ounces of silver to equal the price of 1 ounce of gold.
So what? Well, let's think about this a bit differently.
Think about gold which is typically thought of as used for rings, coins and bars. Yes, I realize that there is gold inside computers, but it is such a small amount that for most recyclers it is virtually impossible to make the effort worthwhile unless you buy some expensive equipment.
Now think about silver. Yes, silver is used for coins, bars and computers just like gold, but it is used for so much more.
For instance, there is an entire Wikipedia page titled "Medical Uses of Silver." This includes:
1) Anti-bacterial cream;
2) Wound dressing;
3) Endotracheal breathing tubes;
4) Catheters;
5) Conjugations with existing drugs;
6) X-ray film;
7) Eye drops (to prevent conjunctivitis in newborn babies);
8) Treatment of skin conditions such as corns and warts; and
9) Staining of cells to isolate irregularities.
And on and on. Get the point? Silver is super important to the medical community!
Outside of the medical community here are but a few of the uses:
1) Cloud seeding to enhance rainfall totals (some say this was done in Dubai where they just had unbelievable flooding), but I'm not here to debate the merits of cloud seeding;
2) Camera equipment;
3) Mirrors;
4) Solar equipment;
5) Engines;
6) Brazing equipment; and
7) Batteries.
Another thing about silver is that much of the silver used is not recoverable. An example is the silver used for cloud seeding.
Now, let's look at the relationship between two other metals- platinum and palladium. Traditionally, platinum was more expensive and often much more expensive than palladium. In just the past few years that dynamic has changed and now palladium is actually more expensive than platinum. I'm not about to suggest that silver is worth more than gold. That would be a dream, but not likely anytime soon. I am suggesting that a ratio of 84 to 1 simply appears to be beyond ridiculous.
Another way to think about silver is this. Back in 1980 silver surpassed the $50 threshold as the Hunt Brothers of Texas were trying to corner the silver market. It got close to the $50 level again in 2011, but not quite as high as it was in 1980. I read just recently that something worth 25 cents in 1980 is now worth $1, four times as much. So, that can be interpreted as meaning that $50 silver in 1980 is equal to $200 silver now. $200 silver and $2,300-2,400 gold sounds much more like a realistic scenario than what we have now.
Yes, anyone with a net worth of, say, $10 million or more who has a lot of money in gold might get a bit testy when reading something like this, but to say that silver isn't vastly underpriced right now just doesn't seem right when you think of all the critical uses it has along with the fact that when it is used it is often gone and not recoverable.
One more thing, and I don't claim to have the answer on this one. It seems that gold is much more likely to be counterfeited (because of the much higher price). I seem to remember reading that there are even counterfeit gold slabs out there that look really good. I haven't seen one first hand that I can remember, so I'll leave that commentary to others. My point is that silver might be a safer investment to own because you can always drop a 1964 Kennedy half to listen for that familiar ring tone.
I don't want this to become a heated political type debate with name calling, etc. But it is worth seriously considering that silver right now is vastly undervalued compared to gold. And, no, I'm not currently selling my silver!