If you missed part 1 read it here
It’s commonly known that silver is more abundant than gold. When looking at the amount held in the Earth, silver is about 19x more abundant. However, due to mining practices, only about 9 ounces of silver are actually mined for every ounce of gold.
Both gold and silver have industrial uses, however gold is primarily used for jewelry, only 10-15% is used industrially. Gold is so valuable, that it can be reclaimed when industrial gold no longer serves its purpose.
On the other hand, about 50% of mined silver is used industrially. Silver is much cheaper, harder to recycle, and is often lost forever once used.
Silver historically trades 15:1 to gold, and even 19:1 seems reasonable since there is an estimated 19 x more silver to be mined, but considering silver’s industrial demand, which is surging, and it’s difficulty to recycle, and even the fact that its mined at about a 9:1 ratio, I think whether silver goes 1:15 or 1:50, it is still way under valued compared to gold, and I believe it will continue marching up towards at least $40 an oz by next year. Right now silver trades about 80:1 to gold.
If silver were to suddenly jump to 9:1with gold it would trade at $300 an oz. this is about a 9x increase in value and that assumes gold stays where it is, which many analysts are saying gold could soon be valued at $3,000 or $5,000 in the near future.
A big question is why everything including metals, stocks, houses, and even bitcoin keep going up has to do with the fact that people have become wise to the game and know that the dollar loses value every minute of every day, forever, and that it is designed to do this intentionally, and therefore nobody wants to hold it long term, and even bonds are not desirable to hold, so an entire asset class (bonds) that absorbed many dollars is not growing or keeping up with other assets.
Anything scarce, whether metals, real estate, or art will continue to rise in value as long as people dump their dollars and put them into investments. Of course a recession could cause massive layoffs and that might result in crashing asset prices if buyers disappeared but even then, recessions are often good for metal prices, at least the run up to them is.
This isn’t financial advice, just food for thought, but I know what I will be buying now and for the time to come.