Silver is my investment.
Over the years there have been alot of discussions and articles written on which metal is the best investment, gold or silver?
I choose silver for one reason, and one reason only. Gold to silver ratio.
The ratio is a very important indicator on which metal is over valued or under valued.
In 1792 the gold to silver ratio was fixed by law in the United states at 15:1. This means it would take 15 oz of silver to buy 1 oz of gold. If this was was still true in current time it would have silvers value at $83.00 an oz.
The silver to gold ratio didn't really get out of line with the 15:1 untill the late 19th century, during the 20th century the average silver to gold ratio was at 47:1.
The highest gold to silver ratio on record was back in 1991 when the ratio hit 100:1. In 2011 it hit 32:1.
Studies show that the current gold to silver ratio should be between 17:1-20:1. Even at the high side of 20:1 that would put silver price at $63. Oz.
Now many people would argue that the ratio should be the same as the mined ratio, which is currently 10:1 so for every 10oz of silver mined there is only 1 oz of gold mined.
I believe we will see this ratio come back in line, I do not see 10:1 but 20:1 would be my guess. With the rising industrial use of silver, this will put pressure on the supply, which is already heading into a deficit.
So my recomendation to you is buy silver untill the ratio proves that it is time to buy gold.
I am not a financial advisor, these are just my opinions based on facts.
Keep stacking my friends.
Follow me @raybrockman
Upvotes and resteems are appreciated.