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$300 Silver is Beginning to Look Conservative! Here's Why
April 9 , 2011
Issue 92
Today's Gold/Silver Ratio: 36/1

Issue 103

Gold: $1476.40/ Silver: $41.00

SGS Notes: Wow! What a week for silver… since last weekend, silver took a $3.17 rise in price, and a reduction in the gold/silver ratio from 37/1 down to 36/1. While many of us remember fondly our purchases of silver in the $12-$15 per oz range, there is still much more room for newcomers to the market to realize growth in their investment.

$300 Silver is Beginning to Look Conservative! Here's Why
Nico Pantelis

The price ratio of gold versus silver has been dropping in the last couple of years in favor of the white precious metal. At the moment, the gold/silver ratio is trading below the "crucial" bandwidth of 40-to-50, currently hovering around 38x… [which] marks the beginning of a new phase in the bull cycle. The gold/silver ratio could finally be on its way to our target of 16x, the historical bottom in the last century. [Let me explain why I think that may well be the case.]

So says Nico Pantelis (www.goldmoney.com) in an article* which Lorimer Wilson, editor of www.munKNEE.com, has further edited ([ ]), abridged (…) and reformatted below for the sake of clarity and brevity to ensure a fast and easy read.

Recent Gold: Silver Ratio


Historical Gold:Silver Ratio

The latest research from Deutsche Bank shows that the gold/silver ratio averaged around 12x (hovering between 10x & 15x) in the Middle Ages. Furthermore, Newton fixed the gold/silver ratio to 15.5x from 1700 till 1873… [For a more extensive analysis of what the historical gold:silver ratio could mean for the future price of silver go here.]

The real price difference between both metals should be dependent on available quantities in the Earth's crust and that's where things start to get tricky. Scientists and geologists have varied conclusions, with some citing silver deposits over 20 times physical gold reserves, while others claim they are as low as 7x. I think the lower end of these assumptions may be more useful as far as future silver prices are concerned, since silver is processed and consumed at a rapid pace - mainly due to the emerging market giants China and India - while gold is being hoarded at the same speed.

Conclusion

If we take all the possible gold/silver ratio's from the past, combined with the assumptions of the physical metals probably available on our planet today, then we could see the gold/silver ratio drop to 10x in the current bull cycle. This brings us to a silver price - still taking my target price for gold into consideration - of up to $500 per ounce and more. I won't go there (for now), but it makes my current target of $300 silver look less exaggerated, doesn't it?

Stick to your guns, we still have a long way to go!

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Silver Bull Run
Lindsey Williams

 

Lindsey Williams who has been an ordained Baptist minister for nearly 30 years, went to Alaska in 1971 as a missionary and because of the executive status accorded to him as Chaplain, he was given access to the information that is documented in his book, The Energy Non-Crisis reveals new bombshell information.

In 2009, Williams talked about the plan by the global elite to sabotage the dollar, destroy the economy and America by 2012. If you think that Gold and Silver are expensive now , you have not seen anything yet says Lindsey Williams , gold and silver are the currency of the elite and anything on a paper (fiat money bonds stocks ) isn't worth the paper it is written on.

 

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