Sprott: “This Decade Will Be the Decade of Silver”

by | Nov 15, 2011 | Precious Metals | 119 comments

Do you LOVE America?


    Contrarian investor Eric Sprott of Sprott Asset Management, who, among other things, manages some of the largest precious metals exchange traded funds backed by actual physical gold and silver, says gold may have seen unprecedented growth over the last ten years, but silver is the investment of the next decade.

    Since Eric Sprott is well respected in alternative wealth preservation investment management and often sits well outside of traditional economic and financial advisory circles, and the fact that he has been right so far, we recommend you pay attention to and consider his most recent views on atypical investment vehicles.

    Eric Sprott interview by Patrick MontesDeOca

    Patrick MontesDeOca: Mr. Sprott, can you please give us the current situation in terms of price in the silver market? What you might see in the short term as it unfolds in the next six to twelve months, what is your forecast?

    Sure, I take a longer term view than six to twelve months. I’ve been involved in silver for about probably almost ten years now and of course the price of silver has done wonderful things in that time period even though recently it has come under a lot of pressure. My thesis being that even though the last decade has been the decade of gold, this decade will be the decade of silver. I can only imagine that it will go back to its historical relationship to gold of 16 to one in term of price. And as an example of 16 to one, with gold at $1600 it would suggest that the silver price should be $100. And most of the data that I look at certainly as it pertains to day to day markets, and I don’t mean the Comex, we’re not talking about that, we’re talking about the physical market for silver, and we have data points that suggest that buying for silver by the public is almost on a ratio of dollars of silver being bought to dollars of gold being bought. We can see that the U.S. Mint’s data that comes out every month, and pretty much every day, so for example, the amount of silver coins being bought through the mint’s service – they sold 50 times the number of silver to gold coins. This month it’s actually running around 70 to one. This really means people are putting as many dollars into silver as they are into gold. But there is nowhere near the amount of silver to invest in as there is gold.

    P: I think a lot of people would like to know, potentially, how soon would you see this change taking place?

    Well that is a very tough question to answer because there are forces at work every day, right, and you have to exhaust those forces or they have to have some reason to change their view on what’s their best interest in the paper markets. I’ve always imagined there, or hoped that some industrial user of silver will say “Oh, I can’t get the silver” and the word gets out that there is a physical shortage. Or the people just continue to buy at the rate they are buying, because you just can’t keep buying silver on a one to one ratio to gold and have the price be 50 to 1. That is mathematically impossible.

    P: So there could be the possibility that we may have a lot less inventory than what appears to be told on these government reports.

    E: Sure, nobody really knows how much inventory there is. We know how much is in Comex, we know how much the PSLV owns, but theoretically that shouldn’t be available, beyond that, I just don’t believe there’s huge amounts of silver and we are buyers of silver every day. We’re very often delayed on our shipments. You know we could go in and buy 2 or 300 thousand ounces and we sort of get the common “Well, you know that shipment is going to take 2 or 3 weeks”, which really means, I don’t think there is really any ready silver inventory that’s just waiting for someone to say “Ok fine, I’m going to buy” [then] “We’ll deliver it to you” because it’s not really that difficult to deliver silver.

    Source: Seeking Alpha

    For now, there seems to be enough silver to meet industrial demand, but there are certainly differing opinions out there about whether or not there is enough physical silver available to meet investor demand (and/or industrial demand as new technologies emerge). As Mr. Sprott points out, any number of things could cause a “run on silver.” Our view is the more likely scenario will be investor demand. In a nutshell, as we commented in Here’s What Happens Next, when Europe goes down, and it will, investors will shift their capital to US Treasuries in the (misguided) hope that the US dollar will protect them. This will begin the next phase of the crisis, as stock markets around the world would collapse in such a scenario. For a while investors will move to cash, but it will soon be realized that the US dollar is not all it’s made out to be, and as a consequence capital will flee to the safety of precious metals, which will at that point become the safe haven assets of last resort. Very few people are buyers of precious metals when compared to other asset classes. But once the media picks up on it, and your neighbors are talking about it, and the price just keeps rising, you can fully expect bubble buying to become a major force in the coming precious metals price rises.

    Mr. Sprott put forth the $100 price point for silver, but it is important to remember he is basing this on the gold/silver ratio, which is running in the 50-to-1 area and has historically (depending on your historical date ranges) fluctuated from 16-to-1 up to about 25-to-1. The point is, that as gold rises, so too will silver, but the added benefit for those holding silver assets is that silver should begin to close the gold-silver ratio as well, which means silver should, in a perfect world, rise at a faster rate than gold. Thus, in our view, $100 is a somewhat low-end long-term forecast (Sprott himself knows this, but is basing his forecast on current prices and ratios). Consider what might happen in the event gold goes to $3000 and the gold-silver ratio drops to 20-to-1. At that rate we’d already be talking about $150 silver per ounce. As things heat up in the global economy, we would not be at all surprised to see silver go to these levels or higher.

    It may sound crazy, but if you consider the factors that could drive silver over the next decade, including industrial demand, investor demand, the gold-silver ratio, and irrational bubble buying, it is not as unreasonable as it may sound.

    Hat tip Steve Quayle


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      1. I’d settle for 16:1 right now at the current price of Au


        • That sure would be sweet!

        • Silver is still dirt damn cheap. Compare the other precious metals prices and ask yourself if any of them can replace silver.

          • IMHO, silver is a BUY if you can get it under its 200-day moving average. It is well below that now. I bought another 400 ounces today.

      2. Silver and gold have been performing real well as of late hasn’t it !

        • I think it is just consolidating for the next run up & some major banks runs. Wake me when it holds above $50.

          • technically silver is in a bear market. It hasn’t reached its earlier nominal high of $49 thereabouts. I like the concept of what the metals provide relative to paper, but have been wondering if staying too long at the party is a good idea. I’m familiar w/sprott, and he is a salesman. Some is good for insurance, but I’m beginning to think that those who are not diversified could get creamed, esp is they bought late. Old saying goes Silver can make a poor man rich, and a rich man poor.

            • G and S are in a bull market, with 3 to 10 more years to run. Ya ain’t seen nothin’ yet, folks.

            • ranger…I am relatively poor man. I’m ALL in with silver. It is honest and the pre 64 coins that I hold will get me anything that I need to survive in my community. I am high in tangible items as they will be barterable. When shtf in areas like mine, the govt will be gone for quite some time…when they show up they will not be welcome.

              With all that is coming to pass, would you rather have a pile of pms or your diversified pile of fiat.

              Take a moment to think about how the earth works.

      3. Ok, now I love silver, have lots of it and think its on of the best “SHTF” things you can have; but isn’t this Sprott the same gay who had an ETF and then changed the standard to less than an ounce in reserve for shares sold; and then sold a bunch of his ETF when silver was over 45? Just wondering if this is the one and the same?

        BTW I think some ETF’s are great for those who want to invest in silver/gold and can’t afford the self directed IRA version.

        • I’ve posted this before here, but still something good to remember:

          Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants – but debt is the money of slaves

          -Norm Franz, “Money and Wealth in the New Millenium”

          • I have a new favorite quote. 🙂

        • I didn’t know Sprott was “gay”.

        • Yup……. That’d be the guy! If you sell silver, what else are you going to say? Too bad his actions don’t always match his words…
          Look at the the “Could’s” “It’s possibles” and the like in that story.

        • I believe he sold a bunch of ‘paper’silver and reinvested in physical.

      4. He talks like he is assuming that there will be a next decade… I cannot see how the game can be dragged out that much longer before it all comes crashing down. I own plenty of physical silver but I do not expect to get rich off of it. If it ever reaches the price point the author is assuming then inflation is going to be absolutely murderous and you could not sell it and realize the profit. My silver is for the day when cash is worthless and I might be able to buy a house or land or a blue water sailboat under the radar for pennies on the dollar from one of the desperate yuppies that didnt see what was coming.

        • What kind of blue water blow boat.

          • Assuming I had a selection to choose from, I would choose something 40′ or bigger up to around 70′, one with a full length keel and of steel or aluminum construction, preferably gaff rig, marconi would be my last choice as it is nice for day sailors and pretty boy admirals but too fragile for deepwater cruising. Basically something that would take me and my family to a remote South Pacific island when the government gets too restrictive or when the biowarfare starts.

            • Nautor Swan ’53 will get you there and back, real fast, in sumptuous comfort. That’s if you plan to come back. Me, I’d rather lay anchor in some tropical lagoon and wait for the storm, metaphorically speaking, to pass over, while hoping in the meantime the local pirates don’t come up on radar.

            • @ M H M : Yup, a good heavy built sailboat would be great. I have a Catalina 27…..like in which a crazy guy named Childress did a circumnavigation in…..but in my mind a 27 is way too small for blue water if you hit bad weather. I like mid 40’s ….nbot too big to handle with a short crew…..but built heavy enough for blue water.
              I will also be looking for a deal……
              Montgomery County Texas.

            • @European American,
              The only thing that concerns me about sheltering in a lagoon, metaphorically speaking, is catching one of those nasty tropical diseases from hostile natives. The threat of biowarfare is real and even if it were not unleashed, their is always the threat of a pandemic from natural causes caused by a breakdown in sanitation and lack of fresh water for hygiene. A honest-to-goodness bioweapon attack would require extraordinary measures to survive above and beyond what most of us have available to us. An airborne contagious pathogen would require physical isolation and that might not even be sufficient. To stand a good chance of survival, I would want to have an airtight bunker with a multi-stage filtration and ventilation system capable of sustained overpressure. And I would be prepared to live in it for months, maybe up to a year or more if it was a sufficiently nasty and persistent pathogen. Basically, you have to wait until the host population has been reduced to a point where the pathogen cannot find new victims before the the infected host has died. If the pathogen was something like anthrax that hibernated in spore form or could survive in a animal population like plague does, it might be impossible to reemerge. Since I don’t have any of the hardware listed above, I would be interested in the next best option which is physical distance and isolation from other humans. An uninhabited island in the South Pacific would fit the bill. If the biowarfare did not completely destroy society then there might be hope that after some period of time, maybe five years or so, there would have been a cure developed or available. If not, and the population was on the brink of being wiped out with frequent recurrences of pandemic, I would not want to inhabit or return to the US anyway.

        • That says it all. It’s all about the money to all of these guys. OUR money. They are no better than the snake oil salesmen…..

      5. I am holding my silver for life. Yes I might sell little bits and pieces over the years as required but I am basically treating it like a retirement fund or as my emergency money in a SHTF scenario. Any purchases or sales will be private and my own business. I still want to be in gold as well. You never know what stunts TPTB might pull on the people.

      6. Gold to be used to purchase the next currency, if there is a next currency. And Silver to use between now and then.

        PM’s not as an investment but simply as a means to protect one’s purchasing power.

        • EA; I have to disagree with one thing you wrote. You say Gold is the next currency. If that is true then I’m sure Silver would be as well. I don’t see even 1/10th ounce gold pieces being used for small items. The currency of small goods / services I think will be silver. The currency for homes, cars, and big ticket items I agree – will be Gold.

          • Don’t think he meant that Jim. Countries will have to back their new currency on a basket of wealth. The top three will be gold, energy & food.

          • Jim, I said Gold will be used to PURCHASE the next currency. There is a difference. But I’m just speculating that it will be used in that capacity. Who really knows? A global currency? I hope not.

            Yes, a few ounces of gold to purchase a home is certainly within the realm of possibilities.

          • jim
            i see you as informed, yet scattered brained when it comes to your thinking on these matters…..maybe one day youll get it.

        • I never purchased any of my PM’s as an investment. They were always insurance for asset protection. I am one that feels no matter what happens, I’ll always be able to trade pm’s for other goods. it has been done for thousands of years, and won’t stop now. I also feel that as history has shown, a black market will always surface to deal with the failure of a fiat currency. Always has, always will. History is a great teacher if we will just study it.

        • EA…that’s a good call…if there is a “next currency.”

      7. PS Gold SHOULD be well over $2K right now and Silver well over $50.

        TOTAL CONTROL AND MANIPULATION by those running the show. TOTAL! Don’t hold your breath, but more importantly DON’T SELL YOUR SILVER/GOLD. THEY want it and they are waiting for all the weak minded to sell so they can have it. When they’ve got it, then watch the prices soar into the stratosphere.

        • you are dead on correct. If you had control of the market like they do, wouldn’t you do the same thing? I also look for at least one more knock down of the price of metals. They hope this will run all the little guys out, but in reality, that strategy is about dead in the water. I didn’t sell on the last rundown. I bought more, and will again. bring the price down again, I’m ready for another sale day. keep stackin…

        • Thank you. Best response of the day.

      8. sold my silver and gold when it was high.Changed my thinking as to what would really be of value to me if the sh*t hits the fan. Ammo(all calibers) nonperisable food,seeds,medical supplies.Guess I never could find a good recipe for cooking a silver or gold coin.Not putting you guys down that are investing in s&g just suggesting more diversification to other things besides those two. Good luck all!

        • Lindsay Williams said TPTB dropped the price of gold to scare all you gold holders; so they could purchase it at a lower price when you sold..smart,huh??

          • Not so smart actually. The Chinese gobbled up all they could at $1500 an oz. That puts a floor under gold and tells you where the smart money is going:

            to gold, not silver.

        • Best to have it all. Now that’s really being prepared. It’s also easy to say, not always easy to pull it off. Guns and ammo first, and Gold and SIlver down below water filters on the list of priorities.

        • you underestimate or misjudge those gathered on this board. I for one don’t just hold precious metals as my only prep.I have all the other goodies you mentioned. I believe in having a well rounded prep program. I imagine most silver bugs here also have other preps to go with their silver.

      9. He manages a fund that trades in silver and he is responsible for making profits. Of course he wants to talk the price of silver up. His funds will show great numbers if he is correct.

        Not that owning precious metals is a bad thing. On the other hand knowing where to dig them out of the ground and having the means to do so is better.

        Harsh Mistress is right, speculating on your precious metal stock is irrelevant if you are looking to store wealth for a post fiat money scenario.


      10. Sprott is the ultimate silver bull, it’s his entire portfolio and he sells silver for a living. I am still unsure of it. For years it was $5 per oz. I need an explanation of why it was $5 an ounce then, and now it will go up from $35.

        In any case, I love nothing more than going to a coin show and buying old dimes, quarters, and half dollars for whatever the melt value is at that time. Nothing sounds better than the sound of a walking liberty halves clanking together, and what a great feeling to have a coffee can full of real silver.

        • I was thinking Morgans with CC on them.

        • The reason for a steady $5 per oz for silver and $300 per oz for gold reflected the relatively stable inflation and a strong dollar that prevailed for more than a decade. The current prices are an indication of the true amount of inflation and the value of a weakened dollar from running the printing presses nonstop for the past several years. One thing to consider is the spot price versus the quoted price. If the quoted price takes a nosedive then that doesnt necessarily mean that the spot price will follow. Consider what would happen if the price crashed to $5 an oz. I would be buying every ounce I could, borrowing money to buy more, and selling everything of value I owned to buy yet more. And I wouldn’t be alone. Everyone who follows silver would be doing the same because it would be obvious it was undervalued. And yet, there would be no pjysical silver anywhere for purchase at that price. You would have to pay far above $5 to get physical silver or be willing to wait for months or longer for delivery.

          • A documentary on the Federal Reserve ran on the tube yesterday, 11/14. It was an older piece from around 2000. It stated that at that time they were cranking out 250,000 bills of differing denominations equaling 400 million dollars, face value, per day.

            • China buys One Billion FRN’s every day to suppress their RmB.

              Uncle Ben has to keep the presses churning to keep up with demand.

      11. silver and gold,silver and gold……Burl Ives from Rudoplh the Red Nose Reindeer…..just in the holiday mood.hahaha

      12. I think copper with a full metal jacket should be valuable.

      13. I’m sorry that should be lead with full metal jacket.

        • If you lived in crazyfornia you would have been right the first post.

      14. I was talking to my metal guy as I was making a purchase and I asked him straight out what are their sales like? (This is a guy I can talk to, he lives down by the coast and likes to go shooting and he travels up here to the high desert and we go shoot in some secluded spots where we wont be bothered.) Anyway he said “all” of his traders were in on silver. They jumped in hard just as Greece and Italy were doing their thing. I know from past conversations his traders are the ones that are 500K+ on a trade. Silver spot was $33 to $34 ish. I just got a purchase today out of Mass. And it only took 6 days to get here. If you are not getting your shipments out of a depository inside of 2 weeks at the max, you had better find a different metals broker.
        They have a research dept. there and they have found that JP Morgan is real deep in silver. I said how deep? He said not quite Hunt Brothers deep but if they moved hard they could put a good dent in the silver market. They seem to think JPC hasn’t got the horsepower to do what the Hunts did without being seen. They do seem to think that the next 12 months silver is going to be “FAT.” Sounds like you oughta buy it while you can, might be a last chance…. And they are looking for the 16 to 1 ratio as well, this is nothing new.

        • Hammerun, there is a profound difference between the Hunt Brothers and JP Morgan. As I understand it, in 1979 and 1980 the Hunt Brothers bought up all the physical silver as well as mountains of paper contracts in silver, creating a massive shortage that had the inevitable effect of a huge price spike.

          When JP Morgan assumed the assets of Bear Stearns in 2008 part of the package included a huge short position, which is a bet that the price of silver would drop. In order to complete the transaction, JPM has to buy more silver than exists in the world. So they came up with a clever solution. They place large sell orders for the paper contracts which show up in the commitment of traders report, the world sees the big guys are selling, so the world sells in advance, dropping the price, and then JPM buys at rock bottom prices. They repeat this process over and over and over, creating extreme volatility. Eventually the manipulation will be over and silver will be allowed to reach its true market value, which should reach into the hundreds of dollars per ounce in the next ten years, in my humble opinion.

          Summary: Short term it’s got great growth potential. Mid term good barter value. Longer term a store of wealth even if FRNs become worthless. Really long term it can be a medium of exchange for real estate or farm land. What’s not to like?

          • When JP Morgan assumed the assets of Bear Stearns in 2008 part of the package included a huge short position, which is a bet that the price of silver would drop. In order to complete the transaction, JPM has to buy more silver than exists in the world. So they came up with a clever solution. They place large sell orders for the paper contracts which show up in the commitment of traders report, the world sees the big guys are selling, so the world sells in advance, dropping the price, and then JPM buys at rock bottom prices. They repeat this process over and over and over, creating extreme volatility.

            I agree with this but that said according too sources JPM as we sit here are buying. Physical, paper it doesn’t matter. Increasing their position in the market is the destination.
            Should they sell off high in total it will slash the market spot, hanging the small investors. IE; us. This has been happening for eons.
            The guy I am talking to called last night confirming I received my order. We talked for about 30 minutes about the market situation and that what’s going on. Their research dept. thinks that the market today is strictly headline driven otherwise it doesn’t make any since. This set of parameters that they work with would have at any other time would have driven metals out of sight.
            Just so you know this isn’t some pawn shop on the corner, this is a company you see advertised everyday and I mean everyday. They had a conference with a woman that came from the Austrian Mint. And she explained their projections.
            She said that due to the current world economy coupled with rising demand, fear, pre positioning and asset protection that they project the future demand on all metals the prices would rise exponentially. Their price projections on gold in the next 4 to 5 years was difficult to believe. Mainly due to the inability of the mines to produce supply will fall way short of demand, driving gold way out beyond common investors thusly resorting to an affordable product, Silver.
            My thing, I am doing silver now. If there is anything to what this woman says and I mean anything close, those that are not preparing now are going to be in it deep.
            My belief is; what we are involved in and exposed to today is a whole different animal. And we had better learn to adjust quickly. Those that are happily swiveling on their thumbs thinking the future is all going to be just peachy and are willingly not adjusting themselves accordingly and blindly following this “FOOL” we now have in 1600 Pennsylvania Ave. are in deep shit and God help them.

      15. im glad im me. im not sure many of you stand a snowballs chance in hell of survivng shtf.

        • I’m sure people will be simply FLOCKING to be near you, Eeder. Yes, I can certainly see you as the very heart of a community of survivalists. Your integrity and your kindness will draw people just like moths to a flame.

          Ahhhhh……Eeder. Where oh where can I find you?

          • you cant find me and i sure as hell dont want you or anyone near me… if i had to count on you or anyone on here… i would certainly shoot myself in the head now… daisy… youre a joke… you are not a survivalist.. in any way.

      16. maybe the government will be there to save you and the kids. thankfully , and god willing, i will never have to deal with any of you. god bless you.

        • and what makes you so special? some ‘leet training? your mountain of black rifles and ammo? your basement full of MREs? come shtf survival is going to be luck. you could have all the training and preps in the world, and still catch a stray round from a few miles away or the common flu.

          • hahaahahaa… what makes me special? pal… i have the eye of a tiger… i wouldnt want to mess with me… hahaaha… what makes you special?

          • ive got guts, determination, toughness and smarts that will far outlast any of you twits… just listen to yourselves… youre still debating whether the freaking CAS is a worthwhile organization… for the kids!… hahaha….. are you people serious? if you are counting on any bloody agency to do anything but rip you a new one and beat you down one more notch… you people are a bunch of fools and harmful to yourselves, your families, and everyone that ever would have to encounter you or deal with you….youre debating thing i already know…. and thats the other thing i have…. i am willing to do alot of things to survive that many of you couldnt contemplate …… you people need to have a dose of reality.

        • big sis – is that u?

        • Yeah, well, see you at the top of the hill, you smug, selfrighteous pig fucker.

          • PO’d patriot,

            I think I was too nice to eeder. I like your reply better.

            • just matt.. i think your soft… and i think thats being to nice.. i think youre yellow too.

          • Whats the problem?

        • eeder,

          You sound like a real peach. I find that those who make rude remarks about people they don’t know are typically worse off than those they are judging.

          • just matt
            you sound like a flaming ferry.. “dont be so mean…” hahahahaha youre an idiot

        • What’s wrong with pig fun?

        • How LAME!

        • hey @eeder , backoff of @ms. daisy, ya doggy doo eatin’ stinky breath inbreeder! she is one of the good guys here!

          • no nina…. youre wrong again.

      17. We are going to see silver to the moon!…soon….

      18. First of all, let me just say, I hold silver, and I want
        to buy more ounces. That said, WAIT! I’m going to
        change my thesis.

        Have you seen all the adds in the newspapers? Last nite,
        goldline ran an add on tv for U.S. mint silver coins.

        Now, here’s an article on the internet (along with all
        the other dozens of them elsewhere). My Point? Silver
        everywhere! Silver this, silver that! You know what
        that means, right? The top is in. As per all the
        investment books I have read in the past, when your cab
        driver is advising you to buy SILVER, it’s time to get
        out! I’m waiting until after the crash, then loading up.

        • Think there will be any sellers when the market takes it down with a veeerrrry long delivery wait while they use OP’sM (cash only) with lots of regs?

        • What??? First of all, Goldline have been brought up on charges. Pfff… Goldline. Really? S and G on the financial channels does NOT consitute a manic phase. Or wait- sorry- are you being sarcastic?

          Silver is but a blip on the investment chart. Miniscule. Nobody is buying it. It hasn’t even hit the mainstream. HellLLOOOOOO

      19. well than I guess I will have to save my silver bullets I was going to use on all these bloodsuckers

      20. its all just a game and every game comes to a end

      21. A wealthy preacher, who has been faithful to God his whole life, is visited by an angel one night. The angel says, “God sent me to let you know that you’re going to die in two days. But don’t worry, you are certainly welcome in heaven.”

        The preacher says, “That’s great. But listen, I know God has this rule that we can’t take anything with us, but do you think he could bend it for me? I’d really like to take something with me.”

        The angel says, “Well, I’ll ask, but I can’t promise anything.” The next night, the angel returns and says, “God told me to tell you that he’ll allow you to bring a single suitcase, with whatever you want to bring along inside of it.”

        The preacher is excited, but can’t decide what to bring. He thinks of bringing along all of his money, but he’s not sure what kind of currency they take in Heaven. He decides instead to trade all of his money in for gold, since gold is good anywhere. So he buys a whole bunch of bars of gold with all of his money, sticks it in the suitcase, and the next day he dies and finds himself before the Pearly Gates with the suitcase by his side.

        Saint Peter stops him and says, “Sorry, but you can’t bring anything in here.” The preacher says, “An angel told me that God said it was okay.” Peter says, “Well, if it’s okay with God, then go ahead through. But out of curiosity, what do you have in there?”

        The preacher lays down the suitcase and opens it up, showing Saint Peter all of the bars of gold. Peter gives the preacher a funny look and says, “That’s what you brought? Pavement?”

      22. The long delivery times are a result of production
        backlogs, not silver supply. Sprott brings up the old
        ‘silver supply shortage’ meme. There is NO shortage of
        silver for investment demand or industrial use. (I have
        a link buried in my notes, spent a few minutes, could’nt
        find it).

        Also, the ’16 to 1′ ratio is always brought up. That
        ratio came about as a result of a VERY RARE instance
        when the HUNT BROS tried to corner the market. The
        average gold/silver ratio runs somewhere around 50 or
        55:1. Again, you have to watch out for the people out
        there who MAKE THEIR LIVING buying and SELLING silver.

        I can’t wait for the coming market crash, I expect to
        pick up silver at around $20/oz. Hey, I may be wrong,
        it’s just MY opinion, but, I’m waiting it out, keeping
        the powder dry……………..

        • HM, do some research. The 16:1 ratio has been in place since gold and silver coins were used as money. First it was the gold dollar. When they started using silver, the silver coin was made 16 times the weight of gold, to make them equivalent in value. Also, silver is about 15-17 times more abundant than gold in Earth’s crust.
          The only thing more annoying about these ignorant comments is the confidence with which you express them!

        • The 16-1 ratio is because that is the ratio at which it is present in nature. Silver, created in the cores of dying stars in the fraction of a second it is going supernova, is 16 times more common as an element than gold which also comes from the same supernova source. Regardless of how much of each element has been mined, it will always exist in the earth’s crust in that ratio.

      23. Since half of silver demand is industrial, it could drop in the event of economic crisis if investment demand does not pick up the slack. However, it will still be above what I paid for it last year. I see no reason to convert it to cash (I have plenty of everything) in hopes of timing the market because I know that is going to be worth less in the future.

      24. There’s a lot of silver coming on line from producers, including a number of “Juniors”.

        The next ten years will be the “Decade of Silver” alright:

        Silver supply.

        Speculate with silver, invest in gold, hoard your lead. They won’t be making anymore lead after the SHTF.

        • What Jr’s in U.S.

        • SHTF, there will be plenty of Pb. In every out-of-gas car on the side of every street. What is really the limiting factor is primer caps.

      25. Drudge Report-
        Gerald Celente, burned by MF Global for 6 figures!
        Trend forecaster, maybe.
        Poor bastard should have seen that one coming.

        • That was only part of his investments. I watched the interview. he also holds the physicals himself. he has been buying futures, holding them for a time, then selling them, and buying more metals for years. He was about to sell his contracts in December, and buy more physical. But he got caught in the downfal of MF global.

          • He holds physical metals which he has purchased previously.

            When he wants to buy more he buys the option and takes possession of the physical gold at the expiration of the contract.

            He would only sell his option or allow the option to expire if the market price were to drop below the option price.

      26. I think metals are a double edge sword, they cut both ways. Thus I have not invested in physical metal because I worry the government will repeg the value to what ever they want.

        I’m rethinking my stance to use physical silver as wealth insurance. For the sake of this illustration let’s just say I have $1,000,000 in savings, 401K, IRA, Annuities or savings. I’m going to move $233,333 into physical silver to insure post collapse I still have my $1,000,000 even after I’ve lost all my cash or the cash is worthless.

        So if I think silver goes to $150/oz I need 6,666 oz.of physical silver, present value, to insure my $1,000,000. At present value I’m comfortable with moving 23.33% of my savings into silver. It will never be worth nothing. Even if we end up with a recovery with out a systemic financial collapse I don’t think silver will ever drop below $15 / oz.

        While physical silver is a double edge sword, at current values, I think worst case I’ll take a 50% hair cut. The worst case senario for physical silver is a recovery and that’s a best case for me. To much of anything is not a good thing. Diversification is key

        • 50% of something is better than 100% of nothing. When the dollar goes, it won’t buy anything. But silver or gold will always be accepted by someone for trade. No matter what the government does, a black market will work around the rules. Just because the government dictates a policy, doesn’t mean people will follow it. they will find a way to get around the law.

          • That’s what I was saying. Economic recovery is a good thing, but in general metals fall in value during a recovery.

            Silver can be used now, I just had to have a crown put in and the dentist charged $1248. When I put 20 1oz. bars of silver on the counter and asked him if he would accept it as full payment he took it. He didn’t think about it, he didn’t check the price, he just handed me the paid reciept.

            My net cost was deduced by 37% or $780. What I learned in the barter was just to lay it out there and ask if they accept. After that is was a silent transaction, reciept issued and the dentist collected the bars quickly went to the back office.

            I thought it was cool because I never tried it before. If you think about it bartering is just another survival skill we need to learn.

            I don’t think the deal would have worked if I tried it with gold, but those 20 shiney bars of silver did the trick today.

      27. so if silver goes to over two hundred an ounce, what could you do with it other than buy land? if you sold it for worthless paper, you’d have nothing.

        • No doubt. At some point, depending on conditions and if it nears bubble peaks, it would probably be a good idea to unload it by trading into another asset… Real estate may be one of the best investments out there 5 – 10 years from now.

        • One could pay off previous fiat debts, purchase just about anything that was used that another person owns out right (boat, car, RV, business, airplane, farm equipment, land, home that was getting ready to be fore closed on). Depending on ratio and spread fee, swap up for (gold).

        • If Silver goes to $200 gasoline is probably $10 or even $20 so a one ounce coin might fill the tank. Think of it this way silver is now $35. What else is $35 – 2 bricks of 22LR maybe? If silver goes to $200 and a brick of 22LR is a $100 its parity if the ammo stays the same then you sell your silver and buy the ammo.

      28. there’s that “you’re comment is waiting moderation again”.

      29. the worlds population will triple by 2050… according to my umass boston professors in 1998… agricultural land / water and precious metals worth / value will grow with the population growth as more and more people desire modern goods and services as the americans have! basic human greed = will insure these investments are worthwhile to invest in now while still affordible! buy now as the market is being intentionally suppressed by the imf to control real inflation occuring right now! now is the time to buy! no matter what the price is 1/4 25% of your wealth should be pm’s store safely securely physically near your home.

        • you are bizzare nina.. but cool… well sort of… except this snooping crap.. oh well.

      30. I believe, that any investment. Gold or Silver, is good.
        When the American dollar, is worthless. What are you going to barter with?
        My favorite is pre 65′ cause first, its spending money, and second, is is 90% Silver.
        When buying, small items. Like food,water,medical supplies. Its easier to use silver coins, rather to use silver rounds. Gold and Silver, has been used since the beginning of time. Even if it did drop, to $20. or even $15. an oz.. It would been better than nothing.
        It is very difficult, to predict the future. So if everything does fail. At this point, a great investment is firearms and ammo. Which should be on the items to stock, is nothing else, then protection.
        David Paul

        • the great thing about pre-65 silver is that almost everyone on the face of the planet recognizes it. I would caution against buying guns and ammo unless they are bought thru a private sale with no paper trail.It looks like we’re leaning toward of becoming a nation of rats in the future and if martial law is ever declared, the first thing to be confiscated will be weapons and your friends, neighbors will give you up for a few meals when the food runs out.

      31. All the gold bugs will be crying soon.
        Give it another 13 months and it will be all over.
        The crash will last 2 to 3 weeks. It will brutal.
        I have been studying the gold charts since 1976 and firmly believe that this will be the last and the most in-famous bull trap ever!
        The ultimate suckers rally !!!

        • Which part of currency/bond collapse don’t you get?

        • Good luck, we’re all counting on you Phil Bob.

      32. I see no reason to believe that silver will go back to its historic ration of 1/16 of gold. Gold is being stockpiled by central banks around the world. Silver isn’t. Silver is still a great long-term investment because the dollar will someday be worth zero.

      33. CarpenterBee73: see article, available from 321-gold
        yesterday, http://profitimes.blogspot.com/2011/11/platinum-cheapest-precious-metal.html. “..When we look at the
        daily gold-silver ratio GOING BACK TO 1920, we can see
        that the DAILY average (52.32) doesn’t differ much from
        monthly average of the last 40 years (56.42)”.

        Uuhhmmm, we ARE talking about the ratio of the price of
        gold to the price of silver, aren’t we? You said, “…
        the silver coin was made to be 16 times the weight of
        gold…”. What? Wow, those are some BIG coins!

        Please don’t embarass yourself further.

        • Going back to 1920? Are you kidding?
          You’re not going far back enough. Not by 100 yrs!
          The Federal Reserve Bank alone was created in 1913! Just to give you an idea how far off base you are.

          Here’s a PICTURE. Defined by the The Coinage Act of 1792 (read SEVENTEEN ninety two) thankyouverymuch. Yes, the U.S. silver dollar is a bigass coin compared to the U.S. Gold dollar, duh. Scroll down 7 or 8 pages (tho it would behoove you to read the whole article…):


          1920… LMAO

      34. The Gold/Silver ratio is trending down again. Means higher silver prices in the future.

      35. “…people just continue to buy at the rate they are buying, because you just can’t keep buying silver on a one to one ratio to gold and have the price be 50 to 1. That is mathematically impossible.”

        Sprott needs to take a math refresher course, as this is absolutely mathematically possible. It’s like saying people can’t keep buying Big Macs and iPads at a one to one total dollar ratio and have the price be 200 to 1 (or whatever it is). The total dollar volume for two goods bears no particular relationship to their per-unit or per-ounce price. I’m becoming more and more convinced that Sprott is a snake oil salesman, and the people who bought PSLV at a 20% premium are suckers.

      36. The gestapo already has all in it’s sights via data bases. How many preppers will really risk life in prison for not turning in their guns and gold.
        The few stalwarts will be ratted out by friends and neighbors for govt rewards before most even realize SHHTF. Check-points will nail the rest of the sheeple

      37. Wasn’t a 1 oz. gold coin called a 50 dollar gold piece at the same time a 1 oz. silver coin was called 1 dollar? 50 to 1 around the year 1900.

      38. Dear ALL,
        don’t buy the gold n silver through ETF,
        the government manipulate the price of gold n silver through the ETF electronic systems,
        encourage to buy the physical or bullion gold n silver,
        WE all must awake.

      39. ETF is fraud,
        ETF is the weapond and tool which being used by big central banks to manipulate the price of precious metals.
        We all MUST aware this.
        otherwise everbody talking about the price of gold will go to 3000 n silver will go to 150 is useless.
        as long as ETF ongoing, the price of gold n silver will drop!!!
        GRASP the gold coins n silver coins as much as u can…

      40. “Behind every cloud is a silver lining” In essence what we need is more rain. Get the picture?

      41. Why isn’t anybody mentioning Max Keiser? He understands that we are into the final stage – systemic unravelling. He has been trying to wake you lot up for 10 years but it’s only now a few people are realising something is wrong – ie OWS – but even they don’t get it – it’s not about greed or taxing the rich, it’s about complete breakdown of law – total utter stinking corruption from the top down. No nation can survive that, expecially the most hated nation on earth. Your enemies can hardly contain their excitement. Germany at last sees her chance to run the world and they won’t give you any browny points for having silver in your pocket.

        • Thanks for stopping by Mr. Keiser.

      42. The silver-gold ratio can be restored by gold tanking as well. There are downside forces operating out there, deflationary in nature.

        • Bring it on. It’s all about the ratio before the big test. I have velcrow on my gell saddle.

      43. Observe gold & silver to stock market correlation over the last several months. Before the US credit downgrade gold and silver acted inversely to the stock market and therefore were considered safehavens. Lately gold and sliver appear to be performing inline with the stock market. When the stock market tanks so does gold and silver. Gold & silver appear to have lost their safe haven status and now both appear to be treated like any other commodity.

        Therefore if and when SHTF then stocks will tank and the PM’s may follow the stocks and also tank. Neither would deflect portfolio loss associated with an economic collapse.

      44. I bought $23,000 worth of American Liberty Head gold MS63 coins from Lear Capital 3 years ago when gold was selling for $1200 an ounce. Now it is $1600 an ounce. I called to see what they were worth now, expecting a big increase, and was told $12,000. I asked why. The agent said I paid him 20% and the economy had gone south so people were dumping their coins. We knew nothing about investing in gold and thought we were investing in gold that would appreciate with the gold rise. We also bought 1000 Morgan Silver dollars at $33 and 500 Morgan Silver Dollars at $37. We hope silver goes way up to recoup our gold loss especially.

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