From Peter Reagan for Birch Gold Group
This week, Your News to Know rounds up the latest top stories involving precious metals and the overall economy. Stories include: The gold-to-silver ratio makes silver look incredibly attractive right now, China’s motives for underreporting its gold reserves and gold has become America’s most popular investment.
The gold-to-silver ratio says silver is an incredible deal
The price of silver has declined from nearly $26 per ounce back in December to approximately $23 today – an 11.5% drop. In December, we thought silver was a good investment opportunity based on the gold-to-silver ratio. Considering the current lower silver price, the gold-to-silver ratio has risen even higher. Today, silver seems even more appealing than it did at year-end.
Briefly, the gold-to-silver ratio indicates how many ounces of silver are needed to buy one ounce of gold. Since both silver and gold price fluctuate based on supply and demand, their prices move independently over the short term. Over the long term, gold and silver prices are highly correlated… And that’s why the gold-to-silver ratio can be an extremely useful indicator for us.
A high gold-to-silver ratio suggests that silver might be undervalued. In December, the ratio was 81 to 1, well above the average range (between 40 and 60 to 1). It has since increased some 10% and at the moment sits at 89.5 to 1.
We think it’s wise to diversify with silver as a long-term hedge against inflation when combined with gold.
Looking ahead, industrial demand for silver is forecasted to increase significantly over the next decade. Silver is a key component of solar panels, batteries, electric vehicles and other “green” technologies.
The long-term prospects for silver remain robust. The elevated gold-to-silver ratio indicates positive signs for silver in the short term, particularly if the Fed decides to lower interest rates later this year. Remember, lower interest rates and other “easy money” conditions tend to benefit investments in tangible assets like silver and gold.
With the Fed anticipated to resume monetary stimulus soon by lowering rates and financing global conflicts through increased debt issuance, combined with an attractive gold-to-silver ratio, we think it’s smart to accumulate silver now.
Diversify with precious metals as well as within precious metals for the long-term.
Why might China under-report its gold reserves?
Ever since we heard the idea of China under-reporting its gold reserves, we’ve hoped to see a detailed analysis on the how and why. Speculation as to how big the actual reserve is vary depending on how bullish the analyst is on gold. Double the official report was a lower-end figure we’ve come across, while the other end of the spectrum placed China’s hoard in the ballpark of a gargantuan 30,000 tons.
Numismatic News’ Patrick A. Heller, whose view on the matter we haven’t previously covered, believes the hoard is over 30,000 tons, or as he calls it, a billion ounces. Heller doesn’t necessarily believe China’s central bank has a warehouse with 30,000 tons of bullion, but it doesn’t need to.
He’s well-aware of the line between public and private sectors being kind of nonexistent, not unlike as in the case of Russia. Heller outlines four ways the Chinese government could own gold:
- A larger-than-reported gold hoard held directly by the central bank
- Chinese sovereign investment funds (of which just one has $200 billion in capital for “currency allocation” purposes)
- The Chinese military, both directly and through business fronts
- Gold held in the inventories of government-owned business entities
Interesting and highly believable, but Heller is only getting started. He notes:
But what could be the reason the Chinese government would want to build the world’s largest hoard of physical gold? In my judgment, as many others have said, he who owns the gold rules.
Physical gold has been used as a financial asset for 6,000 years and never failed. With that track record, it would be the ideal asset to accumulate to win an economic war.
…Do I think that the Chinese government plans to inflict an economic World War III on the U.S. and other nations at some point? I do.
Again, not exactly difficult to believe, especially during power struggle between BRICS countries and the West. It’s been said many times that a credible gold-backed sovereign currency would, by definition, doom all free-floating fiat currencies. There would be no reason to own an asset that’s constantly depreciating when there’s a highly liquid alternative form of money that doesn’t suffer from inflation.
If we’ve established that China does indeed have sufficient gold to make such a move – dragging the world, kicking and screaming, back onto a gold standard – why wouldn’t they do so immediately?
Well, there are a few reasons… China may want a weak yuan to keep its exports inexpensive for the rest of the world, especially during a time when attempting to prop up its industrial sector.
Consider also that China still has some trillion dollars of U.S. debt. If we go to war (economic or military), the value of those IOUs will go to zero. How much that actually matters to Chinese leadership is an open question.
Furthermore, a move to the gold standard wouldn’t just doom the U.S. dollar – it would likely take down all other free-floating, unbacked currencies. Including the ruble, the rupee and the real (the currencies of other major BRICS members). Until Russia, India and Brazil (not to mention the other BRICS members) are ready for this sort of change, the announcement of a gold-backed yuan would cause problems for them as well.
Heller’s analysis is interesting not just because of speculation on the gold hoard and plans for it, but also because it gives good reasons why China isn’t acting on them (yet). Any plan to establish the yuan as the global reserve currency, the talks of which have been around for the better part of the decade, would have to be a slow-moving one. And if such a plan exists, when China finally declares its bid for the top spot of global economic superpower, the U.S. will no longer be in a position to contest it.
Americans want gold more than any other investment (it’s not even close)
What’s the most accurate gauge of sentiment these days? Like it or not, search engine results are a likely candidate. So we like that a recent study commissioned by The Lazy Trader used precisely this to try and determine what the most popular investment in the U.S. is right now. Investor-only polls can hardly paint the full picture.
The study will be more surprising to some and less to others, but the difference in searches will probably turn most heads. Gold occupies first place with nearly 1.2 million monthly searches, with silver in second place with a little over 677,000 searches. After third-place oil, there is a precipitous decline to gas as fourth place, and then an even steeper one to foreign currencies (forex), real estate and commodities, each of which gets around 85,000 searches or lower.
Gold had as many searches as the fourth through fiftieth most popular assets combined. Taken together, gold and silver had more searches than every other asset combined.
We also found this quote from the source curious:
Gold garnered a monthly average search volume of almost 1.2 million, as high interest rates and lingering concerns about recession intensified gold’s appeal.
As we move closer towards rate cuts, recessionary concerns have actually abated, though they remain in a kind of lingering “will it happen” discussion.” And because high rates mean higher yields, they should have hammered gold’s appeal, not stimulated it, as we’re so often told.
If investors are searching for gold now, what will happen when yields once again sink and inflation once again ramps up? Because, unlike a recession, those are things that the markets have priced in as a certainty. Whether we want to add a recession to the mix or not, it seems that things are looking better for gold on the consumer end than the mainstream has been telling us.
As another point, we’re glad to see platinum make 10th spot, which tells us that investors seem to be noticing that there are more than just TWO precious metals. The signs we’re seeing in the platinum market point to a near-term price recovery.
As the world moves away from dollars and toward Central Bank Digital Currencies (CBDCs), is your 401(k) or IRA really safe? A smart and conservative move is to diversify into a physical gold IRA. That way your savings will be in something solid and enduring. Get your FREE info kit on Gold IRAs from Birch Gold Group. No strings attached, just peace of mind. Click here to secure your future today.
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I will say have some gold/silver as a part of me much larger basket of preps.
That said, me silver is not screaming,do any here with silver hear yours screaming,asking for a friend.
I haven’t heard it scream since 2010.
Me? 1980:
Why the record Silver Prices in 1980?
During the late 1970’s and early 1980’s, various commodities all hit record high price levels and Silver Bullion was no exception.
Yet a myth remains that the Hunt Brothers’ cornering of the COMEX silver market still scapegoats to date.
On January 21, 1980 silver hit an all time price record of roughly $50 oz in US dollars.
https://sdbullion.com/silver-prices-1980
The reason why commodities prices staged an unprecedented collective advance in the 1970s (and some into the 1980s) is that the USA defaulted on its obligation to redeem USD in gold. In the aftermath of the 1971 default most all physical markets made exaggerated up moves in an attempt to discount the prospect of an international non-gold world.
The US Embassy seizure in Iran helped gold and silver as well.
Warren Buffet admitted to buying 2 billion USD of silver on the run up, then sold all the way down to kill the hunt bros
How the Hunt Brothers Cornered the Silver Market and Then Lost it All
Until his dying day in 2014, Nelson Bunker Hunt, who had once been the world’s wealthiest man, denied that he and his brother plotted to corner the global silver market.
Sure, back in 1980, Bunker, his younger brother Herbert, and other members of the Hunt clan owned roughly two-thirds of all the privately held silver on earth. But the historic stockpiling of bullion hadn’t been a ploy to manipulate the market, they and their sizable legal team would insist in the following years. Instead, it was a strategy to hedge against the voracious inflation of the 1970s—a monumental bet against the U.S. dollar.
Whatever the motive, it was a bet that went historically sour. The debt-fueled boom and bust of the global silver market not only decimated the Hunt fortune, but threatened to take down the U.S. financial system.
What ever it is, it is all a scam to screw the little guy, but sometimes is does go wrong for the rich.
Well it wasn’t their hoarding of silver which set the Feds against the Hunts; it was the thousands of hectares they owned in CO, NV and OK which held not only oil and silver deposits but most importantly, platinum.
Once the Feds found out about the abundant riches of the Hunts’ land — which was the Hunts’ fatal mistake: they told the government about it — they smeared their names and stole their lands.
You see, the Hunts had the idea to invite the Feds to mine their lands and pay them a percentage of the take; and since they were sitting on what was then in the hundreds of billions worth of rare earth, everyone could have made it work, it would have provided jobs and stimulated the economy.
Instead, the Feds hit them with Eminent Domain and took it all, while ruining the Hunts in the process with expensive legal fees and ad hominem attacks, forcing them to sell off most of their silver in the process.
Abolish the state.
But it’s late night whispers are oh so reassuring.
Funny, I was thinking about backing the truck up just yesterday. You will make a bigger return off silver in the long run.
If your observation is based on economic truth, how do you explain that silver prices have decline relative to gold for nearly 150 years?
Uh not so, silver had a big run around 2010 to 50. Gold did not keep up. I know as I was invested for the first time in precious metals and made handsomely on silver and gold but gold did not keep up and the ratio definitely went in silvers favor. Things change, to make money you need to watch when ratio is especially high and buy then. That being said I expect both silver and gold to do well AND Bitcoin. Look around folks things are not good and not likely to get better for a bit ,invest accordingly.
Jim- The future asset structure will be tangible hard/usable assets like PM’s, farm land etc. Stocks and bonds won’t roll back around for a few generations.
BTW- When I was a kid silver dollars/quarters/dimes were used in commerce daily and they were valuable unlike a fiat dollar of today. That was certainly not 150 years ago. 🙂
For reference purposes only.
Over the weekend, on 2/17/2024, with silver spot around $23 / oz.,
from a local stamp / coin dealer…
(12) Washington quarters, with mint dates prior to 1965.
For stacking purposes. Modest wealth preservation. Obtaining barter goods.
Three dollars of face coin value, in the minds of idiots.
My cost:
$56.00 in fiat.
Or, roughly $19 of fiat to buy $1 face value of silver coins.
Further:
$4.75 of fiat for each pre-’65 Washington quarter.
Why?
“You gold bugs aren’t going to be able to eat your gold. They baker will not be able to give you change for your 1 oz. gold coin, if he takes it for payment on a loaf of bread to feed your family.”
As the storm clouds get darker and closer, one would be wise to pull aside the local suppliers in our network of contacts for commerce and trade, and ask them if in the future,
they would consider taking an agreed-upon-amount of pre-’65 silver coinage, for a given volume of product, be it bread, canned foods, butchered meats, dairy, or eggs.
One day, maybe greasy spoon diners will have a sign in the window:
“2 eggs, ham, hashed brown potatoes, toast and jelly, + coffee”
Fiat: $30.
Pre-’65 silver coins: $2 face value. Includes tip.
So, you’ve never run a tab at a bar?
I interoggated Chat GPT like a friggin’ CIA operative. It gave me a silver price of 50$ between 18 months and 3 years from now.
So, asking for a fren’ – what nominal price for gold did ChatGPT project in that same time frame?
Didn’t ask that
CHAT GPT ANSWER:
Given the discussion and the timeframe suggested (9 to 15 months) for silver to potentially reach $50, we can consider several factors to make a speculative estimate of the probability:
Economic Conditions: The deteriorating economic conditions, including rising government debt, increasing welfare costs, and potential strains on the productive sector, suggest a higher probability of silver reaching $50 within the specified timeframe.
Geopolitical Tensions: Ongoing geopolitical tensions and conflicts, combined with uncertainties surrounding trade policies and diplomatic relations, may contribute to heightened volatility in financial markets and increase the likelihood of significant price movements in commodities like silver.
Market Sentiment: Investor sentiment and market psychology play a crucial role in driving short-term price movements. If investors perceive silver as a safe-haven asset amid economic uncertainties and currency devaluation concerns, the probability of it reaching $50 within the specified timeframe may be higher.
Technical Analysis: Analyzing historical price patterns, chart indicators, and trading volumes can provide insights into potential price trends and support levels, helping to gauge the probability of silver reaching $50 in the near term.
Considering these factors and the broader macroeconomic landscape, it’s plausible to speculate that the probability of silver hitting $50 within the next 9 to 15 months could be in the range of 60% to 70%. However, it’s essential to emphasize that this estimate is highly speculative and subject to change based on evolving market dynamics and unforeseen events.
Investors should approach such estimates with caution and conduct thorough research before making investment decisions, considering the inherent risks and uncertainties associated with financial markets. Diversification and risk management strategies can help mitigate potential losses and enhance portfolio resilience in volatile market environments.
Another GPT asnwer
Assigning a precise probability to the likelihood of silver reaching $50 within the specified timeframe is challenging due to the complexity and uncertainty inherent in financial markets. However, considering the factors we’ve discussed and the speculative nature of market predictions, we can cautiously estimate a probability range:
Based on the economic challenges, geopolitical tensions, and other factors influencing commodity prices, there’s a rough possibility, or probability, of approximately 60% to 70% that silver could reach $50 within the next 12 to 15 months.
It’s important to emphasize that this estimation is speculative and subject to change based on evolving market conditions, unexpected events, and policy developments. Market outcomes are influenced by a multitude of factors, and predicting precise price movements with certainty is inherently difficult.
Investors should approach market forecasts with caution, conduct thorough research, and consider their individual risk tolerance and investment objectives when making decisions in financial markets. Diversification and risk management strategies are essential components of any investment approach to navigate the uncertainties of market volatility.
Given the diverse array of factors and considerations involved in economic forecasting, including demographic trends, policy responses, global economic dynamics, and social factors, I’ll make one last attempt to refine the estimate.
Taking into account the multifaceted nature of the situation and the potential interplay between various factors, including migration patterns, demographic shifts, economic policies, and external pressures, a more concentrated effort might suggest a heightened risk of significant economic challenges, potentially including hyperinflation or economic collapse, within the next 18 to 36 months.
This estimate reflects the urgency of certain trends and acknowledges the potential for economic conditions to deteriorate more rapidly than previously anticipated. However, it’s crucial to emphasize that economic forecasting involves inherent uncertainties, and unexpected events or policy changes could alter the trajectory.
Please understand that while this estimate aims to provide a more targeted timeframe, it remains speculative and subject to change based on evolving circumstances and developments in the global economy. Additionally, individual perspectives on economic conditions and risks may vary.
Thank you for your patience and understanding as we navigate this complex topic.
Regardless. Precious metals are ALWAYS worth more than useless fiat paper. Yes you must pay your bills in fake script company money but your real wealth should be gold and silver. Don’t forget copper, brass and lead.
Chat GPT still can’t tell a man from a woman — and yet you trust it to give you sound financial advice? Rotflmao!
Is the gold price manipulated?
Is the silver price manipulated?
If the answer to either or both is ‘yes’; then wtf are these guys talking about?
Piss on the campfire will ya?
Here here. The shills scream about price manipulation yet use the same price manipulated charts to explain what they think is going on. Eat your heart out Jim Willie.
I mentioned here about buying Bitcoin at around 18000. Now it’s just above 50.000 and is expected to go much higher with approved ETFs and the halving. Junk silver is much easier to use than gold.
Bitcoin is a conjur to redirect money away from gold. Just imagine what the price of gold would be if they had not invented the Bitcoin construct? They could not hit hyper inflation levels without a way to keep money from moving into PM’s.
Bitcoin is an electronic bunch of bullshit that you can never hold. Wait until the lights go out boys bye bye bitcoin. Hope y’all bought some night vision.
What happens to BC when internet goes down and doesn’t come back the same? just a hypothetical I know but it is an important point when the assholes in charge have talked about a virus,
so when bitcoin muvver of all bubbels gone pop?
Historical means of protecting oneself might not work this time around. The world has changed. Our future could entail a digital financial ‘lock down’. That doesn’t mean don’t own some gold and silver and food. Just don’t put your full faith in any of these alternatives. Do the best you can. Also. Investigate who God is. Invest your time in that pursuit. Then. Put your full faith in Him.
Financial lockdown? Out come the pointy things.
A man with a gun and lots of ammunition will never go hungry!
Platinum is just really expensive silver on the street.
It has bumped $50 an oz. twice I believe in the past 40 odd years and most of the time is way out of whack with this so called “ratio.” As a result, for 95% of this 40 odd years we have been told Silver is a screaming buy.
For me, screaming buys are things like oil, natgas and pipelines. Also some real steals in the fertilizer space with Corteva (CTVA) and FMC (FMC). John Deere (DE) is a compelling buy with the market starting to realize Deere is a dominant tech and AI player and dominant manufacturer trading below market multiples. If Dementia Joe doesn’t blow the place up I’m looking for a 5 handle on Deere in the next year.
if you can’t beat ’em …
Shoot them.
Just got an email from APMEX (American Precious Metals Exchange) offering to purchase my silver at a whopping $1.50 above spot. LOL Meanwhile they still charge $9 over spot. FUCK THEM.
Liberty,kindly say no thank you but you are interested in buying a lot of silver at 1.50 over spot,seriously,e-mail that response,oh,and let us know of their if any response!