Silver - Better Investment Than GoldSilver has all the same monetary properties of gold, and more. The historic price ratio of silver to gold shows that about 13 ounces of silver would buy one ounce of gold, a 13:1 ratio. Recently, the ratio is about a 70:1 ratio (with silver at $13/oz., and gold at $1000/oz.) As the silver to gold ratio returns to historic values, from 70:1 to 13:1, you may make over 5 times more money investing in silver, than gold!Silver prices may rise to exceed the 13:1 ratio, for the following reasons: More than all of the silver produced by the mines each year is consumed by industry, which leaves little to no room for substantial investment demand. Investment demand for silver is a tiny $1 billion per year. A small increase in investment demand will drive prices sky high.
Most silver is produced as a by-product of mining gold, copper, zinc, or lead. Higher silver prices might not substantially increase the amount of silver mined each year. Consider, in 1980, when silver prices went up to $50/oz., less silver was mined than in 1979!Higher silver prices may not cause much reduced demand. Why? Because most silver consumed by industry is used in tiny quantities in each application, such as in film or electrical contacts, therefore, rising silver prices will not easily slow down growing industrial demand. Additionally, as paper money continues to falter, people will buy silver and gold without regard to price, or they will buy simply because prices are going up!
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