I participated in my first "silver stacking" contest yesterday. I am new to the idea of stacking, but have been collecting silver for several years. I was asked an interesting question by @gniksivart in the comments section of my first post. It is an interesting question that I wanted to give more though to. I also wanted more input from the silver stackers at Steemit.
Why Silver?
Okay, I have a small stash of gold, but I bought the gold in one gram increments. The main reason why I choose silver over other precious metals is that it is fungible. All precious metal should be fungible in the event of an economic crash of some sort. But how does one purchase a gallon of gas with a one-ounce gold coin? It isn't practical for common purchases. It is a great store of value, but not realistic for smaller exchanges. I even have bulk silver coins (lots of dimes) for micro purchases, if needed. But that is just one reason why I personally prefer silver.
The value of silver to gold has changed in recent years. In 2005, silver was sitting around seven dollars to four hundred dollars for an ounce of gold. Just before the markets crashed in 2008, silver was trading around twelve dollars per ounce, gold was at 700. The ratios were pretty close still. Gold was situation at about 50 times the price of silver. Gold prices have been down over the past year, making it more attractive. But currently, gold is priced at 1300 per ounce while silver is at 17. That places gold at 75 times the value of silver. That seems a bit off kilter to me. I am sure an economist can explain why. I am just a layman. But with silver relatively close to its pre-market crash prices, it seems like a good buy (I purchased most of mine at fifteen). If it gets back to fifteen, I will probably buy more. If it spikes back towards fifty, I will sell.
I am interested in hearing from the silver collectors here. My personal reasons are personal. I have not done a lot of research in this area, which is what prompted me to post this question. I have explained my personal non-economist views on the matter. But I am interested in other perspectives. Maybe it will be enough to push me to double down on my investment!
Fire away!
Silver under $20 is a good deal. Maybe a great deal.
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Great post , i too collect silver drwading the day that paper money will be worthless . Its definatly a good idea to keep a stock of precious metals in the event of another economic crash . The paper money system is much to volitile to trust . Great post keep em comming 😃
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Eagerly awaiting the reply of others and appreciate your thoughts!
Gold is like the bank while silver is like your spending money.
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Great analogy.
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History of silver being used as money aside, one can't accurately look at the value of silver without recognizing it's uses in the industrial realm. I've heard it is the second most useful commodity...behind only oil as far as how many uses there are for it. It is used in small quantities in almost every electronic device. And as technology pushes to new limits and takes ahold of more of our everyday lives, it will be even more useful/required to maintain our standard of living.
True, the value of silver is less than gokd and that makes it helpful for everyday transactions, but we might just see silver surpass the price of gold as it becomes consumed for electronic devices and in some cases, thrown out unknowingly when the device becomes obsolete.
Just a thought...imagine your cell phone being worth more as a trade -in than when you bought it? Not because of the technology, but because the silver in it has increased in value...
Happy stackin'!
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Interesting thoughts. I have heard about silver use in electronics. I don't know what the abundance is vs. gold in terms of unmined metals. But that would be an interesting factor as well.
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The natural ratio of Au/Ag is 1:9 if silvers price reflected this ratio it would be £100. Now consider silvers uses in medical and electronics industries compared to gold, most of the gold ever mined is still around in vaults and in jewellry etc, about 50% (?) of all the silver ever mined is unusable or thrown away. Peak silver is done and gone and it will only become rarer, some predict that it will become extinct as a mineable element. So you have an element with increasing demand and diminishing supply, such market pressures should send silver through the roof.
The reason silver is so low is because of manipulation it is being kept very low by the banks issuing paper ozs or EFTs.
Just imagine holding an inflated ball under water and what happens when you let it go.
What you have is the most undervalued asset ever , one that you can hold in your hand and at these prices is the bargain of the millenium, a once in a lifetime oppertunity.
Thats my opinion of course not financial advice.
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I had not previously seen that ratio listed as the natural ratio. Interesting factoid. It does seem that the ratio is off right now. Even if one considers the price in 2008 to be twelve dollars. We doubled the amount of dollars since then. So the price should be around twenty-four using simple math and logic (yeah, I know it's not that simple). But still...we are 25 percent lower than that simple equation right now. So it does seem a time to buy still.
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Ive seen a few different ratios , a few sources say that is the ratio it comes out the ground , Ive seen 1:17.5 as the natural ratios in the crust, all that matters to me is that i cant find a reason not to buy silver
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Good point.
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thanks for the information. I thought there were a lot of gold used in electronics as well?
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Not as much as silver,but i remember getting old hifi stuff with gold plated terminals. Dont know if youve heard of Cliff High but he has some interesting stuff to say about silver
Be assured that you are in the right place for all things silver
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Where does the silver stuff come in?
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about 32mins in
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Dont know much about it but I do like your perspective and definitely seems more practical for exchange.
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I like your way of looking at this. It's very similar to the views I have. I feel silver is drastically under valued (and gold mind you) but I feel silver has the greatest % gain when it all plays out and like you the silver to gold ratio will get closer
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Good point. Gold is probably undervalued as well. Looking at it statistically, it was around 700 before the markets crashed. We doubled the money supply. So, at the very least, it should be at 1400. But that is a very simplistic way of looking at it. Like the housing bubble, we have a dollar bubble, credit bubbles and a stock market bubble (probably more). If the value of the dollar is propped up artificially, who knows what the real value of gold and silver should be?
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