Gold for Silver & Silver for Gold
Physical precious metals are financial insurance. This means they are static. You buy them and wait for them to go up. And you wait – and wait.
Yes, they require patience, but they don’t have to remain static. You can make them an active investment, if you want to. We’re going to explain how, but first, why you do this.
Strip the human drama from the epic saga of gold and silver throughout history and you’re left with, well, math. You can boil gold and silver’s relationship down to numbers. Those numbers are the gold/silver ratio, which is simply the price of gold divided by the price of silver.
Until 1872, when silver was demonetized (removed as a reserve currency) in the United States, the gold/silver ratio never rose above 16:1. Sixteen ounces of silver were said to exist for every one ounce of gold – the world over. Alas, when silver was demonetized, the ratio climbed and climbed. Since that time, when gold and silver are in a long-term downtrend (usually lasting 20 years or so) the ratio has climbed as high as 100:1.
When gold and silver enter long term uptrends (lasting approximately 20 years) the ratio always returns to its historic level of 16:1.
So silver always outperforms gold in bull markets. This means silver is greatly undervalued and is why we recommend you purchase more silver than gold.