“I must not be very smart,” begins a reader. “For some 5,000 years, the world accumulated a silver surplus nearly every year. Over roughly the last 50 years, that surplus has disappeared. Today’s world production falls short of world consumption. Only recycling keeps the silver shortage from worsening. Fifty-plus years ago, there was approximately 10 times as much silver available aboveground as gold. Today, because gold is not used heavily in industry, that ratio has nearly reversed.
“So this is the part I don’t get: If silver is now 10 times rarer than gold, why is gold still 56 times more valuable? No matter how I crunch the numbers, I can’t find the answer. Can the silver shorters on the Comex really have that huge of an impact on the price of silver (it appears no more than four dealers are short some 260 million ounces)?
“Everyone seems to be a bull when it comes to gold, but what would happen if silver ever ‘trued up’ relative to the price of gold and the shorts were settled? Those numbers boggle my mind. That’s why I am putting all my spare (and increasingly worthless) change in silver.”
SOC responds: If you’d like to place a bet on silver without downside risk, check out EverBank’s Silver CD … seems like a smart deal.
“So this is the part I don’t get: If silver is now 10 times rarer than gold, why is gold still 56 times more valuable? No matter how I crunch the numbers, I can’t find the answer. Can the silver shorters on the Comex really have that huge of an impact on the price of silver (it appears no more than four dealers are short some 260 million ounces)?
“Everyone seems to be a bull when it comes to gold, but what would happen if silver ever ‘trued up’ relative to the price of gold and the shorts were settled? Those numbers boggle my mind. That’s why I am putting all my spare (and increasingly worthless) change in silver.”
SOC responds: If you’d like to place a bet on silver without downside risk, check out EverBank’s Silver CD … seems like a smart deal.
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