A STATISTICAL & LOGICAL PERSPECTIVE
(Adelaide, SA, Australia)
I believe these statistics to be the most important:
1. The gold to silver price ratio: 50:1
2. The silver to gold mining ratio: 9:1
3. The gold to silver investment ratio: $1:$1
4. The proportion of gold mined used in industry: 8-12%
5. The proportion of silver mined used in industry: >50%
Logically, the gold to silver price ratio must contract closer to 9:1 than the current 50:1.
Because gold's price is also being manipulated & the price of gold has risen in recent years in a general-trend arithmetic manner (see chart) & the price correlation between the price movements of these 2 metals is approximately 85%, it may take some time before we see the gold to silver price ratio converge to a number closer to 9:1. My guess is it will reach a trough of 11:1, due the the psychological barrier of 10:1.
According to the USGS, there is 17 billion ounces of reserves left in the earth's crust. At the current rate of production, this gives us a theoretical end to mining date for silver of 2033.
Due to the financial problems on the planet, including that the US has already passed the critical 90% national debt to GDP ratio threshold; I am expecting the peak in price for gold & silver, assuming no collapse of the monetary system, to occur 2014-2023.
I am expecting a lot of recycling of silver during this time period as well, along with price manipulation to continue.
If the monetary system collapses, expect gold & silver to become money again in a practical sense & against government (fiat) wishes.
The last 2 commodity bull markets lasted 14 years each & they occur once roughly every 40 years. This one started in 2001/2003, depending on how you look at it.
Just some fuel for thought.