July 15, 2019
The Amount of Dollars in Existence
Silver is trading around $15 an ounce. This is about 30% of its 1980 all-time high of $50. However, this is an incomplete representation of what silver is really trading at, relative to US dollars.
When you look at the silver price, relative to US currency (the amount of actual US dollars) in existence, then it is at its lowest value it has ever been (see chart below).
Also, it is ridiculous that one ounce of silver cost $50 in 1980 when there were about $132 billion dollars in existence, whereas today it is only $15 at a time when there are $3.3 trillion dollars in existence.
The US monetary base basically reflects the total amount of US currency issued. Originally, the monetary base is supposed to be backed by gold available at the Treasury or Federal Reserve to redeem the said currency issued by the Federal Reserve. This is not the case any more, therefore, the amount of dollars have grown exponentially over the years.
Below, is a long-term chart of the silver price relative to the US monetary base (in billions of dollars)
Note that the ratio, or price of silver, in terms of US dollars in existence, is indeed at its all-time 100-year low.
In 1980, the all-time high was 0.361, whereas the ratio is currently at around 0.004. The US monetary base is currently around $3.3 trillion dollars. Therefore, if silver was today at its 1980 value, relative to the monetary base, it would be around $1,193 dollars an ounce. ($3.3 trillion x 0.361).
So, in terms of US dollars in existence, silver is trading at 1.24% ($15/$1,193) or a 98% discount of its 1980 high – it is the bargain of the century!
The Gold-Silver Ratio
Silver is at a multidecade low compared to the price of gold today.
The ratio of silver to gold in the earth's crust is 17.5 to 1. In Roman times, the price ratio was set at 12 to 1. In 1792, the gold-silver price ratio was fixed by law in the United States at 15 to1, which meant that one troy ounce of gold was worth 15 troy ounces of silver.
Incredibly, the Gold-Silver ratio is near all-time highs of 90 to 1. That means it takes 90 ounces of silver to buy 1 ounce of gold. This extreme level has only happened trice in the last 100 years!
The modern average over the last century is around 40 to1. This tells us that Silver is significantly undervalued compared to gold. In fact, it has been 29 years before today’s 90+ reading.
With the present Gold-Silver ratio of 90 to 1 and the modern average being 40 to 1. The price of Silver today should be $37.50 ( $1,500 ÷ 40) or 150% higher than it's current value of $15 oz.
The top-ranked "True Wealth" investment advisory says ......"500% Gains, and even Triple digit returns are possible in Silver over the next few years"...
Buying silver now is like buying silver back in 2003 when it was under $5 per ounce. And silver soared to $48 an ounce by 2011, turning a $40,000 investment into $470,000 dollars!
So, if you missed out on the last silver boom, this is your second chance. And best of all, you can Invest with no risk. In fact, the Guaranteed silver CD Alternative is the only physical silver account with a guarantee of principal.
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The Guaranteed Silver CD Alternative
U.S. Silver coins were used as our nation's currency from 1787 until 1965. They have averaged an annual return of over 19% this century and are a great way to build wealth.