The GOLD/SILVER ratio
Hi everyone,
As a fundamental and macro trader when you start to learn about economies and countries and central banks you start to get a look behind the curtains and how little we know about the richest 1% that have as much wealth as the rest 99% of the world combined.
Just 8 men own same wealth as half the world
The world’s 8 richest people are in march 2016, in order of net worth:
- Bill Gates: America founder of Microsoft (net worth $75 billion)
- Amancio Ortega: Spanish founder of Inditex which owns the Zara fashion chain (net worth $67 billion)
- Warren Buffett: American CEO and largest shareholder in Berkshire Hathaway (net worth $60.8 billion)
- Carlos Slim Helu: Mexican owner of Grupo Carso (net worth: $50 billion)
- Jeff Bezos: American founder, chairman and chief executive of Amazon (net worth: $45.2 billion)
- Mark Zuckerberg: American chairman, chief executive officer, and co-founder of Facebook (net worth $44.6 billion)
- Larry Ellison: American co-founder and CEO of Oracle (net worth $43.6 billion)
- Michael Bloomberg: American founder, owner and CEO of Bloomberg LP (net worth: $40 billion)
You can check the updated list on Forbes Billionaires list below.
But there are many families and people that are not listed on the Forb’s magazine and their influence and power is bigger then we can imagine. Especially those who own and control central banks, they virtually control and own countries manipulating interest rates and currency making billions while running their hidden agenda.
Russia and China have been stacking up Gold reserves quite heavily while at the same time driving the Gold price lower.
China is well known for manipulating their “official” figures and we can expect these numbers to be inaccurate. If China has more Gold reserves than it actually has it can harm the dollar and steal the dollars world currency status. The modern wars don’t happen in battlefields, but in economical warfare. On a few of my articles I advise to stack physical Silver bullion's or coins (non-numismatic) to secure wealth from any digital collapse, or dollar collapse. All digital assets you have are only that digital. Brokers and bank go bankrupt and the assets they own are only speculative leveraged products. For example GLD Gold ETF is only a speculative derivative that follows GOLD. Its a bet on Gold price. You dont increase demand in Gold buying an ETF.
Stacking up Gold regards a doomsday scenario would not be wise, unless you have a lot of wealth. Imagine the worse case scenario, total collapse of Fiat currency and going back to barter exchanging gold and silver for goods. If you want food it is harder to exchange gold for goods. For common purchases Silver would be more used and therefore have a much higher demand.
“Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants — but debt is the money of slaves.” — Norm Franz
Gold is currently at 1225$ and Silver at 16.15$ per ounce. With a ratio of 75.85. Every time there was a crisis or wars the price of Silver rose much more then Gold. Lets look at some historical charts.
These last years the Gold/Silver ratio has been overbought around 75 and 85 level. We are now again at those levels. Of course it can go higher and we can also see both GOLD and Silver dropping to lower levels while keeping this ratio unchanged. But if you want to diversify your wealth and have a lot of money at the bank that you want to secure from a digital collapse, current Silver price level seems very interesting to consider this kind of diversification. You can find a few official and respected businesses that provide certified Silver and that offer safe storage for a small fee. Do not purchase Silver digitally! Just remember Greece where people where only able to withdraw a few $$ per week.
For the remaining speculative small investors, Silver can be a good way to diversify your portfolio while using very low leverage. Remember it can still go lower from here, but in the following months and years we can expect this ratio to revisit again 65 levels with Silver rising to higher levels.
Quick note, do not purchase Silver coins or bullion's from unofficial internet stores. Most are counter faith and fake. You can spot the authenticity of coins by their sound, https://www.youtube.com/watch?v=GajK6Vrh2Rs ; https://www.youtube.com/watch?v=enBD3GsIaJU
Wish you all the best and save investments,
have a great weekend ahead
Risk Disclaimer
Currencies, Commodities and Contracts By Difference are leveraged products that carry a substantial risk that can work against as well as in your favor. Before deciding to invest you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists of sustaining a loss of some or all of your initial investment. You should not invest money that you cannot afford to lose.
