Question:
David, Here is a list of general facts that I have
found to be true through multiple sources and want
to get your thoughts on the culmination of all of
these indicators/data:
1. Silver's current ratio to gold is about 57:1
which is out of whack from the historical ratio of
say 16:1, for a multiple of 57/16 = 3.56 times
undervalued.
2. In one of your previous responses to me you said
that there is approximately 8 times the actual
physical silver that exists in the form of silver
contracts.
3. There is about 5 times more gold bullion than
silver bullion for investors to buy today (Mike
Maloney).
4. In the bull market of the 70's and 1980 ten
percent of the world's population could participate,
today every one and every nation has access to
purchase silver/gold (Mike Maloney).
5. Today there are at least 2 billion more people
that exist than there was in 1980.
(There are probably more to add to this list that
maybe you can point out)
But is it feasible to say that these 5 components
are not additive to the short squeeze/spike price of
silver that we are anticipating in the future, but
more so multiplicative?
I'm sure multiplying all of those values listed
together would have some sort of overlap. Like for
example the fact that there is 8 times more paper
silver than physical has something to do with the
ratio of silver being out of whack.
Do you have any thoughts pertaining to these points
I have listed?
The reason I ask this is because having a numerical
value to look out for in addition to viewing the
overall market sentiment and hype that would come
with the end of this secular bull market would
assist in pin pointing when to purchase other
undervalued tangible assets like real estate etc.
Your thoughts?
Comments: I would like to help you, you
are asking for my opinion on this so here it is--
too much analysis. There is an expression paralysis
by analysis.
1. 16 to 1 has not happened for a very long time--
on a weighted average over the past 20 years the
average has been about 62 to 1. I do think it could
get to 16 to 1 or even lower but my belief does not
guarantee it will.
2. Yes, and selling on paper is one of the factors
for #1 above as you suggest.
3. Yes
4. Yes
5. Agree with you
There is no way to analyze these as additive only
factors and how to weight each is not feasible. In
commodities it is known if you can buy under the
cost of production and have a long time horizon you
are almost guaranteed to make a profit. When you can
buy real estate for less than the raw materials that
will be similar to me buying silver under $5.00.
Trust this helps
