by Ludger J. Borger
President, Borger Capital Group LLC
Hey there! In last week’s article I talked about the three ways to protect yourself from the “Great Taking”. One of the ways mentioned were precious metals. Today I would like to dive into the fascinating topic of silver. This shiny metal could be the most undervalued commodity on the planet right now. Stick with me, and I'll explain why.
First off, let's talk about historical prices. Silver has had quite the ride over the years. Back in the late '70s and early '80s, silver prices shot up to around $50 an ounce. Fast forward to today, and we're looking at prices hovering around $30 an ounce. That's 40% of its peak, even though inflation has made everything else around us more expensive.
Now, here’s where it gets really interesting. The gold to silver ratio is a key metric that traders and investors use to gauge the relative value of these two precious metals. Historically, this ratio has averaged around 15:1. This means that one ounce of gold could buy you 15 ounces of silver. But guess what? Today, that ratio is sitting at a whopping 80:1! This suggests that silver is extremely undervalued compared to gold.
Think about it this way: if gold is sitting at $2,300 an ounce (the approximate price at the writing of this article), and if the historical ratio were in play, silver should be around $153 an ounce. But it’s not. It's barely a fifth of that price. So, what gives?
Several factors could be at play here. For one, silver is not just a precious metal; it’s also an industrial metal. It's used in everything from electronics to solar panels. As the world moves towards more green technology, the demand for silver is expected to skyrocket. Yet, the prices haven't caught up to this potential surge in demand.
Moreover, silver mining isn't as profitable as it used to be. With silver prices being so low, many mining operations are not as viable, leading to reduced supply. Basic economics tells us that when demand goes up and supply goes down, prices should rise. But in the case of silver, this hasn't fully materialized yet.
Then there's the investment angle. Gold often gets all the glory as a safe-haven asset, especially during times of economic uncertainty. But silver, often dubbed as "poor man's gold," offers a similar hedge against inflation and economic instability, sometimes even better because of its lower entry price point. As more people catch on to this, we could see a surge in silver investments, pushing prices higher.
So, why is silver still so cheap? It could be a combination of market manipulation, investor sentiment, and sheer oversight. But savvy investors are beginning to notice the glaring discrepancy between silver’s current price and its historical and potential future value.
In conclusion, silver might just be the cheapest commodity on the planet right now. Its price compared to historical highs, its relationship to gold, and its essential role in emerging technologies all point to a metal that's seriously undervalued. If you’re looking for an investment opportunity with substantial upside, silver might just be your golden ticket—pun intended.
So, what do you think? Ready to add some silver to your portfolio? Happy investing!
If you want a personal consultation with me to discuss this topic in more depth and find some personalized solutions, click on this link https://calendly.com/borgercapitalgroup/30min to schedule a free 30-minute strategy call.
Comments