Currently, 69.41 ounces of silver buys you one ounce of gold.

Historic norms have gone as low as 5:1 in ancient egypt when all silver was imported and thus less available in supply than gold which was mined locally.

Each time we have seen a gold top in history, silver also tops but tends to swing to the extreme.

See below a chart that few have seen:

Imagine a pendulum swinging and if it is currently swung out to the far left at 69.41, where will it swing back to. All markets do this in terms of swinging in and out in cycles.

A return to a historic ratio of 17:1 at todays gold price would make silver $65.59 / ounce. This is conservative.

We will see price moves in the hundreds of dollar per ounce of gold in a single day moving forward, many will be scared out of their positions.

Remember that hardly anyone owns gold – real gold, not the paper stuff. Same with silver, only with silver the supply demand equation last existed in ancient Egypt.

Do your due diligence to understand silver, it is perhaps one of the most undervalued items on the shelf today – if your gut isnt telling you that we are on the verge of huge changes, please turn off the boob tube long enough to listen to yourself.

We are watching in Greece nothing less than an attempt to short a sovereign. This trend will continue.

Gold is the only currency on earth that cannot be created at will. At the end of the day, only those who own it will be left standing.

This entry was posted on Tuesday, February 16th, 2010 at 12:39 pm and is filed under Archived. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.