Does anybody here play the Gold Silver Ratio?

[Twisted Titan]

You should definately take this as a sign of of the Apocalypse as i NEVER get into any sort of trading.

But i been listening to serveral chaps out in the blogosphere Silver Doctors Brother John F and a few others

And this has just recently captured my attention.


As i understand it price is somewhat irrelevant but you must be able to identify the extremes and that is when you should move between the two

And from what i gather we are at such a extreme right now.



I actually own one Gold coin( for the sake of posterity) and i think i actually pull this off.


What sayeth the GSUS?

[Son-of-Liberty]

The gold and silver ratio play me....

[gunDriller]

As i understand it price is somewhat irrelevant but you must be able to identify the extremes and that is when you should move between the two

And from what i gather we are at such a extreme right now.



I actually own one Gold coin( for the sake of posterity) and i think i actually pull this off.

What sayeth the GSUS?


i few weeks ago, the GSR was 65 and then 66.

it's easier to negotiate on a Friday after the markets have closed.


but it doesn't apply to PM's stored at the site of a boating accident.


i wonder how long till the GSR contracts to 30. it was contracting last week, but now it's sort of sitting there.

[chad]

i used to, but i didn't want to end up getting caught in holding vast amounts of "the wrong metal" tming wise. now i just buy both.

[Son-of-Liberty]

Joking aside, I feel like it is easy to identify when silver is too inexpensive. When do you sell your silver though? 30:1, 20:1? Historically I think 16:1 was common but if you wait for that you would have stayed in silver during the entire run up to 49 and back down.

If you trade at 30:1 or less and silver goes ballistic then you miss out on the potential gains. I don't know, some people feel comfortable trading I am more of the buy and hold type.

[Twisted Titan]

I feel same way SOL

my thinking is this.

Silver has been pushed to the extreme.

We are now at the point were this is beyond punishing shorts or longs.

This price action is forcing mines to be mothballed.

And unlike markets prices that move at the click of a mouse.....mines are very expemsive to take on and off line.

Im very certain the price has to vault up because it will eventually lead to a feeding frenzy in the industrial markets.

I dont have liquid cash to take adavantage how i would like...but i do have my one shekel

Timing may be off but the overal will play out predictably as

[Son-of-Liberty]

Yeah I would agree with that. I would say from here back to 35-40:1 is probably a sure thing. After that though you will have to pay attention.

[Twisted Titan]

I am pretty comfortable with the belife the all time high will be taken out and it may get as high as 70 bucks and then they will slam it back down intobthe low 20 and let it float to a new shelf of about 30-40 until the next big wind up.

[horseshoe3]

Just a couple years ago the ratio was around 90:1. In 1981 it was around 16:1. As far as I know, these are the extremes in modern times. Right now at 59:1 is almost as unextreme as it gets. It's not the time to be trading the ratio.

I remember a while back, I saw 40:1 and thought about trading some silver for gold. In hindsight, that would have been a good idea. Or trading gold for silver at 90:1 in ~2009, but I was pretty new to PMs then and didn't even know about trading the ratio.

[Twisted Titan]

Rule number 1 of investing

Dont do anything you dont understand if you do you are gambling

Thats why im kicking this around with you guys to get a better understanding

[madfranks]

The gold and silver ratio play me....

Me too. I tried it once before but I get nervous watching the ratio move and I end up moving too much, too soon. I'm simply not good enough at it, so I quit and just buy a little of each when I can.

[Sparky]

Rule number 1 of investing

Dont do anything you dont understand if you do you are gambling

Thats why im kicking this around with you guys to get a better understanding

Exactly. And this is totally gambling.

Look at it this way: Would you play the food:water ratio? Keep moving your resources back and forth between all food and all water, hoping to maximize the net value of your resources when converted to fiat dollars as a metric? I don't think so. You need gold. You need silver. You don't know what scenario is going to play out. If we are correct in the reasons we have for holding PM's in the first place, that should be reward enough for your diligence.

If anything, you should be converting some silver to gold because it sounds like you are not prepared for a gold-advantaged SHTF scenario.

[Sparky]

Here's a dramatization of a gold-advantaged scenario for you Twisted: A military squad is coming through your neighborhood as a display of force, randomly choosing houses to raid with their overpowered weaponry. They send a scout up ahead to select a household. He approaches your door, and he tells you that he will divert the squad to another house for a bribe of one half-ounce gold coin that he can discretely slip into his sock, leaving you and your family unharmed and your possessions intact.

Are you going to offer him two 10-ounce silver bricks instead? Or 29 rolls of mercs for him to conceal on his person? Will he be willing to accept an extra three rolls because you obtained them at no cost by playing the gold-silver ratio?

[Silver Rocket Bitches!]

The fundamentals put me on the fence. Silver is used up daily for industry and much of that is never to be recovered again. The governments around the world haven't stockpiled silver since the 70s. I have a few 70s bars that came from the "strategic stockpile" of silver in the US. Why was it strategic then but not now? The only reason I can see swapping Ag for Au is the weight factor. And that is probably at 20:1 or less. We saw the ratio go up to 100:1 during the collapse. Silver is inelastic in its demand. It's gotta spring back to reality some time.