SILVER

[grumpy-old-man]

Gold-to-silver ratio now 59.3

 

My plan is to swap for gold at :

 

- 51

or

- mid February

 

 

right I am obviously not completely understanding the gold:silver ratio then. I though you would wait for silver to be a lot higher in price terms first, or does this just depend on what you bought in at & what your silver:gold split is ?

 

so when the silver ratio is at its lowest, that's the best time to sell your silver ? am I understanding this chart below correctly ?

so that huge spike in '79 was when the pos shot through the roof for a short time ? then you would either buy another hard asset with the currency of your choice, or buy back into gold then ?

 

edited - I know GF has been talking a lot about this lately.

 

[G0ldfinger]

Is the squeeze on?

[ziknik]

Would U be buying now if U hadn´t any silver yet? How You would timeframe Your buyings if U had 600 g of gold U wanted to swap 2 silver.

I would buy if I didn't have any silver. These prices will look dirt cheap in the future.

 

I wouldn't swap my gold for silver at the moment. Gold is a lower risk currency.

 

right I am obviously not completely understanding the gold:silver ratio then. I though you would wait for silver to be a lot higher in price terms first, or does this just depend on what you bought in at & what your silver:gold split is ?

...

Most people here said they would swap silver for gold at 50:1 last time this was properly debated.

 

I will be swapping a percentage of my silver for gold at 45:1, some more at 40:1, more at 35:1 and so on. I will only be doing this with my GoldMoney silver.

 

I won't consider swapping my coins till we get to 15:1.

 

I have no plans to trade my coins for another asset unless I am desperate. The money printing will never stop so I will keep holding my coins

 

EDIT: Silver over $17/toz

[dietcolaaddict]

right I am obviously not completely understanding the gold:silver ratio then. I though you would wait for silver to be a lot higher in price terms first, or does this just depend on what you bought in at & what your silver:gold split is ?

 

so when the silver ratio is at its lowest, that's the best time to sell your silver ? am I understanding this chart below correctly ?

so that huge spike in '79 was when the pos shot through the roof for a short time ? then you would either buy another hard asset with the currency of your choice, or buy back into gold then ?

 

edited - I know GF has been talking a lot about this lately.

 

 

Hi GOM

 

An old chart of mine - sorry it is not updated for the last 6 months or so - but I think this sums up my thinking

 

I'm not so sure the price of the metals matters much, especially if you are just accumulating PMs for a future purchase (from memory, I think a house is your plan). Thinking about this with respect to my circumstances, a house will be c. $100 oz gold, a new career (medical school) about $30 oz. I'm simply using the gold-to-silver ratio as a way to get extra ounces on the way to these targets than if I converted my monthly savings to gold straight off.

 

 

+ Notice that the ratio spends a lot of time at 50-55 - it is the largest bin size so there is no need to panic a decision to swap silver for gold in this ratio range. However, the bins below 50 are very small in size, so if the ratio falls below 50, it is likely that a spike is occuring, and so a quick decision is needed to swap.

 

+ Also - and a seperate issue I am still thinking about - I'd rather hold gold than silver during the 'April - August' doldrums as it has more of a floor (especially now China appear to be hoovering up gold every time there is a significant dip) . Silver seems to have a really low floor (around $5, where I believe it becomes unworthwhile to produce for miners), so it is more risky to hold silver during the seasonal doldrums than gold. I need to think this through more, it remains just a theory at the moment, any thoughts welcome.

[Pixel8r]

I will be swapping a percentage of my silver for gold at 45:1, some more at 40:1, more at 35:1 and so on. I will only be doing this with my GoldMoney silver.

 

I won't consider swapping my coins till we get to 15:1.

 

I have no plans to trade my coins for another asset unless I am desperate. The money printing will never stop so I will keep holding my coins

 

EDIT: Silver over $17

The same as above for me.

 

 

[dietcolaaddict]

 

Just to say - silver > $17 gold now at 1009.5.

 

Has something happened today - any rumours?

 

[bakachu]

Has something happened today - any rumours?

Im thinking it whats GF said.. can you say 'SHORT SQUEEZE'!

 

P.S

 

Excellent countdown image

[azazel]

Countdown round one - the letters game.

Anyone else score 6 ?

 

 

Erm, I can do 8 Bob. "Two wreck"

 

 

 

 

[wren]

so when the silver ratio is at its lowest, that's the best time to sell your silver ?

When the ratio is low the history of the last several years suggests that it's a good time to swap silver into gold.

 

When the ratio is high it has been favourable to swap gold into silver.

 

This way over the years some guys increase their total ounces over just sitting and holding.

 

However, considering that you have bars and coins selling one to buy the other would incur extra costs from the premiums (and VAT in the case of buying silver).

 

I believe that sometime probably late in this bull market the ratio will go to 20:1 or less (very long term like 20 years or so it could even go to 8:1 or lower).

 

So although the swapping has been friutful in this bull market so far at some point the swappers who swap at say 48 or 50 (which has been good so far) will get caught out. E.g. the ratio goes to say 48:1 and silver owners swap for gold, but the ratio continues to drop which one day it will have to if it is ever to reach 20:1. If that happens they would have been better off not swapping as silver does a Mars shot while gold does only a Moon shot.

 

In your case with physical silver bars I'd suggest that you just buy and hold until they buy a lot more house than today.

 

am I understanding this chart below correctly ?

 

so that huge spike in '79 was when the pos shot through the roof for a short time ? then you would either buy another hard asset with the currency of your choice, or buy back into gold then ?

The huge spike was the time to exit gold and silver for different assets.

 

It's best to compare them with real assets like houses and don't let the nominal paper money price deceive you.

[dietcolaaddict]

So although the swapping has been friutful in this bull market so far at some point the swappers who swap at say 48 or 50 (which has been good so far) will get caught out. E.g. the ratio goes to say 48:1 and silver owners swap for gold, but the ratio continues to drop which one day it will have to if it is ever to reach 20:1. If that happens they would have been better off not swapping as silver does a Mars shot while gold does only a Moon shot.

 

Thanks wren, good point.

I feel an evening of Excel lies ahead sometime looking at the G-to-S ratio and optimal historical exit/entry points

 

Erm, I can do 8 Bob. "Two wreck"

 

Sorry azazel, but Bubb and Steve in 'Dictionary Corner' have disallowed it for being two words.

Thus, it remains a 6-letter day.

[G0ldfinger]

... An old chart of mine ...

Good stuff.

[nicejim]

How about this for playing the gold:silver ratio.

 

If it goes below 50, bide your time but buy if it goes back to 51

If it goes below 45, bide your time but buy if it goes back to 46

etc

 

This way you could still have all your silver at 20:1 and only risk a small amount of the gains you'd make if you picked 50, 45 etc as buy points.

[grumpy-old-man]

I would buy if I didn't have any silver. These prices will look dirt cheap in the future.

 

I wouldn't swap my gold for silver at the moment. Gold is a lower risk currency.

 

 

Most people here said they would swap silver for gold at 50:1 last time this was properly debated.

 

I will be swapping a percentage of my silver for gold at 45:1, some more at 40:1, more at 35:1 and so on. I will only be doing this with my GoldMoney silver.

 

I won't consider swapping my coins till we get to 15:1.

 

I have no plans to trade my coins for another asset unless I am desperate. The money printing will never stop so I will keep holding my coins

 

EDIT: Silver over $17/toz

 

ah, that makes perfect sense now. I only talk about physical because that's all I have (or want )

[grumpy-old-man]

Hi GOM

 

An old chart of mine - sorry it is not updated for the last 6 months or so - but I think this sums up my thinking

 

I'm not so sure the price of the metals matters much, especially if you are just accumulating PMs for a future purchase (from memory, I think a house is your plan). Thinking about this with respect to my circumstances, a house will be c. $100 oz gold, a new career (medical school) about $30 oz. I'm simply using the gold-to-silver ratio as a way to get extra ounces on the way to these targets than if I converted my monthly savings to gold straight off.

 

yes, you are right, it's mainly for a house purchase. I am hoping the silver alone might do this @ 4 x ?

 

 

 

+ Notice that the ratio spends a lot of time at 50-55 - it is the largest bin size so there is no need to panic a decision to swap silver for gold in this ratio range. However, the bins below 50 are very small in size, so if the ratio falls below 50, it is likely that a spike is occuring, and so a quick decision is needed to swap.

 

+ Also - and a seperate issue I am still thinking about - I'd rather hold gold than silver during the 'April - August' doldrums as it has more of a floor (especially now China appear to be hoovering up gold every time there is a significant dip) . Silver seems to have a really low floor (around $5, where I believe it becomes unworthwhile to produce for miners), so it is more risky to hold silver during the seasonal doldrums than gold. I need to think this through more, it remains just a theory at the moment, any thoughts welcome.

 

that's a great chart DCA & info, many thanks. I will be learning about this & keeping a close eye on this ratio then.

 

[grumpy-old-man]

When the ratio is low the history of the last several years suggests that it's a good time to swap silver into gold.

 

When the ratio is high it has been favourable to swap gold into silver.

 

This way over the years some guys increase their total ounces over just sitting and holding.

 

However, considering that you have bars and coins selling one to buy the other would incur extra costs from the premiums (and VAT in the case of buying silver).

 

I believe that sometime probably late in this bull market the ratio will go to 20:1 or less (very long term like 20 years or so it could even go to 8:1 or lower).

 

So although the swapping has been friutful in this bull market so far at some point the swappers who swap at say 48 or 50 (which has been good so far) will get caught out. E.g. the ratio goes to say 48:1 and silver owners swap for gold, but the ratio continues to drop which one day it will have to if it is ever to reach 20:1. If that happens they would have been better off not swapping as silver does a Mars shot while gold does only a Moon shot.

 

In your case with physical silver bars I'd suggest that you just buy and hold until they buy a lot more house than today.

 

 

The huge spike was the time to exit gold and silver for different assets.

 

It's best to compare them with real assets like houses and don't let the nominal paper money price deceive you.

 

 

thanks also Wren.

[Pixel8r]

It pays not to get complacent. After all, there was a $6 smackdown in gold this morning

What is complacent about being in a historical physical currency in a world of quantitively eased fiat currencies?

 

I intend to be in the currencies of gold and silver until this fiat currency downfall is over. No trading for me, I can't understand anyone wanting to convert to fiat currencies in these times. I completely realise that some people maybe able to swap in and out and come out on the right side, but feel it would be very easy for me to lose by trying.

 

I actually changed my GBP to PMs in 2007, I intend to hold for many more years. The only currency conversions I am and will be doing is swapping between gold and silver. I actually feel people who are holding any fiat currency are the ones being complacent, in the face of the massive problems being faced by the governments of the world.

[lowrentyieldmakessense(honest!)]

What is complacent about being in a historical physical currency in a world of quantitively eased fiat currencies?

 

I intend to be in the currencies of gold and silver until this fiat currency downfall is over. No trading for me, I can't understand anyone wanting to convert to fiat currencies in these times. I completely realise that some people maybe able to swap in and out and come out on the right side, but feel it would be very easy for me to lose by trying.

 

I actually changed my GBP to PMs in 2007, in intend to hold for many more years. The only currency conversions I am and will be doing is swapping between gold and silver. I actually feel people who are holding any fiat currency are the ones being complacent, in the face of the massive problems being faced by the governments of the world.

+1

[romans holiday]

In regards to the ratio, a lot depends on whether you see another round of deleveraging on the horizon. If you see deleveraging then you will be getting very itchy fingers to get out at around 50.

 

How about this for playing the gold:silver ratio.

 

If it goes below 50, bide your time but buy if it goes back to 51

If it goes below 45, bide your time but buy if it goes back to 46

etc

 

This way you could still have all your silver at 20:1 and only risk a small amount of the gains you'd make if you picked 50, 45 etc as buy points

.

 

Nicejim's pragmatic approach looks like a good option to me. I wouldn't be too concerned if you swapped to gold then the ratio turned again and went a bit lower.... you will never get the exact bottom. Anyway, it is not like you have swapped for cash.

[Steve Netwriter]

right I am obviously not completely understanding the gold:silver ratio then. I though you would wait for silver to be a lot higher in price terms first, or does this just depend on what you bought in at & what your silver:gold split is ?

 

so when the silver ratio is at its lowest, that's the best time to sell your silver ? am I understanding this chart below correctly ?

so that huge spike in '79 was when the pos shot through the roof for a short time ? then you would either buy another hard asset with the currency of your choice, or buy back into gold then ?

 

edited - I know GF has been talking a lot about this lately.

 

 

I still don't use the ratio. Sorry to you guys who do

 

Remember this thread:

 

Gold versus Silver, Volatility & Swapping

http://www.greenenergyinvestors.com/index.php?showtopic=3127

 

This is how I look at it:

 

I watch the gold price. If gold looks like it's reaching a "top" (ie if it's risen a lot and will probably consolidate for a year or two), then I would swap silver for gold.

If on the other hand I think the gold price is reaching the end of a consolidation phase, and could well rise for 6 months or more, than I;d swap gold for silver.

 

So this is the sort of chart I look at:

 

 

If I don't get the timing quite right I tend to stick with it and wait for the next likely turn.

I don't wobble rapidly backwards and forwards

 

 

 

[AK72]

Thanks 4 the very toughtful posts & ways of playing/not playing the G/S ratio. Got 2 finetune my strategy for the future...

 

In case of stocks&economy tanks again between now & nov/october, would that make good entry point to silver if it´s dragged down with the other commodities after this upleg?

[Steve Netwriter]

My view is that now is about the best time to be heavier into silver.

Yes there could be dips short-term, but it does look very much like the end of a long consolidation phase.

 

I think in terms of 6 months not weeks.

 

[AK72]

Yearly cycle wise both pms are favored, but in the idea diversifying into silver now, I´m considering the possibility of a pullback, if the overall economy tanks again and in case of gold I would miss a my just diversified part of the gold upleg. The metals tend to move in tandem, but the overall economic downfall could affect silver more.

[njpurser]

Yearly cycle wise both pms are favored, but in the idea diversifying into silver now, I´m considering the possibility of a pullback, if the overall economy tanks again and in case of gold I would miss a my just diversified part of the gold upleg. The metals tend to move in tandem, but the overall economic downfall could affect silver more.

Me too. Have sold out anticipating Dow/FTSE plunge in the next three months, then will buy back.

 

We are not at the endgame or hyperinflation yet and piles of government debt needs to be dealt with.

 

I think the Americans and Chinese will fight each other over gold and silver, and the Chinese will let them take prices down and the dollar up, then stick the knife in and buy big- screwing those banks that short the price down.

 

Buy and hold is one strategy, but I think it overlooks certain opportunities. Frequent trading is a mug's game.

 

 

 

Nick

 

Great graph Steve, but is the text describing your swap strategy right or am I reading it wrong?

[Steve Netwriter]

I guess it depends how much you think silver has moved from a consumed commodity towards being a monetary commodity.

It's always going to be a bit of a gamble with silver. IMO the only way to play it is make your decision and hang on tight. If you are convinced of your decision long-term.

 

My bet is that the Chinese general public investment effect will limit any dips from now on.

 

Good luck with your decision.

 

[Steve Netwriter]

Great graph Steve, but is the text describing your swap strategy right or am I reading it wrong?

 

Hi Nick,

It's really describing my view on the long-term way gold moves. So when gold looks initially "overbought" would coincide with the sort of time I'd be looking at going more into gold than silver.

The end of that phase (as in "this is it"), would be the sort of time I'd be going more into silver.

 

Obviously if you can pick the best dip of the consolidation phase then that would be THE best time to move more into silver.

I'd have done that in Nov, when most people seemed rather upset at the falls, but I'd already picked an earlier dip

Often it's the first dip, but last time it wasn't