How to make sense of the gold-to-silver ratio

[jeff of pa]

Silver has surged 29% year to date to about $40 an ounce,

compared with

gold’s 13% year-to-date advance, to just over $1,600 an ounce.

Silver is “cosmetically much cheaper” than gold, he said, and if the whole monetary systems breaks down, “gold is likely to be confiscated to back up a new monetary system and silver would become the safe haven of choice investors could still freely invest in.”

http://www.marketwatch.com/story/how-to-make-sense-of-the-gold-to-silver-ratio-2011-07-19

 

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[jim4silver]

Whenever a pundit talks about gold "confiscation", they never talk about why the first "confiscation" happened, nor where all of this current gold would come from.

How many people own gold bullion today in the US? Even many here claim that they only own silver and not gold. Is the gov gonna "confiscate" wedding rings and jewelry? I am sure that is gonna go over well with the populace.

I would personally be much more worried about my 401K or IRA being "commandeered" in some manner by the gov than my PMs. Trillions of $$$$ in those accounts just sitting there. I would opine that a new law could be made to immediately "tax" those holdings or force a percentage into treasuries well before any gold "confiscation" law comes into being. Not only is there not much gold bullion in the private hands of US citizens, but even that which does exist would probably be sent overseas or buried before it was turned in, just like many apparently did in the first "confiscation". To this day there are still "hoards" of Unc pre 1933 US gold being found in European vaults that have been there since the 30s.

If it ever became more profitable to turn PMs in for a new commodity backed currency I would do it in a minute. My goal is to preserve what I have and I know that at some point in the future PMs will not be that place to be. Every asset or commodity that becomes a bubble will burst, PMs are no different. It is just not yet.

Jim

 

[jeff of pa]

yes it was much easier to confiscate gold
when what they were mainly taking
were Spendable Gold coins.

Once they were deposited in the Bank
they were lost to you forever.

Plus people were easily manipulated back then.

"It's for the country"
"It's the Law"
"Your President is asking you for this"
etc.

Now it would be like

"Turn in your Guns & front door locks,
so we can search your house perodically"

 

[hombre_de_plata_flaco]

I believe jewelry and "collectible" gold coins were exempt from Roosevelt's Executive Order #6102...

http://en.wikipedia.org/wiki/Executive_Order_6102

Everything old is new again. The debate about the Gold Standard is creeping back to the forefront. In the late 1800's, there was a political party that favored a "bimetallic" standard of silver and gold called the "Silverites". They favored "free coinage" of silver - which meant you could bring your silver bullion into a mint branch and exchange for US coin, as was already the case with gold at that time.

Here are a few short wiki entries about the situation back then. Pretty interesting stuff.

http://en.wikipedia.org/wiki/Free_Silver

http://en.wikipedia.org/wiki/Silverites

http://en.wikipedia.org/wiki/Bimetallism

http://en.wikipedia.org/wiki/Greenback_Party

http://en.wikipedia.org/wiki/Cross_of_Gold_speech

 

[billjustbill]

I believe jewelry and "collectible" gold coins were exempt from Roosevelt's Executive Order #6102...

After seeing the printed page of the government's recall of gold, I remember reading that they did the same for silver. Do you know where I could look to find that?
Thanks,
Bill

 

[hombre_de_plata_flaco]

After seeing the printed page of the government's recall of gold, I remember reading that they did the same for silver. Do you know where I could look to find that?
Thanks,
Bill

That would be Executive Order 6814 JustBill:

Executive Order 6814 - Requiring the Delivery of All Silver to the United States for Coinage
August 9, 1934
Public Papers and Addresses of Franklin D. Roosevelt

By virtue of the authority vested in me by the Silver Purchase Act of 1934 and of all other authority vested in me, I, Franklin D. Roosevelt, President of the United States of America, do hereby require the delivery of all silver situated in the continental United States on the effective date hereof, by any and all persons owning, possessing, or controlling any such silver, and do hereby require any and all persons owning, possessing, or controlling any such silver to deliver the same in the manner, upon the conditions and subject to the exceptions herein contained, such action being in my judgment necessary to effectuate the policy of the Silver Purchase Act of 1934. . . .

Section 2. Silver required to be delivered..–There shall be delivered in accordance with the terms of this order all silver situated in the continental United States on the effective date hereof, except silver falling within any of the following categories so long as it continues to fall thereunder:

(a) Silver coins, whether foreign or domestic;

(b) Silver of a fineness of .8 or less, which has not entered into industrial, commercial, professional, artistic, or monetary use;

(c) Silver mined, after December 21, 1933, from natural deposits in the United States or any place subject to the jurisdiction thereof: Provided, however, That so much of such silver so mined in the continental United States on or before the effective date of this order which shall not have been deposited with a United States mint tinder the proclamation of December 21, 1933, shall, if processed to a fineness greater than .8 within 75 days from the effective date of this order, be delivered in accordance with this order, not later than 90 days from the effective date hereof, or if processed to a fineness greater than .8 after 75 days from the effective date of this order, be delivered within 15 days thereafter in accordance with this order;

(d) Silver held for industrial, professional, or artistic use and unmelted scrap silver and silver sweepings in an amount not exceeding in the aggregate 500 fine troy ounces belonging to any one person;

(e) Silver owned on the effective date hereof by a recognized foreign government, foreign central bank, or the Bank for International Settlements;

(f) Silver contained in articles fabricated and held in good faith for a specific and customary use and not for their value as silver bullion; or

(g) Silver held under a license issued in accordance with Section 6 hereof.

Section 3. Time and place of delivery..–The silver required to be delivered here under shall be delivered not later than 90 days from the effective date hereof to the United States mint nearest to the place where the silver is situated immediately prior to delivery: Provided, That such silver temporarily falling within the exempt categories enumerated in Section 2, shall be delivered at the end of 90 days from the effective date hereof, or 15 days after the time when it ceases to fall within such categories, whichever date is later. Any person acquiring ownership, possession, or control of silver required to be delivered under this order after 75 days from the effective date hereof, shall deliver such silver within 15 days of such acquisition.

SECTION 4. Amount returnable for silver..–The silver herein required to be delivered shall be coined into standard silver dollars, or otherwise added to the monetary stocks of the United States in accordance with the proclamation, bearing the same date as this order, relating to the coinage of silver, and there shall be returned therefor in standard silver dollars, silver certificates, or any other coin or currency of the United States, the monetary value of the silver so delivered (that is, $1.2929+ a fine troy ounce), less a deduction of 61 8/25 percent thereof for seigniorage, brassage, coinage, and other mint charges, as provided in such proclamation; that is, the amount returnable for the silver delivered in accordance herewith shall be an amount equal to 50+ .– a fine troy ounce, which amount is not less than the fair value, at the time of this order, of the silver required to be delivered hereunder as determined by the market price over a reasonable period terminating at the time of this order.

Section 5. Reimbursement of costs..–The Secretary of the Treasury shall pay all necessary costs, actually incurred, of the transportation of such silver and standard silver dollars, silver certificates, and other coin or currency of the United States, including the cost of insurance, protection, and such other incidental costs as may be reasonably necessary. Persons desiring reimbursement of such costs shall submit their accounts on voucher forms which may be obtained by writing to the Treasurer of the United States, Washington, D.C.

Section 6. Licenses..–The Secretary of the Treasury, subject to such regulations as he may prescribe, acting directly or through such agency or agencies as he may designate, shall issue licenses authorizing the withholding of silver which the Secretary of the Treasury, or such agency as he may designate, is satisfied

(a) is required for legitimate and customary use in industry, profession, or art by a person regularly engaged in such industry, profession, or art or in the business of processing silver or furnishing silver therefor;

(b) has been imported for reexport; or

(c) is required to fulfill an obligation to deliver silver in such amount to a third person, incurred or assumed by the applicant on or before the effective date of this order; Provided, That at the date of the application, the applicant owns such silver or holds the obligation of another to deliver to him such silver.

The Secretary of the Treasury may, with the approval of the President, issue licenses authorizing the withholding of silver for purposes deemed to be in the public interest and not inconsistent with the purposes of the Silver Purchase Act of 1934 and of this order.

Section 7. Deliveries in fulfillment of obligations or to licensees.–No person required to deliver silver owned by him or in his possession or control shall be deemed to have failed to comply with the provisions of this order, if such silver is delivered in fulfillment of an obligation incurred or assumed by such person on or before the effective date of this order or is delivered to a person licensed to acquire and withhold silver in such an amount under Section 6......

Read more at the American Presidency Project: Franklin D. Roosevelt: Executive Order 6814 - Requiring the Delivery of All Silver to the United States for Coinage http://www.presidency.ucsb.edu/ws/index.php?pid=14741#ixzz1SjcZc9QR

 

[billjustbill]

After seeing the printed page of the government's recall of gold, I remember reading that they did the same for silver. Do you know where I could look to find that?
Thanks,
Bill

That would be Executive Order 6814 JustBill:

Executive Order 6814 - Requiring the Delivery of All Silver to the United States for Coinage
August 9, 1934
Public Papers and Addresses of Franklin D. Roosevelt



Thanks, that's exactly what I needed!!

What do you think the probability percentage that this would happen again?