Playing the gold/silver ratio

[Bean]

Anyone play the gold/silver ratio?
It would be a good way to add "free" silver or gold over time to your stash.( although it does take awhile)
You might have trouble trying to find a place to trade up when the time comes.
The ratio is about 80:1 right now, that means it takes 80 oz. of silver to get 1 oz. of gold. And it goes up and down every few years.
Lets say you have 1 oz. of gold and you traded it for 80 oz. of silver. When the ratio goes down to lets say 40:1, you would trade in
your 80 oz. of silver to get 2 oz. of gold. Then if it goes to 100:1, 2 oz. of gold gets you 100 oz. silver. Then around 20:1 your 100 oz.
silver gets you 5 oz. of gold.
I know its not as simple as that but I just wanted to explain it for people who might not know what I'm talking about.
The example I showed above might be over the course 15 years or so but you can see how you can increase your holdings without
doing to much.
But like I said before the only problem might be trying to find a place to trade when the time comes and get as close to the real ratio
as you can. (of course there will be some sort of fee on the trade so you wont get the actual ratio, but pretty close I think).

good?......bad?.......not worth it?........what in the world is he talking about?.............


Bean

 

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[jim4silver]

Anyone play the gold/silver ratio?
It would be a good way to add "free" silver or gold over time to your stash.( although it does take awhile)
You might have trouble trying to find a place to trade up when the time comes.
The ratio is about 80:1 right now, that means it takes 80 oz. of silver to get 1 oz. of gold. And it goes up and down every few years.
Lets say you have 1 oz. of gold and you traded it for 80 oz. of silver. When the ratio goes down to lets say 40:1, you would trade in
your 80 oz. of silver to get 2 oz. of gold. Then if it goes to 100:1, 2 oz. of gold gets you 100 oz. silver. Then around 20:1 your 100 oz.
silver gets you 5 oz. of gold.
I know its not as simple as that but I just wanted to explain it for people who might not know what I'm talking about.
The example I showed above might be over the course 15 years or so but you can see how you can increase your holdings without
doing to much.
But like I said before the only problem might be trying to find a place to trade when the time comes and get as close to the real ratio
as you can. (of course there will be some sort of fee on the trade so you wont get the actual ratio, but pretty close I think).

good?......bad?.......not worth it?........what in the world is he talking about?.............


Bean

Playing the ratio could be a good idea, but the way f'd up premiums make it hard now. If you can get silver ounces now for spot and want to trade them for gold when the ratio ever gets back say 50 to 1 you would obviously be doing well. But right now the prices are out of whack with respect to silver paper vs. physical, so the real ratio is not as high as it is on paper.

For example, ASEs here are going for roughly 17 a piece. A gold eagle is about 835. Thus the ratio is closer to 50 to 1 now as far as physical prices go. You can get cheaper off brand silver rounds and off brand gold, like mexican pesos and coronas, so perhaps you can get a higher ratio that way.

Jim

 

[Silver Stripe]

Jims right- the prems are F'n that all up. Only way to play ratio is with paper and that of course holds transaction fees- and who wants to hold paper anyways. HH Mark

 

[Bean]

Yeah, the premiums do throw a monkeywrench in the works.
But now is the time to hold silver (as far as the ratio goes anyway), so there's no trade for me right now.
Never done it before, but I like to entertain some ideas I have.
Maybe in a few years, if the ratio drops, I could look into trading for gold, and if I find someone to do it and don't
like the numbers then I won't do it, no harm done.
I'll just keep on buying silver and gold the way I do now.
Gotta love p.m. investing.... you don't need a broker or some investment firm, you buy and store it yourself, you know exactly what
you have and sell it when you want to, no pressure... and when you hold those silver and gold coins in your hand, you feel
like you've accomplished something great.

Bean