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galtbob
06-27-2011, 06:50 AM
I was juct thinking about this:

1 Am Silver Eagle = $1 - 1 ounce of silver
1 Am Gold Eagle = $50 = 1 ounce of gold.

China the same

1 Silver Panda = 10 Yuan = 1 ounce of silver
1 Gold Panda = 500 Yuan - 1 ounce of gold.

Same 50 to 1 ratio.

Any other currencies where this is true ?

IF we are headed for a new set of currencies, don't it make sense that if they implement any PM based system that at least locally each government will maintain a 50 - 1 ratio ? Otherwise, they would have to remelt and re-issue hundreds of millions of coins that are otherwise "almost" ready for a new currency system.

I know the tail does not wag the dog. But US AND China both did this....

Ortofon
06-27-2011, 12:32 PM
In Canada the ratio is 10:1?

couchguitarist
06-27-2011, 12:32 PM
Sounds like Fiat Precious Metals Currency. It is this amount because I the democratically elected dictatorate decree it to be so. Often times the market sees things differently.

Ag gnostic
06-27-2011, 12:43 PM
Sounds like Fiat Precious Metals Currency. It is this amount because I the democratically elected dictatorate decree it to be so. Often times the market sees things differently.

It used to be 20:1 in the US, didn't it? I think that might have caused a problem because the 20:1 ratio is not the same ratio the metals were being mined at (15:1 or so?).
2010 = about 2500 tonnes gold produced / 22850 tonnes silver produced. Less than 10:1.

Carssman1
06-27-2011, 01:28 PM
Kinda off topic but along the same lines,


This isn't supposed to be taken real seriously but it may give us somewhat of a future indication of where silver might be heading..

Gold is Currently at $1500, divide that by regular gold bullion demon's ($50) gives us approx 30 times the face.

Silver, currenty $34, divide that by regular silver bullion denom's (5) gives us 6.8 times face.


Now lets see what silver's true value is, based of this calculation would be.

5 x 30 = $150 is where we probaly should be at considering the gap with gold bullion face vs. current spot.

Thats sounds about right, that would give us a ratio of 10-1 at current gold spot.

If we go to a historical scenrio at 15-1 ratio.. 150 silver would give us 2250 gold.

Prospector
06-27-2011, 03:08 PM
If you could actually buy a gae for $50 and a sae for $1, then your thesis might have some significance.

ETA: The logical basis for the GSR is that mining silver costs $6 to $8 per ounce, and gold costs $400 to $500 per ounce. That sets the spot range between 50 and 80.

MorganPSLV
06-27-2011, 03:28 PM
I was juct thinking about this:

1 Am Silver Eagle = $1 - 1 ounce of silver
1 Am Gold Eagle = $50 = 1 ounce of gold.

China the same

1 Silver Panda = 10 Yuan = 1 ounce of silver
1 Gold Panda = 500 Yuan - 1 ounce of gold.

Same 50 to 1 ratio.

Any other currencies where this is true ?

IF we are headed for a new set of currencies, don't it make sense that if they implement any PM based system that at least locally each government will maintain a 50 - 1 ratio ? Otherwise, they would have to remelt and re-issue hundreds of millions of coins that are otherwise "almost" ready for a new currency system.

I know the tail does not wag the dog. But US AND China both did this....total bullion face value is too small compare to monies needed for circulation. New silver and gold coins can be easily issued for circulaton purposes.

HighInBC
06-27-2011, 08:28 PM
By your logic the silver to gold ratio would be different in Canada than the US. Silly.

GoldSilverbvg
06-27-2011, 08:49 PM
By your logic the silver to gold ratio would be different in Canada than the US. Silly.

Historically they have been different in different countries. At one time in the US the GSR was 15/1, while at the same time in France the GSR was 15.5/ 1 at one point. Slight, but still a difference. I am not saying this is how it should be going forward.

Desert Diamond
06-28-2011, 01:06 AM
If you could actually buy a gae for $50 and a sae for $1, then your thesis might have some significance.

ETA: The logical basis for the GSR is that mining silver costs $6 to $8 per ounce, and gold costs $400 to $500 per ounce. That sets the spot range between 50 and 80.

then how come for some 2,000+ years it averaged 16:1 ???

HighInBC
06-28-2011, 09:54 AM
Historically they have been different in different countries. At one time in the US the GSR was 15/1, while at the same time in France the GSR was 15.5/ 1 at one point. Slight, but still a difference. I am not saying this is how it should be going forward.

50:1 vs 10:1 would balance out fairly quickly with our modern postal system.

Face value means nothing when it comes to modern bullion. They just pick a low number and slap it on.

then how come for some 2,000+ years it averaged 16:1 ???

Was it? I know it was around that level when it was American money, but going back 2000 years? Do you have a source on that, I would love to see the details.

Ag gnostic
06-28-2011, 11:09 AM
1st Cent BC - 4th Cent AD: 1~7.3g Roman gold Aureus = 25~6.8g Roman silver Denarius. (about 23.25:1).
337AD-476AD: 1~4.5g gold Solidas = 10~3g silver Argenteus. (6.67:1).

Something I found, I don't know how accurate it is:

Historical Ratios of the Price of Gold to the Price of Silver
Menes (1st Egyptian Dynasty, 3100 BC) gold/silver price ratio of 1 to 2½
Croesus Mermnadae (561-546 BC) official gold/silver price ratio of 1 to 13 1/3
Augustus (Early Imperial Rome) gold/silver price ratio of 1 to 12.50
Charlemagne (AD 781) gold/silver price ratio of 1 to 12.00
Edward III (14th Century England gold/silver price ratio of 1 to 11.57
Jean le Bon (14th Century France) gold/silver price ratio of 1 to 11.11
Spain 1500 massive silver supplies from the Western Hemisphere jump above ratio 1 to 13.0
China 1400 to 1600 gold/silver price ratio of 1 to 5 rising to 1 to 8
Spain 1687 gold/silver price ratio of 1 to 15.0
Isaac Newton (Royal Mint, 1717) gold/silver price ratio of 1 to 15.21
Napoléon Bonaparte (1803) gold/silver price ratio of 1 to 15.5
France's bimetallic system 1848 to1873 French legal ratio of 1 to 15.5
US Coinage Act of 1873 gold/silver price ratio of 1 to 16.00
US 1876 gold/silver price ratio of 1 to 18
US 1886 gold/silver price ratio of 1 to 20
US 1900 gold/silver price ratio of 1 to 33
US 1910 gold/silver price ratio of 1 to 38

radioone
06-28-2011, 08:18 PM
Average through the last decade bull run has been very near 55:1..... that's what I use as the mean...... ;)

lao tzu
06-28-2011, 08:48 PM
them silver lakotas have 50 on the back!

MaxGravy
06-28-2011, 09:08 PM
If you could actually buy a gae for $50 and a sae for $1, then your thesis might have some significance.

ETA: The logical basis for the GSR is that mining silver costs $6 to $8 per ounce, and gold costs $400 to $500 per ounce. That sets the spot range between 50 and 80.

I had no idea it was that cheap to mine silver. Can it be panned, or prospected by an individual?

What are your sources on mining costs?

Thanks