Capital Treasures

Rising cost of silver and and gold has had a hit on crafters, jewelers and metalsmiths alike. Even the once ubiquitously cheap copper is no match for the ever moving market forces. One might threaten to just melt down some Peace dollars in spite just to get raw material for projects. Considering the cost of some of the early purchases were so much cheaper then where the prices stand today – $7/ounce; see hoarding does pay off…  I think I might dig up rocks in the back yard and do more

One interesting factor and point to consider… These days there are more people investing in silver than gold. Somewhere close to 400,000,000 ounces of silver have been purchased by electronic trading funds. It’s just a cheaper alternative to the rising cost of gold… lets say Apple vs Google vs Berkshire Hathaway Class A stocks.

* Earth has roughly 20 times more silver than it does gold. This means the ratio in the chart above for the year 1970 was reflective of that natural balance. If Silver were to return to a 20:1 ratio as compared to today’s prices on gold, we would see $70 silver!

* Gold is generally recovered after its useful life. Silver, on the other hand, is being used in applications from which it is unlikely to ever be recovered. For example, many photos use silver – which will never be recycled for the silver. Bandages are using silver due to its medicinal properties – again, unlikely they will ever be recycled for the silver. Electrical switches use silver, due to its unique electrical properties, and while these may eventually be salvaged, the amount per switch is so small, they may not.

Check out the rest of Rio Grandes’ introspection on the sudden rise of silver and gold.
http://riograndeblog.com/2010/12/bam-silver-prices-again/