The precious metals market, led by gold, is showing signs of life. Still, with gold breaking out above $1,300 per ounce, silver continues to languish below $15. The gold-silver ratio is a great metric to gauge how the metals are performing.
Mike Maloney continues to believe there is something bad heading for the US economy. If he is right and the Fed begins printing money again, gold and silver prices will likely rise. Maloney remains adamant that the bargain is with silver, not gold.
Silver is Trading at just 1/90th the Price of Gold
In a video from June 4th, Jeff Clark, the Senior Precious Metals analyst at Goldsilver.com, explains that the gold-silver ratio has only been this high on two occasions.
In 2011 when gold peaked, Mike Maloney stopped buying silver and focused on gold. The gold-silver ratio fell to near 30 to 1. What’s more, silver fell to a 15 to 1 ratio in 1980.
Silver is Down Near 70% Since 1980 High
Can you think of something cheaper today than in 1980? Mike Maloney and Jeff Clark talk about how most everything is more expensive today than it was in 1980. Clark specifically speaks to commodities, which have all increased markedly since 1980.
Maloney made some bold predictions towards the end of the video. Stating,
“If it’s at 90 now, and it goes to 10, which I believe it probably will. It means that silver is going to outperform gold by a factor of 9. That’s huge.”
He is, of course, referring to the gold-silver ratio which sits at a 28 year high today – near 90. Silver tends to outperform gold on the way up during bull markets. Despite Trump’s booming economy, the US national debt continues to increase by more than $800 billion each year. Something has to give; and, despite the Fed reducing its balance sheet well below $4 trillion and the US economy adding almost $5 trillion since 2009, interest rates remain relatively low.