{"id":335,"date":"2010-08-20T14:12:58","date_gmt":"2010-08-20T18:12:58","guid":{"rendered":"http:\/\/www.silver-investor.com\/blog\/?p=335"},"modified":"2018-06-10T10:58:20","modified_gmt":"2018-06-10T10:58:20","slug":"silver-two-of-seven","status":"publish","type":"post","link":"https:\/\/www.themorganreport.com\/blog\/silver-two-of-seven\/","title":{"rendered":"Silver, Two of Seven"},"content":{"rendered":"

Silver, Two of Seven
\nRichard (Rick) Mills
\nAhead of the Herd
\nAs a general rule, the most successful man in life is the man who has the best information.
\nIn the time of the ancient Babylonians – long before the periodic table – there were seven sacred metals: gold, silver, copper, iron, tin, lead and mercury.
\nIn Roman and Greek Mythology, the First Age was called Golden, the Second Age Silver. Apollo, the god of truth and light, and teacher of medicine, carried a silver bow.
\nThe hieroglyph of\u00a0 Isis (Egyptian moon goddess) is a crescent and images of her are usually reproduced with her standing on the Crescent. This has also become the symbol for silver \u2013 on old maps a crescent shows the location of a silver mine.
\nIslamic alchemy gave silver an important place, alchemical procedures were defined in terms of silver – the silvering of other metals, the act of giving other metals silver like qualities.
\nWe\u2019ve long practiced the science (metallurgy) of separating silver from lead – the earliest known workings of any significant size were those of the pre-Hittites of Cappadocia in eastern Anatolia, the first sophisticated processing of lead-silver ore was attributed to the Chaldeans around 2500 B.C.
\nSilver metal was recognized as more precious than gold when bartering in ancient Egypt – this recorded as early as 930 BC. Silver\u2019s use as money in coin form began around 2600 years ago.\u00a0The Lydian (present day Turkey) Trite is considered by many experts to be one of the first coins used as money. It was made of \u201cElectrum\u201d, a silver and gold mixture. Egyptian silver in coin form began appearing around 300BC.\u00a0
\nSilver and gold have stood the test of time, as a medium of exchange, a storehouse of value and a safe haven in times of turmoil.
\nThe history of fiat money has always been one of failure (most paper money economies downfall\u00a0 can be linked directly to the costs of financing out of control military growth and its wars). Every fiat currency since the Romans started diluting the silver content of their denarius has ended in devaluation and eventual collapse of\u00a0 both the currency and of that particular economy.
\nFor the very first time in our history, all money, all currencies, are now fiat – the US dollar use to be gold backed and it was the rock all the worlds currencies were anchored to – when the US dollar became fiat, all the worlds currencies became fiat.
\nThe Federal Reserve first issued its debt based paper money in 1913. Since then the US dollar has lost 95% of its value.
\n“The major monetary metal in history is silver, not gold.”<\/em> Milton Friedman, Nobel Laureate
\nIn this author\u2019s opinion silver has a few unique twists:
\nFirstly as a much cheaper precious metal silver is winning market share from gold buyers. The higher gold prices go the more consumers will step down to silver, more so if they think silver\u2019s price will rise substantially.
\nToday the gold:silver ratio stands at 65.94:1
\nGold $1224 oz\/silver 18.56 oz\u00a0 =\u00a0 65.94
\nHistorically the ratio has been 15:1
\nSince silver made it\u2019s nominal high in 1984 the gold:silver ratio has held fairly steady at 45:1 – with the current ratio at 65.94:1 either gold will have to fall or silver will have to rise to $27.20 in order to get the numbers back in sync with\u00a0 45:1.
\nTo get back to the historical average ratio of 15:1 silver would have to rise to $81.60 an oz.
\nSilver, like gold, also performs it\u2019s function as a precious metal \u2013 acting as a storehouse of value and a safe haven in times of turmoil – although, and herein might lie the opportunity, silver seems to have been asleep on the job what with the historical gold:silver ratio being so out of whack.
\nGold does seem to be performing admirably and in this authors opinion does not seem set to significantly drop in price any time soon, the Dow on gold\u2019s terms:
\n\u2022 In 2000 gold made its $260 per ounce low
\n\u2022 January 2000 the Dow was 10,900
\n\u2022 10,900 \/ $260 per ounce = 41.9 ounces to buy the Dow
\n\u2022 Today at 10,443 DJII and $1,224 gold it\u2019s 8.53 oz to buy the Dow
\nSecondly silver is an industrial metal\/commodity which, unlike gold, is consumed, therefore giving you a call on an economic recovery.
\n\u201cSilver is a unique metal that wins whether the economy is going well or is in bad shape. In the latter, the investor buys it as a hedge against the downturn in the economy and the markets. And if the economy improves, then the industrial demand increases.\u201d<\/em> Chintan Parikh, CPM Group commodity analyst.
\nThe bottom line? Silver gives you a nice double play with prices expected to perform well no matter what the prevailing economic or geopolitical conditions.
\nThird silver does not have the threat of much publicized Central Bank and IMF sales constantly overhanging it – although silver does seem to trade in lockstep with gold when this old bogey man is trotted out to the herd.
\nConclusion<\/strong>
\nIn this authors opinion, it\u2019s not if, but rather when, the gold:silver ratio will revert to a more traditional number and share price upswings will trickle down to the very few junior silver producers, the soon to be producers, developers and explorers. It\u2019s for these reasons that silver and silver junior precious metal company\u2019s should be on every investor\u2019s radar screen.
\nAre they on yours?
\nRichard (Rick) Mills
\nrick@aheadoftheherd.com<\/a>
\nwww.aheadoftheherd.com<\/a>
\nIf you’re interested in learning more about specific junior silver\/gold stocks and the junior resource market in general please come and visit us at www.aheadoftheherd.com<\/a>
\nMembership is free, no credit card or personal information is asked for.
\nRichard is host of aheadoftheherd.com and invests in the junior resource sector. His articles have been published on over 200 websites, including: Wall Street Journal, SafeHaven, Market Oracle, USAToday, National Post, Stockhouse, Casey Research, 24hgold, Vancouver Sun, SilverBearCafe, Infomine, Huffington Post, 321Gold, Kitco, Gold-Eagle, The Gold\/Energy Reports, Calgary Herald, Resource Investor and Financial Sense.
\n***
\nLegal Notice \/ Disclaimer
\nThis document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified; Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.
\nRichard Mills does not own shares in any company mentioned in this report and none are sponsors on his website aheadoftheherd.com
\nSilver (Ag) has an atomic number of 47. This means it is the 47th element in the periodic table by atomic weight and contains 47 electrons.
\nSilver has a hardness rated between 2.5 and 2.7, and is therefore one of the most malleable of all metals. Silver is white and lustrous.
\nUp until about the 1930’s, and the discovery of antibiotics, silver compounds were used as a normal part of medicine, silver nitrate being the prevalent form. Silver Iodide was used in babies’ eyes upon birth to prevent blinding as the result of bacterial contamination.<\/p>\n","protected":false},"excerpt":{"rendered":"

Silver, Two of Seven Richard (Rick) Mills Ahead of the Herd As a general rule, the most successful man in life is the man who has the best information. In the time of the ancient Babylonians – long before the periodic table – there were seven sacred metals: gold, silver, copper, iron, tin, lead andMore<\/a><\/span><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[121,89],"tags":[],"yoast_head":"\nSilver, Two of Seven<\/title>\n<meta name=\"description\" content=\"Silver, Two of Seven\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.themorganreport.com\/blog\/silver-two-of-seven\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Silver, Two of Seven\" \/>\n<meta property=\"og:description\" content=\"Silver, Two of Seven\" \/>\n<meta property=\"og:url\" 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