What’s the ratio?

Buy Gold Buy SilverI know you are expecting for me to talk about the jump in gold prices and the dive in the stock markets and I will! …in another post.  We know the circus that is happening politically, we are now the clown attraction of the world’s circus. It’s embarrassing. Could it be legit? Sure, it could. I think every single politician would be in jail should the truth come out of their closets (and they actually are subjected by the same laws as you and I – which we know they are not).

Anyway, I need some more time to research all this and put it together. I have been working on today’s prior to the market turmoil and independent counsel set to investigate Trump’s ties to Russia. I read from source (a host) far too many people use as their main source of information (if you dare call it that) claiming that Trump is on Putin’s payroll. They really hate that man! Will he last another six months as the POTUS? Many are betting that he will not.

Let’s slam the breaks on that and change topics (not the best strategy when writing a post, but hey, today was not a typical day).

Today’s topic is actually more appropriate today than it was when I decided to write about it, based on what happened in the markets today.

In last week’s “Week in Review” post, I mentioned the massive imbalance of “paper gold” to physical gold. I found that the paper to physical ratio was around 260:1 (meaning there are 260 ounces of paper to every available ounce of physical gold). That’s horrible (to say the least) and one reason how and why physical metal pricing is where it’s at, suppressed.

Monday, a regular reader of these posts asked about the ratio of paper silver to physical silver.  As I often do, I decided to research this more and take her suggestion and run with it. You know what you want to read about, if you tell me, I’ll do my best to research it and write about it.

What I found was/is intriguing and scary. I figured I’d share for a moment on how disastrous the paper silver market is.

Hang on, it’s going to get ugly.

It could suffice if I simply said the paper silver to physical silver is much higher than the paper gold to physical gold ratio is. I think that may be a given, given that silver to gold ratio is (as I type this) is 74:1.

An organization called “The Silver Institute” produces a World Silver Survey that tracks most everything about the silver markets (as much as can be tracked anyway). You can click here to get a copy of the 2017 report.

According to their research, as presented in the report, the total physical silver purchases for all of 2016 came in at $4.35 billion.  Yes, you read that correctly, around our entire globe a mere $4.35 billion was spent on physical silver in all of 2016. Amazon’s creator Jeff Bezos made more than that in one day off Amazon.com stock (nearly triple).

Here is how they broke it down for 2016:

– Physical Silver Bars sold: 83.6 Million ounces

– Official Coins & Medals: 123.2 Million ounces

– ETP (ETF) Inventory:  47 Million ounces

For a grand total of: 253.8 Million ounces of physical silver sold in 2016.

You get that $4.35 billion by multiplying the total physical silver sold by the average silver spot price for 2016 which was around $17.15, it totaled $4.35 billion.

Now we know how many physical ounces where sold, what about much paper silver? Let’s see…

Based on the data put out by the 2017 World Silver Survey, total paper silver trading around the world was 159 billion ounces in 2016.

We had 253.8 MILLION ounces of physical silver sold, 159 BILLION ounces of paper silver! Wow. No wonder silver has been so low!

What we need to do now is multiply the 159 billion ounces of paper silver traded in 2016 by the average spot price in 2016 of $17.15, we arrive at a staggering $2.7 trillion (approximately) of paper silver traded versus $4.4 billion actual silver purchases.  If I did the math correctly that’s a silver trading ratio to physical silver investment of somewhere around 613:1, more than double the  260:1 for gold.

As a disclaimer, there are instances of silver sales, such as everyday “over the counter” sales that are accounted for. We are talking mined, refined, retailed.

Here’s a basic observation/truth. Gold and silver prices are being repressed because, as with fiat (baseless paper currency) paper contracts can be added as more funds move in. They need more money, they create more silver and gold paper. They need the markets to go down, they (or someone who owns the paper) dumps it on the open markets. We have seen happen many times.  Gold and silver is limited, digital “paper” is not. This WILL be corrected eventually, period. You will be beyond happy that you have your physical gold and silver when it does!

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