Thursday, April 05, 2012

Quick thought on gold and silver prices and their historical ratio

With the proliferation of all the gold buying stores, ads, and parties around I wonder if some economists are correct that the bubble has begun for precious metals. We own a little of each, but it is a very small percent of our total portfolio. I prefer silver because there so many interesting bullion coins made. I have both a Jose Canseco and a John Lennon bullion coin. How cool (or weird) is that?

For us the money invested is just fun money. But I do read about people that are 40% in. Or even all in. A potentially very dangerous position in a very volatile space. But some people think it helps them sleep better at night not trusting in stock, bonds, real estate, and money, etc. And some of these people truly think economic collapse and upheaval is nearing. I think the odds are stacked against their favor. Hard to believe just one assets will trump all others.

I don't have much feeling of which way gold and silver will go. Way up or way down. Or stay the same. I'll be happy one way or the other. There is one aspect that is interesting which ignores the actual prices of the precious metals but looks at the ratio instead.

Here's a quick look at the history of prices between the two metals starting in 1840.

Have you bought or sold gold? Is this something even on your radar? Do you care?

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