Gold is up 11% so far this year.
Bitcoin did even better. It’s up 155% year-to-date.
And gold and bitcoin aren’t the only forms of “honest money” rallying this year. Silver is, too, although not nearly as much. It’s up 6% so far this year.
We’ve spilled a lot of ink already here at the Cut on gold and bitcoin. Today, I (Chris) will show you why silver will be the next one to take off.
As you’ll see, there’s a ratio precious metals investors keep a close watch over. And right now, it signals silver will pop even higher.
It’s part of our mission here at the Cut – to put you on the right side of the big profit trends shaping the market.
As we’ve been showing you, the dollar, the euro, and the yen have a reliability problem. Governments and their central banks issue them.
So governments and central banks can erode the buying power of these currencies by inflating their supply. This is also known as currency “debasement.”
With bitcoin, gold, and silver… it’s different. Their supply is anchored to real-world resources.
In the case of gold and silver, it takes millions of investment dollars and costly mining operations to pull them out of the ground.
With bitcoin, it’s similar. “Miners” have to buy state-of-the-art computer rigs… and cover sky-high energy costs of solving complex cryptographic puzzles… to earn new bitcoins as rewards.
That’s why the bitcoin network is such an energy hog. By one estimate, bitcoin uses the same amount of electricity as Switzerland in a year.
When Congress approves new spending, clerks at the Federal Reserve (the nation’s central bank) create new dollars to cover that spending with strokes of a computer keyboard.
This costs nothing. And since the dollar went off gold, there are no limits to how many dollars central banks can create.
Here’s Bill with more…
U.S. dollars are fake money. And fake money is a form of fake news. It tells you something that isn’t true. The classical economists – Adam Smith, Frédéric Bastiat, and David Ricardo – and the later Austrians – Friedrich Hayek, and Ludwig von Mises – were right. Money that’s not anchored in the real world of time and resources is unreliable.
Like all forms of fake information, this leads to mistakes and frauds – bad investments, wrong decisions, and corrupt behavior that destroy wealth and disrupt the basic fairness of our financial transactions. The best way to protect yourself is with clear thinking and honest money.
And of all three forms of honest money, the one Bill and his right-hand man, Dan Denning, are most interested in right now is silver.
The gold-to-silver ratio tells you how much silver it takes to buy an ounce of gold.
In other words, it tells you the value of silver in terms of gold. And that can help you figure out when it’s a good time to buy and sell silver and gold.
The average ratio going back to 1971, when President Nixon ended the gold standard, is 58.4. That means, on average, it has taken 58.4 ounces of silver to buy one ounce of gold over roughly the past half-century.
A lower ratio says silver holds more value than gold than is normal. This tells you silver has gotten too far ahead of gold in a precious metals rally. That’s when you want to sell silver.
A higher ratio, on the other hand, tells you silver is cheaper in gold terms. That’s when you want to buy silver.
It’s of the gold-to-silver ratio going back to the start of the new millennium. And it plots the ratio against the price of an ounce of silver bullion.
Take a look back at 2003. That’s when the ratio hit 82. This preceded an 83% rally in silver.
Another good example is 2008. That’s when the gold-to-silver ratio hit 85. This preceded a 302% rally in silver.
And a similar thing happened in 2016. After the ratio hit 83, silver rallied 35%.
Remember, silver is a precious metal like gold. But gold is the main focus of metals traders. So silver often gets overlooked.
It lags behind gold in a precious metals rally. But that’s also what gives silver explosive potential as it plays catch-up.
Today, we’re at 87 on the gold-to-silver ratio. That suggests higher silver prices are in the cards.
Here’s the advice Dan gave Bonner-Denning Letter readers (paid-up Bill and Dan subscribers can catch up in full here)…
When silver looks cheap to me, I go down to the local store and buy some. Or I order some 1-ounce coins from APMEX and they arrive a few days later. I prefer taking possession of my metal rather than speculating financially.
Mind you, taking possession means you must physically store it. And a little bit of silver starts to get bulky fast. So buy a safe.
APMEX is one of the world’s largest retailers of precious metals. You can find out how to buy silver on its website here.
And keep an eye out for tomorrow’s Cut…
As you’ll see, there’s a type of silver investing that’s set to do even better than silver bullion – silver mining stocks.
Top-performing silver stocks are up by almost 40% this month alone.
And as precious metals investing expert E.B. Tucker has been telling readers of our Strategic Investor advisory, we’re just at the start of a major rally in the sector.
Stay tuned.
Regards,
 |
Chris Lowe
July 29, 2019
Lisbon, Portugal
P.S. Early Stage Trader isn’t the only thing Jeff revealed on Wednesday. He also walked everyone who tuned in through his newest investment strategy…
It’s a way to get in on early-stage companies alongside the top venture capital firms… and potentially make $151,740 a year – for life. If you missed Jeff’s seminar last week, watch the replay right here.