Wednesday, September 30, 2015

Why Gold Will Outperform Silver During the Next Economic Crisis price ratio

In times of crises historically, precious metals have been the preferred store of wealth.  Even though silver does have intrinsic value; by being the best store of value a preference for gold inevitably develops - this is especially true if the crisis leads to massive inflation and the rise of radical groups both of which occurred in weimar Germany and tsarist Russia.

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Isis, Greece and the confiscation of wealth

As has happened in Cyprus, would've happened happened in Greece if the 2015 summer bailout didn't materialize and is happening in Iraq and other Isis strongholds, the confiscation of wealth makes portability important.  At 75 the current gold silver ratio gives gold the upper hand - being able to move your wealth more easily makes it less likely to be discovered and thus confiscated.


if the US dollar - which is by far the world's most relied upon currency - is ever forced to prove its value the way every other currency does (ie the money supply, possibility of insolvency/national debt levels) - rapid inflation the likes of which has never been seen in history definitely could happen.

US dollar losing precedence in international trade

- in 2006 127 countries called the United States their largest trading partner .. that number has since fallen to 76.  In just five years China displaced the US in 51 nations.

- When forming new economic partnerships with countries China is emphasizing the need to bypass the dollar.  Traditionally all trade is done first by converting into dollars, but China has developed new ways of avoiding this.

America's shaky relationship with Saudi Arabia as of late will affect the petro dollar 's unique status.

International trade by central banks