Silver IS NOT What You Think It IS

Gold has been shooting higher and it's been getting a lot of attention lately but what about silver and should I invest in silver or gold in this video I'm going to dip back through history to explore the gold silver relationship talk about what's changed and where it is today and by the end you're gonna look at silver completely different and you're gonna know exactly where it's going so stay tuned [Music] all right welcome back happy to have you on the channel my name is Mark Moss if you're new to the channel I like to talk about business investing in success mostly we talk about investing because as I always say it's the most important thing you have to get your money working harder than you are if you don't make your money while you sleep you're gonna be working until the day that you die and with the global markets going completely crazy right stock markets are hitting all-time highs interest rates are you know at record lows we've seen global debt it's never been higher and gold's been at the top of the conversations like it should be but today I'm gonna explain where that leaves silver I've talked about gold a bunch of time has made a few videos about gold I'll link them up above and almost all the time all the comments are where does that leave silver what's going on with silver and and what's happening with it and I've tried to answer in some of the comments and I thought you know what I'll just make a full video about it so if you've watched some of the channel you know I like to go way back through history right I go back through history because I believe it gives us a better understanding of where we're going right they say that those don't know history are bound to repeat it and so I like to go through history see what happened and and figure out where we're going and so today we're going back we're going way way way back in 663 BC King Ashurbanipal of the Assyrian Empire invaded Egypt and sacked the city of Asad which is located in the modern-day Luxor on the Nile River now a sharvani Paul vanquished the city and he seized more than 75 metric tons of silver for his own personal collection sounds pretty good right at the time in the ancient world the the prevailing ratio the ratio at that time between gold and silver was one to two so in other words 75 metric tons of silver was worth thirty seven and a half a metric tons of gold now that's equal to almost two billion dollars in today's money you know that gold silver ratio of one to two held up for thousands of years all throughout Persia Mesopotamia ancient Egypt and probably as far back as we can see as far back as like 3,000 BC now over time since then of course over time it's changed periodically we've seen that gold silver ratio change and time Alexander the Great and that was about 300 BC the gold the silver ratio had shifted from 1 to 2 1 to 13 now part of the reason why is because mining techniques had advanced at that point and so the ancient people back then were able to produce higher volumes of silver than they were before it was easier to get it was easier to find easier produce and under Julius Caesar in ancient Rome the it was one ounce of gold was worth twelve ounces of silver so one to twelve now in the time of Muhammad in the early days of the Islamic caliphate in the six hundreds the ratio was one to sixteen so you can start to see it's kind of hovering around there right 1 2 2 1 13 15 1 16 and even in the early history of the United States the United States Mint and or I should say under the mint and coinage act of 1792 they established a gold to silver ratio of 1 to 15 and back then according to the law one u.s. dollar would be defined as one point six zero for grams of pure gold or twenty four point one grams of pure silver so those pieces of paper in your wallet or your hand they're not technically US dollars but Federal Reserve notes right and by the early 1800s gold started to become a more dominant form of money and then we went into the classical gold standard in England about 1819 and then it spread to France and Germany and Switzerland and Belgium and of course to the United States and as the gold standard started to take off more and more silver started to become less and less important silver had been so valuable for thousands of years mainly because it carried most of the same essential qualities that great money that gold has such as being really durable being private being default proof naturally limited supply it had it was divisible it was interchangeable and of course it was portable and it's actually the portability that made silver the perfect complement to gold being useful for smaller denominations and payments right and this is the important part right something changed right so as the gold standard took off we saw the rise of central banks we saw paper gold certificates and the papers gold certificates when they were enabled faster payments easier payments easier settlements to happen on the gold layer and then what happened is it took away much of the usefulness from silver the right silver was used for these micro transactions because gold was big so silver was more divisible but once we could put the gold in the bank and just do gold certificates it took away some of the need for silver we don't need the easy divisible portable silver when we have just paper gold gold certificates and so we saw Silver's value continue to diminish through the 1800s and by 1934 President Roosevelt he set the price of gold to $35 an ounce and the gold silver ratio started to climb eventually it reached a ratio of 98 to 1 in 1939 from 1 to 115 all the way to 98 to 1 in 1939 and then of course the gold race the gold silver ratio did start sliding back closer to its historical standard by 1967 it returned all the way back to its 15 to 1 ratio so if you'd bought it the 92 won and written all the way back to 15 to 1 ratio you were doing pretty good the thing was I was that level didn't hold up for long and then the ratio started to climb again it reached all the way to a hundred to one in 1991 when silver hit a low of only about $4 so the question you're asking mark that's enough history I'm tired of history what does it mean what does this mean for silver today that's what we're gonna answer so in order to answer that question first we just had to understand that gold is pretty unique right so there's a there's a fair amount of demand for gold from jewelry a little bit of gold's used in industrial production but really the key driver of gold demand is from investors it's from foreign governments central banks and they buy it as insurance as I've made the video I'll link to it above I talked about that Gold's like insurance and so when times are tense when when the markets are shaky people buy gold and then of course the price goes up you know I've reported many times right over the last year how the central banks are accumulating more gold or last year the central banks accumulated more gold than any time since 1971 when President Richard Nixon took the u.s. us off the world gold standard but the central banks they're not buying silver right they're not buying silver because Silver's different you see whereas gold is mainly being bought by investors not much industrial used not much jewelry use Silver's different so silver 20% of silver demand is from investors only 20% and that's usually from smaller retail investors and they do that because it's so much less expensive than gold and so we you know we've seen like the most of the foreign central banks the government's stuff like that and they don't even bother with silver the primary driver of silver demand is jewelry and technology and that's what I always hear on the comments but wait silver is used in industrial applications and and yes it is it is used in industrial applications like battery water purification semiconductors dental equipment and on and on and that's a very important distinction to understand right silver can't be worth much more than its primary use case and in a very difficult economy demand for silver from industry and jewelry it's likely to decrease causing silver prices to fall gold on the other hand right is is waiting for that insurance right gold is waiting for that monetary crisis a trade dispute a war to break out something like that and that would cause gold prices to go up that's why gold is insurance here's the thing no don't write off silver just yet I just want you to understand the reasons why you would buy a gold and silver the reasons why you would buy gold and silver are just different right and so like I've often said like in this vid like in the video I did on gold I made the case that we should buy gold as insurance against a failing economy and of course then that video I had hundreds of comments asking me where silver is what I think about silver and so I just wanted you to understand what the differences are of gold and silver I mean they're pretty obvious and really the way I look at it like I said gold is insurance and so what I then look at silver as it's really it's a speculative bet and it's a speculative bet I'm basically Betty and I'm guessing that the gold silver ratio is eventually gonna snap back to it's more historic standards closer to the 15 to 1 I made the case where you know if you'd bought at 85 to 1 and got back to 15 one you would have done really well and so we kind of had that same opportunity today right now today it's about 85 to 1 it's up from 35 to 1 in 2011 and and it's not too far off its historic high of a hundred to one so the question is are we ready to see the ratio start to move lower are you willing to speculate on that that's the deal right so gold is being bought because it's money its value its wealth central banks are buying investors are buying it but when you buy silver you just know that silver and gold move together and there's that ratio and basically what you're doing is you're betting that that ratio is going to get back in line with its historical standards now I tend to not look so math too much into the past history I'd like to look more into the current history and the current history is more of about 40 to 40 or 50 to 1 and so that's kind of where we're at so we're still high above that but I always want to look at you know anything like this and I want to try to guide my decisions and so one of the ways that I look at that look at it is obviously history and we look at the ratios and where it's at I also would like to look at the market sentiment and I've talked about that a lot the whole buy when others are fearful sell when others are greedy type of thing and as investors we oftentimes we want to be contrarian and what that means is when everybody loves something we want to sell it and when everybody hates something we want to buy it right that makes sense and so I stated earlier that the investor demand isn't the primary driver but we still want to take a look at it so we still want to look at investor sentiment even though it's not the primary driver and when we do look at it we notice that investor demand is currently low and so according to data from the US Mint the average number of 1 ounce silver Eagle coin sold over the last three years is half as much as the average sales from the previous years or I should say the previous eight years so it's way off its way investor demands way off and so the bottom line is is that investors aren't as interested in silver as they used to be and that's usually a good time to start thinking about buying an asset being the contrarian another key factor that I like to look at is that silver production is falling and of course I said we use it for for manufacturing and so we need it and so any an asset that's needed has a genuine need and the production is going down well you can guess what happens as I mentioned earlier we don't really see that need that production need in gold and so all the gold that's mined usually ends up in a vault somewhere maybe it ends up in someone's jewelry drawer so as mining companies pull more and more gold out of the ground each year the supply increases but Silver's different most of the silver that's mined this year is gonna end up used it's going to be used in industrial production so that companies make so that so the companies that make the fancy tableware the dentist drills right they need new supplies and they're gonna need more silver next year in order to manufacture the products and so the companies that are growing as as as electronic scale things like that they're done even even more silver so as long as the global economy just keeps growing I I believe we'll see industrial silver demand continue to grow but silver production is actually falling so silver prices should increase as a result just basic supply and demand so what you do is you take that and then add to the fact that Gold's been shooting higher this year right we've seen gold shooting higher we have the central banks that are buying more gold than any time in history all the central banks were on the world are just printing money simultaneously and gold prices should continue to increase and and hopefully as they increase they're gonna drag silver right along with it so to recap all this Gold's the safer play right Gold's the safer play with massive investor demand central bank demand and silver is more explosive and it could shoot much higher much faster but it could also continue to fall with more risk right well as I say with more risk comes more reward hopefully and so what you want to do is you want to manage your position sizes accordingly that's how we manage our risk and so you look at the risk to reward ratios and then you manage that through your position sizes so you can take advantage of it I think that's silver I think it's a good time to buy silver I think it's going to try to keep up with gold with the before the price of gold we just have to worry about that ratio it's at a historic high level hopefully I can return back to the 50 level it could be good but you have to understand my point hopefully I've made my point the reasons why you buy gold and the reasons why you buy silver are just different and so you need to understand that so you can make a good decision in your own Folio does that make sense if you liked the video give me some thumbs up on the video if you're not subscribed click the subscribe button down below make sure you hit the ring the bell so you know every time I put out a new video and that's it hopefully you like that video to your success I'm out you

Channel: Mark Moss

Views: 417,284

Rating: 4.8039584 out of 5

Keywords: silver bullion, stacking silver, investing in silver, silver price, buying silver coins, buying silver bullion, investing in silver vs gold, silver price manipulation, Silver IS NOT What You Think It IS, mark mos, do no buy silver, goldsilverratio, buy silver bars, buying silver bars for investment, gold silver ratio trading, gold silver ratio predictions, gold silver ratio recession, gold silver ratio history, gold silver ratio strategy, gold silver ratio explained

Id: KYlu_rHZ_LQ

Length: 14min 18sec (858 seconds)

Published: Thu Dec 19 2019