At this moment, market experts across the globe are eyeing a key indicator that is about to signal a collapse.
And when it does, those smart enough to position themselves early will make a tremendous killing in the markets.
The gold-silver ratio is one of the foremost indicators that precious metals experts and investors around the world are monitoring. In a nutshell, this ratio tells you how many ounces of silver are equivalent to one ounce of gold. However, it is also a strong indicator for determining when either metal is trading at a discount relative to the other. And right now, it is saying that silver is a screaming buy!
Take it from Keith Neumeyer, renowned natural resources expert who serves as a board member for several mining companies, and who has funded the billion-dollar companies First Quantum Minerals and First Majestic Silver.
Like many smart metals investors, Neumeyer recognizes the fact that the current levels of the gold-to-silver ratio are extremely high and untenable. Take a look at where we’re at:
The current ratio is at 75–or 75-to-1– which is 50% higher than the average ratio going as far back as the 1950’s. But here’s the critical info: look how close we are to the critical level of 80-to-1.
Such levels have only been reached 3 times in the last 30 years–each time followed by a major rally in silver. Once again, we’re at that critical level, on the cusp of another collapse!
- In 1990, the gold-silver ratio hit 80, and continued to hit 100 before plummeting to 40–silver prices soared 57% over the next six years.
- In 2003, the ratio hit 80 and plummeted to the 40–and silver soared 224%.
- In 2009, this cycle happened again, slightly exceeding 80 but this time collapsing to near 30–and silver soared 371%.
- And now 2016-2017–we are near the top of this critical level. But this time, things are a bit different.
Neumeyer predicts that the ratio will plummet not to 40 or even 30, but to 9-to-1!
Why such a bold prediction? It has everything to do with the fundamentals.
Silver mine production has fallen: production last year had fallen for the first time in over a decade, tightening the available supply of silver. But it doesn’t end there. Based on Neumeyer’s estimates, silver mine production will continue to fall this year, further tightening silver’s supply as demand increases.
The silver market is already at a deficit: The demand for silver has been outstripping supply for the last four years. And now with mine production falling, the availability of silver will become even tighter. Into this environment of decreasing supply, demand is expected not only to maintain its current levels, but to increase as its industrial use and value as a counter-inflationary asset increases.
Industrial use of silver is both rising and expanding: The expansion of solar power technologies require huge amounts of silver as one of its key ingredients. In fact, it takes an average of 2,000 grams of silver to build one solar roof!
If 20% of American households were to construct solar panels,something we are most likely to see in the future, it would require approximately 1.3 BILLION ounces of silver to make that possible.
This is coming from just ONE industry–the solar power industry–and it will eventually require 30% more silver than what is currently being used across ALL industries!
Fiat currency interventions and the “war on cash” will make silver a practical and preferable alternative to other forms of money: Gold has traditionally been the safe haven alternative to fiat currencies, but mostly for larger assets. For smaller transactions, silver has always been a more practical medium of exchange, as their prices are more conducive to the exchange of day-to-day necessities.
There is a geological limit to the mineable supply of silver: It is estimated that there are 17 ounces of silver on earth for every ounce of gold. HOWEVER, only half of that supply is mineable. As demand for silver increases in the future, the gold-silver ratio, according to Neumeyer, should reflect this “natural” geological ratio–9-to-1.
In the end, what does this all mean?
The stage is set for a major rally in silver. Precious metals experts and investors across the globe are already positioning themselves to make significant profits from this inevitable ratio collapse.
If you are interested in taking advantage of this once-in-a-decade opportunity, I suggest you do the same.
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