gold, page-283

Hi AJ,

I wrote this on the BDR thread earlier this afternoon after petg posted the ratio and is an example of how I see it possibly playing out. Obviously numbers are theoretical but the way I imagine the mechanics to work.

"That kind of makes sense, so basically in bad times Gold is a better store of wealth than Silver and so the ratio gets all out of whack. Then when the tide starts to turn because Silver is way further away from the mean it moves a lot harder than gold. The chart petg posted had the mean as being 58 so silver should currently be 21.55 for the ratio to be in alignment with the norm.

The thing is though if people are buying silver, people will be buying gold, it is not like gold is going to stand still and wait for silver to rise and the ratio to revert to the mean. Hence why I said in my last post if we see silver hit something like $25, remembering that would be a 60% rise from here, we would see gold at $1450 for the ratio to have returned to the mean. Conversely this is only a 16% rise. We have seen more than that just in the first quarter of this year."