silver mania about to start?

The silver/gold ratio has dropped to 36.88, it has halved in a little over a year and it is still grossly undervalued IMO.

According to Ted Butler (undated website may have changed slightly) there is 5 billion ozs of gold above ground and 1 billion ozs of silver (there were 12 billion ozs of silver in 1900), so there is 5 times more gold than silver above ground. At current prices that means there are $7trillion worth of gold and a meager $40billion worth of silver.

There is virtually no industrial uses for that $7T worth of gold but there is a rapidly increasing demand for the $40B silver. The fact that the far more plentiful and nearly useless gold is worth 36 times more than silver is quite illogical and is set to change.

The US Geological Survey has stated that silver will be the first element on the periodic table to become extinct, possibly by 2020. Extinct might be a big call but there sure isnt going to be much of it kicking around.

The investigations into the manipulation and suppression of silver prices seems to be taking the artificial handbrake off silver and the natural laws of supply and demand will revalue silver accordingly.

With the recent admittance that there is only 1 oz of silver to back up the 100 ozs of paper silver it will not take much for a run on delivery of physical which would cause prices to explode.

China's new affluence has recently turned it from a net exporter of silver to a net importer of silver and the government there is encouraging citizens to buy silver.

The US government's use of the printing press solution to its economic woes prompts people to search for a hedge against inflation.

Most of the above is well known to silverbugs but is largely unknown to the general public. The passing of silver through $40/oz could well be the catalyst for silver to come onto the public's radar and for the silver mania to set in. I am certain all the silver stocks will be on investor's radars next week (especially ARD and GRM ;) ).

All in all the stars are aligning for silver to have a huge re-rate and I believe a 1:1 silver gold ratio is inevitable in the longer term.

Cheers

BN