I am not on reddit, though I do subscribe to the WSB forum I don’t read it. I have a good friend who has been with that group for years. He has been sending me funny screenshots from their forum from time to time - before what happened last week.
Yes, people have been talking about the historical ratio between gold/silver being way off kilter for many years now. Who knows, maybe it is time for them to come back into closer correlation. The first thing that pops into my head is just industrial demand may be higher for gold than for silver, in the electronic age. I don’t know to a certainty just ‘speculating’ on why the prices may have diverged.
My friend just texted me as I am posting this. He says the working thesis is that the value of the dollar is held up by the shorting of gold, and gold is kept down by the shorting of silver. Make of that what you will - he literally just texted me. His ears must’ve been burning. If what he said is true, then a squeeze on silver would come at the social price of devaluation of the dollar. Which is good or bad depending on what you do for a living. Good for US producers and exporters; but since a lot of what is exported depends on source materials that are imported, maybe not good.
TY again.
> “He says the working thesis is that the value of the dollar is held up by the shorting of gold, and gold is kept down by the shorting of silver.”
It is a fact that the dollar crashes as the price of gold rises and that Wall St. Hedge Funds especially those in the JP Morgan sphere will short gold to keep the dollar within a target and that these targets are related to the oil and arms trade.
From there it gets geopolitical and complicated very fast.
What Trump was aiming to do was to replace the Fed dollar with a US Dollar indexed to gold or some basket of finite precious commodities that would be more stable. Because the US had become a big producer of oil and net exporter with the most reserves in the world, the US Dollar could be gold indexed and net oil exports could demand gold or foreign gold-backed currency in trade. This would cause a shift in powers to the US in terms of trade and stop the pile up of treasury debt in the short term, reversing it in the longer term.
The information your friend has about buying silver to cause a short squeeze leading to a short squeeze on gold is valuable to know.
But the aftereffects on the Fed dollar could cause bombs to go off in commodities shaking the US and world economies. If Trump was in office, he would certainly use this to our advantage following through with currency reform and neutering central banker power because they are what’s behind wars, instability and middle class decline.
Although many think Trump is gone for good, countless eyes are on Arizona right now. There’s a war going on there, a political war and its effect can change the course of history because if Arizona breaks through the lies and coverups, 16 other states are ready to follow suit. If you are a God-fearing person, pray for the needed Arizona breakthrough.
Those conspiracy theories are pushed by ignorant imbeciles.
The value of the dollar is determined by many things. All currencies are interrelated. The dollar is the prettiest dog in an ugly dog contest. The winner does not have to be pretty, just not as ugly as the other dogs.
Historically, before the 20th century and massive use of silver in industry, gold-silver ratio fluctuations largely depended on new major discoveries that tilted the market in favor of one or the other.
When a mountain of silver was found in Potosi Bolivia, silver “pieces of 8” flooded the world, and this made gold more valuable in comparison.
Major gold strikes in California, Alaska etc tilted the ratio and the prices the other way.
It’s a fascinating topic. And it’s interesting to compare the original Roman Denarius to “pieces of 8” to the Taler to the silver dollar. Likewise, it’s fascinating to compare the price of today’s consumer items (a gallon of gas, a pair of shoes, a loaf of bread) to their price before 1964, when our coins were real silver.
Found this article at random.
“A Historical Guide to the Gold-Silver Ratio”
https://www.investopedia.com/articles/investing/080316/historical-guide-goldsilver-ratio.asp