william j murray on the silver/gold ratio:

In 1900 there was 1 billion oz. of gold above ground at $20.00 per oz. = 20 Billion

In 1900 there was 12 billion oz. of silver above ground at $0.65 per oz. = 7.8 Billion

Ratio was $20.00 divided by $0.65 = 30 oz. silver to 1 oz of gold

Ratio in market cap is 20 billion divided by 7.8 billion = 2.56 to 1

The Total amount of gold was worth 2.5 times more than silver in 1900

In 2009 there is approx. 5 billion oz. of gold at $1000.00 = 5 trillion dollars

In 2009 there is approx. 1 billion oz. of silver at $17.00 per oz. = 17 billion dollars

Ratio is $1000.00 divided by $17.00 = 58 to 1

Ratio in market cap is 5 trillion dollars divided by 17 billion dollars = 294 to 1

The Total amount of gold is worth approximately 294 times more than silver in 2009.

If we used 1900’s market cap at 2.5 to 1, silver’s price today would be, 5 trillion dollars worth of gold divided by 2.5 = 2 trillion dollars [silvers value] divided by 1 billion ounces of silver = $2000.00 per ounce.

Note: [I believe more silver would appear with higher prices, this is only meant to show how undervalued silver is]

Saying silver is undervalued is an understatement of the century, both gold and silver’s true cost of production is probably double their current price when you add all the other costs of exploration and such. Currency creation will drive the prices a lot higher in the near future and also one day soon, silver will be priced for its rarity and not for its cost of production as most silver is a by-product from gold, copper and zinc mines.

Getting back to the title of this article, is silver more precious than gold? Society today would have a hard time without silver as we consume it in so many products. I believe silver is more precious than gold, as to the value today, gold is more valuable in dollar terms. A more realistic dollar value today for gold would be $3000.00 per ounce and silver at $300.00 per ounce. This is a 10 to 1 ratio, common sense tells us that the ratio will turn in silvers favour in the future.