Gold is not more rare than silver?

[bart]

While it is true that the average ratio of silver to gold is about 26:1 in Earth's crustal rock, actual above ground stocks and ownership show a very different picture. Per the World Gold Council (http://www.gold.org/), somewhere around 4-5 billion ounces of gold exist. Per the Silver Institute (http://www.silverinstitute.org/) and others, .5-1 billion ounces of silver exist in the world.

Using average 2004 prices, the gold to silver ratio for available inventory is over 300:1. On an historical basis, silver is quite undervalued.

<table width="85%"> <tbody><tr> <th colspan="3">Crustal rock, parts per billion of various metals</th> </tr> <tr> <td width="40%">Metal</td><td align="right">ppb, by weight</td><td align="right">ratio to gold</td> </tr> <tr> <td>Iridium (ir)</td><td align="right">.4</td><td align="right">.1</td> </tr> <tr> <td>Rhodium (rh)</td><td align="right">.7</td><td align="right">.2</td> </tr> <tr> <td>Tellurium (te)</td><td align="right">1.0</td><td align="right">.3</td> </tr> <tr> </tr><tr> <td>Ruthenium (ru)</td><td align="right">1.0</td><td align="right">.3</td> </tr> <tr> <td>Neon (ne)</td><td align="right">3.0</td><td align="right">1.0</td> </tr> <tr> <td>Gold (au)</td><td align="right">3.1</td><td align="right">1.0</td> </tr> <tr> </tr><tr> <td>Helium (he)</td><td align="right">5.5</td><td align="right">1.8</td> </tr> <tr> <td>Palladium (pd)</td><td align="right">6.3</td><td align="right">2.0</td> </tr> <tr> </tr><tr> <td>Bismuth (bi)</td><td align="right">25</td><td align="right">8.1</td> </tr> <tr> <td>Platinum (pt)</td><td align="right">37</td><td align="right">11.9</td> </tr> <tr> <td>Mercury (hg)</td><td align="right">67</td><td align="right">21.6</td> </tr> <tr> <td>Silver (ag)</td><td align="right">80</td><td align="right">25.8</td> </tr> <tr> </tr><tr> <td>Cadmium (cd)</td><td align="right">150</td><td align="right">48.4</td> </tr> <tr> <td>Molybdenum (mo)</td><td align="right">1,100</td><td align="right">354.8</td> </tr> <tr> <td>Uranium (u)</td><td align="right">1,800-2,900</td><td align="right">580.6</td> </tr> <tr> <td>Lead (pb)</td><td align="right">10,000</td><td align="right">3,325.8</td> </tr> <tr> <td>Copper (cu)</td><td align="right">68,000</td><td align="right">21,935.5</td> </tr> <tr> <td>Nickel (ni)</td><td align="right">90,000</td><td align="right">29,032.3</td> </tr> </tbody></table> Source (http://www.webelements.com/webelements/elements/text/periodic-table/key.html)

Note also that some believe the naturally occurring silver to gold ratio is 17.5:1. See the American Geological Institute Data Sheets for Geology in the Field, Laboratory, and Office, Third Edition, Data Sheet 57.1, “Abundance of Elements".

Also see Is the Old Gold/Silver Ratio of 16 Still Alive Today? (http://gold.seekingalpha.com/article/14922) for another view.


(edited to fix link to the Silver Institute)

[jk]

there is nothing rational about the value of gold. it has a multi-thousand year history of being irrationally assigned "intrinsic" value. i own a heap of it because of my faith in the consistency of this nonetheless irrational behavior.

[Spartacus]

This is a raw nerve for me - I've had this argument lots of times with people mis-quoting Butler.

Butler's claim: more good - delivery (comex/LBMA form, format, purity) gold exists in the world than good - delivery Silver.

If you measure in dollar terms instead of kilos, there is FAR more good - delivery Gold than good - delivery Silver.


Other peoples' claim of what Butler wrote : there's more Gold than Silver

these peoples' rebuttal of Butler -
<blockquote>
count all Silverware, jewelry, all coinage (assuming no coinage was smelted in the late 70s), all the theoretical Silver in India and china, assume that much of the Silver used in batteries and cell phones can be recycled

COMPARE THIS amount of Silver to

good delivery Gold (don't count jewelry, art, coinage)

Conclusion: more Silver than Gold, so Butler's wrong (and usually they call him an idiot too)
</blockquote>

While it is true that the average ratio of silver to gold is about 26:1 in Earth's crustal rock, actual above ground stocks and ownership show a very different picture. Per the World Gold Council (http://www.gold.org/), somewhere around 4-5 billion ounces of gold exist. Per the Silver Institute (file:///C:/NowAndFutures/false_data.html) and others, .5-1 billion ounces of silver exist in the world.

Using average 2004 prices, the gold to silver ratio for available inventory is over 300:1. On an historical basis, silver is quite undervalued.

<table width="85%"> <tbody><tr> <th colspan="3">Crustal rock, parts per billion of various metals</th> </tr> <tr> <td width="40%">Metal</td><td align="right">ppb, by weight</td><td align="right">ratio to gold</td> </tr> <tr> <td>Iridium (ir)</td><td align="right">.4</td><td align="right">.1</td> </tr> <tr> <td>Rhodium (rh)</td><td align="right">.7</td><td align="right">.2</td> </tr> <tr> <td>Tellurium (te)</td><td align="right">1.0</td><td align="right">.3</td> </tr> <tr> </tr><tr> <td>Ruthenium (ru)</td><td align="right">1.0</td><td align="right">.3</td> </tr> <tr> <td>Neon (ne)</td><td align="right">3.0</td><td align="right">1.0</td> </tr> <tr> <td>Gold (au)</td><td align="right">3.1</td><td align="right">1.0</td> </tr> <tr> </tr><tr> <td>Helium (he)</td><td align="right">5.5</td><td align="right">1.8</td> </tr> <tr> <td>Palladium (pd)</td><td align="right">6.3</td><td align="right">2.0</td> </tr> <tr> </tr><tr> <td>Bismuth (bi)</td><td align="right">25</td><td align="right">8.1</td> </tr> <tr> <td>Platinum (pt)</td><td align="right">37</td><td align="right">11.9</td> </tr> <tr> <td>Mercury (hg)</td><td align="right">67</td><td align="right">21.6</td> </tr> <tr> <td>Silver (ag)</td><td align="right">80</td><td align="right">25.8</td> </tr> <tr> </tr><tr> <td>Cadmium (cd)</td><td align="right">150</td><td align="right">48.4</td> </tr> <tr> <td>Molybdenum (mo)</td><td align="right">1,100</td><td align="right">354.8</td> </tr> <tr> <td>Uranium (u)</td><td align="right">1,800-2,900</td><td align="right">580.6</td> </tr> <tr> <td>Lead (pb)</td><td align="right">10,000</td><td align="right">3,325.8</td> </tr> <tr> <td>Copper (cu)</td><td align="right">68,000</td><td align="right">21,935.5</td> </tr> <tr> <td>Nickel (ni)</td><td align="right">90,000</td><td align="right">29,032.3</td> </tr> </tbody></table> Source (http://www.webelements.com/webelements/elements/text/periodic-table/key.html)

Note also that some believe the naturally occurring silver to gold ratio is 17.5:1. See the American Geological Institute Data Sheets for Geology in the Field, Laboratory, and Office, Third Edition, Data Sheet 57.1, “Abundance of Elements".

Also see Is the Old Gold/Silver Ratio of 16 Still Alive Today? (http://gold.seekingalpha.com/article/14922) for another view.

[bart]

there is nothing rational about the value of gold. it has a multi-thousand year history of being irrationally assigned "intrinsic" value. i own a heap of it because of my faith in the consistency of this nonetheless irrational behavior.


Gold is undervalued currently by virtually any rational measure. Checked helium or rhodium etc, prices lately?

And if you don't own a larger pile of silver and equivalents, you'll very likely miss out on better returns.

[jk]

Gold is undervalued currently by virtually any rational measure. Checked helium or rhodium etc, prices lately?

And if you don't own a larger pile of silver and equivalents, you'll very likely miss out on better returns.
about 1/5 [by value] of my pm's are silver - it's a matter of how much volatility i can stomach.

[bart]

This is a raw nerve for me - I've had this argument lots of times with people mis-quoting Butler.

Butler's claim: more good - delivery (comex/LBMA form, format, purity) gold exists in the world than good - delivery Silver.

If you measure in dollar terms instead of kilos, there is FAR more good - delivery Gold than good - delivery Silver.


Other peoples' claim of what Butler wrote : there's more Gold than Silver

these peoples' rebuttal of Butler -
count all Silverware, jewelry, all coinage (assuming no coinage was smelted in the late 70s), all the theoretical Silver in India and china, assume that much of the Silver used in batteries and cell phones can be recycled

COMPARE THIS amount of Silver to

good delivery Gold (don't count jewelry, art, coinage)

Conclusion: more Silver than Gold, so Butler's wrong (and usually they call him an idiot too)




That's not Butler's data and I'm not a member of GATA, just for the record.

There was a huge amount of silver (coins , jewelry and flatware etc.) melted down in the '70s and early '80s. Using assumptions is poor logic.

We're also talking about actual quantity as in ounces - not dollar values. Rarity is measured by actual metals easily available... theoretical silver or gold is just that - theoretical, and says nothing about whether it will ever come on the market either.

Gold or silver is art is invalid to count or even mention, since it will almost never be melted and sold.

The use of an ad hominem attack on Butler shows a serious logical weakness.

Butler's raw facts about good delivery bars is 100% accurate - check the warehouse figures if you like.


The data at the Silver Institute says what it says, although it should be discounted some due to the obvious vested interest.

Until silver is priced a lot higher, recycling in quantity will not occur (from things like batteries or mirrors, etc.) except as goes on now like in the photo industry. It's Econ 101.