For most of recorded history, one ounce of gold bought about sixteen ounces of silver. That 12-to-1 ratio held steady for centuries because it reflected what the earth produced and what markets valued. Today, that ratio hovers around 85-to-1. In plain terms, silver is trading at barely one-fifth of its long-term relationship to gold.
This distortion didn’t appear by accident. Years of paper trading, leveraged futures, and central-bank distortions have buried silver’s true worth. Yet physical demand keeps climbing. Solar panels, electronics, and investment bars are draining inventories faster than miners can replace them.
Every time the ratio widens this far, silver has exploded higher—sometimes doubling or tripling before the spread normalizes. The math suggests silver should already be above $100 an ounce if it were priced in line with gold.
The ratio doesn’t lie. It exposes how disconnected the paper price is from real-world value. When the market wakes up, the adjustment will be violent. Investors who understand the ratio won’t be surprised—they’ll be ready.
Courtesy of the Morgan Report
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