What would you rather have? An ounce of silver, or a $27 bottle of wine?
For me, that is an easy choice. Sure, maybe I would think about it if the choice was an ounce of silver, or a bottle of Caymus Special Selection, or BV George de la Tour. Then we are talking about a $100 or $150 bottle of wine, which is more like the equilibrium price of silver, than today's $27. I mean, a dinner at the diner for $27 bucks or that ounce of silver?
Let's not forget that silver IS a precious metal. It has a long, long history of serving as a store of value, currency, and vehicle for maintaining purchasing power. In ancient times, it traded anywhere from 3:1, gold:silver, under Menes in Egypt, in 3100 years BC to more typically, 12:1 or 15:1. The ratio, now 66:1, did get as cheap as 123:1.
But let's not get stuck in this theme of the ratio, even though it is a guide, and in my view suggests that ultimately, we get back to 15:1. Let's just use common sense. The inflation adjusted price of silver is dramatically higher .... 25 to 50 times higher.
So common sense tells me that being able to hold that ounce of a precious metal, in a world where money truly seems to be growing on the government's trees, and demand for commodities is exploding, at a little more than $27 bucks, is just too cheap.
The trade off today of that $27 bottle of wine, or the ounce of silver is a starkly obvious choice for me.