hi we're back with ronnie stroberly of incrementum ag with the in gold we trust report and this section is on silver ronnie how are you doing very good mike how are you great so very first chart in your section titled uh silver's silver lining uh we have the chart of the gold silver ratio of the modern era and this has done some pretty amazing things this year that i really wasn't expecting uh for it to do so uh this goes back to 1960. i've seen uh some of these charts that go back a few hundred years


or even more than a thousand years but tell us what you see in this chart well well actually this year as you as as you know we we we write the in goal with trust report for 14 years now and this was the very first year when we had a special chapter dedicated to silver and and we write uh in the summary of the report we will be surprised if the decade or two ahead are not some of the best years in silver's long history and what what we saw in spring was this ratio or let's let's say this


exchange rate between gold and silver going up to almost 125 on a daily basis it was 125 and um we we we have some really long-term charts in the report also 600 years gold silver ratio and based on those numbers we have never seen a gold silver ratio that high so with one ounce of gold you could buy 125 ounces of silver now this this ratio was just crazy and it was probably also because you know in spring we saw this massive stress in the financial market and we saw some sort of a deflationary collapse in


financial markets and normally in those phases um silver just sells off big time and and and gold out performs uh uh uh silver so this spike in the gold silver ratio was was really that was there was history now we said well this is a fantastic opportunity this this this ratio is so so much out of sync of course it can go perhaps slightly higher but on a historic basis this is just a bargain so now at the moment uh you know silver outperformed gold big time over the last couple of months now this


ratio is now trading at 80. so you can buy with one ounce of gold you can buy 80 ounces of silver and and we crunch the numbers and and this shows you the ratio since 1960 and then we calculated the top 10 percent for the ratio the bottom 10 percent and the median so at 80 actually silver is still uh extremely cheap versus gold 58 would be the medium and normally such big trends secular trends and in extremes so i wouldn't wonder if we go to a gold silver ratio of 30 or even lower within the course of this gold bull


market because in every big gold bull market silver outperformed gold yeah i'm expecting silver to weigh out perform gold uh i'm go i plan on uh converting there are times when when the gold silver ratio is above 70 75 i usually buy only silver and when it's between uh 50 and 70 or 75 i buy a mixture and if it's below 50 i only buy gold uh i don't sell so i don't really trade the gold silver ratio i use it as an indicator to tell me which one is the most undervalued and to buy but then when it comes to my


exit strategy i plan on selling in tranches and using this gold silver ratio i plan on converting uh from silver to gold at you know 30 uh potentially 20. i think there's a good potential that it could go to 10. uh you know i'm not sure uh if you could take this back further it hit 100 back in 1992 it looks like but it also hit 100 back in the 30s and so that was the previous peak 125 was crazy and when you look at this over like thousands of years what you see is the the average ratio over thousands of


years was uh somewhere you know depending on where you were on the planet it would vary but it was usually determined by the market uh doing price discovery on the gold and silver coins that were in circulation how many were there in circulation and uh globally uh the the supplies of uh silver uh used to be of mineable supplies used to be uh 12 to 15 uh times more silver that was mineable than gold but um i've been talking with a number of people in the mining industry lately and they say that that's dropped to about


eight and that's what i'm hearing so they're only uh digging up eight times more uh silver than gold uh yet uh the ratio was at 125. how is this possible it's crazy uh so silver is tremendously undervalued and uh that's the one that i uh buy based on this um so this this is a fascinating chart um uh i think uh um even for me uh you know i i like to go back a little bit further than this uh gather a little bit more data so that center line of 58 would come and what did we hit in um


this looks like monthly data i'm seeing here am i correct yes yes okay because in 1980 i know that it hit a ratio of 14. uh and uh and it the in 1992 it looks like our 91 uh that's where it hit 100 and so at on a monthly it's not quite showing that if it was a daily 114 um and uh i just think that uh you know we have not seen the rush into gold and silver yet that hasn't happened and when gold gets past five thousand dollar dollars an ounce there's going to be some time or another


when people look at it and they go wow it was just 250 in in the year 2000 i think it's overpriced how much is that silver stuff and they're going to start buying silver and that was the dynamic that changed in 1979 and people changed their preference from silver to gold and silver vastly outperformed gold so let's move on to the next chart and uh tell me about uh silver inflation adjusted and this is uh on a logarithmic chart so yeah well well we we we always said that because it's interesting mike if i talk


to people that don't really understand gold they say yeah it's interesting but it's it's already too expensive so i will start buying at 1600 and i say yeah it's your decision um but i don't think that we will see sixteen hundred um and if we would go there i think they're i'm damn sure that they that they won't buy them because then they would say no it's in a bear market but anyways i think um on an inflation-adjusted basis the price of gold has to exceed the 2


300 us dollars and because normally that's that's what's what a bull market does it goes above the inflation-adjusted all-time high now we know that um those government statistics for cpi and pce um the way that inflation is measured is let's say we we could question it um it is highly subjective and and it doesn't really has to do anything with with real life so i call it the cp lie so so what you can see here this that on an inflation adjusted basis silver is even cheaper now we saw this this big bull market in


1980s and uh and i think it's it's pretty interesting one thing that i wanted to add i think in gold this rush from from institutional investors is just getting started so we saw for example that the ohio pension fund said that they will invest five percent of their assets in gold we saw that warren buffett was buying a stake in barrick gold we saw that goldman sachs is buying the perth mint etf so those are all signs that well it's getting more accepted in the institutional world now for silver nobody cares about silver


yet and as it's such a tiny market you only really need a couple of billions to really move this market and there will probably be no material left now i think of one thing that we also described in the report a gentleman called warren buffett um many people forget that he was one of the biggest silver investors back in the days and and and and we think um it is also likely that a new source of demand will at some point kick in and this is central bank demand people tend to forget that back in the days


central banks didn't only hold gold they also had enormous amounts of silver so i think from a supply demand picture um to understand silver it's it's it's it's a bit more difficult um than than with the gold market because all those different supply sources for for silver they're extremely interesting and we're explaining them uh in in in this using gold with trust report but i think from a from purely supply demand picture silver looks extremely interesting silver is of course a high beta play on


gold and and therefore i think you know the the stars are aligned for for for a nice bull market in silver but you know you have to live with this volatility it's it's a really wild ride i i once compared it do you want to drive a lamborghini or do you want to drive you know uh a safe volvo i mean not everybody wants to drive a lamborghini and perhaps at some point you're just too old to drive a lamborghini um but you have to you you have to know that the volatility in silver but also in the mining market


especially in june mining is completely different compared to the gold market yeah uh you know the central bank demand is something that i had not really thought of but they sold off all of their no central bank has any silver anymore and they used to so if we went back to any type of standard uh where you know uh i believe that uh we're coming near the end of the global dollar standard this current monetary system that we're on and that we've got to go from a a system that is based on something that


always fails fiat currencies back to something that never fails and all of the other ships in the world monetary system we're just baby steps off of gold now it's no gold backing and when this starts to fail all of the economists and finance ministers are going to look around and say well what worked before and so i do think that there's a high potential that uh gold could have something to do with the global monetary system in the future but i wanted to point out you also mentioned


warren buffett and right in the middle of this in in i think 1998 or 99 here there's something called the buffett blip and just for our viewers that aren't up on their history of silver warren buffett accumulated 129.6 or 0.7 million ounces of silver and then you know using futures contracts and then stood for delivery and said i want my silver and he single-handedly one person almost doubled the price of silver and then he held on to it later and then suddenly berkshire hathaway reported that they no longer had their


silver and somehow slv had their one of their mandates was they had to accumulate 130 million ounces of silver before they could start trading and uh and warren buffett reported that he didn't have he no longer had 129.7 ounces so it's it's a it's a fascinating story silver has just a fascinating background to it so let's move on to the next chart and this shows a tremendous undervaluation right now and this only uh goes through uh basically this century but uh silver is just very undervalued


tell us about the silver s p 500 ratio on page 35 yeah well it's it's it's similar to the gold s p ratio but but the gold s p ratio is already you know a couple of stages higher this is just getting started and this is also very nice confirmation because we always said gold moves first then it's silver following then it's the energy market and commodities and if you have a look at for example well oil prices you know everybody is extremely pessimistic you know we're uh still basically in in in in in the


biggest crisis economic crisis since the great depression oil prices are at 40 bucks a barrel shouldn't they be significantly lower have a look at copper prices have a look at agricultural commodities they're all doing really really really well and this is a sign for me that the market is seeing inflation on the horizon that this cracker boom is really happening now if you have a look at this chart you can see well if you wanna become bullish on silver probably now is a good starting point


this ratio has stabilized over the last couple of quarters and now is about to break out but this is still still pretty early in the whole game but i think it's it's really happening and as you can see here from basically 2000 until 2011 we saw this big trend of out performance of silver versus the s p and then at the end of the trend like in every big trend it was going parabolic now this trend where we are is just a very stable and slow trend but it will pick up momentum yeah uh i absolutely agree with you on


this one too uh it's an amazing chart it just shows you how much of a bargain silver is right now so i want to thank you so much i know that you have to run uh uh it was great having you here uh so uh i want to get together again sometime soon and uh talk about the mining stocks potentially so if you're open to that we'll do this again sometime anytime mike thank you very much thank you and we'll see you later take care thank you bye