the mix in my portfolio right now is i have about one ounce of gold for every 500 ounces of silver that i have hi i've got jeff clark on the line with me the senior precious metals analyst of goldsilver.com uh any we're going to go over some popular questions so take it away jeff hi mike it's great to be back with you again asking uh questions we get from our readership and our subscribers so this was kind of interesting uh we've been buying silver for a while because the gold silver ratio


has uh shown that sober is more undervalued so one of the questions we've gotten frequently from some customers is hey i own silver do i really need to own gold so what do you think mike we own silver oh go ahead i buy both uh and uh there's a couple of reasons uh my allocation uh when the gold silver ratio is over 80 i tend to buy only silver when the gold silver ratio is between 80 and 50 or 55 i buy a mix where i take my cash the higher it is uh the more of my cash i allocate to silver usually about


70 percent and then uh 30 to gold but uh it all depends on where the gold silver ratio is in there and then if it's below 50 i don't buy silver i buy only gold i've used the gold silver ratio for my accumulation plan i haven't traded in or out of them i just uh it determines which one i'm going to be buying more of or less of or all of and i do think that you know part of my plan is to accumulate silver at these very high gold silver ratios which means silver is incredibly undervalued


compared to gold historically and gold is undervalued compared to uh currency the currency supplies the size of them and most stuff uh and so uh and there are times when these things go overvalued gold and silver are not yet in a bubble they will be someday as we approach that bubble what happened back in the 70s is that the public when gold got too expensive for the average guy remember back in 1980 when gold peaked at 800 and it's actually 873 on one of the exchanges but most people say 8.50 uh when gold


peaked at those prices in 1980 the average income in the united states was under 10 000 years 9 000 something and so a guy goes into the bank and gets some cash out of the bank and you know he doesn't have a lot of savings he doesn't have hundreds of thousands of dollars most likely if this is a guy that came in late to the precious metals market he goes in and he uh say in december of 79 just a month before it peaked at 850 it was still down in the 400s so he goes and gets 500 out of his


account rushes to a coin shop and says i want to buy gold too and they plunk just one coin in his hand or one little one ounce bar and his reaction was oh is that all i can get how much is the silver oh well you can get 40 of those for one of these or whatever the ratio was at the time and that's when the public shifted their preference from gold to silver was when gold was perceived to be too expensive because remember it had been 35 dollars just eight and a half years before and now it's at


four hundred dollars so it seems really all their life it had been thirty five dollars four hundred dollars seemed astronomical at the time and so they shifted their preference towards silver now a lot of people will say oh yeah in 1980 that's when the hunt brothers tried to corner the market on the silver and drove the price up to 50 it wasn't them that was the public the guy going in with just the getting the one ounce of gold saying how much is the silver right very good some good history there


mike thank you i'll also point out that silver uh as most investors know gold and silver prices tend to rise together but there are some exceptions and some of those exceptions are silver does not do well during recessionary periods uh sometimes historically and gold does silver doesn't do as well during stock market crashes and and gold does tend to do well during those periods uh central banks don't buy silver but they do buy gold so there are some differences and that's some of


the reasons why we buy both gold and silver so look at the ratio as mike said as your accumulation strategy uh but we do both own uh both gold and silver so uh yeah um as a closing or you know as we're getting near the closing here i do want to say that the gold silver ratio went to where silver's price was 1 14 of gold's price on the peak day uh and you know eric sprott many others believe that it's going to go back down to that uh 15 to 1 ratio and we're currently up uh where are we today jeff roughly uh


we're in the low 70s in the 70s yes yeah and so um there's tremendous uh room for this however you want to you the original question uh was owning gold and owning silver and uh if i've got only silver why do i need gold it could be that if you're trying to play the gold silver silver is extremely volatile it'll go up and then it's going to come down gold is going to go up and it might pull back a little bit it'll keep most of its gains silver is a lot less expensive to mine and super high prices


will cause a whole lot more companies to go out there the the companies that are mining are going to increase production the companies that are uh exploring are going to put all of their fines in you know they're going to develop all of these uh fines that they've had and so more silver will come to market eventually also uh silver is found with uh other uh industrial metals and primary metals and uh some of some of those mines have enough silver to where at certain prices they can just


uh change this from you know same thing with gold they can change it from a zinc mine to a gold mine they can change this from a lead mine to a gold mine or a silver mine uh and so uh other mines that are base metal mines that uh have been shuttered possibly due to a bad econ world economy uh would be reopened and and put into production simply because it's been become economically feasible to extract it to go after the silver ounces that are down there so i would expect that silver is going


to have this super spike like it did back in the 80s and then it'll do a pullback that's greater than gold's pullback and trying to nail the top is going to be a very very difficult task so i have uh plans to measure all of this along with how gold's performance against the currency supplies the dow gold ratio the gold real estate ratio gold silver ratio and at certain gold silver ratios i'm going to be changing my silver into gold but recently uh our producer dan uh brought up the fact that are we going


you know when they're unaffordable and unobtainium are we going to be able to get the even though we want to sell our silver for gold are we going to be able to get the gold that will be the question and at a certain point nobody's going to want to uh let go of it no investors and there's also going to be a great difficulty for dealers to find gold and so the only gold that may be available is like kilo bars or or 100 ounce bars or maybe even only 400 ounce bars or none at all if all those you know


you've talked recently about all of the investment funds coming into this sector and if all of them are trying to buy gold they don't mind buying a 100 ounce bar you know that's okay with them that's what they want actually is kilos and 100 ounce bars and so even those may become very difficult to get so it doesn't matter how well your silver is done if you if you can't change it into gold you're going to experience the leverage on the way up and the way down and so that's the reason i have some


gold exposure and the mix in my portfolio right now is i have about one ounce of gold for every 500 ounces of silver that i have and so there you go very good thank you mike and i will highlight mike is absolutely right about silver's volatility it is much more volatile so you have to be willing to handle that as we go through this process here you might have to be more nimble when the time comes to sell so mike this has been great great input thank you very much and we will see you in the next video


for a frequently asked question thanks jeff