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The Dow Silver Ratio
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Thread: The Dow Silver Ratio

  1. #1
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    Default The Dow Silver Ratio

    As of yesterday July 20, 2010 it was 578.

    10,229.96 / 17.70

    Keep an eye on it,
    as it may be a better indicator from here on out
    of silver's value
    than looking at the price in fake USD.

    an authentic US dollar is defined in silver
    "I foresee little future in 'the price of silver', I see a huge future for 'the price in silver'." - heartbone
    "The truth is called hate by those who hate the truth." - K

  2. #2
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    Default As of yesterday 7/27 it was 597

    I believe this ratio will truly capture the magnitude of the silver correction.
    "I foresee little future in 'the price of silver', I see a huge future for 'the price in silver'." - heartbone
    "The truth is called hate by those who hate the truth." - K

  3. #3
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    Default Historic Value

    What's your thesis on this one heartbone? I understand the historical nature of the Dow/Gold ratio and how many believe they will meet in the middle again 1 for 1. What about silver....got any ideas and tipping points picked out?

    My guess is if the markets crash....gold and the Dow see parity again....silver that's a tougher call to envision.

    Curiosity will not kill this Cat!

  4. #4
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    Default Thanks for asking.

    Quote Originally Posted by AgShaman View Post
    What's your thesis on this one heartbone? I understand the historical nature of the Dow/Gold ratio and how many believe they will meet in the middle again 1 for 1. What about silver....got any ideas and tipping points picked out?

    My guess is if the markets crash....gold and the Dow see parity again....silver that's a tougher call to envision.
    If what some say may transpire, actually happens,
    and the value of gold equals the Dow Jones Index,
    and silver becomes more valuable than gold,
    then this index which is currently just a ¢unthair over 600
    (10499.43/17.48 > 600)
    would be the one to watch
    as it is based on two relatively real things
    the value of thirty shares of multi-national stock versus one ounce of a physical element,
    and will represent one heck of a transformation as the ratio slides to a single digit or less.
    "I foresee little future in 'the price of silver', I see a huge future for 'the price in silver'." - heartbone
    "The truth is called hate by those who hate the truth." - K

  5. #5
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    Default Period of Confusion

    Do you think there would be a period before this where gold holds up and sees adjustment to 1/1 whereas silver is slower to react (the last nice buying opportunity) and then like a coiled spring sees the floodgates crash open? I know alot of silver investors believe that Dow/Gold parity could provide a short term opportunity where money flows shift majority focus to silver when gold becomes too expensive for all the players wanting to get exposure to PM's. Those 10th ouncer engelhards on E-bay could produce even more of a surprise to you should another shortage like 2008 show itself and become more of a shortage due to the level (amount) of players looking for a "safe haven". I think this is the main reason I want to re-adjust my stack from bigs to smaller denominational coinage (service more interest with the investment grade holdings). A period like this could be months, weeks, days, or hours....maybe not as wild as an 8 second bullride at the rodeo....but I think a little wild and people should have a drawn up plan ahead of time...in their heads at least.

    Curiosity will not kill this Cat!

  6. #6
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    Default

    Quote Originally Posted by AgShaman View Post
    Do you think there would be a period before this where gold holds up and sees adjustment to 1/1 whereas silver is slower to react (the last nice buying opportunity) and then like a coiled spring sees the floodgates crash open? I know alot of silver investors believe that Dow/Gold parity could provide a short term opportunity where money flows shift majority focus to silver when gold becomes too expensive for all the players wanting to get exposure to PM's. Those 10th ouncer engelhards on E-bay could produce even more of a surprise to you should another shortage like 2008 show itself and become more of a shortage due to the level (amount) of players looking for a "safe haven". I think this is the main reason I want to re-adjust my stack from bigs to smaller denominational coinage (service more interest with the investment grade holdings). A period like this could be months, weeks, days, or hours....maybe not as wild as an 8 second bullride at the rodeo....but I think a little wild and people should have a drawn up plan ahead of time...in their heads at least.

    Curiosity will not kill this Cat!
    I never thought about it until you asked.
    Which will happen first Gold Parity with Dow, Silver Parity with Dow, or Silver parity with Gold.

    My answer is that I do not know, but at the end

    1) The Dow is irrelevant as the definition of it changes at a whim.
    2) Silver will be recognized as more precious than gold.
    "I foresee little future in 'the price of silver', I see a huge future for 'the price in silver'." - heartbone
    "The truth is called hate by those who hate the truth." - K

  7. #7
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    Thumbs down Takes 584 silver troy ounces to buy the Dow.

    In my opinion, the Dow is a bit over priced.

    I'm thinking we will be able to buy it in the 300 range by the end of this year.
    "I foresee little future in 'the price of silver', I see a huge future for 'the price in silver'." - heartbone
    "The truth is called hate by those who hate the truth." - K

  8. #8
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    Default The ratio is at 531 down over 10% from that 600 peak last month.

    Not to early to sell those stocks is it?
    "I foresee little future in 'the price of silver', I see a huge future for 'the price in silver'." - heartbone
    "The truth is called hate by those who hate the truth." - K

  9. #9
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    Default still over 500

    Friday September 24, 2010

    10,860.26/21.46= 506.07
    "I foresee little future in 'the price of silver', I see a huge future for 'the price in silver'." - heartbone
    "The truth is called hate by those who hate the truth." - K

  10. #10
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    Default Things are looking up from two short years ago.

    Sep 11, 2008
    Dow Jones closing price 11,433.71
    London Silver Fix 10.66 (that's all I have to use)
    for a DSR of 1,072

    Today 10,858.14 / 21.74 = 499

    That's right, under 500.

    On the move to double digits.
    "I foresee little future in 'the price of silver', I see a huge future for 'the price in silver'." - heartbone
    "The truth is called hate by those who hate the truth." - K

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