Jason B asked,

“What do you think silver’s real price would be right now if it was allowed to trade purely on supply and demand fundamentals and not heavily manipulated? Is the possibility of 4 digit silver in a few years realistic?”

Continuing from our mastermind meeting, Michael Maloney answers question #3:

“Yeah, the possibility is realistic, but it’s really the wrong question. The question should be ‘how much more stuff can silver buy me?’ The dollar is this moving target…it’s a smoke screen. Before 1934, the dollar was worth 1/20th the ounce of gold. After 1934, it was worth 1/35th of an ounce of gold.

Gold became free trading in 1971 and it’s value went up. It was actually the dollar’s value falling. Right now, the dollar’s value is 1/1,000th of an ounce of gold and it’s value is going to continue falling. Soon, it will be 1/10,000th of an ounce of gold.

That’s what currency does, it loses value. REAL MONEY retains its value. But, the question should be ‘how much stuff will silver buy.’ And, I know from studying past history that gold should probably one day buy 4-5 times more stuff than it does today. Silver is under valued compared to gold.

For the first time in human history there’s less silver available for investors to buy than there is gold.

This is never happened before. Currently, there’s about 5 times more gold on all of the exchanges available for investors to buy than there is silver. In the free markets, when it comes to supply and demand, and something called the ‘price discovery mechanism’ the free markets are marvelously efficient at balancing supply and demand. They do that through price.

In a gold and silver rush, when the world finds out silver is actually more rare than gold you could see silver just explode and it’s entirely possible that silver can trade at a higher price than gold. That sounds crazy. It sounds unrealistic. Google ‘tulip mania’ and take a look what happened in the year 1637. You’ll see that dumber stuff has happened and silver actually selling for a higher price than gold.

Right now it’s more rare than gold, therefore the possibility exists that in a rush when a whole bunch of investors try and buy this stuff all at once then you can see it go to prices that are higher than gold…but the real question is

‘How much stuff will it buy?’

If gold should buy somewhere between 4-5 times more real estate some day in the future say and silver is 1/60th of the price (currently), in a peak you should see silver go to at least 1/10th of gold’s price. Possibly as high as gold, but I’m thinking 1/10th is good target right now, so that means it will outperform gold by 6 fold. So, if gold can buy 4-5 times more real estate, then that means silver can buy 30 times more real estate some day in the future.

THAT IS HUGE!

…and I’m not passing that one up. I’m buying all of the silver I can.

So, thank you very much, Jason, for your question.”

Michael Maloney of www.GoldSilver.com

To Your Success,

Larry Corbi

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