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TheStreet Open House

Precious Metals vs. Commodities

Stocks in this article: JPM

He noted what is regularly pointed out by myself and other precious metals commentators: In relative terms silver remains a superior value to gold. Rogers based this assessment merely on the fact that the current gold/silver price ratio is sitting at an absurd level of roughly 55:1, as compared to the 5,000-year historical average of 15:1.

This alone implies the price of silver should currently be more than three times the present price, nearly $100/oz. However, this ignores 50 years of "destruction" of silver inventories and stockpiles; the direct consequence of well over a half-century of price suppression of this market primarily through the extreme and relentless "shorting" of silver by the bullion banks, notably J.P. Morgan Chase (JPM).

We have the world's foremost expert on commodities predicting a shortage of the most important "commodity" for any modern economy: legitimate money, the foundation of all human commerce.

We have the two most reliable forms of money currently being the two most under-owned asset classes on the planet (implying a steep discount in current prices).

And we have one of those commodities (silver) priced at a further, steep discount in relation to the other (gold).

This is called "a buying opportunity."



This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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