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Should we trade our gold for silver?

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Old 04-17-2011, 03:53 PM   #21
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Trading silver for gold would be wise if the ratio of gold to silver is less than 16:1. Right now, it's about 40:1, so trading gold into silver makes more sense. When the ratio gets to 16:1, if you believe that history will repeat itself, then trade back into gold.

Basically, if you believe the historical ratios will return, if the ratio is 40:1, then either gold has to go down in value or silver has to jump in value. Either way, getting out of gold and into silver makes sense when the ratio is significantly higher than 16:1. If it were 10:1, then gold would have to increase or silver would have to decrease, making it the right time to trade silver for gold.

Another way to think of it, if the ratio is 32:1 (double the historical average) and you own 1 oz. of gold, you can trade that for 32 oz of silver. Now, either the value of gold has to go down, or the value of silver has to go up to get back to 16:1. When it does, you now have 32 oz of silver that you can trade for 2 oz of gold.

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Old 04-17-2011, 06:24 PM   #22
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Default Keep your Gold and Silver

In reply to your question, I'd personally hold on to what you've got and purchase more silver. Keep your gold too and perhaps consider a percentage of your investment(s) on gold and a percentage in silver.

Considering the gold/silver ratio is going down (possibly to its historical average of 16:1), it may be wise to buy more silver (60%) than gold (40%) - or maybe even 70/30.

As far as confiscation, that's largely a myth. Once you have coins in your possession, they're yours. Many people (myself included) have fallen for the trap that there will be a future confiscation possibly. Even if they did, if the coins/bars are in your possession at a location of your choosing, good luck finding them!!

Beware of Gold Confiscation Myth | Provident Metals

Gold-Silver ratio set to fall lower | 24 March 2011 |
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Old 04-17-2011, 06:56 PM   #23
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Whatever you decide to do, make sure you have the metal in hand. When push comes to shove everybody who invested in "paper" gold and silver are going to be very unhappy.

“The stupid neither forgive nor forget; the naive forgive and forget; the wise forgive but do not forget.”

"Never underestimate the predictability of stupid"
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