True Value of Silver Explained
The historical gold to silver ratio is 1:15. Assuming golds current value ($4300) is accurate, this means silver should be $286 per oz.
The silver certificate (paper) market for silver vastly devalues silver. For each ounce of physical silver that exists, there are 400 contracts claiming ownership of that single physical ounce. It ends up traded like a stock and is never physically delivered. If people started to demand delivery of their silver, we would see (like we currently are) a massive shift in the loss of value in paper, but much higher prices in physical.
Take the $286 silver value and multiply that by 400 when the paper market collapses and we have: 286 x 400 = $114,400 per physical ounce.
This doesn't account for inflation either, this is simple supply and demand of a commodity based on scarcity, production, and the loss of commodity manipulation. I figured this explanation might simplify why banks are freaking out and online suppliers are having supply issues while the paper value appears constant despite supply shortages.
t. silveranon.
God Bless.