Fiends In Stocks

[DeepBlue1]

I saw them bring up a list of gold stocks this morning with a generic chart showing gold vs gold stocks.

Both are heading up strongly, but the point they were making was that the stocks/companies were somewhat leveraged and so going up faster percentage-wise although still lagging just below physical gold at the moment, but catching up fast.

You've probably seen this, but it's an interesting little study for anyone who might not have seen it yet.

THE GOLD/SILVER RATIO STRATEGY and THE CASE FOR SILVER

http://www.gold-eagle.com/editorials_03/sanders030703.html

The current ratio is 66.6
Far far above the historical mean and indicating that silver is severly undervalued relative to gold.

Two of the points in this study that I took away as very telling were that...gold is only 17.5 times less common in the earth than silver, AND, silver tends to get used up in industrial applications whereas gold remains around in the form of jewelry and in vaults and so never becomes more scarce like silver does over time.

The 17.5 to 1 ratio suggests that the gold/silver ratio SHOULD BE closer to that number than it is now at 66.6 to 1 in price.

It's also telling that silver at the current price costs more to mine than it's worth...so supply is diminishing while demand is growing.