iHub Mining Sector Entrance Lobby

[Frank Pembleton]

Silver Fundamentals or Funny Mentals?
by David Morgan -- October 2, 2002
http://www.financialsense.com/editorials/morgan100202.htm

...here's a highlight:

What is of particular interest to investors is the simple fact of how undervalued silver really is relative to anything else. As most who have read my work know, I focus a great deal upon real money vs. fictional money. In an earlier article it was mentioned that the Federal Reserve itself has indicated that the 1913 dollar is now worth 5 cents. To get a current “dollar” back to the 1913 equivalent we would have to use twenty of them. Expressed another way, (.05 x 20 = 1.00). This gave me an idea. Let us investigate how well gold and silver have kept up. In 1913 a twenty dollar gold piece was the coin of the realm. Taking our twenty times factor we see $20 x 20 = 400, so if we trust the FED gold would be worth $400. This is approximately true because a twenty dollar gold piece is not exactly a troy ounce, however the idea is sound. But now let us have a look at silver at $1.29 per ounce (1913 official price) x 20 = $25.80. Interesting gold today is near $320 and silver is around $4.50. We can see from this example that gold would have to increase by 25% to reach this theoretical price, but silver would have to increase by 550%.