The Generalist

Silver/Gold

Silver/Gold

In any study of economics, it’s important to remember — all prices are ratios. That means that they are always in flux as the values of one or the other or both commodities change, whether one of those commodities is used as money or not. This is, of course, a lesson we wish politicians could learn. Nevertheless, it’s easy to forget as we get used to talking about prices in terms of monetary units, in our case, dollars. In the early part of this chart you can see that the exchange ratios between silver and gold were fixed, but ever since the American Civil War, the price of silver in terms of gold has, on average, been falling. There is a lot of talk on the net these days about this changing. Decide for yourself. I’ve labeled some of the spikes which were fairly obvious. If you think I should add anything, feel free to contract me through the discussion board.

This chart is in pdf format.

Silver/Gold Ratio

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