A heretic on the gold to silver ratio

Gold/Silver Ratio Rethink
A second factor, that only entered the equation in the 20th century, could be contributing further to silver’s demonetisation. This is its growing electronic, medical and general industrial role. Make no mistake, silver is now a consumed metal.

This places further strain upon its monetary value. If its industrial value is increasing, its monetary value must necessarily be diminishing.

Silver is being consumed in large quantities in ways that make it difficult to retrieve. That must mean that its stock to flow ratio is falling. It is the stock to flow ratio that ensures the stability of value so necessary for a money.

If, as is generally predicted, silver’s industrial usage continues to expand, then this can only create further volatility in its value causing further downward pressure on its monetary value.

Stock to flow ratio, and volatility of value are inversely, but not necessarily proportionally, correlated. If the above ground stock of silver fell below a certain level (whether actual or perceived), then this could lead to a huge decrease in the component value of silver which is attributed to its monetary function. Is this the cause of the 20th century acceleration of a process that started 400 years ago?

Sam Mathid's has two points, the first is that gold is divisible in the digital age. However, freegold advocates such as FOFOA see gold becoming a wealth reserve, not a transactional currency. In any event, I believe his second point is stronger. Silver is an increasingly industrial commodity and this may cause the stocks to flow ratio to decline over time. As an investment, this may be a reason to own silver, or platinum or palladium, but if there's a monetary event that causes gold to be revalued, silver may not go along for the ride. Overall, a good "outside-the-box" article.

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