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Why It’s Time to Buy Silver vs Gold

Why It’s Time to Buy Silver vs Gold. The U.S. government is sinking deeper and deeper into debt at more than $5.5 trillion a year by some estimates. And that doesn’t count the pile on of even more debt from expected future stimulus packages.  Interest rates on government bonds have made them very unattractive at 0.5% on the 10-year Treasury bond compared with 1.9% in January and  more than 3% in 2018.  Meanwhile, the price of gold has been trading at more than $1,700 as an increasing number of investors have decided they don’t want to be a creditor to Uncle Sam, nor risk investing in stocks with the potential ahead for a sustained bear market.  On the other hand,  investors have been ignoring silver, even at historically low prices of between $15 and $16 per ounce. That makes the ratio of the price of gold to silver to about 113 compared (see chart below) with an historical mean of 40.  That difference in our estimation makes silver a good bet for future appreciation as investors increasingly look for undervalued alternative assets with potential for strong future appreciation.

Why It’s Time to Buy Silver vs Gold
Why It’s Time to Buy Silver vs Gold   –   Chart by Macrotrends

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Brad Lamensdorf

Brad Lamensdorf, the founder and portfolio manager of Active Alts, is a principal and co-manager of the AdvisorShares Ranger Equity Bear ETF. He previously managed a long-short investment partnership from 1998-2005 under the name Tarpon Capital Management. Earlier in his career Mr. Lamensdorf was an equity trader/market strategist for the Bass Brothers’ trading arm. He managed a short only portfolio in addition to co-managing a $1bil hedging program. He also served as in-house market strategist for the entire internal and external network of Bass Brothers money managers.

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