The silver-gold ratio hit the highest level in over a quarter century this week.
The ratio hit to 86:1 as dollar strength pulled both the price of silver and gold lower this week after the Federal Reserve indicated it plans to keep pushing interest rates higher. The price of silver fell even more steeply than the gold price. A research note by Commerzbank said it was that largest gap between the two metals in 25 years. Practically speaking, this means silver is undervalued compared to gold.
Over the last several weeks, we’ve spotlighted a lot of data indicating the economy isn’t nearly as strong as the mainstream pundits keep telling us. We’ve focused on the collapsing retail sector. We’ve looked at household debt and US consumer stress. We’ve talked a lot about the US federal debt and its potential impact on the economy.
There’s another factor that indicates there may be some cracks in the global economy – the silver-gold ratio.