Gold-to-Silver Ratio 
EG: With the ratio of silver to gold being out of proportion right now, should we expect it to even out soon? 

CB: For traders of precious metals the gold-to-silver price ratio has been a long-time indicator and guide for entering or exiting the market. While there is no hard number for what the ratio should be in relation to gold and silver, being at a place of price equilibrium, a widely espoused metric is around 35 to 1, meaning it would take thirty-five ounces of silver to buy one ounce of gold. For some time now, the ratio has been quite extreme with readings around 80-to-1.

Currently, the ratio is moderated a bit and stands around 75-to-1.  The anticipated reversion to a tighter ratio that is more in-line with historic price spreads in conjunction with the burgeoning supply/demand imbalance has buoyed investors faith that silver will outperform gold in the next big precious metals market up-leg and that the hour of truth is in sight.

EG: Considering the current state of fiat currency and its potential downfall, should we be gearing up for precious metals to reclaim their place as the conduit of wealth in the world? 

CB: To paraphrase a timeless axiom, do not listen to what they say, do what they do. In the context of precious metals, it has not been the practice for the vast majority of wealth advisors and other “mainstream” financial pundits to recommend investors take a meaningful position in physical precious metals. Yet, we see many sovereign powers, such as China and Russia, stockpiling gold over the last several years in what appears to be preparation for a new financial order or global financial disruption. Additionally, other foreign powers, including Germany and Turkey, have been repatriating their nationally owned gold from its long term storage in the US. These actions, which came after several decades of indifference regarding gold ownership and possession, would seem to indicate a coming shift in the status and function of precious metals.

EG: Moreover, should we also look into obtaining the shares of mining companies? 

CB: Physical ownership of precious metals is distinctly different from investing in mining companies. The fundamental difference between physical precious metals and mining shares is that unencumbered physical bullion ownership is free of counterparty risk whereas a mining company is an operating business with all the normal associated risks along with the counterparty risk associated with an exchange traded product. 
 

This is not to say that adding mining shares to one’s portfolio does not present an opportunity for financial benefit, just that the research and due diligence required to best allocate investment resources to the mining sector is materially different than taking a position in precious metals as a means of wealth preservation.

EG: Exter’s Pyramid lists gold at the bottom as the most reliable asset. Would it be right to assume that silver also fits into that base? 

CB: While silver has not been a reserve asset for central banks and has commonly been referred to as “poor man’s gold,” silver would definitely be positioned close to gold within Exter’s Pyramid if it was included in that classic visual organisation of the major asset classes. 

EG: What implications would a shift from fiat currency to precious metals have on the economy and sectors such as real estate, for example? 

CB: I do not see fiat currencies vanishing from the scene to be replaced by metallic money, though some may disappear only to be replaced by a new fiat currency, possibly including digital currencies. That said, the probability of a more accelerated debasement of the world’s fiat currencies vis-à-vis precious metals is basically assured, as history will attest.Also, in the midst of the global currency and trade wars manifesting themselves presently, the wildcard of a major sovereign power introducing a gold backed currency is not too far-fetched. In either scenario, economies would be ravaged by inflation when calibrated against the pure fiat currencies and the associated across-the-board financial dislocations would take place. 
 

Interestingly, if Central Bank policies deviate from the expected and they allow deflation to take root, general asset values would collapse and the gold price would also fall. But the decline in the gold price in relation to the collapsing prices of other assets would be less and gold would actually gain purchasing power. The notion of gold benefiting in deflation, when measured in increased purchasing power and not the decrease in the nominal price, is not understood by many. 
 

The bottom line is that in either a hyperinflationary or deflationary environment, the exclusive and time-tested attributes of physical precious metals as an unparalleled store of wealth will be of paramount value to their holders and position the precious metals investor with the resources necessary to capitalise handsomely after the financial maelstrom.

EG: Tell us about your patented PMC Ounce™ investment asset?    

CB: The PMC Ounce™ was architected to incorporate the best attributes of both physical precious metals investing along with the efficiencies and ease-of-trade associated with the exchange type products investors have come to value and appreciate. Specifically, several of the key attributes, differentiators, and objectives which define the PMC Ounce include; a logically weighted allocation across the four primary precious metals, mitigation of volatility via diversification, real-time pricing and  trading, 100% backing by LBMA approved bullion, and the assignment of ownership at the depository level. To sum it up, the PMC Ounce delivers a fully turn-key diversified physical precious metals portfolio within each PMC Ounce along with the insured vaulting and accountability astute investors value. It was thru bridging the gap between the securitised world of precious metals, whose products are often referred to as “paper gold,” and the realm of physical ownership that categorised the PMC Ounce as a true innovation. By marrying the most beneficial attributes from both sides of the investment spectrum and making the end product available in a scalable and tradable asset, the PMC Ounce was awarded a patent in 2013. Since that time, this dynamic investment product has been widely accepted and continues to gain favour among investors and with numerous well respected advisors and analysts.   EG