The Gold-Silver Ratio Is Flashing a Rare Signal—Here’s What It Means for Investors

Guest Post by Nick Giambruno

The Coinage Act of 1792 established the US dollar as the country’s official money.

President George Washington signed it into law in April 1792—just one year after the Bill of Rights was ratified.

The Act legally defined the dollar in terms of fixed weights of gold and silver.

(The green pieces of paper in your wallet today aren’t technically “dollars”—they’re Federal Reserve Notes.)

Under the Act, one dollar was defined as about 24 grams of pure silver—or roughly 3/4 of a troy ounce.

Ten dollars equaled around 16 grams of pure gold—or about half a troy ounce.

The Act also set the gold-to-silver exchange ratio at 15:1.

Today, there’s no fixed ratio—but many people still cling to that 15:1 figure as if it were sacred.

I don’t see it that way.

The 15:1 ratio wasn’t born of the market—politicians imposed it.

It’s not a law of nature. It’s not permanent. And it’s not sacred.

As market conditions evolve, so will the gold-silver ratio—and that’s precisely how it should be.

A government arbitrarily fixing the gold-silver ratio at 15:1 is no more meaningful than when Argentina pegs the peso to the dollar at 4:1—or when any government attempts price-fixing.

The market always overrides arbitrary political numbers.

Why am I bringing this up?

Because recently, the gold-silver ratio exploded past 100:1.

In other words, buying just one ounce of gold takes around 100 ounces of silver.

Below is a long-term chart of the gold-silver ratio, starting in 1792 with the passage of the Coinage Act. The green line in the charts below represents the historical average of around 50.

Here’s a more recent chart showing the gold-silver ratio from 1970 to the present. Once again, the green line marks the historical average for this period—also around 50.

Here’s a better way to think about the gold-silver ratio:

When you go to a coffee shop, you don’t think about a “cappuccino-to-dollar ratio”—you just look at the price.

Gold functions in the same way. Gold is mankind’s most enduring form of money—for over 5,000 years

Pricing something in gold reflects the real value of something far better than fiat currency.

Gold is an honest measuring stick.

Fiat money is like a yardstick where the length of an inch keeps shrinking.

That’s why I don’t view the gold-silver ratio as a “ratio” at all.

Instead, I think of it as the price of silver measured in gold.

Silver prices have mostly ranged between 1/50 and 1/80 an ounce of gold in recent decades.

But recently, silver hit a rare, extreme low: just 1/100 of an ounce of gold.

That means silver is at one of its cheapest levels in all of recorded human history.

I expect the gold-silver ratio to trend upward over the long term because gold is a superior money, and it will continue to demonetize silver, which I think will eventually become a purely industrial metal.

However, I expect that to play out over the long term.

The gold-silver ratio has now broken out of its long-term average range of 50 to 80. While I expect it to grow over the long term, I expect it to revert to in the short term because silver has not yet been totally demonetized and likely won’t be for many years.

That’s why I usually don’t put much stock into the gold-silver ratio, but the extremes can signal something. And now we are in an extreme territory.

The way I see it, the market is handing us a fat pitch. We’d be crazy not to swing at it.

This is a rare setup with explosive upside potential. Opportunities like this don’t come around often.

How to Profit

I believe the best way to capitalize on this trend is through speculations in select silver stocks—more on that below.

But before we get into that, let’s clarify something important.

I’m not interested in holding physical silver for long-term savings. It’s simply inferior to gold in that role.

However, there is one scenario where a limited amount of physical silver makes sense: emergency spending.

Gold coins are generally impractical for small transactions. Silver coins, on the other hand, are much more suitable.

That’s why holding a modest stash of physical silver for emergency use makes sense—no more than 100 one-ounce, widely recognized bullion coins. The Canadian Silver Maple Leaf and American Silver Eagle are both solid choices.

The idea here is simple: you want a small amount of real money on hand in case of an extreme event—where banks, ATMs, or even the internet are offline. In such a scenario, silver coins could be essential for bartering, like trading for food or other necessities.

It’s important to stress this point: holding more physical silver coins than needed for emergency spending is not ideal. Gold is far superior for long-term savings and wealth preservation.

If you’re looking for a convenient way to acquire silver bullion with global delivery, SWP Cayman offers a solid platform for that.

Now, let’s talk silver stocks.

There are very few pure-play silver stocks. Outside of a handful of dedicated mines—mainly in Mexico, Peru, and a few other regions—it has generally been uneconomical to produce silver as a primary product. Most silver mining today occurs as a byproduct of extracting other metals.

That’s not to say profitable silver mines don’t exist—some do—but large, diversified mining companies like BHP or Glencore often own them. In these cases, silver contributes only a small fraction of total revenue. These are not stocks you’d invest in solely for silver exposure.

This highlights a key point about the silver market: roughly 70–80% of newly mined silver comes as a byproduct of mining for gold, copper, lead, and zinc. That means silver production continues largely irrespective of silver’s market price. It’s a relatively small and inflexible segment of the broader mining industry.

The gold-silver ratio isn’t just about metals—it’s a reflection of deeper instability in the system.

What we’re seeing right now isn’t normal. It’s part of a much larger shift—one that could mark the beginning of the most dangerous economic crisis in a century. I believe we’re entering a period of massive disruption that will impact everything: markets, money, and personal freedom.

That’s why I put together a special dispatch called:

The Most Dangerous Economic Crisis in 100 Years… and the Top 3 Strategies You Need Right Now.

Inside, I break down the trends that are accelerating beneath the surface—and the practical steps I’m taking to navigate what’s ahead.

Click here to read it now—before the next phase of the crisis hits.