Silver Cheap vs. Gold, Both Make Sense in a Crisis

Gregor Gregersen founded bullion dealer and storage company Silver Bullion after the 2008 financial crisis, and he continues to see silver and gold as important portfolio components, especially given this year’s banking issues.

“There’s a lot more to come,” he told the Investing News Network, adding that the events of 2008 showed him just how fragile the financial system is. “It hit me like a sledgehammer — it just made so much sense to buy some physical metals.”

Gregersen encouraged investors to diversify into physical precious metals because they are apolitical and intrinsically valuable. When it comes to gold and silver, he suggested using the gold-silver ratio to determine when and what to buy.

“You will find that over the last 50 years, that ratio has sort of bounced back and forth between, say, 50 and 80. So when you’re at 80, silver is very cheap … when it goes down to 50, it means silver is expensive compared to gold,” he explained.

“Right now we are around 83, which means silver is very cheap. So for people who want to buy gold, I kind of tend to tell them, ‘Well, buy silver first, wait for this ratio to go back to its mean of around 60 or 50 and (then) switch back into gold’ — you’ll end up with 50 percent more gold. It’s a very simple rule,” he continued. “If you were to follow it over the last 40 years, you would have quadrupled the amount of gold or silver you’re holding. You would have probably made one trade every four or five years.”

Gregersen also spoke about the new vault Silver Bullion is building in Singapore. Called the Reserve, the 180,000 square foot facility will become the world’s largest capacity vault at over 15,500 metric tons once complete.

“I do believe that the way we are heading we will have a crisis at some point,” he concluded. “It’s very important that you have a base amount of wealth that’s going to be secure no matter what — and there should be some gold and silver.”

Watch the interview above for more from Gregersen on silver, gold and Silver Bullion’s new vault.

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.