Gold-Silver Ratio Falls Below 40 for the First Time Since the Early 1980s

Speaking of gold and silver, the gold-to-silver ratio just dipped below 40 for the first time since the early 1980s. This ratio has fascinated people for centuries. Way back in antiquity, Plato mentioned that the ratio was 12-to-1.

In 1792, the U.S. Congress, at the advice of Alexander Hamilton, passed the Coinage Act of 1792. This was the government’s first attempt at price-fixing (and not the last). The act defined a U.S. dollar as 371.25 grams of silver or 24.75 grams of gold. In other words, Hamilton pegged the Gold/Silver ratio at 15. In 1834, Congress had to bump it up to 16.

Posted by on March 7th, 2011 at 8:29 am


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