The Silver-to-Gold Ratio: 1:20 — Fact or Fantasy? Historically, the silver-to-gold price ratio has floated, but the long-standing historical average (before modern fiat systems) hovered between 1:12 to 1:16.

🪙 The Silver-to-Gold Ratio: 1:20 — Fact or Fantasy?

Historically, the silver-to-gold price ratio has floated, but the long-standing historical average (before modern fiat systems) hovered between 1:12 to 1:16.

Why?

• Silver and gold were both monetary metals

• Governments pegged their currencies in bimetallic standards

• For centuries, the natural extraction ratio (how much silver vs gold came from the ground) was roughly 15:1–17:1

• So people assumed: value = scarcity

🔁 This reinforced a belief system that gold should be ~15x the value of silver.

👨‍🌾 Enter: The Hunt Brothers (1970s–1980)

Who:

• Nelson Bunker Hunt and William Herbert Hunt, oil billionaires

• From a Texas dynasty with deep pockets and anti-Fed sentiment

They believed:

• Fiat money was collapsing (they weren’t wrong)

• Gold had already been made illegal in the U.S. (until 1974), so...

• Silver was the next best hard asset

• Silver was undervalued compared to gold, and the “real” ratio should be much closer to 1:16 or 1:20

So they:

• Bought over 200 million ounces of physical silver

• Accumulated huge amounts via futures contracts

• Formed what amounted to a quasi-cartel, cornering the silver market

🚨 The Aftermath: Silver Hits $50/oz in 1980

• Price exploded from ~$6 to $50 an ounce

• Ratio dropped to near 1:15, briefly vindicating their theory

• But the COMEX changed the rules (known as "Silver Rule 7"):

  • Raised margin requirements

  • Banned further long contracts

The silver bubble collapsed — HARD.

• Silver plunged from $50 to $11 almost overnight

• The Hunts lost billions

• Charged with market manipulation

• Forced into bankruptcy

• Became legends and cautionary tales

🤔 Were the Hunts Right?

In terms of macro vision — yes, in many ways.

They understood:

• Fiat was flawed

• Precious metals were under pressure from central banks

• Real assets would eventually outlast paper ones

But their method was flawed:

• Tried to force the market instead of riding it

• Didn’t hedge political and institutional retaliation

• Underestimated the Fed’s and COMEX’s power

🧮 Today’s Ratio (As of September 7, 2025):

• Gold: ~$3,580/oz

• Silver: ~$40/oz

• Ratio: ~87:1

That’s more than 4x the “historic” 1:20 ratio.

To return to 1:20:

• Silver would need to be ~$115/oz if gold stays the same

• Or gold would need to crash, which is unlikely in the current global debt climate

🧠 What This Suggests Today:

Belief	Status
Silver is undervalued vs gold	✅ Historically yes, especially if fiat weakens
1:20 ratio is "natural"	❌ More symbolic than realistic today
The ratio will close	🟡 Possible in a systemic reset, but not guaranteed
Physical silver is suppressed	✅ By banks like JPMorgan (see 2010s market manipulation cases)
Hunts were ahead of their time	✅ But the system crushed their strategy

🧩 Final Thought:

The Hunt brothers weren't just greedy — they were true believers in hard money, and saw silver as a weapon against fiat tyranny.
Their 1:20 ratio thesis still haunts precious metal circles, especially among:

• Sound money advocates

• Anti-Fed thinkers

• Libertarians

• “Reset” watchers

The Hunts weren’t wrong about why, but they got burned by how!