by Tom Chatham, Project Chesapeake:

There has been much talk in the past few years of how to store your excess wealth to preserve its value. Many people have advised that gold and silver are the best vehicles for doing so but there are many detractors in the mainstream that disagree.

If you look at the price of gold and silver over the years and compare the prices to crude oil you will see a good correlation. As crude oil has moved up and down the price of precious metals has moved in close lockstep with it over the years. That makes very good sense due to the fact that the world runs on energy and gold and silver are real money. No modern economy can have growth without using more energy.

In 1980 the average price of silver was $16.39 and the price of silver spiked to around $50 an ounce, the price of crude that year averaged about $37.42. Adjusted for inflation, in today’s dollars that would make oil about $106 a barrel. Does that number look familiar?

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