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00:00SILVER RATIO, I WANT TO BRING AND KEN HOFFMAN, WHO JOINS US NOW IN SKILLMAN, NEW JERSEY. WHAT DOES THE GOLD SILVER RATIO TELL YOU WHY IT'S IMPORTANT ? KEN: IF YOU WANT TO TRADE USING THE GOLD SILVER RATIO, I GUARANTEE YOU WILL LOSE MONEY. IT DOESN'T TELL YOU ANYTHING AT ALL ABOUT ONE IS NOT A VERSUS THE OTHER. IF YOU WANT TO KNOW THAT INDUSTRY DEMAND TRENDS, THE RATIO IS VERY GOOD. IF THE RATIO IS TELLING YOU THAT DEMAND FOR GOLD RELATIVE TO SILVER HAS BEEN MUCH GREATER, WHY? LOOK AT CHINA. CHINESE IMPORTS OF GOLD SINCE 2010 ARE UP MORE THAN 1000%. CHINESE IMPORTS OF SILVER ARE DOWN BY MORE THAN 50%. THEY ARE ALMOST DOWN TWO THIRDS. IF THE RATIO IS TELLING YOU THAT THE DEMAND FOR GOLD IN THE WORLD IS MUCH GREATER, RELATIVE TO DEMAND FOR SILVER, AND HONESTLY COME OUTSIDE OF THE CALLS I GET FROM THE U.S., I VERY RARELY GET A CALL FROM ASIA OR EUROPE ABOUT SILVER. THEY ONLY CARE ABOUT GOLD, THE U.S. IS WHERE SILVER DEMAND REALLY COMES FROM. ALIX: SCARLET, YOU SHOULD NOT OF CHOSEN MARK BARTLETT'S CHARGE. IT DOESN'T TELL YOU ANYTHING. SCARLET: HE SAID IT DOESN'T TELL YOU WHERE THE PRICE IS GOING, IT TELLS YOU SOMETHING ABOUT DEMAND. ALIX: PART OF THE REASON IS THAT SILVER IS AN INDUSTRIAL METAL. WE TEND TO LOSE SIGHT IS THAT GETS DRAGGED UP WITH GOLD AS A SAFE HAVEN TRADE. HOW WAS THE INDUSTRIAL OUTLOOK SHAPING UP FOR SILVER? KEN: SILVER IS THAT SOME ISSUES WITH INDUSTRIAL DEMAND. PHOTO HOTEL EXCELS HAS BEEN DOWN BY 50%. EVEN THOUGH SOLAR CELLS ARE INCREASING, THE AMOUNT OF SILVER IN A, WHICH WAS A HUGE DRIVER FOR NUMBER OF YEARS HAS FALLEN OFF A CLIFF. THAT'S BEEN ONE OF THE ISSUES , YOU SEE THAT IN DENTISTRY. SILVER AS INDUSTRIAL DEMAND HAS FALLEN BACK TO THE ETF AND THE INVESTMENT DEMAND. AND WHILE THAT HAS PICKED UP, THAT IS A POSITIVE, IT HASN'T BEEN TREMENDOUS JUST YET. ALIX: WE HAD A CHART UP LOOKING AT THE OTHER PART OF THE EQUATION, THE SUPPLY AREA. LOOKING AT WHAT SILVER SUPPLY HAS DONE OVER THE LAST YEAR, IT LOOKS TO BE FALLING. SCARLET: MAYBE ONE OF THE FEW COMMODITIES WHERE THERE ISN'T A GLUT AT RECORD HIGHS RUN OUT. KEN HOFFMAN, WHEN IT COMES TO SILVER, TALK ABOUT THE DEMAND FOR THIS MIDDLE FROM PLACES LIKE CHINA. KEN: IT HASN'T BEEN VERY GOOD. GOING BACK TO YOUR FIRST CHART, SUPPLY IS GOING TO BE A BIG POSITIVE FOR SILVER AND GOLD. RIGHT NOW, WE'VE SEEN IS SILVER IS MAINLY MINDLESS LINK -- MINE D WITH ZINC . NO ONE IS INVESTING IN SILVER OR ZINC MINES. YOU'LL PROBABLY SEE SILVER PRODUCTION DECLINES IN THE NEXT DECADE. THAT'S A HUGE POSITIVE FOR SILVER, YOU WILL SEE THE SAME FOR GOLD. EVENTUALLY GO TO THE OTHER METALS. YOU JUST ORDER TO CUT BACK THEIR X MANAGERS. IF YOU LOOK A ZINC, SILVER, GOLD, THOSE NUMBERS OF BEEN DOWN FOR FOR FIVE YEARS. THEY FIRED ALL THEIR PRODUCTION STAFF, THEY'RE ALL GONE.

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Gold-Silver Ratio at 2008 Financial Crisis Level

Bloomberg’s Ken Hoffman reports on gold and silver ratio gains on "Bloomberg Markets.” (Source: Bloomberg)

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