The gold-to-silver ratio has been trending strongly in favor of silver since last March when silver got historically cheap versus gold. While silver is no longer dirt cheap, it is nowhere near expensive. At under $30 an ounce, it still offers compelling relative value versus just about any other asset – hard or soft.

A strong case can also be made for platinum being undervalued versus gold and most other assets out there. However, its demand profile is highly concentrated in the automotive industry. Investment and jewelry demand for platinum are both relatively small and fuel cell technology that uses platinum is in early stage.

There is a much better potential for large-scale public buying of silver bullion to strain physical supply and drive prices higher. A silver squeeze on the futures exchange could result in an epic price spike with the potential to send the metal to triple digits.  

In the meantime, the ongoing debasement of the U.S. dollar by politicians and central bankers will continue to exert gradual upside pressure on all hard assets.

On Wednesday, the Federal Reserve released the minutes from its most recent policy meeting. Fed officials downplayed the recent surge in price inflation as temporary. That remains to be seen.

The Consumer Price Index, Producer Price Index, and other inflation gauges have been running hotter than Jerome Powell and his cohorts expected. So, their expectations that inflation will soon come down should be viewed with skepticism.

The Fed hinted at its last meeting that it’s preparing to eventually taper its $120 billion in monthly bond purchases. An interest-rate hike seemed unthinkable at the beginning of the year, but now central bankers are at least thinking about hiking at some point – perhaps in 2022.

A lot can happen between now and then. With rates still ultra-low and stimulus still being pumped into financial markets and the pockets of the unemployed, asset bubbles are prone to form.

The next manic move higher could be in stocks, real estate, cryptocurrencies, precious metals, or all of the above. But investors should ask themselves which asset classes represent real value at current prices and which have already been driven to extreme overvaluation by the Fed’s money printer.

Precious metals naysayers can try to make the case that there won’t be a gold and silver mania ahead. But they can’t deny that the metals offer better value than a lot of other assets that recently got bid up to stupendous heights in herd-driven trading frenzies.