Marshall Gittler of currency trading house BDSwiss, who was quoted today by about the extraordinary widening of the gold-silver ratio, elaborates on the issue in an essay at



Gittler writes that he cannot discover exactly what has driven the ratio to this extreme, but speculates that it may forecast "a tremendous deflationary period ahead."



He adds: "One other point that may be connected. I'm not sure how accurately the price of gold that I see on my screen reflects the actual demand. The gold market seems split at the moment. While the price is falling, meaning there are more sellers than buyers, everything I read on Twitter is that physical gold is nearly unobtainable. Many banks and refiners have run out of inventory. Apparently there has been a surge in retail demand for gold coins and bars at the same time as the price has been falling.

"It seems that the 'paper' market, the futures and exchange-traded funds, is determining the price and does not reflect the heightened demand on the street for hard metal during this time of insecurity. In that case, gold prices could be even higher and the ratio even higher than what we see."

Maybe the trading desk at JPMorganChase & Co. could offer an explanation of the gold-silver ratio when the bank's people finish being interviewed by the Justice Department about "spoofing." Maybe the guys at the Treasury Department's Exchange Stabilization Fund could offer some insight as well.