The Silver Boom

The world is dangerously running out of silver.

 

Silver is there in most of our useful devices than any other commodity besides petroleum. Over HALF of silver is used in industrial applications. It is used in just any of the electronic devices made-from TVs to computers to electric cameras to iPads. It is also essential for batteries, disinfectants, solar energy, CDs, solar energy and water purification.

The list of products that need silver is enormous and constantly growing- including the two biggest areas of all:

·         Photovoltaic cells used in smartphones (1.2 billion cellphones were sold last year i.e. 2012!)

·         Its recent leading role as antibacterial agent being used by hospitals and health care facilities around the world.

 A report from Thompson Reuters shows, industrial demand for silver could hit a record 511 million ounces by 2014.

On the other hand, the SUPPLY of silver is in downward of historic magnitude. Silver inventories have fallen 92% since the start of 20^th century. Just think about it…..90% of the gold ever mined has been saved, but 90% of all the silver ever mined has been used up for industrial purposes.

 

As we mentioned in our previous discussion on silver, silver is severely underpriced. Wheres the availability of silver in relation to gold is only 3X, the price of gold in relation to silver is 55X (historically, gold silver price has been 16X). So, no doubt silver is set to skyrocket. Simply, there is no other alternative. If we look at the price trend of gold and silver, we find that:

In last ten years, silver has returned 609%, while gold has returned 439%.

 

But still, it is underpriced. And as the data above shows, it has no way but to rise sharply. It has to more than TRIPLE in price (from current ratio of 1:55 to historical ratio of 1:16).

The critical part is this- As people learn of the growing silver shortage, demand rises even more sharply. John Embry, Chief Investment Strategist of Sprott Asset Management of Toronto, says: “When silver  breaks free, I think many people are going to be shocked by how fast and far it goes.”

Multimillionaire and Investments guru Jim Rogers says: “If you put a gun on my head and said you had to buy one, I would buy silver rather than gold.”

So, folks, prepare to take roller coaster ride on silver!