Stinking Thinking
The only reason silver is so cheap right now is that people “think” it should be cheap. They’ve been conditioned to think that because governments have been dumping their silver into the markets for half a century. This extra supply has had the effect of suppressing silver’s price and the low price has resulted in our consuming more silver than produced for over half a century.
But won’t they just mine more Silver?
That’s a good question. The short answer is: yes. But the good news is that most silver supplies don’t come from silver mining operations. Rather, silver supplies are often a by-product of mining copper, lead, zinc and gold. In fact, about 75 percent of the supply of newly mined silver originates as a by-product of mining other metals.
But won’t they just open more Silver Mines?
Good question again. Again, the short answer is yes. But the worldwide average for taking a mine from discovery to production is five to seven years, and in countries with strong environmental laws, it can take much longer.
The world isn’t just running out of silver aboveground either, it’s also running out of silver in the ground. Minable deposits of silver are becoming harder to find.
The coming Silver Boom
I am certain that one of the biggest catalysts for growth in precious metals will come from silver. Indeed, I think we are on the verge of the greatest silver boom history has ever seen.
As the dollar continues to collapse, big investors will first turn towards gold and dramatically drive up its price. By the time the public catches on, gold will look pretty expensive to them. Everybody will then start hearing about silver being rarer than gold. In a frenzy, people will dive into silver, just as the stockpiles are practically diminished and production has practically stopped. That is when silver prices will explode.
From the book: “Guide to Investing in Gold and Silver” by Michael Maloney
