Billion Silver
Posted in Uncategorized on 09/06/2005 04:05 am by admin
Billion Silver
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Silver value today is not consistent with its underlying fundamentals of supply and demand. The high demand and strictly limited remaining supply of silver both above-ground and below-ground are going to ignite a silver prices explosion in the near future. This article explains one of the six primary reasons silver prices are about to undergo a tremendous increase.
Over the last 5,000 years, billions of ounces of silver bullion have been mined and extracted from the ground (this is called "above-ground" silver). In fact, in 1940, the world had approximately 10 Billion ounces in total worldwide silver bullion inventories. Of that 10 Billion ounces, the U.S. Government had the largest holding with 6 Billion ounces.
Today, the U.S. Government has zero ounces, and most of the rest of the world governments have zero or close to zero as well. Furthermore, since silver is actually consumed (i.e., used up) in most industrial applications, the total world above-ground silver bullion currently in existence is estimated to be less than 1 Billion ounces. That is a 90% depletion of the world supply of silver in just 60 years!
As if that weren't bad enough, the U.S. Geological Survey (the chief geological statistician for the U.S. Government) estimates there is only 8.5 to 18 Billion ounces of silver left "below-ground" (i.e., not yet mined), there is less below-ground silver (versus its current rate of usage) than any other precious metal. In fact, based on the current rate of annual consumption of silver and the estimated total underground reserves, the world has only about 14 years left before all the below-ground silver is completely consumed... according to the U.S. Geological Survey.
Since the world Government inventories are essentially zero, this means we are quickly going to run out of one of the most useful metals in existence (with no readily available substitute in many applications)... perhaps in less than 14 years.
What happens when you have an enormously useful material with a high demand and a strictly limited supply?
That's right; the price goes up!
And when the price has been held artificially low for 6 decades as a result of world governments dumping inventories into the market to keep the price low... and now with no remaining inventories to dump... the prices are not only going to go up they are going to skyrocket extraordinarily fast!
Many experts are predicting the price of silver will actually surpass the price of gold... and why wouldn't it? Silver has many more uses than gold, and gold is never actually consumed or used up.
Historically, the ratio of the price of gold to the price of silver is 16-to-1 (i.e., gold costs approximately 16 times what silver costs). Due to the recent multi-fold run up in the price of gold, silver is way behind (in other words, gold costs a lot more than 16 times the cost of silver). However, when the strictly limited supply starts to impact businesses that use silver, silver will catch up and actually exceed the price of gold.
Buy silver bullion now while it's still artificially cheap!
Written by Dr. Bryan Stoker
Click here to read the other 5 reasons silver prices are going to soar and to read more silver articles.
Discover the best way to buy silver and Earn Free Silver Coins
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