Silver Investments

Silver Investments

Break the Cycle of False Hope with Silver Investments

It is hard to imagine a better time to invest in silver than right now. While the media effervesces with promises of recovery, rising prices and stagnating wages continue to erode the purchasing power of everyday Americans. Interest rates remain unrealistically low, eating away at our life savings. And for those of us who have always trusted in the long-term stability of stocks, we fear a stock market whose mood swings have grown manic.
We seem to be trapped in a vicious cycle of false hope while the dark cloud of economic uncertainty hovering over us grows ever more ominous. On the edge of the cloud, however, a bright silver lining illuminates the path to a better future.

Don’t Settle for Just Staying Afloat

People aren't asking for much these days in terms of explosive portfolio growth. Just being able to break free of the weight that has been pulling us under would be a welcome relief. But we need not resign ourselves to merely treading water.
The troubles that we now face are not as diverse as they may appear. At the root of them all is the unavoidable decay of fiat money. Replace that with real money, and things get better.
Like gold, silver is real money, its value anchored to scarcity and universal desirability. By itself, that is reason enough to invest in silver. A much more compelling reason, however, stems from the extraordinary potential for profit and growth that exists in the silver market today. To fully appreciate the magnitude of that potential, we need only to examine silver's supply and demand.

Silver Supply and Demand

In regards to silver, one might reasonably conclude that the law of supply and demand has been repealed. For nearly a quarter of a century the price of silver has been well below that which the law would seem to dictate. The low price of silver compared to other precious metals is much to blame for the incongruity. For one thing, the low price makes price manipulation much easier for big money and governments. For another, it makes silver accessible to vast numbers of casual and poorly-informed investors. Because they act primarily on emotions and as a pack, they exert significant and unpredictable pressure on the market. Nonetheless, such influences account for only short-term volatility. Eventually the fundamentals must take over, and silver is long overdue for a correction.

Rising Demand and Dwindling Supply

The very fact that silver has been consistently undervalued for decades has curtailed production and brought exploration to a virtual standstill. In addition, three quarters of the annual supply of silver is produced as a byproduct of copper, lead, and zinc mining operations. The price of silver must therefore rise substantially to make it cost effective for those operations to boost production. Finally, because most of the silver produced is irrecoverably consumed, there is no vast above-ground reserve to buffer supply. For comparison, gold reserves are 100 times greater than those of silver. Meanwhile, demand for silver has risen substantially with the emergence of major new economies. In fact, supply has lagged demand for more than 20 years. With nothing to drive increased production, it is not surprising that silver reserves are rapidly disappearing. We are approaching the point where there simply will be insufficient silver to meet demand. If that were allowed to happen, silver would become a runaway market that no power on Earth could control. Fortunately, that is unlikely to happen. Restraints on the silver price have been stretched to their limit and a breakout is inevitable. Exactly when that will happen is uncertain, but a few key trends strongly suggest that it will be in the very near future.