I found this article interesting as it kind of compares industrial usage of silver to the amount collectors and investors buy. They mention the amount of reserves and talk about price a bit. Enjoy. http://www.busrep.co.za/index.php?fArticleId=5525824&fSectionId=630&fSetId=662
I thought it was an interesting article. I was surprised about the projection for the expected demand from investors outpacing the industrial demand. I guess they have to make sure at least some of their paper silver is backed with something. I think that when inflation kicks in we will see a quicker return then the article projects. Thanks for posting the link, Steve
bump! Thanks for posting the article. You may not have received much feedback since it was posted late afternoon. Perhaps more of us are around to read it this evening... I've been watching, with a lot of anticipation, the pharmaceutical sector concerned with bio tech and nano technologies, especially those with anti-microbial products. The number of products on the market is growing in the medical field as well as in over the counter products that use nano-silver. (There's a lot written about these things to read, just search nanosilver for some examples.) There is an enormous growing demand to fight virus and protect the masses and to do so with tools that are not plant based medicines, which is where metals are a big key. Profitability may not be so much about being in silver itself (physical or ETFs) but which companies are utilizing it and what products show efficacy in this regard that may be smart investments, indirectly being a play on PMs. Sorry if that was vague.
Yes cool article and I definitely think there is validity to it. I have heard this scenario a few times now and along with the uses Krispy pointed out I have also heard of a replacement for the Lithium-Ion battery made with silver which greatly outperforms what is currently available and I believe intended for use in the automobile industry. I believe with the current "green" movement in the world and so many manufacturers experimenting with hybrid/electric cars, if silver starts to be used for those batteries then the supply will wither away much faster then expected driving prices higher and higher. So keep an eye out for the auto manufacturers making big silver purchases, they may know somthing we don't $.02 Thanks! J
When you consider that $20 billion is enough to buy just about all of the warehouse-eligible silver in the world, it would only take a commitment by a few hedge funds or large institutional investors to drive the price to much higher prices. I think investment demand will eventually turn out to be more important than industrial demand.
Hmmm...if there's already plenty of silver, and the investors are propping up the price for now, compared to industrial, what is it really worth?
I don't agree that there is plenty of silver. Inventories have been decreasing for years, which is an indication that industrial usage exceeds mine production.
Everything I have read and studied indicates and confirms what Cloudsweep99 is saying about inventories decreasing and industrial usage exceeding production levels. Especially in up & coming thrid world nations and technologies. Steve
I can see where you're coming from, however, experts say that Futures Contracts are the reason that the price of silver is extremely artificially low right now. Once people realize that the number of futures contracts can't be fullfilled due to a limited supply of silver, all paper assets could fold. I'm not an expert, so don't quote me. Just relaying info from what I read in several books and articles. Some also say that industrial demand will rise due to rising economies like India and China. As they grow and can afford all the electronics that we take for granted, they will turbo charge the industrial demand. Again, don't quote me, just relaying info I read. Anyways, hit me back, would love to hear your opinions.
I agree with your observations on futures contracts. The one thing to watch out for is that if the silver longs decide to take delivery in mass, and the silver shorts don't possess the metal, the CFTC will change the rules and permit cash settlement in order to "preserve" the market. This won't do much good for industrial users who counted on that delivery, but I don't think the CFTC cares. I also agree with the observations on industrial demand.
