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<p>[QUOTE=&quot;InfleXion, post: 1356436, member: 29012&quot;]Your argument about supply and demand makes perfect sense in the real world, but that&#039;s not the world that silver lives in. Its price action is determined by paper traded contracts to the tune of 1 billion ounces of volume per day in the uninsured futures market on the COMEX which is more than is mined in a single year. This volume does not even include the options market, the SLV, foreign exchanges, or the derivatives market which dwarves them all. Physical supply and demand only affects the price insomuch as to prevent it from becoming completely unavailable. </p><p><br /></p><p>Because of this, we could see $6 silver again. We could see $0 silver, BUT that will be the paper price. At some point the physical price will diverge from the paper price, and the lower the paper price goes the sooner that will happen due to all the physical disappearing from the market as it gets further undervalued. The supply levels are already dangerously low, the lowest levels in over 700 years, and less than a year&#039;s worth of mining supply. </p><p><br /></p><p>Eric Sprott&#039;s purchase last week of $300 million in physical silver caused a 5% price increase. If $300 million is 5% of the market then the entire market is only $6 billion. Contrast this with oil which is a $3 trillion market per year. Silver is the second most useful commodity after oil with over 10,000 industrial uses, none of which can be done cheaper, and none of which can be substituted without loss of quality because silver is the best conductor of electricity, the best thermal conductor of heat, and the most reflective metal - of anything in existence whether man made or a nature made finite resource as silver is. Gold&#039;s purpose is a hedge against inflation, but silver is an indispensible miracle metal that technological advancement is utterly dependent upon. It is running out due to price suppression, and in my opinion will be a wonderful investment regardless of what the currencies or the economy does - the caveat being on a long enough timeline.[/QUOTE]</p><p><br /></p>

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