Silver on the other hand is a most interesting metal, yes it is precious, traced back thousands of years too, a monetary metal of course, but this time, it has industrial uses. A LOT of industrial uses. I'll explain in another article in detail. For now, lets just focus on the prices of Silver and what affects it.
View these Charts. Ill explain it simply, doesn't take a genius to interpret it.
Conclusion:
Silver over the last year has risen more then Double of its initial value. Gaining at least 100%
Versus Gold that grew only 33% (Which is still phenomenal considering this zombie economy)
Why? WHY? How is it even possible? How can anything beat the GOLD?!
Here are the factors that make silver rise & fall
Why Silver will Rise:
1.Extremely important industrial metal:
Your mirrors, your ipods, your CDs, your handphones, your telephones, your satellite dishes, your cutlery, your cars, your watches, your wires, your medical equipment etc. All these require silver. In many instances, silver cannot be replaced by a cheaper metal because
Silver is: - The highest electrical & thermal conductivity metal
- The only metal in the world that has anti-bacterial properties etc.
2. Silver Production cost is getting Above its selling cost:
What do i mean? Simply put, digging the silver from the ground and pouring chemicals on it to refine is is more expensive then selling it on the open market. The production cost is almost the same as its selling cost. Silver is undervalued.
3. Silver recycling is economically impossible:
This is not your plastic bottles or newspaper save the earth foundation people. Most items that contain silver does so in minute amounts, from a few microns of silver (CDs) to a few grams (handphones). Asking people to recycle silver is like telling them, spend 10 dollars tearing the item apart and refining 1 dollar worth of silver.
4. There is less Silver on earth then Gold:
I am not joking. Silver is now rapidly being consumed, eaten up by industries. The total amount of gold in the world can make up a cube of 18 ft x 18 ft x 18ft. Silver is probably less then 75% of that total amount. I don't know about you, but lesser of something more functional then gold spells and smells like its undervalued.
5. China just launched its public Silver Bullion Smiths:
Why is this a factor, China is the world's next superpower. the chinese government is aggressively asking its population to accumulate gold & SILVER. Why? Its to protect the citizens wealth, and more insidiously, is to let the country profit when the world reverts to a monetary system backed up by gold & silver.
Why Silver will fall
1. Comex Silver/Paper Silver:
Once again it calls into play manipulation and covering of shorts in the market. What do i mean? Lets say i have only 100 grams of silver, but i am selling silver certificates online that is equivilant to 10000 grams of silver and i call it 'unallocated silver' or Silver futures. Selling silver that hasn't even been mined yet? FUBAR
2. Dollar is strengthened:
Bailouts, government rumors, investors all dumping their commodities to take extra risks out there in the stock markets will make gold & silver fall.
3. Supply & Demand:
Once again very simple, if demand for silver falls, the prices will fall. Production currently is rather steady, so if industries one day discover a mystery metal cheaper and better then silver, then silver is in trouble.
4. Manipulation of Silver prices:
-Refer to my JP morgan manipulation article ,coming soon.-
To end this, this is like comparing a reliable horse (Gold) to a new age high-potential motorcycle (Silver). Both still wins the economy (Turtle). So if you have lots of money, tens of thousands, throw into gold if you have doubts. If you are daring or your budget is in the hundreds - thousands. Explore silver. You won't regret it.
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