Inflation

Inflation is not a general rise in prices as such but an increase in the supply of money, which in turns sets increases’ in the prices of goods and services. The charts below show that global central banks are printing money recklessly.

As a result, more money is needed to chase fewer goods, with silver as being one of those goods and fact is when there is more available money, the price of silver will continue to “inflate,” just like any other hard assets.

Why not Gold?

Both silver and gold are monetary metals but gold is only good for two basic uses; money and jewelry, whereas silver, is an industrial metal which is used by hundreds of industries.

Silver is widely use for jewelry, medical applications, batteries, photography, solar energy cells, electronics, water purification and etc..

While many people would choose to invest in gold, it does not have that investment asset and industrial material dual role unique to silver that makes silver a better investment opportunity.

Silver Shortage

In 2010, industrial production of silver increase to 18% due to rising demand from the technology sector. Since silver is often consumed in most industrial applications, and it is not monetarily feasible to recycle silver, hence the total world above-ground silver bullion currently in existence is estimated to be less than 1 billion ounces compared to 10 billion ounces in 1940.

For the first time in history, of the available quantities that investors can buy, silver is in fact rarer than gold.

What happens when you have an enormously useful material with a high demand and a strictly limited supply?

Gold to Silver Ratio

China Silver Demand

China has gone from a net exporter of 100 million ounces of silver to a net importer of 150 million ounces of silver within the last 10 years. This essentially means that 250 million of silver is no longer sufficient to provide to the market on an annual basis.

The sudden demand in silver is due to the Chinese government encouraging their citizens the ownership of silver is an antidote to a devaluing U.S. dollar.

With the continuing demand from the China market, massive implications could arise on the supply of silver when considering that there are 1.3 billion people in China rapidly becoming more interested in buying physical bullion, which in turn will increase the price.

Other Resources

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