Silver has gone from five something when conservatives took over to nearly twenty dollars right now. I’ve read that the price of silver and Gold is over 70% correlated to the U.S. dollar. In other words when the dollar goes up metals go down and vice versa. Metals perform well during times of great crisis. When you add inflation to the past performance of $48 per ounce and silver could rise well above that figure. A very important point is that 45 percent of all silver mined is used up in industrial uses. It’s used in computers, cells phones, and electrical relays. The majority of that used silver is not recoverable. As countries like China, India, and Vietnam, and regions like Eastern Europe, become more modernized, their demand for silver for industrial uses will increase.
Silver is also used in medicine. One little-known use is as a bactericide, a role silver has filled throughout history. Today, medical devices such as catheters and stethoscopes use silver, and every hospital in the western world uses silver sulfadiazine to prevent infections.
• Silver is scarcer than gold.
Gold is hoarded. It’s estimated that 95 percent of all gold ever mined is still around. The exact opposite is true of silver: An estimated 95 percent of all silver ever mined has been consumed.
45 percent of all silver mined is used up in industrial uses. Jewelry accounts for 28 percent, and 20 percent has been consumed in photography. Only 5 percent is in coins.
• Silver supplies are down.
In 1900, it was estimated that the world had 12 billion ounces of silver. By 1990 it had dropped to 2.2 billion ounces. By 2007, the supply was down to 300 million ounces.
Some of the more pessimistic forecasts estimate that the world will be out of silver in about 10 years. This could be catastrophic to the world economy. In 10 years, silver might have as much of an impact on the world economy as $200-a-barrel oil.
A Safe Haven?
As a precious metal, silver is also money. And as the U.S. dollar drops, gold and silver are seen as a hedge against a loss of value. As more and more people wake up to the reality that their cash is trash, real estate is a gamble, and the stock market is too volatile, silver may be a great safe haven.
If silver does dramatically increase our dollar will become worthless.