Silver Shortage This Decade, Silver Will Be Worth More Than Gold
March 27th, 2012 by The Raging Bull
Uploaded by VictoryIndependence
Silver Shortage This Decade, Silver Will Be Worth More Than Gold – FutureMoneyTrends.com
“Silver, the most undervalued metal in human history. Gold, today, is without a doubt more rare than silver, but what about tomorrow? On average, today, for every 10 ounces of silver pulled out of the ground, only one ounce of gold is mined. However, the majority of silver mined is used for consumption, while the majority of gold mined is nearly all added to global inventory. Yet precious metal investors, as small of a group as they are, are still investing $7 in GLD for every $1 they invest in SLV.
“Looking at modern history, silver is destined to be more rare and certainly worth more than gold. In 1950, there were 10 billion ounces of above-ground available silver. By 1980, it shrank to 3.5 billion ounces, and in 2010 it is estimated that above-ground available silver supply is between 500 and 700 million ounces.
“To put this into perspective, total above-ground available gold in 1950 was 1 billion ounces, and today it’s estimated to be around 7 billion ounces. In 1980, when silver nearly reached $50 per ounce, global population was 2.5 billion people; global GDP was $10 trillion, and China had the 11th largest economy. Today, global population is near 7 billion people, global GDP $60 trillion, and China is now the second-largest economy.
“So the population since 1980 is up 176 percent. Global GDP is up 500 percent. Above-ground available gold is up 600 percent. Meanwhile, above-ground available silver has plummeted at least by 91 percent, and the price is still down 46 percent from its 1980 high of $50 per ounce. To say the opportunity in silver is enormous is an understatement.
“Looking at the historical silver to gold ratio of 15:1, silver is highly undervalued today. It now takes 50 ounces of silver to purchase one ounce of gold. Even when ignoring the above-ground supply deviation, mined metal production should, at the very least, bring that number to 10:1. Using today’s prices with gold at 1400, silver should be worth no less than $140 per ounce.
“Silver is being consumed more than ever, and it is a fact that there is less above-ground available silver than there is gold. Industrial demand for silver is up 18 percent in just the last year. The need for silver is growing by the day. Silver is being consumed and used for bandages for wound care, batteries, brazing, soldering, catalytic converters, cellphones, computers, satellites, high-tech weaponry, lasers, digital technology, clothing, electronics, circuit boards, ink, solar cells, water purification, wood treatment, antennas, RFID chips, freeway toll transponders, passports, and the list goes on.
“From 1990 to 2000, nearly 2 billion ounces of above-ground available silver disappeared to consumption. Yet industrial demand for silver was only 35 percent by the year 2000. Today, it’s 54 percent, and looking at the new uses for silver, the silver production deficit will only widen.
“China, since 2003, has been growing its solar energy base by almost 100 percent every year. By 2014, the world will need 130 million ounces of silver just to satisfy one year of global solar demand. The world has consumed so much silver in the last 50 years that the last time above-ground available inventory was this low was 1300 A.D.
“The deficit of silver production has been met mostly from government stockpiles. The U.S. has dumped nearly 5 billion ounces since World War II into the silver markets. But as of 2010, according to the USGS, the government’s stockpile for silver is listed as none. The supply and demand deficit continues to be ignored by global investors year after year, decade after decade.
“Total mining production for 2009 was 710 million ounces. Total demand was 889 million ounces. That’s a mining production deficit of 179 million ounces to meet demand. With each day comes a new use for silver, and the supply and demand deficit continues to eat away at the above-ground available supply.
“FutureMoneyTrends.com is projecting that just as palladium was once worth more than platinum, silver will one day be worth more than gold. The demand for silver will continue to increase; yet mining production will never be able to keep up, depleting the above-ground available silver supply possibly by the end of this decade. Silver may be the greatest investment in human history. How often does any generation get the opportunity to invest in a finite resource that will soon be extinct?”