Silver is 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 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 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 1959 there were 10 Billion ounces of above ground available Silver, by 1980 it shrank to 3.5 Billion and in 2010 it was estimated that the above ground available Silver supply is between 5 – 7 hundred million ounces.
To help put this into perspective, total above ground available Gold in 1950 was 1 Billion ounces and today it is estimated to be around 7 Billion ounces.
Global Population: 2.5 Billion People
Global GDP: 10 Trillion
China: 11th largest economy in the world
Global Population: 7 Billion People
Global GDP: 60 Trillion
China: 2nd largest economy in the world
The population of the world is up 176%
Global GDP is up 500%
Above ground available Gold is up 600%
Above ground available Silver has plummeted by at least 91%
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. Currently it takes 50 ounces of Silver to purchase 1 ounce of gold, even when ignoring the above ground supply deviation, mined metal production should at the very least bring that number down to 10:1
Using today’s prices, where Gold is at an average $1400 an ounce, Silver should be worth no less than $140 per ounce.
Silver is now 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 went up 18% in 2010 alone and the need for Silver is growing by the day.
Silver is being consumed and used for:
Bandages for wound care.
Industrial brazing and soldering
High Tec weapons
Electronic circuit boards
Freeway Toll transponders
And the list goes on and on:
From 1990 until the year 2000 nearly 2 Billion ounces of above ground available Silver disappeared to consumption, yet at that time the industrial demand for Silver only reached 35% by the year 2000.
In 2010 the total industrial demand for above ground available Silver reached 54%
In looking into the new uses for Silver this Silver Production / Usage Deficit will only get wider.
China since 2003 has been growing its Solar Energy base by almost over 100% every year. By 2014 the world will need 130 Million ounces of Silver just to satisfy 1 year of the global solar demand.
The world has consumed so much Silver in the last 50 years that the last time above ground available Silver inventory was this low was 1300 A.D
The current deficit of Silver production has been met mostly from Government Stock Piles. The United States alone has dumped nearly 5 Billion ounces since WWII into the Silver markets. But as of 2010 according to the USGS, the Government stockpile for Silver in the U.S. is listed as NONE!
The current supply and demand deficit has continued to be ignored by global investors year after year, decade after decade. Total mining production for 2009 was 710 million ounces but the 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.
Just as palladium was once worth more than platinum, we believe that 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, simply put, looks like 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