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We’ve all seen these cash for gold commercials on television recently, yet few stop to think why gold is suddenly in the spotlight. For gold followers, you’ve seen the price of gold increase from $260/oz in 2001 all the way up to $1,170/oz today. The gold rush is on, and smart investors have been buying gold to hedge against inflation.
There are not many people who are familiar with why their money should be invested in gold. As much as I would love to talk about gold, today I’m going to speak about a much better investment which is silver. Silver is a better investment than gold for many reasons, and the corresponding gains in gold will be nothing compared to silver.
If we look at the price for an ounce of silver we see it is at $18.60/oz today. Since 2001 the price of silver has risen over 400%, up from just $4.00/oz. But I still haven’t explained why silver is such a great investment. After all, we saw gold increase roughly the same 400%.
Silver is much more rare than gold in above ground inventories. There is roughly 5 billion ounces of gold above ground in the world, and most is available for investment purposes. There is less than one billion ounces of silver in the world, and most of that is used in industrial applications.
The silver that comes out of the ground is consumed by industrial application. Silver is used in solar panels, batteries, electronics, medical and surgical equipment, and many more applications. Once silver is used in these applications, it is thrown into landfills never to be recoverable again.
95% of the gold mined is still in investment form, because gold does not have an industrial role. Silver is simply consumed and thrown away, and that’s why the inventories of silver are at all time lows. The levels are dangerously low because companies consume silver at a much faster rate than can be mined. The USGS has informed us that by 2020 silver will go extinct.
Many economists are calling for silver to go to $500, $1,000, or even past the price of gold due to the rarity fundamentals of silver. A silver explosion will happen, and sooner than later. Robert Kiyosaki stated that “Silver is the best investment I’ve ever seen”. That’s coming from a self made billionaire, and professional investor.
Let’s look at the price of rhodium if you are having doubts whether silver could really go that high in price. The price of rhodium has risen to $10,000/oz from a low of $300/oz in the past several years. This really can happen to a metal, and especially silver due to all of the bullish factors.
There has been price manipulation of silver and gold for many years now on the COMEX. This price suppression of silver has held the price artificially low for a long time and is about to bust. Certain banks have been illegally short selling silver contracts in order to suppress the price of silver. Some organizations are putting a stop to this illegal activity, and once the short sellers are forced to get in line with the position limits on the COMEX there will be a historic price explosion.
If it is not evident to you that you must be in silver coins, silver bars, silver bullion, or Silver American Eagles then I have not done my job. Invest in silver to protect yourself from inflation. Most people will not listen to this advice until the pundits on CNN are spouting about how high the price of silver is, then it will be too late.
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