Not That Much Silver Investment Insurance to Go Around

The comments below are an edited and abridged synopsis of an article by SRSRocco

As the Fed and central banks continue propping up the financial markets, many precious metals analysts advise owning gold over silver. But the real winner in terms of future value in percentage terms will be silver, not gold.

There’s Just Not That Much Silver Investment Insurance to Go Around | BullionBuzz
Silver bars, silver coins and jewelry. Isolated on white background.

It all comes down to energy. Energy is the driver of the economy, but many precious metals analysts and investors don’t get it.

If you don’t understand energy, you’ll never understand the real reason to own precious metals. If precious metals investors don’t understand the energy market, they may lose faith in holding gold and silver in the sea of conflicting financial and economic information.

The silver price will not act as it has in the past. Due to the massive propping up of the stock market, financial system and economy by central banks, investors don’t have many choices in how to protect wealth this time around. Bonds won’t be the safe haven they were in the past, because bonds are nothing more than debt instruments.

The silver-to-gold production ratio and what it means in the future is an important factor discussed here. In short, a large percentage of the global silver mine supply is gone forever (or at least less likely to find its way back into the market).

Silver will outperform gold in the future. There isn’t as much aboveground silver in the world as there are gold stocks.  Moreover, 41% of the total world gold production from 1493 to 2019 is held in aboveground investment gold stocks, compared to only 5% for silver.

The world burned through silver to supply its enormous industrial needs, but also to provide the market with a great deal of inexpensive silver jewelry. Unfortunately, most silver jewelry won’t be recycled, even at a $100 silver price.

Silver investors have been given a huge gift. The world consumed tens of billions of ounces of silver for industrial use and jewelry fabrication, and most of this will never come back to the market. This means that investors looking to protect wealth won’t find much silver available to acquire, and what is available will be at much higher prices.

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