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Message: Ryan Jordan: The Taper and Three Reasons to Buy Silver
Ryan Jordan: The Taper and Three Reasons to Buy Silver
By Ryan Jordan, Dec 18, 2013
The nonsense continues with the FED reducing the rate of its bond purchases– but the purchases will continue folks– plus the central bank aims to keep interest rates at ZERO for quite some time. This doesn’t sound like tightening to me- but who knows. So for all of those looking for new lows in gold and silver, simply because the FED bond buying program is being reduced, allow me to remind you of some reasons for higher silver prices in the years ahead. These fundamentals cannot be undone by central planners.
- The possibility of gold investors diversifying into silver2013 is shaping up to be a record year for silver imports into India. The reason for this should be clear to even the most casual observer of the precious metals markets: with the Indian government trying to kill the gold market, at least some Indians are seeking an alternative monetary metal. The only problem is that the size of the silver market is nearly 100 times smaller than that of gold. Billions of dollars of investor interest in gold hardly moves the price of the yellow metal– in the case of silver, however, billions of dollars can potentially double or triple the white metal’s price. In the year to come gold owners outside of India may begin diversifying into the white metal.
- Continued interest in alternative currenciesYou may have also heard (or are lucky enough to be one) of the new “bitcoin millionaires.” I find it interesting that at a time when the propagandists will tell you that the world economy is recovering, that the dollar is king, and that critics of the current political or social system are traitors, that somehow you have interest in alternative currencies like bitcoin. It seems that a determined minority wants something else besides fiat currency. We have seen the trend toward greater interest in alternative currency for a while with precious metals like silver. For example, Utah recently made it easier to transact in precious metal and we have had repeated efforts in Mexico to bring back silver as a form of savings, due to the efforts of Hugo Salinas Price. I don’t think the silver shorts take seriously the desire for alternative currencies– a game changing reality that will take years to unfold globally.
- Supply Shock?While I believe that the mining stocks will someday get their day in the sun, recent events in the mining industry demonstrate how hard it is to get precious metal out of the ground economically (please note the word economically.) If I didn’t know any better, I would say that mine supply for metals like gold and silver may be nearer to decline than many realize, given the disastrous cost overruns and other headwinds facing the mining industry. Moreover, the widespread belief that mine supply will just go up up and away forever flies in the face of historical reality. For whatever reason– declining ore grades, energy costs, wars, or political or regulatory issues– mine supply has gone down for decades before. Why should we expect our era to be any different? Silver supply has steadily increased for decades without any meaningful decline. Might we finally see the beginning of peak silver (at least for a few decades)? Is anyone out there factoring that into their analysis of where silver prices might go?
http://www.geckoresearch.com/The_Taper_and_Three_Reasons_to_Buy_Silver
This article is written by Ryan Jordan and with his kind permission, Gecko Research has been privileged to publish his work on our website. To find out more, please visit:
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