Silver Is Cheap Because of Mining Effiencies- Debunked

Chris,

I watched “The Silver Bullet and the Silver Shield”.  What about the progress in silver mining?  In Empire Rome times I guess it was very inefficient to mine silver.  So it took a lot of resources to do it.  Now a days its 10 times more efficient or more so the price of silver should be 10 times less.   You mention the price 960$ an ounce as a good target so 96$ an ounce is a real target if I am right?

– Eldad

Eldad,

They have certainly become more efficient in mining silver.  As a result the USGS said that by 2020, if we continue consuming silver at these levels, silver will become extinct.   Silver is used in such small quantities, that is is essentially destroyed.  The US had 5 billion ounces of silver in it’s strategic stockpile in 1950.   Today it has nothing.  I believe that there is less physical silver above ground than the treasured gold stockpiles.

The uses of silver are exploding faster than the production can keep up.  And this is with no monetary demand or much in investment demand.  The uses of silver in technology, energy and the medical industries are massive and growing.  We have been running supply deficits for decades as we bleed through the stockpiles of silver humanity has stored up.  Throw in a currency collapse and you will see massive investment and monetary demand.  And when most of the naive investment community realizes that the paper instruments that they thought they had real silver, this will only increase demand for those that have physical.

Then what are you measuring your silver in?  If you are stuck still pricing your silver in dollars, then you are really valuing silver in something that can become worthless.  I buy silver mainly because I do not trust the dollar.  With trillion dollar deficits in Washington and an unlimited Federal Reserve balance sheet, they are going to kill the dollar.  The destruction of the dollar means that the dollar will become worthless.  Therefore the dollar value of silver is not going up as much as the value of the dollar becomes worthless and you need more worthless dollars to buy the same goods. So there is no dollar price target for silver and the $960 an ounce was a way to value silver in human labor and relate it to today’s terms.

Primary-Silver-Miners-Q2-2013-Adjusted-Income-Break-EvenFinally, the mining efficiency does not explain why gold is worth 60 times more than silver when they come out of the ground at a Gold to Silver ratio of 1:9?  Gold is also far cheaper to mine relative to it’s market price than silver.  The average miner can mine gold for about $1000 an ounce while the average silver miner is mining silver for $25.  Why is it gold is gold miners today are making $300 profit and silver miners are losing $3?  This tells me that silver mining supplies will either dry up or the price will rise dramatically. Certainly with thousands of more uses silver has over gold it should be a little higher than gold relative to it’s mining costs?

Silver is cheap because it has been manipulated that way.  The bankers know that silver is an abundant, debt free currency that would challenge the debt based paradigm they rule.  They have dumped huge amounts of physical silver on to the open markets and as a result there are no major physical stockpiles of silver.  And when they could no longer do that they dump huge amounts of physical silver they dumped paper contracts of silver to destroy the paper value of silver.   They know that silver is a Giffin Good that when the price rises, demand rises.   For if the price would rise they would see insatiable demand for which they cannot possibly deliver upon.  They need to at all costs keep it low to support their generational ponzi scheme.

Things that cannot go on forever… won’t.

The greatest transfer of wealth is coming from intangible, fiat, debt based, generational ponzi scheme assets like stocks, bonds, and Real Estate in to real wealth, without counter party risk.

I just so happen to believe that silver will do the best because it has been the most abused for the longest time.

I encourage you to listen to all and follow none, but don’t wait too long before taking personal action in light of your discoveries.

Peace,

Chris

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