silver fundamentals 1 of 2-article 2 of 2 today

SILVER FUNDAMENTALS ( article 2 of 2 today )

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When you consider whether or not to buy silver ( I’m assuming any minion wealthy enough to buy gold is over at Rawles site, who while after feverishly slamming the Buy button at his advertisers FLIR scope store multiple times in nipple tightening glory has enough left over to pay for a private consultation AND then stack lots of gold.  Less well off  minions treat themselves to silver after tightening the budget.  Frugal hermit redneck minions can only afford copper and sort through for pre-82 pennies ), you must anticipate fundamentals changing. 

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As usual, that pesky timing issue works diligently to queer up the deal, so this is a trend warning, not a stab at timing.  I could be dead before anything I’ve written about in the last ten years happening, or I could be bayoneting babies ( a snide reference to Anglo propaganda on German atrocities in WWI ) well past my prime.  I have no clue about timing.  I can only say, “be prepared yesterday” and “I’m always right on the trend, not the time”.  But I see several major silver trends changing dramatically.  This isn’t really a great time to be listening to the Precious Metal porn stars.  Forget about industrial use of silver.  Forget about industry, period.  The gold and silver ratio is less an indicator of future price than shortage is.  And silver is running out along with the Industrial Oil Age ( plus, derivatives will change things ).

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I am of the mind that silver is going to run out quickly and shoot up in price ( as will gold ), but precious metals are NOT, ever, never, an investment.  They are a safe transfer of wealth through collapse, calamity and confusion.  Anyone that thinks silver is an investment is welcomed to do a bit of research at the price of that metal in 1980, compared to ever since.  It is just an inflation proof savings, AND you cannot time that inflationary period. 

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Before, I was only recommending silver as a store for inflation proofing your property tax obligations through to the die-off.  I really only recommend the same now, regardless as to whether you convert bank savings to silver as I just did.  My purchase had a whiff of desperation about it ( I simply have too much cash cached and worry about inflation-and I know many of you would advise beans and bullets or FLIR scopes and AR’s, but this is my savings, not my stockpile.  You need both, for that pesky economic collapse that occurs before the die-off ).  I don’t know if you should emulate me.

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But if you ARE thinking about it, you need to know what has changed in our world which contradicts a lot of PM Princess’ data.  I recently read, but did NOT verify, that ( to paraphrase ) 90% of all gold ever mined is still being hoarded and that 90% of all silver ever mined has been destroyed by industrial use.  I believe this was brought up as the amount of recycled silver has dropped drastically.  Perhaps the huge push to photovoltaic panel every house in China has used up far more silver than realized.  Okay, I don’t know for sure what the domestic market is for PV panels in China, but I wouldn’t put it past them to have such a strategy.

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If this is correct that all the recycled silver is drying up, and as primary silver mines are running out, AND the global economic implosion will shut down a lot of mines that produce precious metal as a byproduct of industrial metal ( many times the PM are the only profit, and the primary ores are mined at cost ), or at least drastically curtail production, silver is about to get VERY dear.  This is not to say “buy now and profit” as much as it is to note this might be the last opportunity to buy silver.  Period.

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I’ve harped on this for many years.  Ores are running out.  Whenever I say, hey, only diffuse ores are being extracted now, and have been for twenty odd years, you say something like “look at all those untapped reserves in Afghanistan or country X”.  Okay, I’m looking.  What do I see?  Ore that is uneconomical to extract.  Uneconomical to extract when oil was $40 a barrel.  Do you see a problem here?  Anyone who cheers for oil from the Rocky Mountains, or untapped ores, is in effect saying that ocean saltwater or asteroids have all the gold we’d ever need.  We just need the energy to extract it.  Energy we don’t have.

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Oh, plenty of oil, abiotic oil, respected authors jumping the shark declare.  Sure, just wait a hundred years while that drained reserve trickle charges again.  It’s like running a semi truck that carries one twentieth the cargo because the batteries are most of the weight, on a single solar panel.  In overcast western Oregon.  We were running out of ore almost thirty years ago, and were forced to use far more energy extracting the less desirable sources.  And we did that with super cheap oil.  Which doesn’t exist anymore, as we’re busy depleting those diffuse sources, which, when scraped dry, are to be substituted with…what?

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Peak Oil isn’t the end of oil.  It is the end of CHEAP oil, the kind we built an infrastructure to rely on.  Peak Ore isn’t when ore runs out.  It is when affordable ore runs out.  Peak Oil was 13 years ago.  11 years ago our economic problems started.  Why do you think expensive energy can mine inexpensive ores?  Plenty of discoveries, in both energy and ores, will be ignored or abandoned.  You could argue that industrial use demand destruction will free silver for the PM market, but I contend that the supply will contract so much ( as the recycle market dies ) that even then the price will skyrocket. 

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Remember how shortages work?  A ten percent demand increase causes prices to quadruple.  Do you even remember the rimfire shortage that lasted for years?  The rice shortage was solved more by empty shelves and purchase limits than rising prices ( rimfire was both ).  But that is even worse, since no rice for zero cost is not as handy as some rice at inflated prices if you are hungry.  I’ll continue tomorrow.

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