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World could witness silver shortage by 2015

The world has already witnessed a 93% drop in global inventory of Silver since the 1950 and consumptiom, investment demand continues to outpace supplies, that the world could witness silver shortage as early at 2015 or if not latest by 2020, according to FutreMoneyTrends.com.

In a new video titled ‘All Hell Will Break Loose in the Physical Market If Silver Goes down: Silver Investment Update’, it is said that in 1950  there were 10 bn ounces of silver above ground available which was sufficient for 140 months of supplies but by 1970 available supplies were sufficient for only 70 months and by 1990 15 months and by 20101 11 months.

The last time above ground inventory was so low was in 1318. Consumption of silver in industry has seen a surge in recent years. In 1999 only 100 mn ounces of silver went into electronics industry while in 2011, 250 mn ounces of the metal may be consumed. In 1999, the use of silver in solar panels was so small, but in 2010 it has risen to 75 mn ounces.

It is increasingly becoming difficult to extract silver from mines- considering the cost and time involved. New mines identified in USA and Canada may take more than 10 years before a single ounce of the metal can be mined out.In Nevada, mine production has already peaked, according to FutureMoneyTrends.com. In 1997, the place produced 25 mn ounces of silver but in 2010 only 7.3 mn oz. In USA large quantities of silver go into production of American Silver Eagle coins. Of the top eight silver producing states in US, all have achieved peak production despite the newer technologies. According to US Geological Service, ore grades have collapsed 95% in the past 75 years.

Hence, considering the present gold: silver ratio, silver is an attractive investment.

“2012 is shaping up to be a very exciting year for precious metal investors, especially if we see a small pull back. As investors rush into the physical metal, we could very well see some type of Silver shortage or at the very least major delays on delivery if silver was to fall back down to the $25 mark. We are not saying that it is, but if silver was to pull back, all hell could break loose in the physical market.”

“If silver during the Euro crisis has the same initial reaction as it did in 2008, with a sharp decline, we believe that due to the nature of the crisis, 2012 being a currency crisis vs. 2008 being a liquidity crunch, the demand for physical silver would be overwhelming on a global scale. FutureMoneyTrends.com’s ultimate low for silver is $22.50, this being roughly the same percentage pull back from the 2011 high that we saw in the 2008 crash. Only this time, we believe it would be a flash crash, short lived, sending silver north of $50 in the matter of weeks. If a fiat currency crisis starts, Europe, Asia, and even Americans will start to purchase precious metals in order to protect themselves from currency devaluation.”  - CommodityOnline

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Posted by on Dec 14 2011. Filed under Silver Analysis. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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