I try not to think about silver, because when I do, my head ends up whirling
around at the sheer compelling nature of the fundamentals, and I always come to
the conclusions that whirling makes me dizzy and that I need to buy more silver
right away because silver is going to start exploding in price over the next
few years, it could happen soon enough to do me some good, especially
considering the sorry state of all alternative investments right now and the
sorry state of just about everything right now, and by the fact that I am
slashing the kids' allowances to zero, freeing up some of the cash I will need!
But sometimes something comes along that makes me think about silver, such as
David Morgan of the silver-investor.com site reporting that "during the past
ten years, silver's use in industry
has gone from roughly 35% of the entire annual production in silver, to greater
than 50%. Not only that, but it is the fastest growing area of the silver
market."
So how much silver was mined? Well, the commoditynewscenter.com notes that
"According to the US Geological Survey, about 672m ounces of silver was mined
in 2008. And with an average silver price of $14.94 per ounce, if all mined
silver was sold at spot, the entire supply chain would generate revenues of
only about $10 billion."
It is statistics like these, coupled with the dismal fact of the virtual
elimination of above-ground stocks of silver as the myriads of electronic
devices produced over the decades consumed it all, that makes me look at the
world with suspicious distrust, my eyes narrowed to slits and my hand inching
under my jacket to the shoulder holster in case I have to blast my way out as I
realize - to my dismay - that the creatures of this planet are so stupid that
they can look at this silver thing, and yet not start buying silver right away!
Weird! More than weird!
Even when I politely yell at them, "Hey! You are Really, Really Stupid (RRS) if
you are not buying silver, and I hope your children are not as stupid as you,
although they are every bit as ugly as you, ya morons!" they still don't buy
silver! Again, weird!
Addison Wiggin of Agora Financial's 5 Minute Forecast does not actually come
out and say, "It's weird!" or that I am, for once, making sense or how he can't
understand why everyone hates me, but he does say that "there are only 22 pure
silver mines around the world. For 15 years straight, they've fallen short of
meeting total silver demand." Wow!
In fact, "in the last two years alone, they were off by nearly 76 million
ounces"!
And since this is after decades of dis-hoarding of strategic stockpiles, the
result is that "Today, most of the US silver stockpile is gone," and whereas
"the world once had about 2.2 billion ounces of silver above ground," now there
are "only about 300 million ounces. In other words, total world silver supply
has plummeted by over 86% just in the last few years ... while silver demand
has gone UP!"
I know you won't listen to me, since you never have, and all I ever hear is how
you are sick of hearing me tell you to buy silver and gold, for one reason,
protection against the inexorable predations of a ravenous, sick government,
and secondly to make money with silver since the supply/demand imbalance is (as
we professional economists term it) So Preposterously Out Of Whack (SPOOW), and
you are always asking, "If you're so smart, how come you are just a lonely,
pathetic little man who locks himself in the closet under the stairs because he
is so scared of everything?"
Well, I am tired of screaming my lungs out in rebuttal, so maybe you will
listen to Addison Wiggin, who is a bigshot at Agora Publishing and has his own
newsletter, whose own statistics scream, even if he doesn't, "Whee! This
investing stuff is easy!"
Richard Daughty is general partner and COO for Smith Consultant Group,
serving the financial and medical communities, and the editor of The Mogambo
Guru economic newsletter - an avocational exercise to heap disrespect on those
who desperately deserve it.
(Republished with permission from
The Daily Reckoning. Copyright 2009, The Daily Reckoning.)
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Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
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