Gold is undervalued to the point of idiocy. But silver? Silver is in another universe. And this extended GSR makes it all the worse, because when people get over the fact that there ISN’T available above ground hordes of silver anywhere close to sufficient size to deal with a new Silver bull market, we could end up with a GSR below 10 VERY QUICKLY. Hell, just by the odd sort of crap that has evolved in the last 2 decades of this price suppression and exploding use of industrial/medical uses of silver, we’ve got a seriously explosive situation here. Forward mine supply is crashing and it will keep on crashing even if silver rose 50% in the next 3 months because to much damage has been done and when a sector crashes and forward supply is crushed as it already started to have been crushed, it takes time for an industry reboot – no way around that even if the underlying asset recovers in a “v” shaped move.
At the very time investors start to go nuts for silver, and even with a global economic crash, the inventories of freely available silver are NOT going to meet demand for any buyer category. Remember what happened when Ford Motor Company freaked and bought Palladium in, what was it, 2000, 1999? I forget the year – one of those two. But they freaked, and the market exploded as Ford bought to make sure they had enough for catalysts. That’s a nice little metaphor. Now, we’re going to see a scramble from all sides – investment demand and even industrial demand (because the industrial buyers are simply not going to have a choice even with a global economic depression because 450 million ounces of industrial demand is not going to zero even with a depression and the investor demand is going to go absolutely BONKERS).
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While silver is underpriced, the premise above does not take an economic collapse into account. No demand for silver means no price increase to $2000.
David DeGerolamo
