Both silver and gold have been used as money in the past. The value of gold or silver will never reach zero.fschmidt wrote:My view may not be popular here in conspiracy land, but I will tell you all the things that make no difference to me: industrial demand, market manipulation, investment demand, and the future of fiat currencies. There is only one thing that matters to me, and that is the long term cost of mining silver. Industrial demand just determines when existing supplies will be used up, not if. The idea about shutting down more expensive mines and just running cheaper mines to lower costs is also temporary because these lower cost mines will eventually run out. I am patient and I can wait as long as it takes for the cost of finding new silver to kick in.Rock wrote:Have you looked at global industrial use demand for silver and how much it fluctuates according to global economy? How much does it vary at low and high points in a given cycle? Like, does demand fall 20% or more? There's been a lot of noise in last year about China slowing down and with it, demand for copper and other industrial metals. You also gotta consider the stock situation in China. Look at these relationships over time. Also see if you can find a chart of silver price vs. mining cost over time. If you can get this data, you will have a much better insight as to how safe a silver investment would be now or at what price that investment would seem acceptably low risk. Intrinsic value arguments don't always work in financial markets. Often, things trade way about it. But sometimes, they trade well below it. Consider the example of many closed-end funds. And also consider, mining cost may vary a lot depending on many factors. So if price stays low too long, the mines with highest cost could go out of business while the ones who had easier (cheaper) to mine reserves could continue to do so at their lower cost.
Once you get a target price, you could look to either buy at that level (assuming it gets reached) or just sell uncovered options at that price level with view to buy if price ever gets there. If it doesn't, at least you've been paid the option premium and if it does, you get silver at the price you wanted.
If you do any research on this, please share it here. I would be willing to contribute to the effort.
An interesting aspect of silver is that the yield, meaning ounces of silver per ton of dirt dug up, has been declining rapidly. It was 13.0 in 2005 and 8.1 in 2012. This decreasing yield has to drive prices up over time.
Most silver fans say silver is money. This is nonsense. Silver is an industrial metal and that is why I like it. Gold is money, and that is why I don't like it. The value of money is simply the value people feel it has. I don't like investing in feelings. What I like about silver is that it is the most easily storable useful material around, so it is a good store of value.
According to Noble Laureate, the major monetary metal in the history of the world is silver, NOT gold.
