Best of the Week
Most Popular
1.What Happened to the Stock Market Crash Experts Were Predicting - Sol_Palha
2.London Housing Market Property Bubble Vulnerable To Crash - GoldCore
3.The Plan to Control ALL Your Money is Now at Advanced Stage
4.Why Gold Is Set For An Epic Rally This Spring - James Burgess
5.MR ROBOT NHS Cyber Attack Hack - Why Israel, NSA, CIA and GCHQ are Culpable - Nadeem_Walayat
6.Emmanuel Macron and Banking Elite Win French Presidential Election 2017 - Nadeem_Walayat
7.Trend Lines Met, Technical's are Set - US Dollar is Ready to Rally (Elliott Wave Analysis) - Enda_Glynn
8.The Student Debt Servitude Sham - Gordon_T_Long
9.Czar Trump Fires Comey, Terminates Deep State FBI, CIA Director Next? - Nadeem_Walayat
10.UK Local Elections 2017 - Labour Blood Bath, UKIP Death, Tory June 8th Landslide - Nadeem_Walayat
Last 7 days
UK Local Election Results Forecast for General Election 2017 - 26th May 17
Stock Market & Crude Oil Forecast! - 26th May 17
Opinion Pollsters UK General Election Seats Forecasts 2017 - 26th May 17
Bitcoin and AltCoins Crypto Price Correction - 26th May 17
Bearish Head and Shoulders in EURUSD? - 26th May 17
SELL US Stocks - Massive Market CRASH WARNING! - 26th May 17
EURGBP: A Picture of Elliott Wave Precision - 26th May 17
Credit Downgrades May Prompt Stock Market Capital Shift - 26th May 17
Rosenstein and Mueller: the Regime Change Tag-Team - 25th May 17
Stock Market Top - Are We There Yet? - 25th May 17
Should I Invest My Fortune in Gold? Inaugural Lecture by Dr Brian Lucey - 25th May 17
USD/CAD Continues Decline - 25th May 17
Bitcoin Price Goes Loco! Surges through $2,500 Despite Unclear Fork Issues - 25th May 17
The US-Saudi Arms Deal - Sordid Saudi Signals - 25th May 17
The No.1 Commodity Play In The World Today - 24th May 17
Marks and Spencer Profits Collapse, Latest Retailer Hit by Brexit Inflation Tsunami 2017 - 24th May 17
Why Online Trading Platforms Are Useful for Everyone - 24th May 17
The Stock Market Will Tank Hard - 24th May 17
It’s Better to Buy Gold & Silver When It DOESN’T Feel Good - 24th May 17
Global Warming - Saving Us From Us - 24th May 17
Stock Market Forecast for Next 3 Months - Video - 23rd May 17
Shale Oil & Gas Production Costs Spiral Higher As Monstrous Decline Rates Eat Into Cash Flows - 23rd May 17
The Only Metal Trump Wants More Than Gold - 23rd May 17
America's Southern Heritage is a Threat to the Deep State - 23rd May 17
Manchester Bombing - ISIS Islamic Terrorist Attack Attempt to Influence BrExit Election - 23rd May 17
What an America First Trade Policy Could Mean for the US Dollar - 22nd May 17
Gold and Sillver Markets - Silver Price Sharp Selloff - 22nd May - 22nd May 17
Stock Market Volatile C-Wave - 22nd May 17
Stock Market Trend Forecast and Fear Trading - 22nd May 17
US Dollar Cycle : Deep Dive - 21st May 17
Bitcoin Breaks the $2,000 Mark as Cryptocurrencies Continue to Explode Higher - 21st May 17
Stocks, Commodities and Gold Multi-Market Status - 21st May 17
Stock Market Day Trading Strategies and Brief 20th May 2017 - 21st May 17
DOW Needs to Rally Big or Correction is Next - 20th May 17
EURUSD reaches DO or DIE moment! - 20th May 17
How to Get FREE Walkers Crisps Multi-packs! £5 to £28k Pay Packet Promo - 20th May 17
UK BrExit General Election 2017 - Will Opinion Pollsters Finally Get it Right? - 19th May 17
Gold Mining Junior Stocks GDXJ 2017 Fundamentals - 19th May 17
If China Can Fund Infrastructure With Its Own Credit, So Can We - 19th May 17
Evidence That Stocks are More Overvalued than Ever - 19th May 17
Obamacare May Become Zombiecare In 2018 - 19th May 17
The End of Reflation? Implications for Gold - 19th May 17
Gold and Silver Trading Alert: New Important Technical Development - 19th May 17

Market Oracle FREE Newsletter

Why 95% of Traders Fail

Silver: Don't Miss the Opportunity of a Lifetime - AGAIN!

Commodities / Gold and Silver 2017 May 16, 2017 - 06:42 AM GMT

By: Submissions

Commodities

Peter Ginelli writes: Silver is and has always been one of the most essential metals on the planet, and yet it has never received the respect it deserves as does gold.

If tomorrow morning we wake up and discover there is no gold on the planet, only three groups of people would miss it: banks which use it as partial reserve, private investors who use it as a hedge and the general consumers who buy it in the form of jewelry.


However, if we wake up tomorrow morning and there was no silver on the planet, in addition to investors and Jewelry buyers, the biggest group who would be devastated by its demise would be the majority of the tech industry listed on the Nasdaq whose very existence depends on silver. In fact not a single day goes by when you don't use some sort of gadget that doesn't have a small amount of silver in it.

Think about that for a minute.

According to the last count, there are over 7.3 billion people on the planet Earth and easily 80% of them can't go through a single day without using something that doesn't have silver in it. From cell phones to tablets, computers, cars, solar panels and beyond, silver is an essential ingredient as an electronic conductor without which many companies who manufacture these gadgets would literally be in deep trouble.

In fact, in the case of cell phones alone, according to data from digital analysts at GSMA Intelligence, today there are 7.15 billion active mobile devices on earth. That is almost one mobile device per man, woman and child on the planet. Now add to that all the other essential devices I mentioned above and you will get the magnitude of how important silver is in our daily lives. Truly amazing, right? But wait, there is more.

According to multiple reports, well over 90% of all above-ground silver supply has already been used in commercial applications. Used, as in gone for good! This is because it is too expensive and time consuming to extract and recycle the used silver from manufactured devices already in use.

Add to that dilemma, the cost of mining a single ounce of silver by miners and you will get the whole picture.

According to numerous reports from various mining sources, including one very thorough report published in 2013 by SRSrocco, which included the most complete and comprehensive breakdown of each cost, item by item, the all-in cost to produce one single ounce of silver, including new mine discovery and exploration, averages at around $22-24 per ounce. This means mining companies won't make a dime in profit until silver spot price goes from its current price of $16 to at least around $23 per ounce on average. Well guess what? Silver has not been at $23 an ounce for over 3 years.

So the question becomes: if you make a widget for $23 and sell it at $14, 18 or even $21, how long do you stay in business? The answer: Not very long!

This should also explain why so many silver mining companies have filed for bankruptcy in the recent years as they have been making significant cutbacks in new mine explorations while their existing inventory of silver has been depleting to records lows in recent years.

This should furthermore explain why the biggest bank in the world, JP Morgan Chase, has been accumulating the largest stockpile of silver in history. According to the silver expert, Ted Butler, JP Morgan is now sitting on over 100 million ounces of physical silver in NY alone, along with nearly as much in their London vaults.

What does the JP Morgan CEO, Jamie Dimon, one of the highest paid and smartest CEO's in the Fortune 100 companies, knows that the rest of us don't know?

Remember folks, although like all other banks Dimon has diversified JP Morgan assets into many other assets, he is NOT quite "stockpiling" on stocks, bonds, treasuries, options, real estate, oil or even gold in a way that would make it to the headlines. Instead, he is buying every ounce of silver he can get his hands on. So much so that it made it to the headlines. Why?

In short, as I have been stating, this is a case of demand versus supply. When the demand for something is dramatically rising while the supply continues to dramatically shrink, there is no place for the price to go, but up. Simple as that!

One thing that separates smart money from dumb money, is that smart money detects opportunities long before the dumb money even has a clue. Smart money use all their resources in researching the markets, and see opportunity in sectors not as what they are valued at today, but what the future potential value will be, before they make their move.

Well, the jury seems to be out at JP Morgan and they have detected where silver prices will be headed in the not-too-distant future and they are spending a significant fortune, hand over fist to get as much silver as they possibly can, before the dumb money wakes up and sees what they have discovered.

Typically, the dumb money finally wakes up and sees the result, after smart money has already made a killing in the market and is about to get out. And as the dumb money finally start getting in during the late stages of a bull market, the smart ones are getting out with fistful of profit, running to their banks to make a large deposit.

A fairly recent example of this can be found when silver moved from only $4 per ounce in 2001 to over $49 per ounce in late 2011, a whopping 1220% growth. This means, had you invested $10,000 in silver in 2001, by 2011, your investment would have grown to $122,000. Numbers don't lie, they tell the whole story.

But in the last bull market in silver, the dumb money waited and waited till silver had already climbed to $45 per ounce before they finally convinced themselves to get into the market, just as the smart ones were getting ready to sell.

If you were one of those who waited till it was too late, don't sweat it. Hopefully you learned your lesson. Here is your second chance. Go make yourself proud.

I believe today we are back to 2002 all over again. Silver is in its 2nd year of a new bull market, and the potentials couldn't be greater. Indeed I believe this new bull market in silver will be a doozy. After all, in 2002 we didn't have a world in political turmoil with nations drowning in massive debt. Today we do.

This is truly an opportunity of a lifetime. Simply put, when was the last time you saw something as essential in everyone's daily life as silver, selling at nearly $7 below its production cost? This means if you invest in silver at today's price of $16, it has to go up at least 44% to $23 for miners to just break even and pay their cost. In case you didn't know, no one is in business to break even. That is not how businesses survive.

Your procrastination in taking advantage of this rare opportunity will cost you dearly. A few years from now when silver has moved into a new all time high, which I'm convinced without a doubt it will, don't be the one looking back with regrets, reciting to your children and grandchildren how you could have changed yours and their financial life, had you invested in silver when it was below production cost. These kinds of rare opportunities truly come around only once in a lifetime, and here is yours.

Peter Ginelli

I have been actively involved in market research and analysis for over a decade. My opinions are based on extensive research from various sources including the latest world geopolitical and geo-economics events and best available information and data available. My professional background is primarily in the precious metals market place which include but not limited to research and analysis of daily news events at LCI and how they may affect the precious metals market.

© 2017 Copyright Peter Ginelli - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife