Best of the Week
Most Popular
1.Bitcoin War Begins – Bitcoin Cash Rises 50% While Bitcoin Drops $1,000 In 24 Hours - Jeff_Berwick
2.Fragile Stock Market Bull in a China Shop -James_Quinn
3.Sheffield Leafy Suburbs Tree Felling's Triggering House Prices CRASH! - Nadeem_Walayat
4.Bank of England Hikes UK Interest Rates 100%, Reversing BREXIT PANIC Cut! - Nadeem_Walayat
5.Government Finances and Gold - Cautionary Tale told in Four Charts - Michael_J_Kosares
6.Gold Stocks Winter Rally - Zeal_LLC
7.The Stock Market- From Here to Infinity? - Plunger
8.Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - MarketsToday
9.Electronic Gold: The Deep State’s Corrupt Threat to Human Prosperity and Freedom - Stewart_Dougherty
10.Finally, The Fall Of The House Of Saud - Jim_Willie_CB
Last 7 days
Some Traders Hit. Some Traders Miss. Here's How to be Part of the 1st Group - 22nd Nov 17
Geopolitical Risk Highest “In Four Decades” – Global Gold Demand to Remain Robust - 22nd Nov 17
Relationship between Crude Oil Price and Oil Stocks - 22nd Nov 17
Harry Dent’s Gold Prediction Invalidated - 22nd Nov 17
Gold Sector is On a Long-term Buy Signal - 21st Nov 17
Saudi Arabia and Israeli Alliance Targets Iran - 21st Nov 17
What History Says for Gold Stocks in 2018-2019 - 21st Nov 17
US Bond Market Operation Twist by Another Name and Method? - 21st Nov 17
Learning from Money Supply of the 1980s: The Power and Irony of “MDuh” - 20th Nov 17
Trump’s Asia Strategy, Goals and Realities - 20th Nov 17
Crude Oil – General Market Link - 20th Nov 17
Bitcoin Price Blasts Through $8,000… In Zimbabwe Tops $13,500 As Mugabe Regime Crumbles - 20th Nov 17
Stock Market More Correction Ahead? - 19th Nov 17
Universal Credits Christmas Scrooge Nightmare for Weekly Pay Recipients - 18th Nov 17
Perspective on the Gold/Oil Ratio, Macro Fundamentals and a Gold Sector Bottom - 18th Nov 17
Facebook Traders: Tech Giant + Technical Analysis = Thumbs Up - 18th Nov 17
Games Betting System For NCAA Basketball Sports Betting - Know Your Betting Limits - 18th Nov 17
Universal Credit Doomsday for Tax Credits Cash ISA Savers, Here's What to Do - 18th Nov 17
Gold Mining Stocks Fundamentals Q3 2017 - 17th Nov 17
The Social Security Inflation Lag Calendar - Partial Indexing - 17th Nov 17
Mystery of Inflation and Gold - 17th Nov 17
Stock Market Ready To Pull The Rug Out From Under You! - 17th Nov 17
Crude Oil – Gold Link in November 2017 - 17th Nov 17
Play Free Online Games and Save Money Free Virtual Online Games - 17th Nov 17
Stock Market Crash Omens & Predictions: Another Day Another Lie - 16th Nov 17
Deepening Crisis In Hyper-inflationary Venezuela and Zimbabwe - 16th Nov 17
Announcing Free Trader's Workshop: Battle-Tested Tools to Boost Your Trading Confidence - 16th Nov 17
Instructions to Stop a Dispossession Home Sale and How to Purchase Astutely at Abandonment Home - 16th Nov 17
Trump’s Asia Tour: From Old Conflicts to New Prospects - 16th Nov 17
Bonds And Stocks Will Crash Together In The Next Crisis (Meanwhile, Bond Yields Are Going Up) - 16th Nov 17
A Generational Reset That Will Redistribute Wealth to the Bottom 60% Is Near - 16th Nov 17
Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - 16th Nov 17
Gold’s Long-term Analogies - 16th Nov 17

Market Oracle FREE Newsletter

Traders Workshop

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.


© 2005-2017 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