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Silver as Investement? Opinions wanted

johnsgonefishinjohnsgonefishin
edited July 2008 in The Economy
I keep reading things about silver as significantly undervalued as newly mined supply is less than demand. I have also heard that in terms of the amount of above ground silver it is way more rare than gold. By the same peoples estimates there are 2billion ounces of silver in existance right now or 34billion dollars in value. If this is true one rich billionare could buy alot of the supply and significanlty impact the price. Historically silver is valued around 1/8 of gold. Some people also state that the silver market is manipulated by market shorters, and banks(efts, funds) that do not hold the physical silver and stand alot to loss if silver went up high in value.
Is my information I am getting completely wrong? I don't buy silver from anyone giving the advise and I can usually get silver for high spot however I have not purchased any since $12.00/oz but was debating on putting a good chunk of change into alot more(less than 5% of my annual income in a one time purchase).
Where do you guys see the future price of silver? Any incite into silver would be appreciated. Any facts that dispute what I wrote would be helpful. I know if silver hit $100/oz alot of junk jewelry will be melted.

Comments

  • rose-colored-coolaidrose-colored-coolaid
    Your information sounds suspect to me. If there is so much more gold than silver, their values would be reversed, and The Wizard of Oz wouldn't have been advocating the silver standard (very popular in the mid to late 19th century) to solve a repression that many felt was exacerbated by a shortage of gold currency.

    I can't tell you if the current spot price of silver is high/low/good, but a lot of the reasons you quoted for it sound like people with too much time on their hands grasping at conspiracy theories.
  • johnsgonefishinjohnsgonefishin
    I am pretty sure that there is less silver above ground then gold. Silver is used in alot of manufacturing, photography, chemistry and other things that make it hard to be reclaimed. Most industrial uses of gold, which has less uses than silver, most can be reclaimed like melting jewelery. Because of this the supply of gold generally just gets larger as it is mostly just held for value, investment, hedge against inflation, and jewelry.
    Thank you for your response Rose but I am looking for hard numbers into the amt above ground etc. Hey its up 4.5% today. Personally I think gold is more valuable because women like it, and it makes them happy to receive gold. (Of course generally speaking, kind of like the price of Diamonds which after all are just clear pieces of carbon.)
  • deejayohdeejayoh
    30 seconds with mr google sez...
    Silver supply seen as in surplus and staying that way
    The latest comprehensive Virtual Metals analysis of the world silver market shows the metal to be in surplus in 2007 and that situation likely to continue.

    and as recently as last week

    Barclays forecasts tarnished outlook for silver, base metals less volatile

    Money quote:
    Noting the large number of major projects and expansions scheduled to come online, Barclays forecast the largest annual silver mine production increase since 1990 for a record 6.5%. "In our view, burgeoning mine output should offset weakness in other forms of supply, leading to an overall increase in supply," the analysts said. "Silver's fundamentals appear to be the weakest within the precious metals complex. "

    "Investment demand remains the only factor that could provide some partial compensation," according to Barclays. Speculative interest on Comex is already strong, while the three physically-backed silver ETFs now cumulatively hold 6.6Kt, with flows for the year to date up almost 700 tonnes. In our view, silver's poor fundamentals are likely to add to downward pressure on prices."

    yes, they'd love you to invest. make up for all that photo demand that is disappearing.
  • johnsgonefishinjohnsgonefishin
    Great Links deejayoh!
    Thank you.
  • mkingmking
    If this is true one rich billionare could buy alot of the supply and significanlty impact the price

    Thats been tried, and it didnt end well for the billionaire.

    http://en.wikipedia.org/wiki/Nelson_Bunker_Hunt
  • AlanAlan
    Hard:
    Buying a lot without the price going up while you are buying.
    Selling a lot without the price going down while you are selling.

    Not so hard:
    Buying a lot and driving the price up.
    Selling a lot and driving the price down.
  • rose-colored-coolaidrose-colored-coolaid
    Alan wrote:
    Hard:
    Buying a lot without the price going up while you are buying.
    Selling a lot without the price going down while you are selling.

    Not so hard:
    Buying a lot and driving the price up.
    Selling a lot and driving the price down.

    That's why all supervillians add an additional step.

    1. Buy lots of _____
    2. Destroy all the other _____
    3. Sell what you've got at stupendous prices.
  • AlanAlan
    As we all learned from Frank Herbert, the true test of ownership is the ability to destroy.
  • siddha99siddha99
    The Plunge Protection Team (courtesy of the Reagan Administration, although it was never officially brought out from under "conspiracy theory" status until 9/11, when Stephanopolous made a reference to it on live TV that day) has been manipulating gold prices worldwide in order to float the worthless US dollar. The USD historically moved inversely to the price of gold, but that ended a few years ago due to PPT manipulation of the gold price. You can learn more about this in detail at http://WWW.GATA.ORG.

    It will continue this way until the conditions are ripe for collapsing the US dollar, which will usher in a new era in which gullible, media spoon-fed American gringos will offer open arms to the suggestion of a North American Union, and the new economic regulations that will come with it (already being planned in the EU).

    SIlver and platinum are better bets than gold, although it may be good to have all three on hand -- on both coin format (1/4 oz bullion) and also in the form of ETFs that invest in metals -- SLV and GLD, for example. If you own bullion, make sure to buy two safes at the same time. One safe of where most of it goes and that one stays hidden. The smaller safe is not well hidden and it contains a fraction of your bullion, in case your home is broken into (by the Feds, the private military contractors, or your hoodlum neighbors in the event of martial law, which Bush now has the legal right to declare at any moment, for no reason at all).
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