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"ATTENTION INVESTORS"
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Your Watchman |
NOTES FROM THE BULLION TRADING DESK |
WIDELY UNKNOWN FACTS ABOUT SILVER:
Known silver stockpiles are low and are well on their way to zero. Annual total supply for all of the worlds Silver mines put together
in 2002/3 was 589 Million Oz’s and yet world wide demand for Silver was a massive 878 Million Oz’s! And then add to this the ongoing
estimated accumulated Silver supply deficit (every year since 1990) of 1.2 Billion Oz’s. Just these figures alone have set the stage for
serious upturn potential for Gold’s little brother in the coming months and years ahead.
SEVEN KEY FUNDAMENTALS:
Below are some of the key fundamentals which will and are already starting to take effect on the Silver resources sector to the upside;
Because silver has been priced below its all-in production cost for so long, silver exploration has practically ceased.
Also the US Government who has been the biggest supplier of Silver since World War 2, has now officially exhausted it’s stock piled reserves and has no choice other than to enter the market as a buyer.
Once a discovery is made, a mining project must advance through a series of pre-production steps before a mine is opened. In-fill drilling, feasibility studies, permitting, project financing, infrastructure construction and the like. Because silver has been priced below its production cost for so long, development and advancement phases of silver projects has practically ceased.
Due to such a long period of low prices there has been a decrease in silver substitution research.
More primary silver mines are closing than opening (usually due to depletion).
In 2003 the Silver resources sector had an approximate growth rate of +230%, this has widely gone unnoticed by the main stream investing public.
Theoretically, when the overall stock market is rising, a single investment dollar entering the market may be sub-divided between hundreds of stocks that are rising. The Silver stocks are and have started to become the beneficaries of a multiplier effect. Being in the smaller group, they receive a much higher proportion of each investment dollar.
AN UNRECOVERABLE COMMODITY:
Silver is widely used in manufacturing such as medical, photography, electronics and is therefore largely unrecoverable!
HISTORY:
In the last 6,000yrs on average it has always taken approximately 15Oz’s of Silver to purchase 1 Oz of Gold. Even from an historical
perspective Silver is way under valued currently taking approximately 65 Oz’s of Silver to purchase 1 Oz of Gold! It’s also interesting to note
that geological surveys of the earths crust comes up with the same 15 to 1 ratio!!
COMMENTS:
I personally believe in the fundamental laws of supply and demand, as well do I believe in the laws of gravity and that we are early in the
current Silver cycle. As generous as the past year has been to Silver investors (+230%), I am convinced that we’re just entering the second
stage of a once in a life time generational cycle that has plenty of positive growth ahead of it.
by Simon Heapes
(c) copyright 2007
www.anglofareast.com
Mr. Heapes has studied,
lectured and written on
Economic and Monetary
Ethics, the role that
gold and silver has played as
money through history,
and the eventual
consequences of today’s
fiat currency.