"... silver is the best investment in the world."

[youngbuck]

Silver is the #1 conductor of electricity. It has the highest reflectivity of all metals. It has unique properties as a catalyst. It is also a very popular anti-microbial agent in medical applications. There is no suitable substitute for it in several applications. You computer, your ipod, you electronics, all run on Silver. In this century, we consumed 80% of the Silver stockpile that we amassed above ground since the days of the Romans. The question is, how long does the other 20% get us? The mining industry has not been able to mine enough Silver to meet the physical demand from the market. At some point in the next 10 or 20 years, a sever supply squeeze will materialize which will force prices to skyrocket. Whether the market prices this in before that event or after is anyone's guess. Point being, it hasn't happened yet, so yes, Silver is a home run as a long term investment. You must be patient for that home run to clear the fence. In the meantime, you just have to sit tight and be satisfied with the 10-20% annual returns it has given us the past few years.

You got that right; I'm holding my silver for the long haul.

 

[theoakman]

You assume I haven't already diversified. I hold nearly 300oz of physical silver. I bought the majority of it at about $10/oz. My greenhouse has already made me many times my return on silver. Yes, I know I don't know the future, but I can never imagine my silver providing more benefit, both in inherent security (i.e. food) and for cash flow (allowing me to invest in all kinds of things) than my greenhouse.

No I didn't. I'm merely pointing out that the law of diminishing returns applies to your greenhouse and a green house does not cost much money. If you have 100k in the bank, you can't invest in a thousand greenhouses and consider yourself safe. Surely, for anyone with a decent amount of money, a greenhouse should constitute less than 1% of their safety net. I'm also pretty sure that you are not including the cost of labor involved with the production of food within that greenhouse in your calculation.

Btw...my friend's father runs a farm. You can get about 25k worth of crop out of an acre of land if you have no problems at all. Not for nothing, but your greenhouse isn't going to make you rich. You'd be lucky if you made minimum wage off of it.

 

[theoakman]

I was under the impression that all of the official stockpiles were gone, and that we are currently meeting demand by using up ~100% of production (which meets something like 75% of demand), with the balance coming out of private hands (thus perhaps the rise over the last few years?). But I'm not sure, I'm not thinking very clearly today.

The stockpiles are no longer in the hands of the central banks. They are in the hands of private individuals. Nevertheless, they are still above ground and waiting to be consumed.

 

[tmosley]

The stockpiles are no longer in the hands of the central banks. They are in the hands of private individuals. Nevertheless, they are still above ground and waiting to be consumed.

Do you have a source for that? I am under the impression that those stockpiles were all used up by industry (especially photography), such that the silver is all in landfills, leeching its way into water supplies, or at the bottom of the oceans.

The amount that is in private hands was always there, with some more added each year. It seems to me that the rise in price is an attempt to pull that silver out of private hands for industrial use, but it is probably due to a multitude of factors.

 

[Original_Intent]

I don't think the demand is all industrial use, although if it were that would bode well for future prices. And this could just be a cluke spike and we could be back at $15-$16 in a month.

Sooner or later the rubber will hit the road, industrial demand will consume the last of the stockpiles. I also think silver is catching on as poor man's gold. As with everything it is just a question of when reality forces itself on the market, not if.

 

[theoakman]

Do you have a source for that? I am under the impression that those stockpiles were all used up by industry (especially photography), such that the silver is all in landfills, leeching its way into water supplies, or at the bottom of the oceans.

The amount that is in private hands was always there, with some more added each year. It seems to me that the rise in price is an attempt to pull that silver out of private hands for industrial use, but it is probably due to a multitude of factors.

Goto the USGS surveys. If the situation you described was true, we would already have a severe supply squeeze and a huge price spike. Above ground, we currently have about 20% of the Silver left over that we did in 1900.