TIGHT SUPPLY
Not many people in the world know the incredible facts about silver. If they did, they would buy it and the price would go out of sight. The combination of industrial demand and investment demand requires around one billion ounces of silver each year. That’s the total amount produced each year from mining and recycling. Only 100 million ounces is available for investment, so a slight uptick of investor buying would overwhelm the market and cause a shortage.
We have just experienced one-hundred million ounces of buying of physical silver over the last month or so. That means we are perilously close to a shortage. The price rise in silver has caused more buying. A continuation of the price rise will cause even more buying. In the past we have experienced shortages in silver coins and bars. That causes investors to aggressively buy whatever silver item they can get. If the price continues to rise, we are likely to soon experience a buying frenzy in physical silver. Silver analyst Ted Butler has said that it’s quite possible the price will have to burn itself out at levels so high that owning a small amount of silver will make a significant difference in one’s financial fortunes.