Monday, January 3, 2011

Silver Historical Chart and the Future

Here’s a neat chart to reflect on from time to time…..If any of you had watched that video I sent out over the weekend you would know that there is about 5 times more gold above ground than silver……

There is about 10-15 times more silver than gold in the ground however industry uses about 650 million ounces a year of which very little is recovered. The rest goes to investors. Also, the USGS has published a report stating that silver reserves will be depleted BEFORE gold, in about 10 years. Think about that, in 10 years (+-), no more silver will come out of the ground (for the most part).

When industry discovered that rhodium had 14 years left to be mined the price was run up from $300 an ounce to $10,100 an ounce. The difference between silver and rhodium (other than if rhodium disappeared life would go on) is that rhodium is NOT traded on the futures exchanges. If/when the silver paper manipulation of prices ends, God only knows what the upper limits of the price will be.

Personally, I view silver as my retirement. I can see selling 1 ounce of silver a month to cover my living expenses. Keep in mind that this will most likely be in an environment where the price is higher than the month before, averaged out over the year. I believe silver will cross the $1,000 mark, perhaps within the next 4-6 years. How many months will you "buy" in advance? View it as a time saver.

If sanity were to come back to the planet we live on and supply/demand fundamentals mean anything, silver could surpass the $5,000, $10,000+???? mark. Sound unbelievable? When gold crossed $700 analysts were calling for it to fall back to $250. It’s doubled since.

When rhodium was $5,000 an ounce (from $300), an analyst, Jack Lifton, said it was a good time to buy!!!!!! Many sold. Who could believe that? It doubled from there.

Anyway, the chart.

Link to larger chart...

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