The statement that silver is rarer than gold right now is true from a particular and important point of view. When you take into account the above ground silverware
and jewelry available supplies, then the grey metal is not rarer than the yellow metal proves to be. But, if you are looking at just the quantity of identifiable actually available silver bullion, then silver truly is rarer than is gold. It is an important starting point to understand that practically speaking, silver turns out to be rarer than gold.
Although silver jewelry and silverware could in theory be melted down to secure
greater sources of silver, this is not likely to happen for an important reason. Gold metal jewelry trades at a tiny premium over the present market prices for the
yellow metal. This means that with relatively small change in the price of gold, people could be easily persuaded to melt down their gold jewelry.
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The Silver Fortune Formula - How to Make Extraordinary Profits from the Silver Bull Market As gold has risen aggressively in the past several years, you have already started to see this happen with the rise of the many cash for your scrap gold operations that have been successfully advertising for and attracting clients to sell them their old, unwanted gold jewelry.
Silver jewelry on the other hand sells at a much higher premium to its underlying precious metal value. This means that most people would not be persuaded to sell their scrap silver jewelry until prices increased by another $50-$60 more per
ounce.
Strictly by the numbers though, the World Gold Council and comparable experts
claim that there are somewhere between four and five billion ounces of physical
gold still left in the world. This phrase “still left” is actually meaningless, since gold experts routinely point out that 95 percent of all of the actual gold that has ever been uncovered since world history began is still in existence. The truth about gold is that it is rarely consumed, or burned up. In general, it does not simply go away, but it stays with us, preserved in some form.
There was a time when this proved to be the story for silver as well. The facts on the ground regarding silver and its availability and utility have changed in an
incredible fashion since the end of the Second World War. How this translates into available silver is surprising.
As you saw in the last chapter, a mere six hundred and seventy-one million ounces of silver bullion that is available for use are still found above ground, per the World Silver Survey of 2004. The updated numbers on this show that silver has been
drawn down still significantly further, to a mere twenty million ounce by the end of 2009.
There literally is not much silver to go around anymore.
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The Silver Fortune Formula - How to Make Extraordinary Profits from the Silver Bull Market The present supply of mined, refined, available silver bullion in the world is
generally held in the warehouse of the COMEX, or the Futures and Commodities
Exchange. This warehouse proves to be the greatest silver supply and inventory on the whole planet. Here are found in excess of one hundred and twenty million
ounces.
This sounds like a large amount of silver, until you consider that Warren Buffet bought more silver bullion than this back in the late 1990’s. Another telling sign about the tight supplies of silver situation is found in the U.S. government vaults. It was not so long ago that they maintained an inventory of a few billion ounces of available silver in the vaults for U.S. Mint coining operations and needs.
These days, it does not have inventory left to speak of at all. It is rather comical to think that eight years ago, the government had no choice but to begin buying
significant quantities of silver in the world markets to be capable of continuing to mint its beloved one ounce Silver Eagle coins.
The main reason why silver is rarer than gold revolves around the demand for it.
While a greater amount of gold is mined each day than is typically demanded, it is mostly preserved. This is not the case for silver. All of the silver mined each year is utilized and then some beyond that, as you saw in the last chapter.
Between industry, photography, silverware, jewelry, and coins, there simply is no longer enough silver to go around each year. This deficit for silver is nothing new.
The metal has been in a real supply and demand deficit now for sixty-three years, going all the way back to 1942.
Remember as you read through the rest of this chapter the important point that
the available amount of silver is now rarer than the available amount of gold.
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The Silver Fortune Formula - How to Make Extraordinary Profits from the Silver Bull Market Not only are the available stocks rarer for silver than for gold, but the amount of silver mined relative to the silver demand every year causes it to have a net decline in above ground stocks each year as well.
These are some very compelling reasons for why you should consider silver as a
superior opportunity to gold right now.4.2 Silver Is on the Bargain Table
Silver has come to be more and more expensive to find and mine as it gets rarer. As silver companies have to go farther and farther afield and dig deeper to locate the dwindling supplies of it, the prices of extracting it from the ground continue to rise.
There are now silver companies that can no longer afford to bring it out of the
ground practically and viably even at today’s relatively higher prices of $23 per ounce. Some of them are choosing to shut down production and lay off workers as
a result of how low silver prices remain when adjusted for inflation.
If silver is less highly priced than the cost of digging it out of the ground, then
you could literally say that silver is cheaper than dirt.
This phrase is becoming the mantra for some silver investors. Its sentiments have been echoed by legendary commodities investor Jim Rogers, who has been
recommending silver over gold since the summer of 2010. Jim made his billions as the partner of foreign currency investor George Soros when they took heavy
positions against the Bank of England in the 1990s and literally made a billion
dollars in a single day as their positions proved to be right on the money.
Although the billionaire Jim Rogers has been recommending gold for years and
telling people that he never sells gold, but that he only buys and hold its, he has recently changed his long standing tune. Jim has announced that he is no longer
buying gold, although he loves it and still believes that one day soon, everyone will own gold and will walk down the street checking the prices of it in storefront
windows. Instead, he is sinking his smart money and that of his investors heavily into silver.
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The Silver Fortune Formula - How to Make Extraordinary Profits from the Silver Bull Market Jim says that the reasons for this are abundant. Silver is still at less than 50 percent of its all time high made back in 1980. Gold on the other hand is trading at all time highs seemingly all of the time lately. Jim said that silver is depressed and
ridiculously cheap at these levels. When silver companies can no longer afford to mine and refine it at the world prices that are offered for it, you can expect it to appreciate higher in the near future.
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The Silver Fortune Formula - How to Make Extraordinary Profits from the Silver Bull Market Chapter 5
How You Can Make a Fortune Investing in