"Too many people miss the silver lining because they're expecting gold."
- Maurice Setter
The silver supply and demand imbalance simply means that there is no longer
enough silver to go around. The above ground stocks are almost non-existent at 20
million ounces.
With only one more deficit year production of silver versus its demand for the year, there will no longer be sufficient amounts of the gray precious metal for the
existing needs.
Even though the price for silver seems high at the multi year peak of $23 per ounce (as of this writing), this is only the case when you detach the silver prices from their historical highs and ignore the inflation adjusted highs and silver to gold ratios as well.
Remember that the all time high for silver is still at near $50 per ounce.
As the legendary commodities billionaire investor Jim Rogers has so astutely
pointed out on more than one occasion, this represents as a 55 percent discount to the all time high that was set back in the early 1980s.
48 - Chapter 5 - How You Can Make a Fortune Investing in Silver
The Silver Fortune Formula - How to Make Extraordinary Profits from the Silver Bull Market Timing, Markets, and Value – Looking Good Right Now
What would you rather invest in, gold that has surpassed its all time high several different times already, or silver that still has more than 117 percent price
appreciation left before it reaches the high?
To put it in practical terms, $10,000 invested in silver at today’s prices could be worth more than $21,500 if silver reclaimed its constant dollar high. For constant dollar price appreciation opportunity, there are few investments out there that offer you the opportunities that silver does right now.
You must not forget either that the $50 high price of silver only represents a
constant dollar high. The actual inflation adjusted high for silver is somewhere closer to $165 per ounce, when 1980 dollars are converted into 2010 dollars.
By this measurement, silver still has a long, long way to go.
According to the inflation adjusted high for silver, it is trading at an astonishing discount of 86 percent to its true value dollar high price.
In other words, silver has more than a whopping 615 percent in price
appreciation potential left to it before it reaches its inflation adjusted high again
of from $23 per ounce to $165 dollars per ounce. If you put $10,000 into silver at
today’s prices and watched it reach the inflation adjusted high, then you would
have more than $61,500 in profits when all was said and done.
Using the gold to silver historic ratios of 1:12, you see that silver also has
enormous price movement potential. Silver to gold is valued at 1:58 pricing ratio these days, as you read in the last chapter. But should silver realign to its traditional average of 1:12 purchasing power of gold to silver, than the silver prices would similarly be far higher.
49 - Chapter 5 - How You Can Make a Fortune Investing in Silver
The Silver Fortune Formula - How to Make Extraordinary Profits from the Silver Bull Market With gold at $1,350 per ounce, silver’s historical ratio price to gold would have it at $112.50 per ounce. This figure also has silver trading at a substantial discount presently of around 80 percent to its proper gold to silver ratio. Using this figure as the proper value for silver, then you have the possibility of 390 percent returns from the present levels of silver at $23 per ounce to the historical gold to silver 1:12 ratio price of $112.50.
In practical dollar terms, this means that $10,000 invested in silver at today’s
prices would yield a $39,000 profit if silver realigned to its traditional gold to