Why Silver Prices will go MUCH LOWER (Excellent Analysis)
Why Silver Prices will go MUCH LOWER
1. We produce twice as much silver as we USE each year.... We produce 1 billion ounces per year, and only USE half of that. All the excess silver is STORED in the form of bars and coins and other forms of stored silver. There is a huge OVERSUPPLY of stored silver that grows larger each year. Verifiable at Silver Institute.
2. We can produce all the silver we USE for under $3-$4 per ounce. Hecla produces silver for $1-$3 per ounce, many copper mines produce silver as a free "waste" byproduct. 79% of all silver produced is produced as a free by-product of other mining. Silver prices can crash to at least $5 and we'll still produce all the silver that we need.
3. Demand for silver is crashing and volume of SLV shares traded on "up days" is collapsing. The US Mint sold 6 million fewer eagles in 2012 than in 2011. Dealers are swimming in excess silver. Dealers and ebay have tons of eagles. Dealers have tons of silver available at .49 to .59 cents over spot and few buyers. The silver bubble is collapsing and falling prices are scaring folks away.
4. The SLV fund has stopped adding any net new silver. The SLV fund bought well over 11,000 tonnes of silver up until April 2011 and since then, they have been dumping it with no net new silver purchased. The SLV fund was one of the major drivers of the silver bubble, and now they will be one of the major deflators of the silver bubble as they dump silver on the way down. They've dumped nearly 1000 tonnes so far.
5. Silver will only go higher if oil goes higher, but oil can't go higher without choking the economy and KILLING demand. Falling demand will send prices crashing. Oil crashed to $33 and silver to $8 in similar circumstances 4 years ago.
6. Governments/central banks are starting to figure out that anything they attempt to do to "Stimulate" the economy too much just makes commodity speculators drive commodity prices higher which KILLS the economy. Central banks are starting to figure out that the ONLY thing that will stimulate the economy is LOWER commodity prices.
7. Fiscal Tax Increases and fiscal cost cutting = reduced government and military spending, and tax increases = stronger dollar = crashing commodities demand = crashing silver prices.