Over the past year there has been tremendous demand on the silver market. We are talking record sales. In January and February, there was such pressure on the silver market, that retail bullion dealers were unable to keep up and fulfill the demand and orders they were receiving. Bearing in mind, we were able to fulfill every single order without any delays. We get asked how was that possible? For decades we have been preparing for these times by continuing to add to our storehouses. We anticipate having to tap into the storehouses in the short future but that is a topic for a different article. Additionally, we received information that the US mint is currently not taking new orders because they have not been able to keep up with and fulfill the rising demand for gold and silver orders. Check out this article from Silver Doctors for more on silver and gold shortages: U.S. Mint unable to keep up with “surging demand” for gold, silver – Silver Doctors
However, in spite of what many dealers are seeing in their inability to meet the demand of gold and silver sales, recently the top silver analysts are coming out and saying that there are no shortages. Philip Newman, managing director of metals focus who provides the World Silver Survey for the Silver Institute claims that there was an 80-million-ounce surplus last year, the highest in a decade. This statement by Newman surprised many silver dealers, because it hasn’t been their experience over this past year.
One of the issues with Newman’s claims is that his “surplus” did not take into consideration the Global silver ETF demand. Newman, and other analysts, are not viewing ETF silver as genuine demand on the market. Unfortunately, this short-sighted view could come back to bite them when the genuine shortages come to light in the future.
However, for the sake of speculation let’s just imagine that there are $5 billion ounces of silver just sitting on the sidelines, waiting to enter the market. Is this even a significant problem in light of the global deficit and world economy we are seeing today? Should silver investors take their profits while then can at $40…. or even $50 per ounce?
It is my opinion and that of many advisors out there, that this would be an extremely hasty decision. I continuously remind advisors that we need to treat gold and silver as Wealth Insurance. Personally speaking, I am still going to be buying at $50… $75… and so on. Until “they” solve the spending crisis and pay off the debt, gold and silver will continue to rise over time. It’s just that simple, folks.
If you have been paying attention to the stimulus programs, the unprecedented monetary easing (money printing) and the astronomical amount of world debt added in this just past year alone ($24 trillion), silver still makes a tremendous amount of sense. Let’s just say that there are 5 billion ounces of silver just sitting around for the taking. If and when silver reaches $100 per ounce, which we are confident it will shortly, the total price for all the silver out there will still only be $500 billion. Compare that number to the 24 trillion of global debt added in 2020. The $500 billion attributed to silver is only 2% of the total global debt added last year!
This, in and of itself, is one of the primary reasons you need to consider silver as an investment and wealth insurance. The global debt being tolerated and the rate of which it is increasing is completely unsustainable over the long term. We as investors don’t want to be left holding the bag when the financial system implodes around us. Even as Fed Powell and Treasury Secretary Yellen put on their happy faces to tell us that all is well and that “inflation will be temporary,” I’m reminded of when Bernanke came out with the statement that the housing market was “healthy” just before the bubble burst in 2008.
When and if the next financial bubble bursts, those who jumped on the silver band wagon will be in a much greater financial position than those who didn’t. During times of financial uncertainty, when the dollar itself is being threatened by inflation and deficit, gold and silver have a history of thriving and outperforming all other assets.