This Week's Economic Updates

Published: Sat, 10/16/10

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What's Inside:

  • Question of the Week

  • Video of the Week

  • Article of the Week

  • Silver Summit 2010 Conference

  • Join The Morgan Report

    •
    Question of the Week

    Gary writes to silver expert David Morgan of the Morgan Report:

    The idea that the world is running out of silver seems a little hard for me to believe. The argument is regarding the amount of reserve silver, which is used up annually, and how mining does not replenish it. Hence we will run out in the next decade. As a result, supply and demand dictates that the price must skyrocket.

    Since the underlying information is public, surely the major industrial silver users would also know about this, if it were true. Surely, companies like Sony, Intel, or Apple could buy up every ounce for future products, and not even miss the money. Yet, they are not doing it, and silver is still easy to get.

    So either we are smarter than them with their teams of researchers and consultants, or we are missing something. Can you please comment?

    David Morgan responds:

    First, the deficit stopped around 2007. This means that above-ground inventories were no longer being depleted because all silver mining activity and recycling was covering total demand and producing a bit more. I know you have probably read something different elsewhere, but I can cite my sources, unlike others who wing it. The Silver Institute and the Silver Yearbook both agree on this point: silver supplies above ground have been growing since 2007. So, there has been a buildup in aboveground silver supply, and I have reported this in The Morgan Report.

    Secondly, the silver users have their own association, unlike any other commodity user you can name. Perhaps it was due to their researchers and consultants that they (Silver Users Association) made certain that binding contracts are in place so all the big silver users are the first to get the silver they need to continue their manufacturing through the big mining houses and their smelters/refiners.

    So, will silver be depleted in ten years? It is doubtful, but the competition with investors may drive the price very high. Additionally, there could be some new application that demands a great deal of silver, and this new “user” is not part of the SUA (Silver Users Association) and would have to go to the market directly forcing a squeeze on the above ground supply.

    Remember what happened to the palladium market going to over $1000 per ounce while gold was well under that price? What happened was Ford Motor Company got scared and decided to buy palladium for their assembly line. Just one buyer for industrial applications took the market sky high.

    All things considered and trying to be objective about the situation, I believe silver offers a tremendous amount of upside and whether we ever run out becomes a moot point.

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    Video of the Week

    Silver Guru, David Morgan, gives a frank interview - "Currency Crisis has begun!"
    David Morgan - Silver-Investor Interview about What is Happening with Silver! Mentions MERS Foreclosure Fraud Influencing the Prices of Metals!
    http://www.youtube.com/watch?v=VFLo6IktVvA

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    Article of the Week

    CityWire
    Silver price manipulation: 'public deserves answers'.
    http://tinyurl.com/2ds9dfy

    Money Morning
    Three Ways to Play the Silver Rally – While Limiting Your Risks with Options
    http://moneymorning.com/2010/10/13/silver

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    Silver Summit

    The Silver Summit Sets 2010 Conference Dates
    October 21-22, 2010

    The Silver Summit, Inc. is pleased to announce it has finalized dates for its eighth annual Silver Summit to be held Oct. 21 and 22 at the Davenport Hotel in Spokane, Washington.

    To learn more go here....
    http://www.silversummit.com


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    Information contained herein has been obtained from sources believed to be reliable, but there is no guarantee as to completeness or accuracy. Because individual investment objectives vary, this Summary should not be construed as advice to meet the particular needs of the reader. Any opinions expressed herein are statements of our judgment as of this date and are subject to change without notice. Any action taken as a result of reading this independent market research is solely the responsibility of the reader. Stone Investment Group is not and does not profess to be a professional investment advisor, and strongly encourages all readers to consult with their own personal financial advisors, attorneys, and accountants before making any investment decision. Stone Investment Group and/or independent consultants or members of their families may have a position in the securities mentioned. Mr. Morgan does consult on a paid basis both with private investors and various companies. Investing and speculation are inherently risky and should not be undertaken without professional advice. By your act of reading this independent market research letter, you fully and explicitly agree that Stone Investment Group will not be held liable or responsible for any decisions you make regarding any information discussed herein.
     


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