Silver production tends to center around two often unknown factors. First of all, many people seem unaware that byproduct mining is the primary source of new silver supply.
Secondly, the broken price discovery mechanism for silver has resulted in artificially low prices that have led to the demise of many primary silver producers.
Although this seems to be yet another compelling positive factor underlying silver’s fundamentals, the end of price controls and key technological improvements already on the horizon will ultimately determine silver’s price going forward.
Silver Price Control in Action
For example, after silver recently breaks below the $19 dollar paper price, short term price controls break down temporarily, allowing the price to run up to $23, where it even threatens to breach the $24 level.
Also, the President is planning a meeting with his top monetary officials. The White House said it expects the heads of the Securities and Exchange Commission, Commodity Futures Trading Commission, Consumer Financial Protection Bureau, U.S. Federal Reserve, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Federal Housing Finance Agency and the National Credit Union Administration to attend the meeting Monday afternoon.
Fed Chair Ben Bernanke et al. will speak tomorrow, as well. Then the paper price of silver gets smashed overnight by some entity with enough weight to push around a far too thin market.
Highly Conductive Nanofiber Shows Parallels to Graphene
This forum has recently reported on the (remote) possibility of Graphene replacing silver in some of its industrial applications. Along similar lines, new breakthroughs in nanofiber technology have just been announced that have produced carbon based materials that exceed the conductivity of copper, but with half the bulk, one tenth of the weight and a lower price.
Manufacturing of the new highly conductive materials is already in construction, according to recent MIT and Cambridge material science reports.
This cutting edge technological advance could have huge benefits for the development of electric cars and airplanes in particular, as well as notably reducing industrial demand for copper.
How Nanofiber Advances Could Boost the Price of Silver
Still, such nanofiber development could well be a disruptive technology for the silver market, with a potentially very significant bullish impact on the price of silver.
Just consider what would happen to the supply of silver if copper becomes essentially obsolete for its major industrial use as an electrical conductor in virtually every electric product’s wiring.
Since most of the new silver currently being produced is a byproduct of copper mining, the production of silver from mining should drop considerably if demand for copper decreases substantially, thereby driving silver prices way up as physical metal shortages increase.
Once the precious metals market becomes free from price controls, and aware of this major technological news, a nanofiber induced rally in silver could happen very quickly.