Silver Industry

[silver industry]

A quick look at the silver industry reveals yet another justification for investing in advance of the coming move in silver prices.

Unfortunately, many fail to understand silver's industrial applications because, while silver is used in many finished products, it is generally used in very small quantities. And the knowledge that there is a small amount of silver in my cell phone, for example, does not necessarily translate well, in the minds of many, to the masses of cell phones that are produced each year.

Also, the use of small quantities at low prices creates an inelastic demand character that may likely be the force that moves price the most.

Can you think of another easily-held commodity as inexpensive, as useful, and yet as scarce as silver?

Uses for Silver

Silver metal is used in quite the array of devices and appliances, as well as in chemical processes.

The silver industry uses far more silver than what has been and what can be produced each year.

You may also want to re-visit the chemical properties of silver to get a powerful perspective.

Industrial silver is also strategic. It is crucial for the world's military-industrial complexes. Nearly all of the industrial uses have corresponding military applications, from aviation to electronics.

The industrial demand for silver alone almost certainly justifies the argument for holding silver for the long run.

For a comprehensive list of the industrial applications of silver, click here.

Low Prices

[silver industry]

In many ways, at current prices, physically held silver is a steal.

It sounds almost too good to be true that you can walk out of a local coin shop with pure silver at such incredibly low prices compared to any other metal or commodity.

Read more about why silver prices have historically been so low here.

Without the silver industry, most of the production lines responsible for many of the necessities of modern life would simply shut down. Cell phones, computers, keyboards, and automobile components are just a few of the familiar items we use that depend on silver.

[silver industry]

Make the comparison with oil. We read about the surging cost of oil and the impact it has on the price of almost everything. Yet silver, because it is used in small quantities and is a key component, has inelastic demand. It will be bought (and likely hoarded) all the way up the price curve.

There is much evidence that the combination of industrial necessity, low prices, and limited supply with cause a major shift in silver prices in the near future. Here are just a few considerations, each of which is covered in greater detail elsewhere on this site:

  • Silver has inelastic demand
  • There has been a production deficit in silver for many years
  • New uses for silver are being discovered all the time
  • Substitutes for silver are rarely discovered
  • As a portion of production, recycling will fall, thus decreasing supply as digital photography takes hold in the developing world
  • I like to visit the palladium or platinum story from time to time for a fair comparison.

    Click here for the palladium story.

    [silver industry]

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