Silver is the investment of the decadeBlog added by Fred Greene on August 17, 2011
Atlas Precious Metals Exchange

Fred Greene

Boca Raton, FL

Joined: June 27, 2011

With the economy still in turmoil and not recovering the way the U.S. government says it is, now is the time to sit down with your family and work out where to put any extra income and where to invest your money for the future.

Regardless of the run up on commodities recently, silver will be one of the strongest investments this decade. Even though it is at a new high today, there are still calls for the cost of silver to go a lot higher. Especially if inflation is added to the mix.

Instead of viewing myths and pundits’ predictions about silver, you need to base current silver cost projections on the fundamentals. You can look at various data points that will stick out and show you where silver is likely headed.

Much of the new silver optimism can be traced back to the new investments taking place: The silver ETFs, the funds and just a general demand for people to replace their currencies with silver.

Last year industrial production was up 18 percent. There are all sorts of new uses for silver such as solar panels. It is used in the health care business — in bandaging and clothing, and for other uses such as antibacterial devices.

So the industrial demand has been quite surprising. But the real demand has been from the investment side, in terms of the price of silver on the charts.

There’s an argument for secular silver. Silver has traded in a ratio to gold of 16:1. So in other words, if the cost of gold was $1600 an ounce, typically silver should trade at $100 dollars.

But that ratio has not been effective in the last 20 to 30 years. The last time it traded in that range was in 1980 when it was arranged for the price of silver to go up to $50 an ounce. This ratio is coming down, but today it is at 41 and has been as high as about 81.

We are likely to see it trade at the previous 16:1 ratio again, maybe even within the next 3 to 5 years. Right now there is a silver shortage. The shortage is sending the prices through the roof. There is a tightness in physical silver indicating a short term supply problem for some time to come. In the future do not be surprised to see silver reach as high as $100 an ounce.
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