Silver Investing – On a Roll

May 26, 2005 by SMD · Leave a Comment 

Silver Investing – On a Roll

Silver is often overlooked as an investment.

I ran across this article on about the price of silver. The price has been on run, similar to gold in the last few years.

In my view, Silver’s demand will continue to outstrip supply because of its unique properties, not the least of which is its amazing reflectivity and electrical conductivity capabilities. It is silver that is used in the manufacture of “room temperature superconductors” that will emerge as the next generation of electrical cable because copper cable – whilst efficient – also results in a loss of up to 33% of all energy that is pumped into it at the power generation source…

But silver has been the subject of price manipulation – by a cartel that is probably operating illegally in the strict sense of the term. These “walnut and pea” price manipulators have been using confetti trails of derivatives for years to prevent the price from rising – even as government stockpiles world-wide have been dwindling to virtually zero. [Quoted from here]

Charts for the price of silver [scroll to the bottom the interesting ones are the 5 and 10 year charts]. The following is not exactly current but the price has risen sharply since the time it was made [currently ~$7 oz.]

As this is written in mid to late February 2003, if you take care to notice, there are widespread shortages in all silver categories from coins to large bars at dealers all over the U.S. Many categories are intermittently sold out; a run on silver is taking place. Almost none of this metal will return to the marketplace until silver hits at least $10. [Quoted from here]

In 1997 Warren Buffet purchased a warehouse full of silver bullion [It is rumored that he is buying again]. Here’s the reason he gave at the time:

We have no inside information about great new uses for silver or anything of the sort. You can see from looking at the numbers that aggregate demand, primarily from investor and fundamental type uses, is close to 800 million-plus ounces a year, and there are 500 million or so ounces of silver being produced annually. [Quoted from here]

Silver investing is definitely an interesting topic: with fascinating players, conspiracy theories, price manipulation and the standard history and allure of precious metals.