The Silver Supply Deficit is About to Explode
I am staking my entire reputation on this one call… And I know I’m right.
If we remain at current prices, with silver below $22 per ounce, the world is going to face a major supply disruption in a key resource that we all use on a daily basis sometime in 2019. Even as you read this, we are all silver-dependent because this precious metal is in your phone, computer, and even the electrical lines that are powering all of your technology.
Silver is used for healthcare, pharmaceuticals, water treatment, solar electrical grids, vehicles, bandages, RFID chips, weaponry, and thousands of other everyday uses. However, the biggest increase in demand is coming from the solar industry. Something that was essentially at zero ten years ago is now consuming 10% of new mine supply!
Investment demand is down significantly from 2015 (293 million oz.), and as of last year, physical coins made up only 181 million ounces. That’s a drop of more than 100 million ounces.
Overall physical demand was about 29 million ounces more than what the world was able to supply last year.
Annual silver supply includes mine production (855m ounces) and recycled silver (151m ounces).
Physical supply over the last decade has had 6 years of being in a deficit.
New mine supply peaked in 2015/2016 with 893 million ounces produced in each year.
It was 876m ounces in 2017 and 855m in 2018.
We believe new mine supply will cliff dive over the next 5 years if silver doesn’t explode higher.
It’s important for everyone reading this to know that most silver comes from copper, zinc, and gold mines.
A silver mine is extremely rare.
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The majority of “silver miners” have more silver in their name than their actual revenues coming from this precious metal.
Only 20% of silver comes from primary silver producers… the rest of silver comes from zinc, copper, gold, and other metal mines. This is important because right now, we have a situation where primary silver producers are now selling silver for market prices, and in some cases, below the cost of production itself.
Demand, which has been on the rise, is surging! Supply is declining due to base metal mine closures and cutbacks.
Due to some foul play by industry insiders and misinformation by the financial media, we believe silver is likely the most undervalued physical asset available to investors today.
Over the past decade, the ETF SLV has siphoned off a significant amount of demand from both the physical silver market and the mining shares themselves.
The COMEX has also regularly been used to manipulate the precious metals through margin increases, massive selling during holiday hours, and the fact that the futures market just doesn’t have the metal to support all of the trading that goes on.
In the end, this is going to be about supply disruption in the face of surging demand.
As gold goes higher, so will silver. Any additional demand in the face of falling supply is going to make silver a big winner for us.
Physical silver is a screaming buy at these levels.
Recommendation: Consider accumulating physical silver coins and shares of First Majestic Silver (NYSE: AG).
Editors Note: Where to buy physical gold and silver…***We personally purchase ours through Miles Franklin. They are known industry-wide as the most reputable dealer you can transact with.***
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This work is based on SEC filings, current events, interviews, corporate press releases and what we’ve learned as financial journalists. It may contain errors and you shouldn’t make any investment decision based solely on what you read here. It’s your money and your responsibility. We will never sell any shares during any active email marketing campaigns. The information herein is not intended to be personal legal or investment advice and may not be appropriate or applicable for all readers. We have not been paid for this email. We are regular customers of Miles Franklin and have received options in the past from First Majestic Silver for agreements that have since expired. If personal advice is needed, the services of a qualified legal, investment or tax professional should be sought.