When Silver Explodes Above $100/oz, It Will Never Return to Current, Absurd Price Level

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When it is no longer regarded as "inferior" jewelry, at that point supply/demand fundamentals become more normal: a rising price discourages demand while a falling price increases it. Thus after silver is propelled well above $100/oz, silver jewelry becomes a "price support mechanism", where any drop in the silver price spurs new demand.

What these dynamic fundamentals represent, when viewed in aggregate terms is the following picture. Once the silver market "blows up", due to the extreme/disconnect between supply and demand (and rampant fraudwith respect to inventories), the price of silver will go straight up. Indeed, it can be expected to rise from five times to ten times current prices with little to no effect on demand. This is a demand "picture" which is unprecedented in the history of commodities. Then, once the price of silver reaches some new price-plateau (at some three- or four-digit number), new fundamentals will evolve (specifically with respect to silver as jewelry) which will serve to keep silver at an elevated price - and not suffer some sickening collapse, as would normally be expected with a commodity which had "spiked" in this manner.

To keep this series to a minimal length, I have been forced to briefly summarize a large number of fundamentals which (as I have stressed) are essentially unparalleled in the history of commodity markets. This means that the reaction which will take place in the silver market when rampant fraud and depleted inventories are exposed will also be unlike anything we have ever witnessed before in our personal experience. And every day that silver remains so grossly under-priced, all of these fundamentals simply get stronger.

As a precious metals commentator, I would never discourage investors from adding to their gold-holdings. For many different reasons, gold also remains under-priced - and as the perfect "monetary" metal, all investors should have some gold holdings in their portfolio. However, at Bullion Bulls Canada, we have been first-and-foremost "silver bulls".

Today, silver is one of only two forms of "good money" (along with gold) - at a time in history when all the "bad money" (i.e. un-backed "fiat currencies") is in grave danger of plunging to zero. However, even if silver had never been used as "money", or even if there was not a great need for "good money" today, the merits of silver in terms of basic supply/demand fundamentals represent an unprecedented investment opportunity.

While those investors who have been accumulating silver for many years may curse the continued market-rigging of the bullion-banks, for newer investors, the nefarious deeds of these miscreants can be thought of as "keeping the train at the station". Today, investors still have one, last opportunity to buy silver at (literally) "once in a lifetime" prices. When silver explodes above $100/oz, it will never return to current, absurd price levels.

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