Will silver shine again?
While so much attention is focused on cryptos now, it might be a good time to step back and look at the big picture, taking into account that an historic mania is in full swing.
My thoughts are drawn back to silver. Here's what I believe are facts about gold and silver.
| Gold | Silver | |
|---|---|---|
| available for investment | 2 billion t oz | 1 billion t oz |
| current price | $1250 | $16 |
| value | $ 2.5 trillion | $ 16 billion |
Although the amount of existing investment quality silver by weight is comparable to that of gold, silver is priced so low that the total value of the silver is relatively tiny.
Silver is not as rare as gold on the Earth; it is at least 10 times more plentiful. But most mined silver is consumed and governments no longer make a point of hoarding silver as they do for gold. So, for some time to come, existing investment quality silver will practically be somewhat rarer than gold.
Thus, a case can be made that the price of silver should be at least 10% that of gold, but as much as 50% that of gold for years to come: $160 - $625 per t oz. And this takes no account of mania conditions.
Silver investors are well aware of these numbers and by now must wonder how much longer the price can be suppressed. Having already lasted much longer than most believed possible, the suppression could go on much longer yet.
But at least one thing has changed. Cryptos have taken the world by storm. They have taken attention away from silver; some doubt that silver will ever be valued again as a form of money.
But what will happen if the crypto bubble pops? The crypto market cap stands at almost $500 billion. That's a lot of money that will be looking for a place to go. And a mechanism is already in place to facilitate the conversion, namely Goldmoney.
Unlike in the past, now only a tiny fraction of the market cap would be needed to buy all the silver in the world. Some billionaire could have done it before, but none did (not since the Hunt brothers tried to in 1980). Now the Winklevoss twins could do almost do it alone.
Who will capitalize on the opportunity? Once the silver is claimed, there will be no hard fork of silver, no silver lite. There is only one element 47. Silver will shine again.