Why has silver exploded to $23US this last week?

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Why Has Silver Exploded Past $23 US this week?                    July 26, 2020

Silver is up over 28% year over year and from the March market crash it’s up from $11.65US to today’s $23US…an astounding 80% plus return! Gold just hit $1900US and is up over 23% this year…last year it did 18%. We are clearly in a precious metals bull market and I believe we have just begun – with many factors driving demand. Both gold and silver are very small markets and less than 0.5% of individuals and financial institutions have positions. If major money continues to flood this sector, I see large increases in the years to come.

For almost a decade I have encouraged family, friends and clients to have a position in physical gold and silver with a heavy leaning towards silver. Why? Silver is a precious metal and is scarce, but it’s used in 100’s of high-tech and industrial applications. In fact, around 60% of silver in used for industrial, medical and tech purposes because of its incredible properties. Silver is a superconductor and used in every computer, digital camera, smart TV, solar panel and cell phone on the planet. The medical industry uses silver due to its incredible antimicrobial and antibacterial qualities. The car industry uses 36 million ounces of silver annually.

But what really got my attention regarding silver was its investment purposes which make up about 25% of its global demand. Silver has been used as money for thousands of years due to its beauty and scarcity. Annually, about 800 million ounces are extracted from the earth at great cost and new supply has become harder to find. In fact, the annual production continues to shrink the last few years which is one of the key factors in silver’s rise in price. Silver and gold have been excellent hedges against both inflation and deflation. Now these realities are playing out due to excessive currency printing globally and extreme over-valuation of mainstream stock markets and real-estate in many regions of the world. Canada is one of those regions.

Another extremely important factor in silver’s price rise is the serious problem of central banks printing fiat currency in utter abandonment and governments around the world joining the party. The Canadian dollar has lost 96% of its purchasing power since the early 1970’s. Our current government – due to its extreme fiscal policies – has just had our credit rating lowered from AAA to AA+ by Fitch Ratings. There are real consequences when a government goes into serious deficit spending and its currency becomes less worthy; if they continue on this path it will truly become worthless! So, if you are wise and wish to protect your wealth, you will have a significant position in physical silver which central banks cannot print.

In contrast, gold is mainly a monetary metal and the purest form of money on the planet. Historically, he who holds the largest cache of gold holds the power. This has been true for millennia and we see the wealthiest families quietly holding large portions of their wealth in gold. Most central bankers publicly trash-talk gold, while amassing huge tonnage of gold in the last decade to protect their institutions. Some of the smartest financial experts and institutional investors (like Ray Dalio, CEO of Bridgewater Assoc.; largest hedge fund in the world) has warned that “cash is trash” and advises buying gold. Many eastern countries like China, Russia, India, Iran and dozens of others have been accumulating large amounts of gold and silver for years. What do they know that most people don’t?

I won’t go into detail regarding the silver and gold price manipulation by central banks and their bullion bank cohorts, but many of the biggest banks in the world – including J.P. Morgan – are currently under criminal investigation due to these unethical practises. I will just say that they have been using paper contracts (futures), derivatives and spoofing (fake trades) for decades to keep the price of precious metal down. However, due to the growing shortage of real metals, they are losing control of the manipulation and this is another reason for silver and gold’s significant price appreciation in the last couple years.

Currently, due to the ongoing Covid-19 crisis, many silver mines have had to shut down. In fact, just this week two of the largest silver mines in Peru (owned by Pan America Silver) were shut down due to Covid for months potentially. This is creating a serious silver shortage worldwide just as the demand continues to grow. The fundamentals of supply and demand are significant factors in the shining price of silver.

So, let’s put this all together. We have significant silver shortages, inflation fears, growing global demand, people losing confidence in their governments and central banks, bullion banks under criminal investigation and people are finally realizing that we have very serious economic issues in front of us. Therefore, I would strongly suggest you consider taking a position mainly in silver, but also a small portion in gold. All the major indicators point to price rises in precious metals as people lose confidence in paper currency and exchange it for the real money…silver and gold!

If you have questions please reach out to me. I have been helping people buy precious metals from one of the most trusted bullion dealers in Canada for almost a decade. If you need guidance please reach out to me at bill@fivefoldfinancial.ca or 778-539-7107.

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