Hello all, Firstly I want to wish everyone a happy and healthy new years. May you achieve your stacking goals in 2013. I wanted to discuss the subject of Silver Mining. Unlike gold, AG mining involves crushing up large volumes of rock formations. It is highly energy intensive and thus subject to the forces of EROI popularized by people such as Chris Martenson and sites like Automatic Earth. Assuming that silver mining is operating under the rules of EROI, that energy prices will increase going forward and world population continues to expand I am wondering what the industrial costs are for silver. Or if you prefer what is the price that industry is willing to pay to access silver for its myriad of uses in todays global markets. I would add the following condition that silver will be used for industrial purposes until certain costs are reached. When the price for silver increases beyond an industry to make a profit from its use they will naturally turn to substitute metals. The reason for asking this question is that many who challenge the idea of silver as money or as an investment claim that silver is an industrial metal. They correctly point out that the majority of silver demand is from manufacturing and so with a global slowdown we can expect prices to fall. I don't fully buy into this argument because investment demand on silver is up as is population and ETFs that favor metals are also becoming more common. So I believe that investor demand may in fact exceed industrial demand so we could in fact see a rise in the price rather than a fall because people will continue to keep silver for hedge/investment/cost certainty and other reasons as well. I think that many who claim that silver demand will fall simply do not factor in the billions of emerging market consumers in East and South Asia. So I was wondering what the silver stackers feel about this. Specific feedback is especially appreciated as I reckon there are already plenty of hardcore silver stackers ready to "defend" their positions with a knife if necessary Just in case you didn't know what is involved in mining silver, Endeavor mining has posted a couple of good videos on the subject http://www.youtube.com/watch?v=7kPWU-knyCk http://www.youtube.com/watch?v=yGGUgC7V-vs I am looking forward to any and all responses May another year of volatility and potential yield profits to us all
Missed the original post for some reason. I don't have anything "specific" to add. Basically I would note that: 1. Investor demand will always drive a price further than industrial demand (because unlike investors, industry are driven by explicit profit/loss calculations). 2. Related to 1., what is the industrial demand at different prices? No-one knows. At some price point demand for any metal will fall to near zero (or zero) and depends on a lot of factors with the last being substitutability with another product (you no doubt know all the possibilities but Graphene, for example). Is silver's at $100/oz, $500/oz, $2,000/oz? No-one knows. 3. With respect to investment demand, by far the biggest driver into sub-20 GSR territory is remonetisation. As people have pointed out many times, the absence of a substantial stockpile severely limits this possibility for many years. Probably lots more could add but I think you know all this stuff and I wouldn't be adding anything for you.
