If you are a manufacturer and you suddenly can't get the materials you need to make your products or the price of these materials rises dramatically what do you do? You raise your prices and simultaneously begin looking for alternative materials But what if there is no viable substitute and competition will not let you raise prices and still keep your customers? You panic, and you try to build your inventory of the materials you need. What happens when you start to build inventories of a material that is in strictly limited supply and is already rising in price? The price goes up even faster! This is what is about to happen with silver bullion. Supplies of silver are getting more and more scarce while demand is growing. When deliveries to manufacturers starting impacting their schedules, they will begin stockpiling silver bullion which is going to drive silver prices up fast. Silver is one of the most useful of all precious metals with literally thousands of applications besides jewelry, ornamental items (like silverware, platters, figurines, etc.), and silver coins. And unfortunately, when silver is used for these industrial applications, it is normally used up and gone forever. Most companies using silver in their industry keep lean inventories using the JIT (Just In Time) manufacturing methods. In other words, they order the materials needed so they arrive "just in time" to use it in their manufacturing process; this delays the cost of the materials and minimizes inventory storage and tracking costs. Furthermore, world production of silver is only meeting about half of the world consumption of silver with Government inventories making up the difference. But now, Government inventories around the world are completely or almost completely depleted. Also, since the U.S. Geological Survey has discovered there is very little silver left in the ground (they state it is the most rare of all precious metals still below-ground), the supply of silver bullion is "strictly limited". When the inevitable delays in silver suppliers kicks in, these companies are going to try to build their inventories. And when this happens, silver prices are going to start rising quickly. The real issue here is it only takes one significant manufacturer using silver to kick off this trend, and we have seen it happen before with Palladium. The Palladium scenario was based on fear of shutting down assembly lines due to late deliveries; there never was a real supply problem for palladium. Silver bullion, however, is completely different; there is a major supply problem brewing. If just one major manufacturer begins to hoard silver bullion, it will tighten the supply (and raise the price) for all the other manufacturers. What types of manufacturers are we talking about here? Just about any manufacturer that makes batteries, steel bearings, silver brazing, plastics or adhesives, polyester textiles, magnetic tapes, metallurgy, electrical conductors, electronics, pharmaceuticals, eyeglasses, solar cells, and lots more. And it only takes one of these suppliers anywhere in the world! An explosion in silver prices is coming; it's inevitable. You need to protect, and ensure, your financial future, and buy silver bullion now. Visit http://eSilverDollar.com to learn more and to discover how to get your silver below market price. Join this insightful blog's free silver newsletter and find out how to get a rare 90% pure silver Mercury Dime for free as well. Written by Dr. Bryan Stoker http://esilverdollar.com/category/buysilvercoins/ Last Updated on Saturday, 15 January 2011 10:55 Author of this article: Dr. Bryan Stoker Show Other Articles Of This Author Lease Repayment Defaults Force Silver Bullion P... (04 January 2011) Atomic Talking Watch Sets Itself & Literally "T... (02 January 2011) The Silver Short Squeeze Blows Silver Prices Th... (27 December 2010) NEWSFLASH: "Silver Prices Skyrocket Past Gold!" (21 November 2010) Would You Rather Have $1,000 In Gold or Silver? (14 November 2010) .
As I was reading this post, i remembered that palladium was heavily bought up by some car companies ( they need Pd for catalytic converters ), and when Pd crashed they had to write of some major losses. Great article, and going to eSilverdollar.com now
yeah this is something i've been speculating on for some time now. and on that note, i think i better order a few coins! oh yes, the point that's missing from this, the market in 'paper silver' is holding this process back. but at some point the inability to satisfy silver demand will go from a growing issue to an in your face on the evening news type situation. silver is used in so many industrial processes, at some point physical silver speculation is gonna really bite the market price. it's been going on now for i figure 5 years in serious volumes, silver speculation lagged behind gold quite some ways but now for the first time in probably a long time (i'd like to hear whether this is unprecedented or not) silver looks set to overtake gold. just my opinion. and here i am just liquidated nearly 20 ounces cos my finances are tight... on a traceback...
IMO, JIT causes more grey hairs, stomach ulcers and heart attacks than the wharehousing savings in $ are worth. There are too many things that can go wrong that are out of your control, which is the antithesis of managment.
When I was much younger I worked on a car manufacturer's production line and they used JIT for pretty much all stocks to save them "massive" amounts of money. I used to wonder exactly how much it saved when we'd shut down the production line and send 1000's of workers home on full pay because we had run out of a certain screw or indicator light or some other part of the company was on strike so we didn't receive engines or any of the miriad of other things that used to hold us up. malachii
yup, JIT inventory management hasn't turned out to be a very good idea after all. someone has to take the job of stacking up a month or two's inventory or every time the tungsten mine in wherever has a tunnel collapse the whole production line comes to a standstill when nobody in the supply chain is *saving*. a lot of people don't realise that the whole thing that got us to this place of wealth was stacking up a decent reserve aside for the future. i guess when they inflate currency constantly it's inevitable that people don't want to hold onto disappearing cash and then they get in this mindset of lean warehousing and start waving their hammer at everything even though only one of the things is actually a nail (the cash).
actually, to be precise, it's the antithesis of entrepreneurialism. the whole point of starting up a new enterprise is not just cashing in on an unrecognised unmet need in the marketplace, it's also equally applicable to the situation of shortages, those of us who have stacked something up are immediately in a position to perform the entrepreneurial role because nobody else did it. perhaps with the clear signs all around that the climate is in a particularly volatile mood people could make a lot out of stacking not just silver but other things as well, obviously the more survival critical things make a lot of sense to start with but moving outwards from the core of urgent supplies there is still many opportunities. now we just need to get the government out of our way so we can rapidly adapt our tactics to changing situations. hopefully government is presently nailing the last nails in its coffin.
