Agree 100%.
And mining output is driven by demand, which is measured by price.
My point was the potential to greatly expand output if it becomes financially feasible.
Greatly expanding output is a lot easier said than done. Many mines today, especially primary silver mines are teetering on the edge of their maximum ore processing capacities. With clearly evident declines in ore grades, the production abilities of mines will depend on new technologies and/or processing machinery to achieve production levels of previous years.
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Is that really all you took from the Vans analogy? Or are you deliberately skirting the point?
Then you make the same comparison with bitcoin? WTF?
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No, I understood what you were saying and felt that you dismissed the point I made with your Vans analogy. History has shown us that in times of economic uncertainty, money flows into Gold and silver, as well as other "safe" asset classes. It's far from fantastical to think big money could flow into Both markets, especially as we near the end of this current Fiat monetary experiment.
The connection to Bitcoin was only to show how a small market can be blown into a bubble. Bitcoin is at least seen as an asset class and an alternative store of wealth... Even if I think it's a massive Ponzi scheme and has only made it this far to be a prototype to the cashless monetary system we are heading towards.
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BS. I disagree, and explained why current supply can be so easily ramped up. Looks like you only need to open another 5 mines, according to your numbers?
Mining supply can keep up by opening more mines, or digging more ore. But price needs to move first, and in the absence of that, then a supply deficit is but a mere fallacy. Price measures everything.
I guess you didn't read my post, or don't want to see my point? [/QUOTE]
I think you over-estimate the ability of mines around the globe to just ramp up production to meet excessive demand.
As it was mentioned by another member, a Non-primary silver mine isn't likely to ramp up production for a metal that isn't their primary target, yet I could see that easily changing if the price was high enough relative to gold.
One interesting point that I learnt from our conversation is the amount of silver that is sacrificed to process other metals. This is obvious in the ratio of silver to gold found in the ore grades relative to the final production ratios.
The question this raises to me is:
If silvers price reached a 1:10 ratio to gold, would that translate into higher final production ratios for mines simply because less silver would be lost or wasted to target/process other metals? I could see this as being a potential bubble popper in the 1:1 ratio hypothesis. The other major threat would be the scrap metal industry (as I mentioned previously).
None-the-less, a 1:1 ratio environment would not be a natural price and wouldn't last long at all, but IMO still has a good chance of occuring. Even if production was ramped up and our malls were full of "We Buy Silver" shops, I can't see them filling a deficit of 2 billion Oz's.
Further to this, Large companies like Sony, Samsung and Apple would likely increase their orders for silver 10 fold once they learn of a supply shortage. This would artificially increase demand in a very short period and in-turn affect the price significantly.