Part VI: Overlooked Silver Just Waiting to Be Scooped Up

Now here’s an interesting thing about those silver mines: In the old days, the Spanish/Mexican miners would only mine the visible silver. They didn’t realize that the black rock around them was thick with silver ore!

Plus many of Mexico’s silver mines fell into decline. In the 20th Century, as political winds shifted, as the price of silver cratered, it often became more trouble to mine the metal than it was worth.

But now the price of silver is rising again. And the Mexican government and people alike are eager to work with companies that will reopen and recapitalize the old mines.

And I believe this is a great time to buy silver. The metal is well off the highs it hit earlier this year, but its bull market is still intact. It has gone through a consolidation that is a normal and necessary part of any bull market. If you look at a chart of silver, you can see that it is coiling up like a spring. A big breakout should come next. I believe there are many forces driving silver higher. Here are some examples ….

• According to research consultancy CPM, in 1990, there were around 2.2 billion ounces of silver held in above-ground stocks. As recently as 1995, there were 1.4 billion ounces of bullion in stockpiles. Today, there are probably only about 300 million ounces. That's a 50-year low.
• In 2005, there was a gap of 35.5 million ounces between fabrication demand for silver and the conventional supply from mine production and scrap. Industrial demand for silver is hot and getting hotter. Silver is the metal that is the best conductor of electricity. Uses for it are growing. Silver is substituted for lead by companies making electronics for environmentally conscious European market.
• The silver ETF, the SLV, is a roaring success. Already has 104,208,000 ounces of silver. It recently filed papers to issue another 16,822,727 shares in its silver trust, representing, at 10 ounces per share, another 168 million ounces of silver. That will effectively increase the size of the trust by 150%. This is a huge new demand on the silver market – HUGE!

The supply of silver from mines has not been able to meet demand for years. There are new silver mines coming online, but they’ll probably be playing catch-up for quite some time to come … potentially for years.

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