What are the compelling reasons to invest in silver now?
Michael DiRienzo, Phillips Baker, Richard Daughty, Roger Wiegand, Doug Dobbs, John Embry, David Morgan
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Host: Regardless of the gold to silver ratio and where it falls, one thing is quite clear. The analysts we interviewed are quite confident that the future of silver is very bright indeed. Particularly, when you consider the explosive growth in new industrial uses, many of them so critical to health care, technology, transportation, and energy. Add to this the fact that a weakening dollar is leading to new investment demand in an already thin market. When you then factor in a new global demand spurred by emerging nations, could it be that this precious metal is uniquely positioned to be, as one of our experts projected, silver the investment of the decade?
Mike Maroney: Well first of all, I think it's important to put things in perspective, but if you take all of the gold and all of the silver and you combine those two assets together, and then you look at the float as far as Apple computer is concerned, Apple computer is worth more than all the gold and silver. What we're looking at is a fairly thinly traded market. When you talk about the fact that the market hasn't moved into the mania phase yet, the bottom line is that the true catalyst that has moved gold and silver over the course of history hasn't even really started to kick into gear yet and that's inflation. What we're seeing right now is we're seeing more and more money printed, but that money hasn't really started to circulate in the system and the money multiplier effect hasn't taken hold and we haven't seen interest rates start to increase because of inflation. Once we see inflation surpass 5%, 6%, 7%, that's when you can't leave your money in a bank, because the negative real return, as far as interest rates, will force you to make other decisions. When that money starts to get freed up and starts to flow into a very small investment, as far as a thinly traded product, the price potential for silver and gold is very extreme.
Michael Dirienzo: I think, you know, what excites us at the silver institutes and excites most players in the market is the fact that silver has so much room for growth. I mean, there are other technologies and other scientists inventing new medical applications every day.
Phillips S. Baker, Jr.: The industrial demand for silver is strong and is growing at such a rapid rate that I do not see silver prices doing anything but go up in a general sense. I mean, you'll have volatility where it will go down and it will go up, but generally you should see silver prices increase, given the demand for silver, particularly, the investment demand.
Richard Daughty: This thing should be selling for over a 100 right now, but it's not. What a bargain!
Roger Wiegand, PhD: In 2005, I did a very elaborate study, a forecast, to see for myself how far silver and gold would probably go. It was just a forecast prediction. At that particular time, I came up in 2005 with a number for gold at $2960 and silver at $156. Now since that time, that's been several years ago, markets have changed a lot and the prices have changed a lot as we as the technical and fundamental aspects. Consequently, what we're seeing now is silver prices at $156 seem to be too modest for us for the future. How high is high? We can't really tell. All we know is that it seems unlimited.
Mike Maroney: We've seen investment demand in silver increase from 2009 at 5 billion and in 2012 it's expected to exceed 10 billion; so it's doubled in 3 years. If we see that sort of exponential growth over the next 10 years, where could the price of silver be? I can't even begin to imagine.
Doug Dobbs: We are now seeing the ingredients for a next leg up that can push this thing up to completely new highs, not only over the recent highs, but over the inflation adjusted highs of 1980 where you saw $50 silver. An inflation adjusted high today might be $100 or $150 per ounce.
John Embry: As far as I can see, most of the above ground inventories are gone and when we reach that inflection point, the price is going to skyrocket.
David Morgan: I think, it's the one investment that's, probably, not only the best investment, but it's probably the best over all investment from the standpoint is that you're buying real money, you're buying something that is historically known, you're buying something that is negotiable worldwide, and you're buying something that is in high demand in all kinds of aspects on a worldwide basis, and it's not going away.