World silver supply, gold/silver ratio, annual industrial consumption . . . you’ve heard so many numbers and figures that your head is spinning. We understand that numbers can be confusing, but what do all the statistics mean for the average investor who is just trying to protect his portfolio and produce some income in a tough time for Wall Street? Here’s 3 easy statistics about silver you need to know:
- 1. The gold/silver ratio shows amazing potential for silver. So what is the gold/silver ratio anyway? Miners and geologists estimate that roughly 10 oz of silver is mined for every oz of gold. This would naturally tend to make gold worth about 10x the price of silver. However, because of numerous factors (including perceived value and demand) analysts have noticed that throughout history gold tends to generally cost roughly 16x as much as silver. Given this monetary 16:1 gold/silver ratio, with the current price of gold over $1,800/oz, silver should be over $110/oz. This 16:1 gold/silver ratio is one more reason that silver is under-valued and has plenty of room to grow.
- 2. The supply of available silver in the world is decreasing . . . fast. In 1980, it is estimated that there was around 2.5 billion oz of above-ground silver bullion available for investor purchase. Today, those numbers are a mere fraction of what they were – roughly 200 million oz were available in 2007. The government stockpiles of silver have also been part of this sell-off. Government supplies world-wide sat at over 3 billion oz in 1980. In 2007, that number was about 50 million – an 80%+ decrease. The US government supply of silver in 2010 was only 7 million oz – down from over 1-2 billion oz several decades before. The bottom line is that the available silver supplies in the world aren’t getting any bigger.
- 3. The demand for silver is increasing. In 2010, the investor demand for silver rose by 40%. Silver used in the manufacturing of coins and bars increased 28%, and the amount needed for ETF’s increased as well. And despite all this, the mining production of silver in 2010 rose a paltry 2.5%. Also, the amount of “registered” silver available on the COMEX (US commodities exchange) has decreased by 70% in the last 2 years. Meanwhile, silver continues to be used in manufacturing and industry around the world. Over 480 million oz of silver were used in 2010 for industrial application, and another 318 million oz were used in jewelry, silverware, and coins. And that’s just for the 2010 calendar year. Consider all the uses for silver:
- Batteries, Bearings, Brazing and Soldering
- Chemical Catalysts
- Electronics (flat screen TV’s, iPods, and much more)
- Medical Applications and Water Purification
- Mirrors & Coatings
- Solar Energy
- Silver Jewelry, Silverware and Table Settings
Whether you’re a life-long investor in silver or you are considering it for the first time, you need to know what’s going on. Physical silver will eventually be hard to get, and it’s probably only going to get tougher as more investors lose confidence in Wall Street and start investing in physical gold and silver. Consider adding physical silver to your portfolio today. With Cornerstone’s policy of no minimums, low pricing, and friendly service, there’s never been a better time to start!