Just got to thinking, regardless of the perceived scarcity of silver and its increased dollar value as the dollar tanks, I got to wondering, will demand for silver increase in certain industries as the economy slows down or totally tanks, or will it remain primarily as a monetary medium if the economy slows down so much that industrial demand is negligible? Or is it even likely that industrial demand for silver would drop appreciably if the economy goes further down the crapper or TSHTF?
The ratio silver/gold follows S&P (SPX) rather closely. That means silver demand increases as industry goes to work, which is fairly obvious once you think about it. But that assumes the USA drives the market, which is not true any more. China and India are building up and will soon surpass the USA in their influence.
A penny sorted is a penny earned!
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They have been in the driver’s seat for a very long time and we are only fooling ourselves if we think we are in control. For the last few year China has been trying to dump dollars as fast as they can and do not want their huge surplus to be all wrapped up in our currency that continues to fall in real value! Interesting too in the 1980 the US decided that there was no strategic value in holding silver so they dumped all the strategic reserves. Around the same time I might add the government started the American Eagle program. Interesting huh! Telling everyone to buy American Eagles and at the same time seeing no need to hold strategic reserves! If you look on page 49 you will see 0 beside silver: You must be logged in to see this link.
Now do not get me wrong I love silver and know it is the poor mans gold but have for a very long time realized that only the collectors and speculators are holding up the value our government could care less about silver. Gold is another story!
By the way I might add one more point... the US is disposing most of what we hold in reserves because they deem it as excess! H. Rpt. 109-452 - National Defense Authorization Act for FY 2007 You must be logged in to see this link." target="_blank">http://a257.g.akamaitech.net/7/257/2422/15may20061514/You must be logged in to see this link.
Every moment has the potential to be a teachable moment and I'm willing to learn. Help me out. If the government has no strategic reserves of silver then how does it benefit them if the price goes up?
Industrial demand for silver as the economy slows
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Posted - 05/03/2008 : 03:50:30
