3 Ways to Play the Coming Silver Shortage
Across the country, coin dealers are scrambling to fill orders amid massive silver shortages… And as the severity of this shortage deepens, silver investors stand to profit considerably
Silver dealers all over the country are running out of the "white" metal – fast. Buyers are waiting months for delivery of coins, bars, and junk silver.
In fact, silver supplies all over the world are at their lowest levels in 200 years – and dropping. Right now there are less than 200 million ounces of above-ground silver reserves.
According to Van Simmons, president of David Hall Rare Coins:
"There is an acute shortage of physical silver available at this time. The U.S. Mint is out of the Silver Eagles…[and] silver bars in the 100 ounce size are unavailable at this time. In 30 years I have never seen that."
Compare that to 1950 when the U.S. alone had 2 billion ounces of silver reserves.
So where has all the silver gone? Year after year, its been used up to fill the gap between supply and demand. In 2007 alone, silver demand was at 843.7 million ounces while silver mines only pulled 670.6 million ounces out of the ground.
Meanwhile, Industrial demand for silver, especially in electronics, has risen at a rate of 7% a year – primarily in growing markets like China and India, countries which have recently depleted their silver supplies and are now relying completely on imported silver.
And yet, despite an increasing industrial demand for silver and worldwide supply shortages, prices have remained relatively low at just over $12 an ounce. That's still 76% below its historic high.
Basic economics teaches us that increased demand, mixed with a dwindling supply, leads to one result – higher prices.
This imbalance won't last forever. And whether you buy silver bullion directly, use an ETF, or invest in a silver mining stock, this precious metal could give your portfolio a nice boost in 2009…
The Right Time to Buy
In addition to basic supply and demand, there are several more reasons silver will make a vital addition to your portfolio in the current market…
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