Economics 101, when something has high demand and low supply (production), what would happen to the price? Imagine there are only 5 cars available for sales in the market and there are 10 eager buyers bidding against each other, what would happen to the car price? Simple, the price will simply shoot up!
Similarly for silver, in 2011, the total production was about 24,000 tonnes and total demand was about 32,000 tonnes. Demand greater than supply. In fact, for the last 60 years (since 1950), almost every year the industry used up more silver than being produce.
Tighter supply, coupled with increased industrial and investment demand, means that the only way for silver to move is up.
Billionaire investment guru Jim Rogers has become a big supporter for silver, insisting silver is now a better investment than gold. He added that if he were to invest in one metal today, it would be silver. Indeed, silver is the only metal that has yet to reach a record high in recent history; it remains lower than the peak price of $50 per ounce that it hit 32 years ago. Gold has historically been valued anywhere between 12 and 16 times more than silver, but it is currently worth about 50 times more than silver, making silver an even better bargain! Silver is more volatile than other metals, which gives investors more opportunities to profit.
Right now, the market is anticipating Federal Reserve Chairman Ben Bernanke’s speech at the annual economic policy conference in Jackson Hole, Wyoming on August 31 2012. At that meeting, Bernanke will make his first public appearance since the release of the latest Fed minutes, which suggest that the central bank is ready to move quickly to jump start the country’s economic recovery. Further quantitative easing is expected to trigger another round of asset-buying interest across the board.
If Federal Reserve does trigger another round of Quantitative Easy (QE3), that means the Dollar will be further diluted and consequently affect our Ringgit. All currencies are pegged to US Dollar as US Dollar is still the world reserved currencies. When that happen, our Ringgit will again worth less. Saving your cash into physical silver (the real money) would be a smart financial choice.
Educate yourself with the correct investment knowledge before investing in silver. Invest in yourself for your better financial future. Download the eBook: Practical Guide For Investing Silver In Malaysia today!