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Falling Supply & Surging Physical Investment, We Could See Some Crazy Silver Prices

As I have stated over-and-over again, the coming ENERGY CLIFF is going to change the world as we know it.  Thus, the value of most Stocks, Bonds, and Real Estate will disintegrate when global oil production heads south in a big way.  And, we have likely already begun the process, due to the massive economic lockdowns in combating the global contagion… which seems to be heading into a second wave.

While the global contagion impacted global silver mining the most over the past several months, I believe it will deteriorate even further in the second half of 2020.  According to a Reuters article, Mexico mining output to shrink 17% in 2020: industry group… this could impact silver supply considerably as Mexico is the largest silver producer in the world.

  1. The lockdowns of mines will impact two months of silver supply, mostly April & May.  Most of the global mine supply affected by the worldwide contagion took place in Mexico and in South American, where most of the silver is produced.
  2. Even after the world economies start to reopen, along with the mining industry, there has so much damage done to these economies; it will also hurt Global GDP in the second half of 2020 and likely into 2021.  This will curtail base metal mining where 55% of silver comes from… as a by-product of copper, lead, and zinc production

Global silver production peaked in 2015 at 894 million oz (Moz) and declined to 836 Moz last year.  While global silver production declined since 2015,  world gold production increased from 104 Moz to 111 Moz.  Thus, the global silver mine supply fell 6% since 2015, while world gold production increased by 7%.

The overwhelming majority of investors have no idea how undervalued silver is as an asset.  With falling supply and surging physical investment demand in the future, we could see some crazy silver prices.

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