Regardless, the reason I believe silver will be one of the few KEY INVESTMENTS to own going forward has to do with the dire energy predicament we face… which I label as the ENERGY CLIFF. Unfortunately, most analysts that look at silver as more of an industrial metal do not understand the Falling EROI – Energy Returned On Investment and how it’s impacting the global economy and financial system.
While all this fancy FED FINANCIAL WIZARD OF OZ propping hasn’t destroyed the U.S. Dollar or the faith in the U.S. Treasury Market, it will in time. Just be patient. At that point, those few who own physical precious metals, especially silver, will be glad that they understood that you couldn’t erase 2,000+ years of SILVER MONETARY HISTORY.
THAT’S CORRECT… Over The Past Decade, 5 Billion Ounces Of Silver Mine Supply Likely Lost Forever
The irony of being an ANTI-SILVER analyst will actually be the reason to invest in silver. Again, most analysts look at silver as more an industrial metal. They say the real monetary metal is gold, not silver. However, what seems to be seriously overlooked by these analysts is that silver is still by far the most acquired investment metal, IN TROY OUNCES. From 2010 to 2019, total global physical silver investment demand was 2.3 billion oz versus 345 million oz for gold. Sure, the Dollar amount of investment gold was much higher, but ounce for ounce, silver is the largest physical metal investment market in the world.
With that being said, silver investors should be happy to know that 5 billion ounces of world mine supply over the past decade is likely lost forever. The term I use for this lost silver supply is “ECONOMICALLY LOST” metal.
Some precious metals analysts, such as Jan Nieuwenhuijs of Voima Gold, stated that there was a lot more above-ground silver in the world than what the Silver Institute discloses as “Identifiable above-ground stocks.” Jan argues that there are 1.6 million tons or 51 billion oz of above-ground stocks in the world, 20 times higher than the quoted 2.5 billion oz of physical investment silver stocks by GFMS in the 2019 World Silver Survey.
Approximately 60% or 5 billion oz of the total 8.35 billion oz of silver mine supply from 2010-2019 was economically lost. Now, compare that to the estimated 123 million ounces or only 12% of the gold mine supply lost over the past decade. Thus, 88+% of the 1+ billion oz of gold mined over the same period can still be counted as Above-Ground stocks. Most of the gold that was economically lost 2010-2019 was in the technology sector. According to the World Gold Council, over those ten years, gold consumption in the technology sector was 116 million oz. While some of this high-tech gold is recycled, 90% of global gold recycling comes from scrap gold jewelry (Source: World Gold Council).
Silver vs. Gold: Mine Supply & Recycling (2010-2019)
- Global Silver Mine Supply = 8.35 billion oz
- Global Silver Recycling = 1.86 billion oz
- Silver Recycling-Mine Supply Ratio = 22%
- Global Gold Mine Supply = 1.03 billion oz
- Global Gold Recycling = 424 million oz
- Gold Recycling-Mine Supply Ratio = 42%
Because only 8% of world gold demand is in the technology sector (2010-2019) versus approximately 50% for silver industrial consumption, most silver mined is economically lost forever. During the ten-year period, 4.8 billion oz of silver was consumed in the industrial sector. On average, only 20% of the annual industrial silver demand is recycled. Thus, less than 1 billion oz of that total 4.8 billion consumed in the industrial sector will likely be recovered.