SILVER TO $250.00 PER OUNCE

2002-03-01

return to silver information listing

Advice from a rich man does not always make as much cents as words from a wise man.-- WJ.Murray

If you are interested in silver read Ted Butler. Check out his web site at www.butlerresearch.com

Silver at $250.00 per ounce sound crazy?

How about the scores of dot com companies that went from pennies to hundreds of dollars all with hot air. Now that was crazy.

Do you have house insurance? Do you have car insurance? Do you have life insurance? Do you have financial insurance?

What is financial insurance? What could have been used for financial insurance in Argentina?

Ten percent (10%) of your assets in gold and silver will protect the other 90% of your wealth.

Laws do not need to be passed for people to accept gold or silver in payment.

People talk about Argentina’s currency losing 50% of its value in a matter of weeks. What about Canada losing 50% of the dollar? The difference is that it just took longer in Canada. Watch Japan.I wonder why the Japanese are buying gold, that barbaric relic.

We have used all, the above ground stockpile of silver [about 10 billion ounces in 1942] plus all that has been mined since, what will the next 60 years be like for supply and price.

I believe silver will lead the way for gold. Why?

The powers that be can use paper gold to keep the price of physical gold down just as they are using paper silver to keep the price of physical silver down.

The difference being that once physical silver disappears [in about 6-12 months] paper will not work any longer.

There is talk that silver will be $15.00 to $20.00us by the end of the year. I disagree because if silver goes to $15.00 to $20.00 it will draw a lot of attention and I think it will go higher just with the shorts covering their positions [the ones that can]. The short position of silver is unbelievable.

Once the general public jumps in the sky’s the limit.

The general public never buys gold and silver when it is cheap, they only start buying when it gets very expensive.

We have run a deficit in silver of about 100 million ounces per year for the last 13 years.

Just because a product is cheap does not mean there is lots of it.

When investing one is to buy low and sell high.

There is more gold above ground than silver.

Incas of Peru called silver "the tears of the moon."

Based on its 1860 dollar value, silver should be valued at over $100.00 per troy ounce.

Silver values are now at their lowest in history but the cost of recovery is at its highest.

Overall Percentages of Silver Use

Photographic materials............................................................................40%

Durable electrical and electronic products, alloy and solders...................30%

Electroplated and Sterling ware, jewellery, coins and medallions............ 22%

Catalysts in chemical manufacturing..........................................................6%

Health Industry [mostly dental amalgam and treatment of burns]............2%

Photographic materials

When Joseph Nicephore Niepce created the first photographic image in 1826, it was silver nitrate that made it possible.

Silver is unique in its ability to react to light, forming latent images that can be developed to produce photos and motion pictures.

The photographic sector could absorb 270.5 million ounces of silver in 1999, a 5.2% increase from 275.1 million ounces last year. Silver use in jewellery and silverware is projected to rise 4.0% this year to 304.2 million ounces from 292.6 million ounces in 1998.

Some say digital cameras will slow the use of silver. This might happen in 10 –20 years from now.

With a major recession or depression coming silver use will drop but so will production so one will offset the other and we will still have a deficit for years to come.

Durable electrical and electronic products, alloy and solders.

Ordinary household wall switches which normally carry high electric current for electrical appliances use silver because it does not corrode. The U.S. electric switch market is a $1.5 billion market.

Today, switch manufacturers use high-performance silver for ordinary household switch and circuit breaker contacts, since less expensive metal contacts have high resistance which can overheat; this consideration of liability assures the public of continued preference for silver in switch contacts. Extended warranties mean that industry cannot chance even one failure in a million _ that level of performance requires silver.

Silver has been the metal of choice from the dawn of electricity, because of low contact resistance, high thermal conductivity, mechanical wear resistance, chemical stability, low polymer formation and cost effectiveness.

Of the metals, silver is the best conductor of heat and electricity; consequently, it is used widely throughout industry. Including photographic demand, some 845 million ounces were used in 2000. Since 1990, demand has exceeded production and secondary recovery by 1.39 billion ounces. Now, a recent development appears set to increase demand by 50 million ounces annually within ten years.

The discovery of revolutionary high temperature superconducting (HTS) compounds in 1986 led to the development of a radically new type of wire for the power industry-the most fundamental advancement in wire technology in more than a century.

HTS wire carries 140 times the electrical current of copper wire and relies on silver for its flexibility, conductivity, and strength.

Silver is the crucial element in HTS because the ceramic core of the wire is brittle. But, when encased in silver, the wire can be drawn out to one-sixteenth the diameter of human hair and can be bundled and wound for use in electric motors. Further, the silver sheathing provides a protective and benign barriers for the ceramic. Silver is the only material that works in this unique application. Studies have shown that the greatest amount of electric current flows in the superconducting oxides where they touch the silver.

Although HTS wire has the potential for multiple applications, two applications appear set to have the greatest impact on electricity, both its delivery and consumption. First, the Department of Energy is spearheading (funding) a national program to increase the efficiency, reliability, and capacity of America's electric power delivery system. The goal is to reduce the nation's reliance on imported oil by reducing transmission losses in conventional distribution systems, which can be as high as 8%. Eventually, though, silver-encapsulated HTS conductors will be incorporated into the complete range of electrical devices from the largest electric motors to toys.

The development of HTS wire is revolutionary, the greatest advancement in wire production in 100 years.

HTS wire replaces copper wire. Approximately 24% of newly mined silver comes from the production of copper. As HTS wire usage becomes widespread, it will reduce the demand for copper. As the demand for copper slackens, so should production. Consequently, use of HTS wire, which is expected to require 50 million ounces annually within a decade, could result in less silver being mined.

From Silver: the Great Conductor by Bill Haynes www.certifiedmint.com

When the first telegrapher tapped out his code in 1832, silver was the electrical contact that made the current flow.

A universal safety feature of every automobile produced in America, and most throughout the world, is the silver-ceramic lines fired into the rear window. The heat generated by these conductive paths is sufficient to clear the rear window of frost and ice.

Silver contacts in membrane switch panels are now standard in control panels for machinery, chemical industry processes, railway traffic controls and elevator call buttons, to name a few. In 1996, almost all of the 72 million personal computers manufactured worldwide were controlled by silver-membrane switches, plus almost all of the control panels for microwave ovens, automobile dashboards, electrical appliances, elevators, etc.

Silver imparts special properties to aluminum alloys. It's addition to aluminum has provided the strongest cast aluminum alloy known, now used to advantage in aircraft such as the Air Force C17 transport and in the Army's Apache helicopter. A new silver-lithium-aluminum alloy is the strongest wrought aluminum alloy known. It has been used on several of the NASA space shuttle missions.

Many batteries, both rechargeable and disposable, are manufactured with silver alloys as the cathode. Although expensive, silver cells have superior power-to-weight characteristics than their competitors. The most common of these batteries is the small button shaped silver oxide cell (approximately 35% silver by weight).

The silver battery provides the higher voltages and long life required for quartz watches. In fact, over 1.2 billion silver oxide-zinc batteries are supplied to world markets yearly, including miniature sized batteries for watches, cameras, and small electronic devices and larger batteries for tools and commercial portable TV cameras.

In addition to button cells, silver remains the industry standard for systems requiring absolute reliability. “There's always a trade-off,” explains battery consultant Robert Morey. “But silver has a proven track record for over 50 years, and in products where safety and reliability are important, silver is worth any premium you might pay.”

Silver is used in silk-screened circuit paths and membrane switches. Every time a homeowner turns on a microwave or television, he activates a switch with silver contacts. The majority of computer keyboards also use silver membrane switches.

The low-current capacity of membrane switches, normally rated for a life of 20 million cycles, matches the low current used for digital electronics. Typically, the membrane switch is made of a conductive ink of silver flakes in a polyester binder with carbon. This film is silk-screened in an electrical circuit pattern onto each of two Mylar sheets. The two surface patterns of silver face each other so that the touch of a finger will make the contact. A latching transistor circuit is simultaneously activated to keep the circuit closed after the membrane is released. In 1995, the value of silver-based membrane switches was estimated at $33.2 million.

Silver facilitates the joining of materials (called brazing at temperatures above 600o Celsius and soldering when below) and produces smooth, leak-tight and corrosion-resistant joints. Silver brazing alloys are used in applications ranging from air-conditioning and refrigeration to power distribution equipment in the electrical engineering sector. It is also used in the automobile and aerospace industries.

Silver's unique combination of properties has been useful to plumbers, manufacturers of appliances that use water, in electronics etc. Silver brazes and solders combine high tensile strength, ductility and thermal conductivity, unusual wettability and the added value of being bactericidal. Silver-tin solders are used for bonding copper pipe in homes to eliminate lead-based solders and provide piping with built-in antibacterial action. For this reason, faucet manu-facterers use silver-based bonding materials and refrigerator manufacturers use them to provide the ductility required for constant changes in temperature of the cooling tubes. With other metals, silver-based alloys provide a melting range from 143oC to over 1000oC. Silver alloys provide strong bonds for ceramic-to-ceramic joints, silicon chips to metallic surfaces and surface-mounted electronic components soldered to printed circuit boards.

Silver paste is used in 90% of all crystalline silicon photovoltaic cells, which are the most common solar cell. All silicon cells used in space to power satellites use silver in the form of evaporated metal to make the electrical contact.

Electricity generated by photovoltaic cells is highly reliable. Sunlight striking silicon cells immediately generates electrons, which the silver conductors collect to become a useful electric current. The conductive silver, which also enhances reflection of the sunlight, is applied in the form of a glass paste with a minimum of 90% silver along the top and across the bottom of the silicon crystal. When fired, the silver forms a complete circuit, collecting solar energy and conducting it to the power supply line. Roofing-tile solar cells can generate sufficient power to provide a house and fill batteries to supply power after dark.

Electroplated and Sterling ware, jewellery, coins and medallions

Silver early proved a desirable medium of exchange; coins appeared in the Eastern Mediterranean around 550B.C. By 269, Rome adopted silver as part of its standard coinage, and silver became the trading medium throughout the world (gold was for governments and the wealthy). Silver trade coins such as the Empress Maria Theresia Taler, first minted in Austria in 1741, are still used where paper is not, e.g., parts of Africa and the Middle East. The Maria Theresia was standardized in 1780 as 28 grams and 8333/1000 silver; 370 million were minted through 1967, and many remain in circulation.

Until the late 19th century, most nations were on a silver standard, silver being in greater supply and more practical than gold. As gold became more plentiful, silver was gradually replaced, though it is still used in some circulating coins as well as bullion coins for investors. In the U.S., silver is used only in bullion, commemorative and proof coins; Mexico remains the only country with circulating silver coinage. Many countries now issue pure silver bullion coins with nominal face values sold at a premium over bullion value. Since 1982, Mexico has sold over 16 million 999-fine (99.9% pure) Libertads. Since 1986, the U.S. Mint has sold 76 million 999-fine $1 Silver Eagles and the Royal Canadian Mint has sold 9.8 million $5 silver Maple Leafs (9999-fine). Australia has sold over 6 million $5 .999 fine Kookaburras since 1990.

Throughout history, silver coins were, and still are in many places, essential for internal and international trade. The Spanish reales ("pieces of eight" containing 0.8 oz. of silver), minted in Mexico and Peru, were used throughout the Americas for generations. And nearly 400 million of the 1780-dated Austrian Maria Theresa thalers (containing 0.8 oz. silver) have been struck over the past two hundred years to serve as trade coins in Europe and Asia.

The U.S. government eliminated silver from quarters and dimes in 1965 and half dollars were reduced to 40%. In the U.S. today, silver is used only in bullion, commemorative and proof coins. Mexico is the only country currently using silver in it's circulating coinage.

During the past decade, the United States, Canada and Mexico began issuing pure silver coins with nominal face values sold at a small premium over their bullion value (not their face value). In 1982, Mexico began minting a 999-fine (99.9% pure) silver Libertad ranging in weight from 1/20 oz. to 5 ounces; over 16 million coins have been sold. The U.S. Mint issues a 999-fine Silver Eagle (a one ounce bullion coin with a face value of $1) bullion coin; over 76 million have been sold since 1986. The Royal Canadian Mint issues a 5 dollar 9999-fine silver bullion coin, the silver Maple Leaf; over 9.8 million have been sold since 1986. Australia issues a 5-dollar, 1 ounce .999 fine silver bullion coin, the Kookaburra; over 6 million have been sold since 1990.

Top Ten Issuers of Pure Silver Coinage (1995) (in troy ounces)

U.S. .............................................. 6,727,235
Federal Republic of Germany........................ 6,619,375
Mexico............................................. 2,049,123
Isle of Man.........................................1,157,017
The Netherlands.....................................1,107,872
China, People's Republic of...........................760,541
Canada................................................657,684
Marshall Islands......................................616,040
Australia.............................................553,365
Austria...............................................501,989
All other countries.................................3,101,632
Total............................................. 23,851,873

Everyone is familiar with silvered mirrors, but now there's invisible silver _ a transparent silver coating on double pane thermal windows that both rejects the sun's heat and traps internal heat. A double layer of silver on glass marketed as "low E squared" reflects away almost 95% of the sun's rays, offering enormous energy savings. The U.S. uses over 250 million square feet of silver-coated glass yearly; even more for silver-coated polyester sheet for retrofitting windows.

Catalysts in chemical manufacturing

Silver's use as a gasket material in the chemical process is due to it's chemical inactivity even under powerfully oxidizing conditions of the Space Shuttle engine.

Silver is also a powerful oxidative catalyst for the chemical process industry. A worldwide inventory of some 30 million ounces of silver are in daily use for catalytic oxidation in it's chemical reactors. The production of polyester fabrics, hydraulic fluids, engine antifreezes, and most flexible plastics, such as Mylar, is made more efficient by the use of silver.

Health Industry

In 1884, German obstetrician Dr. F. Crede discovered that silver killed the virus that caused blindness in generations of children at birth.

Recent research shows that silver also promotes the production of new cells, increasing the rate of healing in wounds and bone. The regeneration of whole areas of lost skin is being accomplished by the use of silver treatment.

Research indicates that silver-based purification systems are effective in disinfecting water. For the home, silver-based water purifiers are becoming increasingly common. Here silver is used to prevent the buildup of bacteria and algae in the filters. Research has also shown that the catalytic action of silver, in concert with oxygen, provides a powerful sanitizer, virtually eliminating the need for chlorine in swimming pools. Polyvalent silver oxide, a highly charged silver, is finding wide application in the treatment of bacterial and viral disease.

The early discovery that water, wine, milk and vinegar stayed pure longer in silver vessels led to its desirability as a container for long voyages.

The use of silver to sanitize water and wounds are among our earliest attempts to control the environment.

Silver has no adverse health effect on humans. In 1991, the EPA dropped the primary drinking water maximum contaminant level because the effect of silver was judged to be cosmetic, and the concentration limit was doubled to 0.1 milligrams per liter. A year later, the agency dropped the human health portion of the ambient water quality criteria for silver for the same reason.

In 1954, the Soviets constructed a facility for the development of biological warfare in Joachimsthal, now in Czechoslovakia. They used water from nearby streams and, for landfill, solid residues from the old mining operations; to their astonishment, the minute traces of the landfill dusts carried throughout the facility disinfected every germ warfare bacteria in the Soviet arsenal. This dust - Movidyn - was so effective, the Czech factory was carted back to the Soviet Union.

Analytical information on Movidyn was apparently suppressed, but so have all reports of germ warfare experiences that went wrong.

Recorded Medical Uses of Silver

by Michael Moone, DriLube Company, Glendale, CA

Finely divided ("Colloidal") silver and several of its insoluble compounds are used in medicine for antiseptic and antibacterial action on mucous membranes. Water soluble ("Ionic") silver nitrate is antibactericidal, astringent, and stimulating.

Silver nitrate (also known as lunar caustic) is currently being used externally as an antiseptic and astringent, for unrinary bladder irrigations, and prophylaxis of opthalmia neonatorum. Solutions of silver nitrate are caustic and very irritating to skin tissues and mucous membranes, and ingestion of the solution causes severe gastroenteritis that may end fatally. Solutions of silver nitrate can not penetrate deeply into skin tissues, as they will react instantly with the chlorides present, and immediately form an insoluble silver chloride precipitate that is extremely sensitive to light, darkens quickly and readily deposits a visible, black colloidal silver precipitate.

Silver salts (both soluble silver nitrate and insoluble silver oxide or halide) form several complexes with different types of such protein substrates as gelatin, peptone, casein and albumin; these are used externally in the form of ointments and antiseptics. The silver - protein complexes containing from 19 - 23% of silver are identified as Mild Silver Protein, while those complexes containing 7.5 - 8.5% of silver are known as Strong Silver Protein, which is differentiated from Mild Silver Protein in that most of its silver is present in the ionic form, and gives a heavy precipitate with sodium chloride solutions.

Facts about Silver and Silver Use

If the Islamic financial center was to put four Islamic Dirhan coins with Islamic theology stamped on them into the hands of 200 million Moslems it would require over 60 million ounces.

Nearly all silver used in electronics is never recovered.

Silver performs the task of switching on or off electric power, our most dependable servant.

Only 25% of silver produced in 2000 was derived from primary sources. This is, in part, a consequence of the scarcity of large silver deposits, which can be economically exploited at prevailing silver prices.

However, the dominance of by-product or co-product silver in total mine supply also testifies to the fact that silver often occurs naturally with a variety of other metals. Silver is typically found in the oxidized zones of ore deposits, or in the hydrothermal veins associated with sulfide ores. This natural association with lead and zinc (which often occur together), gold and copper, results in significant quantities of silver being produced at operations where it is not the primary target nor the principal earner of revenue - in fact, in many cases silver is regarded as a "bonus" of base metal or gold mining.

Whether as a primary product or a by-product, silver is also mined in many parts of the world. In 2000 Mexico, Australia, Peru and the United States were the top four silver producing countries. North America produced roughly one-third of the world's silver last year.

Peru remained the largest silver producer in South America with more than half of its silver generated from lead-zinc mines. Primary mines contributed to over half of the total silver mined in the United States. Australia is home to the world's largest silver mine, Cannington, which alone produced nearly half of all of Australia's 2000 production.

The country with the largest above-ground silver stocks is India, where latest reports estimate a minimum of 3.3 billion ounces, are privately held, mainly in jewellery, tableware and artefacts.

In many instances, silver is not the first so much as the only choice. For example, other substances have been tested extensively, but none can produce photographic images with the quality and detail of silver.

Demand for silver is built on three main pillars: industrial and decorative; photography; and jewellery and silverware. Together, these three categories represent over 95% of annual silver consumption.

As the best reflector of thermal energy after gold, silver plays another role in the collection of solar energy: efficient reflection of solar heat.

The physical silver market grew tighter in 1998, as the deficit that has persisted since 1990 continued to chip away at market inventories.

In 1998 the net deficit in the bullion market amounted to 192.2 million ounces, down from 218.2 million in 1997. Industrial demand is projected to exceed new supplies by 144.0 million ounces in 1999.

One out of every seven prescription eyeglasses incorporates silver.

Silver has a pure sweet acoustic resonance, better than any other metal, and is preferred by musicians for making high quality silver bells and musical instruments.

The electrical/electronics sector -- primarily compact discs -- consumed 148.5 million ounces in 1999.

Sterling became the U.S. standard in 1868.

A cubic foot of fine silver weighs 656 pounds.

Steel has a poor coefficient of friction. A layer of silver between steel ball bearings and rotating engine components reduces friction and increases jet engine performance.

India is the world's most voracious consumer of silver.

Total of US Silver stocks went from 1.25 billion ounces in 1934 up to a peak of 5.9 billion ounces in Nov 1942. They are now out of silver.

For the year 2002 the US will have to buy silver for their coin program.

The highest closing spot price ever per troy ounce of fine silver was $50.35 on Jan. 18th 1980.

Silver's unique optical reflectivity and its virtually 100% reflectivity after polishing allows it to be used both in mirrors and in coatings for glass, cellophane or metals.

The National Defence Silver Stockpile began as a stockpile of 139,500,000 ounces of silver purchased for $180 million:

In previous years the U.S. Treasury provided $180 million of silver for the stockpile.

At that time the silver had a cost basis of $1.29+ per oz.

As of December 1999, the Defence Department's silver stockpile totalled 21.2 million ounces, down 85 percent from its opening balance of 139.5 million ounces.

Here you can see how the stockpile has disappeared at the rate of 250 ton per year ever since 1986 and now is empty.

These stocks were used extensively by the US Treasury/Mint

Europe/England were cleaned out of the majority of their silver back in 1934-1942 and then there was the silver rally of 1980 which brought out a lot more hoarded silver over the following ten years.

So we can see that the visible recorded stockpiles of silver in the US have gone from 5.9 billion ounces down to the current 10 million ounces in 60 years. Now to zero.

What will the next 60 years be like????

That's a reduction in visible silver of 96.5 million ounces (or 3000 tons) a year on average.

Silver to gold ratio is 10-15 to 1

Today gold is at $325.00 silver is at $5.00 which is 65 to 1. Get physical now.

This one shows US Imports/Exports of silver over the last 30 years.

As you can see exports have recently collapsed.

The latest statistics show US consumption at 7,700 tons last year. (approx 250million ounces)

With total global production at just under 18,000 tons. (approx 575 million ounces)

http://minerals.usgs.gov/minerals/pubs/commodity/silver/880301.pdf

Demand globally in 1999 ran at 27,625 tons (888.2 million ounces)

http://www.silverinstitute.org/demand.html

We're currently running a 10,000 ton deficit (320 million ounces)

On an almost empty stockpile (only 1/8 of a years production) whilst consumption is still strong.

If there's 300 million ounces available it's going to disappear fast.

"A word fitly spoken is like apples of gold in pictures of silver." -- Proverbs 25:11

(Courtesy The Silver Institute)

(Courtesy The Silver Institute)

(Material and statistics were adapted in part from the Silver Institute's World Silver Survey 2001 publication.)

600 Year Chart of Silver

Just imagine how pissed off the alchemist of old who tried to turn lead into gold would be if they knew the Banksters today turn paper into gold and silver.

Let's Get Physical

There is a saying that if you want to make money follow the smart money, Warren Buffet purchased 129 million ounces, Bill Gates purchased about 13% of Pan American Silver Corp. PAA tse .

Do you want to buy a silver certificate? Why exchange one piece of paper for another? Get physical!

Will silver go to $250.00 per ounce, who knows, but I can tell you one thing it has to be the buy of the century at $4.45 - $5.00 per ounce.

Regards,

WJ

Bill Murray

A word about “The War on Drugs and The War on Terrorism” Voltaire says it best:

“Those who can make you believe absurdities can make you commit atrocities.”—Voltaire

A Word about Silver Certificates

This is a true story from my sister.

Ripped Off by the Banksters at CIBC the Canadian Imperial Bank of Commerce in Canada

This is my story. The time was March of 1981.

I consider myself to be an average person with average intelligence. A few extra bucks in my jeans and silver seemed like a good investment.

I went to the CIBC in Salmon Arm to buy some and ran into a friend at the bank [someone I always considered smarter than myself] who suggested I purchase the silver certificates as they wouldn’t be so much to pack around. [I didn’t want to tell him I was only buying 50 ounces]

Silver was $12.65 per ounce Canadian at the time. Taking his advice I gave the Banksters $804.00 and received a piece of paper stating I owned 50 ounces of silver. Stamped on the bottom of the certificate was a note saying there would be a storage fee [seemed unimportant at the time].

I left the bank with my piece of paper thinking that I had made the right choice.

Fast foreword twenty years to Sept. 20th 2001 when I decided to go to the CIBC and pay the storage fee and pick up my 50 ounces of physical silver [a 10 ounce bar for each of my grandkids].

To my surprise I was told the silver was not at the bank. Who was I to pay the storage fees to? Who was storing my silver for 20 years?

The girl at the bank made some calls and this is what I was told:

She had never cashed in a silver certificate. After the call she stated there would be a $3.50 charge for each 1 ounce of silver [$175.00] plus storage fees of $112.50. Silver was $4.39 US at the time.

I said I want to pay my storage fees and take my silver. I’m getting pissed off now thinking I will have to pay them for storing silver that they do not have. This started putting doubts in my mind about the banking system.

How many people bought the same 50 ounces of silver that I bought?

Were we all paying storage fees for the same 50 ounces of silver?

Did they even have enough silver to give everyone their silver if we all cashed in our certificates?

The banksters gave me a check for $174.15 Canadian.

Do you want to buy a silver certificate? Why exchange one piece of paper for another?

!!!!!!!!!!!!!   Get physical  !!!!!!!!!!

This article was taken from a Gold-Eagle forum. (Read this fine post and see his conclusion @ end.)

<snip>
ski (03/25/02; 23:40:51MT

My Medium-term Silver Price Prediction

I have been following the evolving silver story for the past 19 years or so. Being curious about how high silver prices might go, I began making a list of major market forces that will come to bear on the future POS. The first time I did this exercise I came up with 29 approaching forces. The list has now grown to 44.

At the end of this post I will have my conclusion for the medium-term (3 to 7 year time period) POS.

Making investment predictions and projections is usually a huge waste of time because almost no-one is ever right. But on the other hand, virtually all investment buying and selling is an exercise in price prediction. We only buy when we expect a price increase and sell when anticipating a general price decrease.

No one knows the future POS. However, one can study the individual approaching forces and then make an educated guess as to its impact on the future price. Anyone can make price predictions. However, IMHO supplying the actual data that the prediction was based on is far, far more important. In the spirit of "show me the data" that my prediction is based on, see below:

1. The same PROFESSIONAL DEALERS and INSIDERS that have made so much and done so much structural damage on the downside will surely be positioned to capitalize on the upside. At the least, their personal accounts will be properly positioned. Their activities have not simply been analogous to holding a lifejacket underwater but rather to holding a helium filled balloon underwater. It not only wants to break to the surface but wants to fly to the moon.

2. In a rapifly rising price environment, the process of metal coming to market will SLOW. Why? A DELAYED SHIPMENTwill stand an excellent chance of being worth even more.

3. In a free market, the amount of metal coming to market will have to "overshoot" demand to create at least some SURPLUS. The words "silver deficit" will have to be removed from current literature. A permanent silver deficit is economically impossible in a free market.

4. The practice of "just-in-time" or zero inventory techniques will give way to the old STOCKING-UP MENTALITY for distributors and end users. Why? Survival and price protection.

5. Due to such a long period of low prices there has been a decrease in silver SUBSTITUTION RESEARCH than would otherwise have been the case.

6. Since silver cannot be created, it can only originate from 3 sources: ABOVE GORUND SUPPLIES, re-cyled silver, and mine production. Above ground supplies are apparently nearing exhaustion, leaving only two remaining sources. 3 minus 1 leaves us with only 2 future sources of silver.

7. Silver MINES open and silver mines close. More are CLOSING than opening (usually due to depletion).

8. Beause silver has been priced below its all-in production cost for so long, silver EXPLORATION has practically ceased. The net result is that there are almost no silver projects in the pipeline to activate. Rather than just re-opening shuttered mines, the industry will have to sart from ground zero exploration.

I have attended a large mining show for several years running. Gold mining projects are a "dime a dozen" but true silver projects are rare at these shows.

9. Once a discovery is made, a mining project must advance through a series of pre-production steps before the first ounce is produced. In-fill drilling, feasibility studies, permitting, project financing, infrastructure construction and the like. Because silver has been priced below its production cost for so long, DEVELOPMENT and ADVANCEMENT phases of silver projects has practically ceased.

10. Around 75% of mined silver originates from by-product base metal mining. A deepening RECESSION, particularly in manufacturing, will dampen the demand for base metals resulting in decreased overall silver production. (I have yet to see any sustained data that supports the end of the recession/depression.)

11. Any ANXIETY BASED CRISIS that comes along will boost demand. Stock market, holy war, oil shock, civil unrest, defaults, currency crisis etc. Our war on terriorism has just begun. When, where, and how will THEY strike next?

12. Higher ENERGY PRICES and OTHER PRODUCTION COSTS are here stay. The process of mining, smelting, transporting and refining require huge amounts of energy and effort. Higher production costs necessitate higher commodity costs.

13. Presently the PAPER COMMODITY PRICE is determining physical silver price. A price jolt will occur when prices begin to be set by physical availability.

14. Large quantities of silver have been LEASED into the world market. During this process, silver that is BORROWED (leased) is actuall SOLD into the physical market, depressing prices. As falling prices reverse or the supply of lease silver evaporates, this prevailing negative counterforce will end. Leasing, while the POS is rising is like holding your hand in a fire.

15. In most cases there will be a legal and/or contractual obligation to RETURN LEASED SILVER to the lenders. This force will ADD to the demand side of the equation.

16. Metal LEASE RATES have averaged near historically low levels. A sustained period of rising lease rates will increase the incentive to return borrowed metal from an ever-shrinking physical pool.

17. A huge PAPER SHORT POSITION has depressed prices. When prices begin to rise in earnest, many short sellers will switch to becoming buyers. To close out a short position, a short must deliver physical silver or buy out their contracts if so allowed.

18. A percentage of FORWARD SELLING MINERS will repay their metal loans with phsical silver thus removing those ounces from the grasp of the marketplace and increasing the shortage.

19. A percentage of UNDERWATER HEDGED INERS may slowproduction, close down, or go bankrupt. Because they will owe so much while being denied the profit from higher prices, they will have little remaining incentive to produce silver.

20. LEGAL attacks and LAWSUITS by a wide range of parties will be launched that will effectively curtail some production. Lawsuits by two or more of the following parties will be commonplace. Auditors, bankers, bullion banks, central bankers, commodity houses, counter parties, depositors, employees, government agencies, hedge funds, individuals, insurance companies, lessees, lessors, management, mining copanies, regulators, shareholders, speculators, third parties, and users.

21. When the STRONG DOLLAR falls as expected, it will take more dollars to buy the equivalent amount of silver from foreign producers.

22. When supplies are exhausted and prices skyrocket, GOVERNMENT will be expected to "do something". The usual, counerproductive answer is to interfere and regulate. In economic circles, it is a well-established fact that when anything is regulated, you get less of it.

23. The RULES that the COMEX and Commodity Futures Trading Commission (CFTC) presently operate by could be described as liberal to the exteme and have contributed to depressed metal prices. More rigid and restrictive RULE CHANGES should be anticipated.

24. In a free market, INFLATIONARY FORCES are enevenly manifest in different economic sectors. One day it's Nevada land prices. The next day it's the price of milk. The long term price of silver has gone nowhere for several years which seems to indicate that price inflation has not yet been properly priced into the commodity.

25. For eons the US GOVERNMENT has been a silver supplier. They are now apparently at the cusp of being out of supply and will how have to enter the market as buyers; an effecive double whammy for silver price.

26. During most market conditions, ASTUTE INVESTORS do not try to pick bottoms. Rather, the preferred technique is to wait until an apparent bottom can be observed before big positions are initiated. With silver fundamentals as well known as they are, you can be assured that there are huge amounts of investment money poised to enter this arena once a technical turnaround is apparent.

27. A certain percentage of investors will be attraced to silver for only one reason, BECAUSE ITS GOING UP. Like a moth attracted to light, these momentum investors will want to jump on the bandwagon.

28. Because of the INTERNET etc., the world will quickly be alerted to what is happening and why. They will want their piece of the action.

29. The total silver MARKET IS TINY. It would take perhaps $10 billion to buy all the remaining physical silver and silver mining stock in the world at today's prices.

30. Mutual funds and other institutional players are grossly underrepresented in ownership of PM socks and physical. If and when these investors simply REBALANCE their PORTFOLIOS to include silver, it will result in a tidal wave of demand for this tiny market segment.

31. Virtually every US and world citizen already has a WORKING KNOWLEDGE of what silver is. We're not talking semiconductors, megabites, export quotas, or quasars where the learning curve is extreme. When silver begins to get world attention, this residual, in-place knowledge will grease the skids for the novice participation.

32. In the coming economic environment, precious metals may be one of the few investment areas making established up-trends. Individuals, businesses, mutual funds, pension funds and hedge funds who WOULD NOT DREAM OF INVESTING IN METALS today may have few other choices.

33. Silver may be the most versatile metal of all. NEW USES are constantly being discovered in a very immense range of applications.

34. SUPERCONDUCTIVITY technology as applied to electricity transmission efficiency will increase silver demand. (On one hand this is just a repeat of "new uses" for silver being discovered. However the amount of silver that this area may use is so relatively high, that it merits ts own place on this list.)

35. Increased use in automobile battery manufacture as they evolve into ELECTRIC GAS HYBRIDS for mandated greater fuel efficiency.

36. The % of SILVER BULLS is historically low. When prices begin to rise, newsletter writers and their readership will join the party by buying.

37. The more taxes rise (the overall trend has always been up), the more people will seek ways to keep the govenment out of their pockets. Silver is one of the few remaining alternatives left in this area.

38. In a growing environment of envy & financial distress, the NON-REPORTABILITY advantages of silver will enhance its demand.

39. If a mineral is found in great abundance in the earth's crust, depletion will never be a real issue. But a silver occurrence is an extremely rare event. Therefore, every day that a silver mine is in production it is one day closer to its closing date due to REAL DEPLETION. "They ain't making any more."

40. In broad geologic terms, the deeper you go in a gold mine, the richer the ore deposit becomes. Silver is the opposite. The deeper you go in a silver mine, the lower the grade of ore. To state this PERCENTAGE DEPLETION another way, because silver deposits are found near surface, they have already been found and mined out.

41. At this point in the business cycle, there is a very high level of conidence in paper or fiat, especially the US dollar. This cycle can be expected to change. The result will be INCREASED TRANSFER OF PAPER WEALTH to PM'S.

42. There are presently no PM backed currencies in the world. Yet, the history of currency shows us that all paper currencies eventualy crash. A SILVER BACKED CURRENCY is ust a matter of time. The discussion phase has already begun in some quarters.

43. For many reasons, we have not had a pure and free market in world silver since the US began supporting the price and supply in the late 1800's. This artificial intervention is finally coming to an end.

44. In world markets, virtually all stocks and commodities go from being under priced to being overpriced and back again. There is no reason to believe that the POS will stop rising when it reaches its EQUILIBRIUM PRICE.

What forces might contribute to lower silver prices?

1. In a high price environment, some jewelry, tableware, silver coins and the like will come out of hiding. Is thought that much of this silver is long gone. Most people don't own any silver to sell and have never seen a real silver coin.

2. With higher prices, STERLING SILVERWARE and TABLE ITEMS will be too costly and many potential buyers will be priced out of the market.

3. Sales of silver JEWELERY that is now being sold at your local shopping mall and flea markets will practically vanish. However investment demand can be expected to take its place.

4. High prices will cause end users to attempt to MINIMIZE USAGE by any means available.

5. A RECESSION or DEPRESSION will result in less industrial silver demand. (This force may be off-set by decreased by-product mining.)

6. During a silver shortage, fewer and fewer retail outlets (coin shops) will have avaiable silver for distribution. If some potential buyers are not able to satisfy their demand, potential maximum demand will be reduced.

So there you have the data that I have used to make my MEDIUM-TERM SILVER PRICE PREDICTION. I believe that in the 3 to 7 year time frame, the price of silver will exceed the price of gold.

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