What Happens If Silver Exchanges Can't Meet Demand? - Peter Krauth
Summary
TLDRIn this Kito News episode, host Jeremy Saffer discusses the rising prominence of silver in various industries with guest Peter Krauss, author of 'The Great Silver Bull.' Krauss explains how gold's all-time highs and a shift towards green technologies are driving silver's demand. Despite silver's price consolidating, he predicts a sustained upward trend, potentially reaching $300 by 2030 based on historical ratios and inflation. Strategies to mitigate supply-demand constraints include investing in silver now and exploring alternatives like silver ETFs trading at discounts.
Takeaways
- 🌟 Silver's price is experiencing a significant increase, breaking past the $26 mark and approaching $30.
- 🔋 The rise in silver's value is attributed to its diverse applications, including solar panels, electric vehicles, and 5G technology, beyond just jewelry and coins.
- 📈 The silver market has been forming a triangle pattern on charts since March 2023, indicating a potential for a major price movement.
- 💡 Peter Cruss, author of 'The Great Silver Bull', suggests that gold's all-time highs and lack of mainstream excitement could be a bullish sign for silver.
- 📊 Despite the potential for a short-term correction, Cruss believes we are at the beginning of a sustained, long-term upward trend for silver prices.
- 🔄 Silver's industrial demand is growing, with solar panel production alone forecasted to require over 200 million ounces in the coming year.
- 🌍 Geopolitical tensions and economic policies are also contributing factors to the reshaping demand for silver globally.
- 🏭 Silver mining output has dropped significantly in countries like Mexico and Peru, raising concerns about future supply.
- 💰 The gold-silver ratio and historical comparisons with real estate prices and inflation rates are used to make bullish predictions for silver's future value.
- 🚀 Cruss projects a potential silver price climb to over $30 in the latter half of 2024 and speculates about reaching $300 by 2030 based on various indicators.
- 💡 Investors are advised to purchase silver now while premiums are relatively low, as demand and prices are expected to increase.
Q & A
What is the current trend for silver prices as discussed in the transcript?
-The current trend for silver prices, as of the discussion, is an upward movement. Silver has broken past the $26 mark and is getting closer to $30.
What are the main factors driving the recent silver rally as per the discussion?
-The main factors driving the silver rally include gold making all-time highs, increased industrial uses of silver especially in solar panels and electric vehicles, and its role in 5G technology. Additionally, the lack of mainstream media attention and public excitement about gold is seen as a bullish sign for precious metals.
What is the triangle pattern on silver market charts and what does it suggest?
-The triangle pattern on silver market charts is a technical analysis pattern where the price swings become progressively smaller, suggesting that the silver market is at a crossroads. This pattern usually indicates a period of consolidation before a significant price movement, either up or down.
What does Peter Cruss think about the potential for a sustained upward trend in silver prices?
-Peter Cruss believes that the current market conditions indicate the start of a very long and sustained move much higher for silver prices. He bases this on the lack of public excitement around gold reaching all-time highs, which historically has been a sign that the market is closer to the beginning of a bullish phase rather than the top.
What are the potential short-term challenges for silver prices near the $30 mark?
-Peter Cruss suggests that there may be a small correction in the short term due to high speculation levels in the futures market. However, he believes that any potential short-term dip would not significantly affect the overall sustained upward trend for both gold and silver.
How is the global push towards green technologies affecting the demand for silver?
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What is the significance of the solar industry in the silver market according to the transcript?
-The solar industry is significant in the silver market as it represents a large portion of industrial demand for silver. The solar industry's growth has led to an increase in silver usage, with forecasts suggesting a demand of over 200 million ounces of silver in the coming year, which is about 20% of the entire silver market.
What are the implications of the shift towards newer solar technologies that require more silver per panel?
-The shift towards newer solar technologies that require more silver per panel indicates a growing demand for silver in the industry. Even if the growth in solar manufacturing capacity plateaus, the transition to these newer technologies will continue to drive up silver demand.
What are the challenges in silver supply as discussed in the transcript?
-The challenges in silver supply include a significant drop in output from major silver-producing countries like Mexico and Peru over the last decade, and the fact that there are limited places in the world where silver can be found and mined. Additionally, mines reach the end of their productive lives or face geopolitical and profitability issues, leading to a structural deficit in the silver market.
How does the silver market's structural deficit affect its price?
-Despite the structural deficit, the silver price has not significantly increased as one might expect from basic supply and demand economics. This discrepancy suggests that large industrial users may be sourcing silver through other means, such as futures contracts and silver ETFs, which could be drawing down the available silver inventories.
What is the potential impact of large consumers demanding physical delivery of silver?
-If large consumers demand physical delivery of silver and the exchanges are unable to fulfill these contracts, it could lead to a significant market disruption. This scenario could result in a situation where consumers demand silver over cash settlements, potentially leading to a sharp increase in silver prices.
What is Peter Cruss's long-term outlook for silver prices?
-Peter Cruss has a bullish long-term outlook for silver prices. He projects a potential climb to over $30 in the latter half of 2024 and even suggests that silver could reach $300 per ounce by 2030, based on historical price trends, gold-silver ratio, and comparison with other asset classes and inflation rates.
What investment strategies does Peter Cruss recommend for dealing with the silver market's supply and demand crunch?
-Peter Cruss recommends investors to buy silver now while the interest is relatively low, as it is likely to become more expensive in the future. He also mentions the option of investing in silver ETFs that may trade at a discount to their net asset value, providing an alternative way to gain exposure to silver without overpaying.
Outlines
📈 Silver's Market Surge and Its Driving Factors
Jeremy Saffron introduces the discussion on the rising silver market, highlighting its significance beyond jewelry and coins. Silver is now crucial in solar panels, electric vehicles, and 5G technology. The market has formed a triangle pattern since March 2023, indicating a potential breakout. Peter Cruss, author of 'The Great Silver Bull', shares his insights on the market's dynamics, attributing the rally to gold's all-time highs and a lack of mainstream excitement, which he views as bullish for precious metals.
🌐 Impact of Global Shifts on Silver Demand
This paragraph delves into how global shifts towards green technologies and geopolitical tensions are reshaping silver demand. The surge in industrial uses, particularly in solar panels and electric vehicles (EVs), is a key driver in the silver market. Cruss explains that solar demand, led by China, is a significant factor, with forecasts showing a dramatic increase in silver usage for solar panels. He also discusses the transition to newer technologies that require more silver per panel, thus increasing the demand further.
🤔 Market Manipulation and Silver's Price Trends
The conversation turns to potential market manipulation and its impact on silver prices. Cruss discusses the high level of speculation in the futures market and the possibility of a minor correction in the short term. However, he believes this could be a sustained upward trend. The discussion also touches on the lack of public excitement about gold and silver, which Cruss sees as a sign of a market that's closer to the beginning rather than the peak.
🌍 Regional Dynamics in Silver Production
This section explores the regional aspects of silver production and demand. Mexico and Peru are identified as significant silver producers, but their output has dropped significantly over the last decade. Cruss raises concerns about where new silver will come from, given the lack of new discoveries. He mentions potential areas such as Australia and Europe that might see increased silver production. The focus is on the need to watch these regions closely as they could impact the global silver market.
📉 Silver's Structural Deficit and Price Impact
Cruss discusses the structural deficit in the silver market, noting that despite consistent deficits and increasing demand, the price has not reflected this imbalance. He suspects that large industrial users are sourcing silver through futures contracts and ETFs, leading to a decrease in available silver inventories. This has implications for the market, as these contracts may not be fulfilled with physical delivery, potentially leading to market chaos if silver becomes scarce.
🚀 Silver's Future Outlook and Potential Reach
Peter Cruss shares his bullish outlook on silver, projecting a potential climb to over $30 in the latter half of 2024 and even reaching $300 by 2030. He bases this on historical silver price trends, comparisons with gold, and inflation rates. Cruss suggests that as gold reaches new highs, investors will shift their interest to silver, driving up its price. He emphasizes that this is a long-term view and that silver could see a mania phase similar to other assets.
💡 Strategies for Investors Amidst Silver Market Dynamics
Cruss provides investment strategies for dealing with the silver market's dynamics, advising investors to buy silver now while premiums are relatively low. He mentions the Royal Canadian Mint's silver ETF as an alternative for gaining exposure to silver at a discount. Cruss encourages investors to get involved early, buy a little at a time, and suggests that the shift from gold to silver will increase investment demand and push silver prices higher.
🙌 Wrapping Up the Discussion on Silver
Jeremy Saffron concludes the interview with Peter Cruss, thanking him for his insights and contributions to the discussion on silver. They touch on the importance of understanding the silver market and the potential opportunities it presents for investors. The conversation ends with a reminder for viewers to engage with KITO's content and look forward to future discussions.
Mindmap
Keywords
💡Silver
💡Market Trends
💡Investment Demand
💡Supply and Demand
💡Solar Panels
💡Electric Vehicles (EVs)
💡5G Technology
💡Price Manipulation
💡Geopolytical Tensions
💡Economic Policies
💡Industrial Uses
Highlights
Silver is making waves in the market, breaking past the $26 mark and getting closer to $30.
Silver's role is expanding beyond jewelry and coins to power solar panels, electric vehicles, and 5G technology.
The silver market has been forming a triangle pattern on the charts since March 2023, indicating a potential breakout.
Gold reaching all-time highs is a significant factor propelling the rally in silver prices.
The lack of excitement in mainstream media about gold's all-time highs is very bullish for precious metals.
The potential for a small short-term correction in silver and gold prices due to high speculation levels.
The global push towards green technologies is reshaping the demand for silver, with solar panels being a significant driver.
Solar capacity is being built out dramatically, with China leading about 80% of the market in manufacturing and demand.
The transition to new solar technologies requiring more silver per panel is expected to continue feeding the demand for silver.
Supply and demand issues in the silver market, with demand rising and supply falling, have not yet led to a significant increase in prices.
Large industrial users may be buying long futures contracts and standing for delivery, draining silver from exchanges and ETFs.
Peter Cruss, author of 'The Great Silver Bull', predicts a potential climb of silver prices to over $30 in the latter half of 2024.
A long-term projection by Cruss suggests silver could reach $300 per ounce by 2030 based on historical ratios and inflation rates.
The gold to silver ratio historically has been around 15:1, which could indicate a higher future value for silver if gold continues to rise.
Investors may shift interest from gold to silver as gold prices rise, making silver a more attractive alternative.
Strategies to mitigate the impact of supply and demand constraints include buying silver now and taking advantage of silver ETFs trading at discounts.
The importance of getting involved in the silver market when investor excitement is low to benefit from more reasonable delivery times and premiums.
Transcripts
hey everyone I'm Jeremy saffron and this
is Kito news make sure you hit that
subscribe button for the freshest
insights in markets and of course
Commodities well silver is Making Waves
again folks today we're seeing a break
past at $26 Mark aging closer to $30 so
why the buzz well it's not just jewelry
and coins anymore Silver's powering our
future from solar panels lighting up our
world to electric cars zipping around
our cities not to mention its role in
The Cutting Edge world of 5G technology
however the journey for silver has seen
its twists and turns since March 2023
the silver market has been forming what
analysts call a triangle pattern on the
charts this pattern where the price
swings not progressively smaller
suggests that silver is at a Crossroads
with its price consolidating and
building energy for its next big move
now the setup often leads to a breakout
but whether silver will shoot up or
tumble down Remains the big questions
keeping investors on our toes today to
explain this author of this book The
Great silver Bull and publisher of the
the silver Focus newsletter the silver
stock investor Peter cruss joins us now
thanks for coming on the show Peter
Jeremy pleasure to be here always a
pleasure uh we were just talking off
camera a second I saw you a couple
months ago there was a lot of excitement
in the industry even more today so let's
break it down Peter with today's price
breaking the $26 Mark covering around 26
almost 27 getting closer to $30 anyhow
talk to me a little bit about the main
factors propelling the rally and how
does it the line with your long-term
predictions so I mean I think that
really what's driving silver right now
because you're right you mentioned as
your opening this it's been in a sort of
consolidating uh uh move for the last
few years in fact I think that um really
what's driving it right now is gold
making all-time highs and uh you know
that's actually impressive and
impressive by the fact that uh people
are not excited about it you don't gold
being quoted on mainstream media through
their their their ticker um their ticker
marker running across the screen um I
just read yesterday that you have uh
coin dealers are actually receiving
twice as many requests to buy back gold
from their clients than they are to sell
to their clients so sentiment really is
nowhere close excitement and that is
very very bullish for the precious
minals because it tell tells you that
we're much closer to the beginning than
we are to any kind of a top where when
you get you know at a top when you get
this fear of missing out and everyone's
overly excited that's when your odds of
uh you know it being sustained are are
much lower people have have done all the
buying they're just everyone's sort of
piling in and there's not much of the
move left here we're we're really at the
opposite end so I think that this is a a
the start of a very long and sustained
move much higher okay okay so you think
this will be a sustained upward Trend
I'm curious you know this price action
we always see it get close to that $30
mark it almost seems like the Market's
short a little bit talk to me a little
bit about the manipulation what happens
here at these
levels so I mean you know we also don't
have uh too much excitement there the
one side where there is I guess a fair
bit of participation and that is in the
Futures I was just looking at some of
the numbers this morning and so we are
getting to a point where speculation is
kind of high uh we may get a small
correction that would certainly not
surprise me um I hope we don't get all
kinds of hate mail because of it and I'm
as big a silver bow as anyone but that's
my point is on a very shortterm basis I
think both both gold more more gold
actually because gold is at all-time
highs uh but I do think both medals
could be in for a really small
correction I'm really talking small
amounts over the next sort of week or a
couple of weeks um just because really
has become little sort of near-term Bry
absolutely much more gold and silver um
that would not surprise me but yes these
are mes that could could certainly be
sustained and I think that where when it
comes to manipulation my view at least
is that uh there is manipulation and not
just but not just in these markets and
that that tends to be kind of on a on a
shorter term basis uh the big players
play with the markets play with the
price benefit from it in terms of a sort
of a longer term um uh managed kind of
manipulation that's where I honestly
don't know a lot about uh the the the
Futures Market but also have a hard time
understanding how that would be uh
possible to sustain on an ongoing basis
I'm talking years and perhaps even
decades now let's give a little bit of a
take on let's let's go back a little bit
and talk a little bit about silver just
as a metal here you've highlighted how
the global push towards green
technologies is coupled with of of
course geopolitical tensions and then we
got the economy and econ economic
policies here it's really reshaping the
demand for silver so as we see a surge
in the industrial uses particularly as I
mentioned off the top and solar panels
and EVS elaborate a little bit on how
these factors synergize to influence the
Dynamics here in the silver
market so you know if if you're looking
at the silver market really if if you're
not paying attention to what's happening
in solar in particular then you're
really missing uh I would say probably
the biggest single driver other than
investment demand because solar has
really become what I call sort of the
800 pound gorilla in the market U it
went from few tens of millions of ounces
maybe a decade ago to over 200 million
ounces next year that's what the
forecast is we were at apply 190 or so
million ounces in
2023 and um so so industrial has become
more than half of the silver market in
terms of demand and solar represents
something like 30% of just industrial so
solar at 200 million ounces is 20% of
the entire solar Market every year right
which is roughly about a billion ounces
so you've got to watch what's happening
in solar and the fact is that solar
capacity is being built out dramatically
led by the Chinese about 80% of the
market is China terms of
manufacturing and solar demand so sales
of these panels has also been beating um
forecasts dramatically now if you take
sort of a I think a reasonably even
conservative view of solar and you say
to yourself all right so there's been
all this
capacity um what if there's some sort of
uh recession things slow down and
there's less demand for solar and solar
kind of plateaus and and building out of
the solar um uh
uh e economy and the solar sector starts
to Plateau you are still going to get a
lot of demand of silver in from the
solar sector just because we are
transitioning to new technologies so the
I guess incumbent technology is what we
would call Perk um it's about half of
manufacturing capacity right now about
three or four years ago the next two
technologies that by the way require
from 50 to 150% more silver per panel
these were about 10% of manufacturing
capacity last year combined they were
already
35% the silver Institute thinks that the
Next Generation which is 50% more silver
per panel is going to already represent
50% of new manufacturing capacity this
year alone so even if we plateau in um
silver sorry in solar manufacturing
capacity the fact is that we're moving
to techn IES that require more silver so
that is going to continue to feed the
demand um of silver from the solar
industry Peter you continue to talk a
little bit about supply and demand
supply and demand and that Divergence
over the past couple of years I'm
curious if you anticipate any specific
regions becoming maybe more pivotal in
silver production or innovation
here well when you talk about regions
you mean
geographically yeah I'm thinking
geographically I mean silver mining
obviously you know Mexico's largest one
here are you seeing any specific regions
you know trying to really bolster up
their supply and demand issues going on
in silver and trying to take over that
that
demand well as you say uh Mexico
certainly is by far the largest producer
from there you have S in second place
and it's a little bit debatable whether
it's China or Peru uh but both Mexico
and Peru where we have I guess what
you'd call relatively reliable data have
seen their output drop dramatically
something like
20% over the last 10 years or so so
that's kind of concerning where are we
going to get new silver from um great
question there aren't that many places
that you can actually find silver if you
look at the Americans it tends to be uh
focused on sort of the West Coast so you
see whether it's Canada the us all along
sort of that uh that the these um
mountain ranges is where you tend to see
concentrations of silver in South
America it's the same thing mostly along
the Sierra mandre the Andes and so on um
there is a potential that we're going to
see more silver come out of places
perhaps like Australia uh perhaps even
Europe there there is a lot of silver
that comes out of Poland um there are
there is one um sort of smallish
potential project that I see in Germany
for example that's a long ways off uh
there is a project in I believe it's
Serbia starting to come online uh
there's a large producer uh a relatively
large producer out of Morocco that's a
place I think we need to watch carefully
that's a gold and silver uh they're
actually in the midst of a big expansion
that's going to take their production
from 2 million ounces to 8 million
ounces now that's fantastic for a and
for a investors but it's going to do
very little to uh impact Supply and I
was actually talking to a re um silver
researcher this morning and talking
about the whole sort of demand Supply
um aspect of the market and really there
are constantly new minds coming into
production the fact is that there are
also regularly mindes going off
production either they've reached the
end of their lives um or there are some
sort of geopolitical issues um they
could be not profitable The Mining
Company decides
we're there are some serious challenges
there was a a interesting bit of
research from Bank of America a little
while back that looked at they went and
looked um at the 13 largest primary
silver Ling companies asked them where
they thought Silver Mine Supply was
going to be over the next couple of
years and they all said on average it's
going to be flat for the next at least
two to three years it peaked at 900
million ounces in 2016 they expect we're
going to be about 800 million ounces
over the next you know per year over the
next couple of years which is just
incredible when you think of how land
has just been ballooning and and the the
deficit deficits that we've been living
through uh each year for the last four
years have um have been sustained and
the silver Institute thinks those will
continue to be sustained so I mean we
can talk about that a little bit too
there are structural deficits uh why is
the silver price sort of uh capped if
you wish if we're facing deficits and uh
you know i' I've spent some time doing
some research and some digging and I and
I think I know what what is um affecting
the market this way what what we've seen
in the last couple of weeks um it looks
like it may actually be starting to uh
reverse but um there are some really uh
specific things I think that have have L
to where we are right now that's
interesting I want your outlook on
Silver but before we get to that then
talk to me a little bit about that
what's holding us back usually when you
have a supply and demand issue and
demand is up and Supply is down the
prices go up but it hasn't really been
there exactly so that's economics 101
exactly right Jeremy so you know I I had
sort of a susp suspicion that if we had
structural deficits and the price was
really not moving and we had you know
it's it's not just one year or two years
it's been four years straight we still
have forecast for these sizable deficits
we're talking multi you know say well
above 100 million ounces a year so more
than say 10 to 15% of the entire Market
again in structural deficit for the next
couple of years at least how is it and
why is it that um we're not seeing the
silver price move and I had this
suspicion that industry especially which
is the big consumer is getting their
silver somewhere somehow um rather than
from mining or from from the uh
recycling which are the two main
suppliers normally and so if you look at
and so I did some digging found um
inventory charts for the comx for the
lbma for the Shanghai and over the last
three to four years each and every one
of those exchanges has seen their
overall silver in inventories drop about
30 to
40% wow and now that's just overall
inventories that's not what is supposed
to be available for delivery they've got
something called registered silver which
technically apparently is what is
available for delivery if if you want to
take delivery um and that's down 70 % on
two of those three exchanges so I
suspected and still do that you have
large industrial users going to these
these Futures exchanges buying long
Futures contracts and simply standing
for delivery going to The Exchange and
saying okay you know my contract is
expired now I'm entitled to take
delivery here's the address here's where
I want it shipped and and that's that
and so there's another aspect too and
that is the silver ETFs and right they
have seen um their inventories drop
dramatically you know I did some
research on this and there's some really
interesting um uh charts that I've put
together one looks at you know the you
really kind of uh can can look at one
which is the largest which is SLV goes
back to 2006 the first uh and of all
silver ETFs and the largest has about10
billion dollar worth of silver and um if
you look at how two two aspects of SLV
you look at how the silver price has
behaved and you look at the number of
ounces that are held by SLV so going
back to 2006 there are two periods where
early on in its life where you would
have um you know silver the silver price
ran up went through a correction the
first one was in the great financial
crisis so silver went up to about I
think it was about 18 or 19 $20 or so
corrected to about $10 and then um and
what happened during that period was you
still had the number of ounces held by
SLV rise in that in that period when the
silver price corrected during the the
financial crisis so that means that
people were still buying SLV despite the
silver price falling the next period was
um when silver the silver price peaked
in 2011 at say $49 and over the next
couple of years went into a big
correction and went down to about $25 or
$30 during that period the number of
silver ounces H held by SLV also moved
or this time moved in a sideways uh
pattern so people on balance were not
selling their SLV uh units now fast
forward to 2020 2021 you had this big
runup in the silver price when the co
pandemic hit silver went from uh say $12
when it corrected in say March of 2020
run up to $30 and since then have been
in a range of say 22 to almost 28 $30 U
ever since about mid
2020 however since early
2021 the number of in fact in that
period in 2020 when covid hit the number
of silver ounces held by SLB ran up
dramatically to like an all-time record
high I think it was something like um
600 million ounces and ever since then
it's been dropping and dropping steadily
so we've had about three years of
sustained drops uh in the number of
ounces of silver held by SLV and yet the
silver price moved sideways there has
not been in SLV a period of sustained
falling of ounces held by the ETF until
the last three years I believe here
again you have the large consumers are
buying SLV are allowed to exchange their
units for physical silver and taking
delivery and that explains in my again
my view that explains why we've seen the
silver being drained out of SLV as much
as out of the U out of the Futures
exchanges interesting interesting stuff
I'm curious what are the implications of
a market where these contracts can't be
fulfilled with
delivery so that's what um I'm wondering
about myself and sound like what do you
do yeah I mean I think that's going to
be some sort of chaos uh I think that
you're gonna have a big consumer of
silver stand for delivery these markets
were not really meant for that but this
is as I say based on what I can tell how
a lot of uh the industrial users are
actually getting some of their silver um
this is where they're getting it and all
it takes is for one big consumer to go
to the market hold a long contract say
okay it's expired now I want my silver
and for the exchange to say oops sorry
we're out of silver um we're gonna have
to pay you out in cash and they're GNA
say no no no I want I want the silver I
don't want the cash and you'll say sorry
Force meure noral silver left here's the
cash and that and there and that
consumer that user silver is going to
scream and we will hear about it
interesting does the user or consumer is
is there Rumblings of this I mean do
people know about this have you been you
you're in the industry people talking
about these
Rumblings I have not heard about it uh
you know I've what I have heard is in
fact uh just about a month and a half
ago a large large-ish silver producer
has told me that they sell part of their
production to China they sell part of
their production to the west and the
Chinese are coming to them and they're
saying we really really really want the
silver we we're prepared to pay you a
couple of weeks in advance and we're
actually prepared to pay you $3 over
spot in order to get our silver we
absolutely want our silver so that to me
is the best indication of the tightness
in the market it is severely tight but
we're we're just not hearing about it
and this is um you know it's these kinds
of of anecdotal bits of evidence that
certainly point to it yeah interesting
uh what an analysis uh okay let's get
back on to the Outlook because of of
course supply and demand should mean
prices go up and you've suggested
obviously you have a bullish Outlook but
you've projected a potential climb to
over $30 in the latter half of 2024
we're currently sitting around that 2686
we're getting close right uh you
probably were correct in there but
you've even positioned yourself uh maybe
a scenario where silver could reach $300
Us by 2030 so let's break this down you
may have been correct about the 30 but
300 well 300 I mean I know it's sounds
Sensational but uh when I got to that
number what I did was um I looked at
what had happened to silver prices in
the past uh and and I compared it to
other other assets important assets hard
assets typically or U stock indices for
example large indices and so couple of
examples are one of the probably your
your viewers understand and know the
best is the gold silver ratio so I said
okay if I'm going to look at where where
Sil silver could go ultimately uh what
has it done in the past well in 1980
when gold peaked and silver peaked the
ratio fell to somewhere around 14 or 15
at the time gold was $800 silver was
about $50 and the ratio as I say was
let's use 15 so I said okay if I look
forward and I make my own projections
and I'm not the only one by the way and
I and I detail this very I provide lots
of detail about this in the book how I
get this uh the fact that I'm not the
only one I I believe some very very very
smart uh you know observers uh
researchers in the sector have forecasts
for gold and um I went with 5,000 I
think that's a realistic Target we're
almost halfways there at this point so I
don't see 5,000 as the biggest stretch
in this bull market in any case if you
use $5,000 gold Target and um you say 15
to one you're to $333 Silver so to me
not a stretch if you use and I think
it's probably perhaps more realistic
ultimately perhaps say we go to and
again I'm not the only one some very
Savvy very accomplished very well
respected analyst it's all in the book
have reached
$10,000 um as a target for gold and if
you do perhaps say $10,000 and you use a
more conservative gold silver ratio of
say 30 instead of 15 you're still AT3
$33 for silver so that's the gold silver
ratio if you look at for example in 1980
when silver peaked uh you look at the
silver price versus let's say the
average home price so at that point when
silver peaked it took just shy of about
1500 ounces of silver to buy the average
us home if you go with to today's
numbers the average us home costs about
$500,000 let's say make it even easy
round numbers if you use that same ratio
you're looking at um again uh right
around I believe it was3 $333 silver so
by that measure again you're
at over $300 in silver if I look at the
inflation rate and you know officially
we're at say 3% if you look at where
we've been for the last several decades
it's probably averaged about somewhere
around three maybe four uh but more
realistically and everybody in their
daily lives will tell you that uh they
don't they're not comfortable with those
numbers they don't feel that they
represent what people actually have to
deal with and live with and there's a
fantastic research uh service called
Shadow stats that calculates in fact
inflation um the way it was back in the
1980s and um they have uh inflation
running at more like seven or eight% for
the last say 40 or 50 years so if you
project um using inflation rates that
are more realistic again you get a a
peak in silver much closer to about $300
so I think I'm being quite reasonable
and and I also say that to get to that
Peak um we're going to be in some kind
of a Mania phase I'm not saying Silver's
going to steadily to $300 and it's going
to stay there and then and or it's going
to keep climbing I'm saying you know
ultimate crazy F Mania silver could
easily reach
300 yeah well I mean we've heard we've
heard crazier things over here so uh I
could probably you know I'm not going to
call you out on it I'm I'm curious so
you know when you talk a little bit
about that gold silver ratio it seems to
be very Divergent I talked to an analyst
last week saying he's not sure if it'll
ever go back to the place that it was
but I'm curious are consumers or
investors purchasing silver because it's
easier entry to the market in terms of
price than
gold so that's one of the reasons I
think that silver lags gold but then
eventually outperforms it
because I so so people will go to gold
first or pay attention to gold first
because it's it's the king of of assets
it's the king of uh it's certainly the
king of precious metals it has been for
thousands of years and so everyone pays
attention to gold first and as you see
people ultimately
eventually decide they absolutely need
some exposure to gold and gold you know
let's say we're talking about 12 months
from now gold has run up it's 2500 it's
2600 let's say um they're going to look
at gold and say wow that's that's rich
you you know for me to buy an L of gold
and to put that kind of money out um
what else what else can I get and silver
is the natural alternative to that and
even if silver is at say 30 or 35 or $40
they're going to look at gold 2,500 for
an ounce silver $40 for an ounce um much
less
uh it will have run up much less even at
that point still below its all-time high
gold will have set new all-time highs
and I think that um that's one of the
reasons that silver will gain in appeal
you'll have investment demand really
become the wild card it will pick up
dramatically and people will shift their
interest from gold to Silver and and
really push through investment Dem man
push the price ultimately a lot higher
interesting you know we talked a lot
about the supply and demand crunch here
how do we prepare for it are there
strategies that you could talk to
investors about that could maybe
mitigate the impacts of these
constraints on the market
so if you're talking are you talking
about say investment demand specifically
exactly
yeah uh buy it and buy it now because
it's probably only going to get more
expensive uh you know yes people will
say well the premiums are high they're
actually not as high as they have been
uh if you look at um and I'm not saying
that that they're that they're not that
they're low I'm saying that they're not
as high as they've been if you look at
what happened during Co you could not
even get your hands on Silver if you
looked at what happened um during the
silver squeeze of late January
2021 again you could not get your hands
on Silver I mean there are stories I
talk about that in the book where you
have um you have these uh bulling
dealers just never witnessed anything
ever like that and then these are people
who've been in business for decades at
sometimes a second generation they've
never lived through markets like that
their their computer systems were
overwhelmed their phone systems were
overwhelmed and they knew it was
basically retail buying because it was
mostly small orders and they were
starting to tell people I'm sorry I
can't I can't ship this in two or three
days I'm going to have to ship it in two
or three weeks and in India for example
best uh to the best of my recollection
some of the uh some of the premiums this
would have been uh during the covid
pandemic Panic went up to uh almost 100%
over spot right so people really really
wanted the silver and were willing to
pay for it and I'm suggesting get
involved when you know people are not
excited you will have the the benefit of
having access getting delivery under
reasonable times um you know being able
to shop with with peace of mind you'll
you'll pay as I say reasonable uh
premiums relatively reasonable they tend
to where normal premiums historically
have been say 12 to 15%
if you're even at somewhere around 20% I
think that's attractive today and I
think you can probably find those kinds
of premiums right now um so I I think
get involved get involved now buy a
little bit at least to get your feet wet
get that coin in your head appreciate
what it feels like what it looks like
and uh I think you'll be sold and and
start building on it um yeah someone
pointed out actually a subscriber
pointed out to me something interesting
and I'm not suggesting people do this
but it is an option and that is that the
Royal Canadian Mint has its own version
of a silver ETF and the silver is stored
at the mint well not just their product
but others as well will over time trade
anywhere from you know um discount to
net asset value to premium to net asset
value and so this subscriber these are
the kinds of things that I that I know
of but I'm not constantly tracking yet a
subscriber wrote to me and told me about
this and said you know right now this
product is trading at about 12% discount
to the silver price to that for the
silver that's actually being held by
this ETF so I went and looked at it and
then I told my own subscribers about it
and I said right now that's actually got
worse it was at 16% so worse one from
one point of view better from the buyer
point of view you're actually buying
silver at a 16% discount so um you know
these things don't tend to last
uh that's likely to correct especially
if you get people piling in and and you
know Silver's making new highs new say
20 12 or 20 24 month highs and um that's
one way I'm not saying that's the same
as buying physical silver there is no
equivalent but I am saying that you can
get exposure you can get it quickly you
can get it you can buy something like
that wait for it to reach uh nav or net
asset value or wait for it to reach a
premium to net asset value then sell it
and switch to physical silver these are
the kinds of things that people do kinds
of things I talked about tactics you can
use uh I talked about that to my
subscribers and kinds of things people
can take advantage of it's it's
certainly one way to gain exposure and
not
overpay right and to mitigate that risk
a little bit well like our friend Rick
rule says he loves silver because it's
hated so maybe not a bad strategy there
absolutely uh the author of The Great
silver Bull and the publisher of silver
Focus newsletter the silver stock
investor my friend Peter KRA joining us
today hey thanks for coming on the show
Breaking it down for me and the viewers
today Jeremy always a pleasure um it's
always fun to to chat and to to give my
insights and hopefully I have helped to
contribute something that um your
viewers will will find helpful you
absolutely did and I could have chatted
to you all day but we'll have you on
again soon Peter appreciate your time
today thank you so much thank you thanks
so much and thanks again to our viewers
don't forget to go to kito's YouTube
channel subscribe like that video
believe it or not I read the comments
and we'll see you tomorrow we'll see you
next time I'm Jeremy saffer for Kiko
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