Yes, I completely understand that silver has dropped from around $35 to $27 in the last month and a half losing about 23% of its value in the process and that if you go back to last April it has been something more along the lines of a 44% dip in price. But here is the thing, more people need silver than need gold. The problem is that buyers and speculators are skittish right now with half of Europe teetering on the edge of a financial abyss and they’re scared that if Europe goes over the edge it will take everything with it. This is not so.
Approximately one-third of the world’s population can be divided into two countries: China and India. When you think about it these two countries are also growing by leaps and bounds economically and through increased infrastructure and the whatnot. They are on their way to becoming the economic superpowers of the twenty-first century. This is because they have become manufacturing countries that produce more goods than services. But again, as they produce more, especially electronics they increase their need for industrial silver. This means that more silver is going to be taken off the market for those purposes, leaving less physical silver for others to possess.
You should also consider the fact the U.S. Mint is still producing record numbers of silver eagles. Despite the fact the price has been dropping for a year. As late as 2007 the mint was only producing 9 mil ounces of silver eagles a year, in 2008 that number more than doubled to 20 million ounces, then increased to 30 million in 2009 and up to 34 mil in 2010. Mintage figures have not yet been released for 2011, but all indications are another record-breaking year. None of this silver is going into industrial use, it was all being squirreled away while silver was climbing. Now that silver is dropping, no one seems to be buying. I don’t understand why someone wants to buy $40 silver when it is on the way up, but won’t buy $28 silver when the market looks stagnant. Buy, please buy, silver is not going to stay this low forever and will rebound probably up near the $40 mark.