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Thursday 8 December 2011

Why invest in silver ?


- Silver is even more undervalued than gold. 
Throughout history one once of gold used to buy 15 onces of silver. Today you can buy around 43 onces of silver with one once of gold, meaning that silver is extremely undervalued based on historical valuation against gold.
Silver shoud be at 120 dollars an ounce today just to catch up with this ratio of 1/15.
- Silver is driven by monetary and industrial demand :
Silver is used in many products as well as in the industry for a lot of application. When silver is used it’s merely destroyed. Silver is the second commodity in the world in term of use and applications.
Industrial demand is not going to fade when silver price will skyrock because silver is used as a very small fraction in all these different products (computer, camera and so on). Even If the price of silver go very high, industrial demand will still be there.
- As gold is becoming more and more expensive to buy, people are turning to silver to protect against inflation. In Asia for instance, people only have this option to buy silver in view of the salary they are paid. This huge demand for Asia didn’t exist during the last bull market in the late 70’s.
- On the silver paper market, huge short positions will have to be covered one way or another by the bullion banks. This short covering will send the price of silver to very high level.
- Besides, it’s said that for each once of physical silver in existence, bullion banks have sold 100 times more silver in the form of paper certificate. Now when all the silver investors will try to convert their silver certificate into physical silver ETF will go bust and physical silver will skyrock.
This huge offer of “paper” silver, help drive the silver price down for many years by creating fake offer in the market.
People are now waking up to this fact and are investing more an more in physical silver.
Only own PHYSICAL silver.

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