• 288 days Will The ECB Continue To Hike Rates?
  • 288 days Forbes: Aramco Remains Largest Company In The Middle East
  • 290 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 690 days Could Crypto Overtake Traditional Investment?
  • 694 days Americans Still Quitting Jobs At Record Pace
  • 696 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 699 days Is The Dollar Too Strong?
  • 700 days Big Tech Disappoints Investors on Earnings Calls
  • 701 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 702 days China Is Quietly Trying To Distance Itself From Russia
  • 703 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 706 days Crypto Investors Won Big In 2021
  • 707 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 708 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 710 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 710 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 713 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 714 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 714 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 716 days Are NFTs About To Take Over Gaming?
Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

Trade In Counterfeit Goods Hits Half A Trillion Dollars

Trade In Counterfeit Goods Hits Half A Trillion Dollars

The counterfeit market has breached…

How Millennials Are Reshaping Real Estate

How Millennials Are Reshaping Real Estate

The real estate market is…

  1. Home
  2. Markets
  3. Other

Whither Peak Silver?

The United States Geological Survey recently published its silver summary and it turned out to be yet another record year of global mine production for silver. The 2015 estimate will be revised, but in the last twenty years, only four years (2000, 2003, 2005, and 2011) have been revised downwards in the subsequent summary.

If it does happen that 2015 output comes in below 2014, that does not mean that Peak Silver has arrived as 35 years out of 115 years of global data have been dips from the previous year only to see silver production resume its upwards march.

But, one day, global silver production will dip and it will never return to the heights it had previously hit. A look at the chart below shows the global output of silver since 1900. If this was the share price of a company, you may decide that now is not a good time to invest in it since a correction would be on the cards. But this is not a chart of a company's performance, but rather an interplay of geological formations and market forces.

As you can see, the story of silver mining can be broken down into three phases. The first is flat but erratic as the new century dawned and progressed to the beginning of World War II. After this, came the post-war boom and silver reacted by climbing up a new gradient. By the time the interruption of the 1992 recession and a silver bear bottom came and went, the stage was set for an even steeper rise as China and its one billion citizens entered the market and silver production entered its third and current phase.

Silver Production 1899-2016

The question is how long this elevated gradient of global silver production can be sustained? That silver would enter an even steeper gradient of production looks highly unlikely. Maintaining the current levels depends not just on global demand, but a complex mixture of energy prices, inflationary expectations, falling ore grades, estimated geological reserves and improving extraction technology. Anyone that tells you Peak Silver has arrived based on one down year is wrong.

Peak Silver (and Peak Gold) will be an event viewed through the rear view mirror. The most likely indicator of this will be rising prices allied with falling production over a certain number of years. After that comes confiscation and rationing, subjects covered in my latest newsletter.

 


Further analysis of silver can be had by going to our silver blog at http://silveranalyst.blogspot.com where readers can obtain subscription details for the Silver Analyst newsletter. Comments and questions are also invited via email to silveranalysis@yahoo.co.uk.

 

Back to homepage

Leave a comment

Leave a comment