The Next Silver Run To $50 (And Beyond)
By: Theodore Butler
SilverSeek.com
August 9, 2018
Twice in the past the price of silver has risen in a short period to $50. It happened in 1980 during the Hunt brother’s manipulation and again three decades later in April 2011, when the price rose to nearly $50. Prior to the price run up in 2011, I wrote that a move to $50 was more than possible, since it had already occurred and that proved such a move was possible. Something that has happened twice before can certainly occur again. One thing that makes it probable is that there was three times the amount of silver above ground in 1980 than there is today. The six billion ounces that existed in 1980 has shrunk to two billion ounces of industry standard 1000 ounces bars. The amount of world money creation and buying power has increased exponentially over the past seven years. It is nothing short of extraordinary that there is less than a third of world silver inventories remaining today than there was in 1980 while the price has remained far below the peak it reached back then.
In 1980, there were less than 3 billion ounces of gold in all forms above ground throughout the world – the cumulative production of thousands of years. Today, 38 years later, the total amount of above ground gold has doubled, thanks to an explosion of gold mine production. While silver mine production has similarly exploded over the past 38 years, there is much less silver around now. The explanation for why there is so much less silver and so much more gold is that silver is a vital industrial commodity, consumed in a wide variety of applications, while gold is not. Silver lost its primary consumption use – photography, due to digital displacement, but despite this loss, a myriad number of new uses powered silver’s continued consumption. Unlike silver, the price of gold is substantially higher than it was at its peak in 1980.
There is no minimizing the powerful dynamics in place for the next move higher in silver. That move should extend far beyond the $50 barrier of the past and, when the move does start, it will most likely unfold much quicker than the previous big moves. When it occurs, most observers will be dazed and confused. The principle dynamic of this coming big move in silver and gold will be the role of JPMorgan. Over the past ten years, as a result of its government-assisted takeover of Bear Stearns, JPMorgan has been the dominant futures (paper) short seller on the COMEX, becoming so powerful that it has compiled a perfect trading record – never once taking a loss and amassing many billions of dollars of trading profits. As remarkable as this unblemished trading record of the past decade has been, it actually pales in comparison to what JPMorgan has been able to accomplish in the physical market. It has used the highly depressed prices it largely created to accumulate on the cheap 750 million ounces of physical silver and 20 million ounces of physical gold.
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