Declining Silver Deposits to Mine
No new silver deposits have been discovered in recent decades, the result of which is that more silver is used and required than it is mined. Ted Butler expresses this well when he wrote that ‘It is only a question of time when the shortage of silver will come. The USA has enough gold for 1,000 years of future defense needs, and not one day’s worth of silver.

Growing Investor Demand
There is increasing demand for physical silver in terms of investor demand. There is presently less above ground investment-grade silver available to investors than there is gold. As pointed out by Mike Maloney, ‘for the past 30 years the world has used up more silver than has been mined.

Increasing Industrial Demand
The second aspect of the physical silver demand relates to the ever-increasing industrial demand. Silver had been dubbed the indispensable metal, for it has literally thousands of essential industrial, medical, military and manufacturing uses. A case in point is the electronics industry. Each electronic device, like cell phones, computers, and even hearing aids contains a particular amount of silver; silver is the most electrically conductive metal on the planet. Even if the silver price shoots through to the stratosphere, so to speak, Apple will nonetheless still require a specific amount of silver to manufacture their electronic products, thus, being forced to absorb the price increase.

Manipulation of the Silver Price
The manipulation of the silver price by the so-called ‘cartel’ has been investigated since 2008. JP Morgan has been accused of being one of the central players in this price manipulation scheme. The price of silver will inescapably rocket to its intrinsic worth set by the free market. The longer the silver price remains manipulated, the more dramatic the breakout will be towards its fair value.

Gold/Silver Price Ratio
Historically, the average ratio between silver and gold is about 1:16. In other words, one ounce of gold could purchase about sixteen ounces of silver. Currently, the silver/gold ratio is around 1:110. This is clearly skewed and unsustainable and a correction is inevitable. As Chris Dwain has asked, ‘if throughout all of history, for every 1 ounce of gold that has been mined, ten ounces of silver have come out of the ground, how much longer can we expect to have a 1:110 ratio?’

The Inflation Adjusted Silver Price
The silver price is way below the inflation-adjusted high. In January 1982, the silver price reached an all-time high of about $50.00 per ounce, this is about 75% below the real 1982 silver peak price. The silver price is extremely undervalued in terms of its all-time price highs.