Silver supplies will be depleted and industrial demand will “suck up all the silver that’s available,” over the next ten years, causing silver prices to rise, and making it the best investment in decades, according to David Morgan, Founder and Author of The Morgan Report.
“If you’ve got a long time horizon, like ten years or more, I can’t think of something that would be better than a silver investment,” he said. “Silver will shine at some point… but it’s probably going to take a natural corner… a natural corner is when industry alone sucks up all the silver that’s available and there isn’t any left.”
Morgan told David Lin, Anchor and Producer at Kitco News, that the silver supply could run out within a few decades.
“The [U.S. Geological Survey] said that silver would be the first element on the periodic table that would be in such short supply, and that was a few years back,” he said. “Just the industrial side alone is probably going to take all the silver available at some point in time.”
Supply Crunch
Commodities like base metals have fallen in price over the year, with copper down 18.4 percent and lead down 8.3 percent. Morgan suggested that silver, which is often a biproduct of base metal mining, will suffer supply-wise from a fall in the price of base metals, since there would be less incentive to mine.
“Seventy-percent of silver is a result of base metal mining,” he explained. “If that is down, and down noticeably, then that takes a great deal of silver supply off the market.”
Morgan stated that rising energy costs would limit silver mining as the world’s oil reserves are depleted.
“We are at, or maybe just past, the energy cliff,” he said. “I’m a big believer in the peak oil situation. What we’re seeing is inefficiencies in the fracking sector. There are very few places that fracking makes sense from an economic standpoint. And then you’re seeing depletion that’s taking place rapidly throughout different parts of the world… that means higher oil prices.”
Demand Surge
Pointing to growing industrial usage of silver, in areas from photovoltaics to semiconductors, Morgan said that applications of silver in industry will continue to grow, squeezing the available stock.
“The Silver Institute put on their pie chart that the solar uses in 2019 was about 9 percent of the silver industry, and now it’s probably around twelve, and that’s going to continue to increase,” he said. “You may recall that there was a statement made by the U.S. Mint that there was a worldwide silver shortage, and that came from the Mint Master of the U.S. Mint. He quickly retracted that statement. I don’t think there is a worldwide silver shortage. It’s just that if you look at what the mint is producing now, they’re not able to keep up with demand whatsoever.”
Morgan added that there are no good industrial substitutes for silver.
“Nothing reflects light as well as silver, and nothing conducts electricity as well as silver,” he said. “Most silver applications are absolutely essential and irreplaceable. There is no substitute.”
To find out Morgan’s short-term price target for silver, watch the video above.
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