Hi Lufkinunit!
The price of silver actually peaked close to $50 back then but only for a few hours of trading. That is why I went with the $30 price level for my comments since I think it is a more realistic point for a historic high in comparison.
My personal price objective is for silver to trade in the three-digit range in the years ahead. I have already pointed out how stockpiles of silver are much lower today than back in the last spike high. But also consider the much higher multiples of printed money in circulation today, the fact that world population has more than doubled since then, and the fact that they are literally hundreds more uses for which silver is a critical component today that did not even exist the last time around. Also, consider that the world is now facing a currency crisis and that silver is the dominant monetary metal through human history (not gold, as is commonly assumed). These factors would suggest to me that silver can and should go much higher this time around.
Also, consider that the world CBs hold no silver, and thus are not in the same position to dump metal today to calm rising demand, as they did back in 1980. Consider that spec players and hedge funds now account for much of the silver short position in the metals futures, and this was not nearly as big a factor in 1980. So you have more acute demand for silver to satisfy delivery requirements, but not the same overhang of easily sourced silver supply on hand. We know from other commodities that have faced similar short squeeze behaviour that the upside can be explosive.
Will a 30 million ounces of new production in the next couple of years be a factor to address the above issues? Not a chance. We have an urgency of short term demand that will not be resolved by incremental production growth months into the future.
Lastly, I draw attention to the fact that nearly every other commodity has surpassed the old all-time highs in the recent trading, but silver alone remains far below that old barometer. This in itself is an indictment of a crooked market that is ripe for a quantum leap higher in price. One can plug in a variety of production and demand assumptions for the last few years but I do not think there is a credible analysis that documents a silver surplus. And dig into the footnotes of the scam report put out by Virtual Metals on silver, and you will see a massive estimated silver recycling from Asia to account for their assumption of high supply levels. This is convenient since no firm data is available anywhere to prove this estimate. They can make up any number they wish in order to arrive at their conclusion of a surplus. If you discount this trash, then most other reputable fundamental analysis shows a distinct silver deficit ongoing for many years.
Combine all of the factors I have summarized and one must conclude silver is headed much higher in the years ahead.
cheers!
mike
