Silver, Boom or Bust?

Question

I have started down the rabbit hole of silver and the trajectory. Silver is a hot topic. I hear all sorts of opinions of it tanking or going to the moon, curious on thoughts?

Henry Clark · Answer

Op depends on your perspective.

1.   If life is good don’t invest in it.  Even though it has skyrocketed for the last 2 years.  Still expected it to double in the next 1 1/2 years.  I would stay away.

2.  If you think the stock market will collapse 50% and the USD will lose 75% in the next 10 years then it is a great buy, even if it doesn’t go up in value.

3.  Great buy if you believe under supply for the last decade, comex and lbma stocks are dwindled, China and Mexico have put national clamps in silver trade, in elasticity of silver price-  say $10 of silver in a solar panel-  if price doubles or triples will those companies still buy silver- same for ev, military apps, etc., production takes 5 to 10 years to ramp up, only 20% of silver comes from silver mines- rest comes from copper/fold/lead/zinc mines who won’t dig just for silver, Silver arbitrage and shorts can’t hold the price down any longer without risk of being called and bankrupt, etc

4. If you think you missed the boat on silver then look at mining stocks. Wall Street analysts use quarterly and trailing data. The last quarters 100% price hike has not been computed into the market valuation. Operational leverage. If it cost $20 to produce silver and the price is $55. That is $35 profit. If the last quarter and going forward is $90 and $70 profit, stock price should do a multiple increase. Even though they already increased last year.

5. If you do invest it in. Decide when you will take profits. If the stock markets crashes silver and gold will crash within 6 months afterwards. Plant to transition out after the stock market crash.

All depends on your view of the world.  If you’re just chasing the latest fad like crypto then don’t use any logic.

Jaron Walling · Answer

It's a boom as long as the current administration keeps giving us geopolitical uncertainty, global economic concerns, and high inflation (Trumponomics).

It's boom if the demand for AI infrastructure, data centers, and advanced electronics keeps going (very sustainable - said no one).

It's boom if the government keeps hammering the US dollar's value (so much winning).

The silver bust occurs when any one of these situations stop.

Jaron Walling · Answer

It's unfair to say the least. One our counties blocked a 715 acre rezoning request last week. The vote also stops proposals from being reintroduced for at least 12 months which is rare in Indiana. The public is fed up with them.

I met a county commissioner through my 9-5 job and he seemed like a nice guy. Six months later he voted yes for big datacenter in that county. Needless to say nobody likes him.

Ying Tang · Answer

Tanking and going to the moon both mean one thing -- high volatility. I would stay away. If I really want to pursue, I would probably go with gold.

Caleb Brown · Answer

We have one trying to go in our area and it's a battle. They have the money to throw at these fights. I saw something regarding the utility cost increase that can be from these centers going in. More demand from the grid which rises everyone's electric bills.

Caleb Brown · Answer

That's what I have been thinking. The biggest draw I see is the need for silver in the data centers and infrastructure. I started buying silver with cash I keep in a safe, good hedge against these things.

Caleb Brown · Answer

Good points, thank you! For me it's a place to park cash that I would otherwise keep in a safe. I am going to accumulate for awhile but it's a fascinating topic right now. I sell a lot of items on FB so I hold cash from that.

Jaron Walling · Answer

It's a county-by-county war against data centers in Indiana. For every successful stop to a rezoning request another project pops up somewhere else. Big tech is relentless.

Silver, Boom or Bust?

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