Silver another Fundamental Reason (8/4/07)
In our modern manufacturing world, the supply and distribution lines are thin. Most goods today are produced and distributed in a just in time manner or lean manufacturing. as to opposed to holding big inventories, which protect a company in an event of an unforseen emergency. Since capital is tied up in those inventories, it's advantageous to the bottom line to hold minimal inventories. The downside to this kind of distribution is that it can be overwhelmed by distruptions and sudden surges in demand. Then just-in-time breaks down and fails miserably.
While silver may not be needed by the average peson to sustain daily life, it is certainly needed by thousands of industrial consumers, whose corporate life suffer and die without a continuous supply. It is industrial consumers, who will panic at the first sign of supply disruption. Perhaps not all of them, but certainly some of them will panic.
Then the spiral will begin.
Nothing comes close to silver, as both a vital industrial commodity and a precious metal recognized by the masses. As the price escalates in an inventory panic, people will be attracted by the price action to participate in the price rally. This will add fuel to the fire.
The coming buying panic may take 1-2-3 years to develope and will be worldwide.
A commodity in a deficit must become unavailable at some point, unless the price rises enough to slow demand and increase supply. That is the great allure and certainty in silver. That buying panic will occur whether you buy or not.
You can only maximize your profit if you are positioned before that buying panic occurs.
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