Silver, undervalued and overlooked. This is a fact about this
commodity and it very well might be about to change, and in a serious manner.
For years, it has been in a sideways pattern after reaching its
near $50 high. It has been cast aside as investors have become discouraged, and
honestly, you can't blame them. For those not strong of heart, or strong of
will, it has not been a great period to be invested in silver.
Yet, for those who have been thinking long-term, you have been
doing the intelligent thing and thinking in ounces, not fiat dollars. You have
been stacking and accumulating your real wealth,
your hard money.
Now, silver stands on a potentially explosive opportunity, one
that could be imposed on it not on its own accord, but by external political
forces.
It is no secret to anyone that a dispute over "the
wall" between Mexican and US leadership has been taking place in the
public court. The argument is over who is going to pay for it, and why they
should.
It is very unlikely that the Mexican government will do this. They
simply cannot due to political pressures from within their country, even if
long-term it would be in their best interest.
Unfortunately, there are other ways in which they can be made to
pay which are out of their control, such as the much discussed 20% border tax
that is now being floated out there. If imposed, this could lead to an
explosive rise in the price of silver.
Historically, Mexico has been the largest silver producer in the
world, and if a 20% tax is imposed on it, then it could lead to dramatically
higher prices in the short term, especially within the United States as
wholesalers are sent scrambling to find alternative sources of supply.
Take also into consideration that the US debt level is set to surpass
the $20 trillion mark any day now, and you can quickly begin to see the
potential profit that is unseen in the currently depressed silver prices.
Will this unfold? It is unclear as of yet, as an agreement could
always be reached before such dramatic actions are taken on the United States'
part, but the odds are there, and they are high as this game of chicken comes
to a conclusion. Regardless of the outcome, I'll be stacking.
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Nathan McDonald is a libertarian, entrepreneur and precious metals enthusiast. He has always taken a keen interest in free markets and economics since an early age, which naturally led him to become a true believer in precious metals and all that they stand for.
Nathan served eight years in the Royal Canadian Navy as an electronics technician, seeing the true state of the world, before starting his first successful business. He has since gone on to create a number of businesses, all of which are still in operation and growing.
In addition to this, Nathan runs a network of successful precious metals blogs, and a growing newsletter that has attracted readers from all around the world.
He is a regular and highlighted writer for the highly respected Sprott Money Blog, which covers world events, geopolitics and of course precious metals.
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The views and opinions expressed in this material are those of the author as of the publication date, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.
