If there’s one thing we know about precious metals, it’s that everyone has
an opinion about how gold and silver will behave as we
delve deeper into global economic crisis. So, who better to give us
a bit of perspective than the Chief Executive Officer of one of the world’s
largest primary silver producers?
Keither Neuemyer, who has been an outspoken critic of rampant price manipulation on commodity exchanges is the CEO
of First Majestic
Silver and the Chairman of precious metals mineral bank First Mining
Finance. His latest revelation suggests that despite billions of
dollars being traded daily on paper exchanges, physical silver
supplies around the world have tightened to such an extent that
manufacturers have been left with no choice but to come directly to mining
companies to acquire the precious metal for their high-tech products. With
this in mind, and the fact that silver demand today is greater than when it
was trading at nearly $50 in April of 2011, one can’t help but think that
based strictly on the fundamentals we should see a much higher price in
coming months and years.
We got approached by an electronics manufacturing company that
manufacturers cell phones and computers about four weeks ago… There were
three of them in the meeting and they wanted to bid on our silver… It’s the
first time in the fourteen years that I’ve been with First Majestic that
we’ve ever been contacted by an electronics manufacturer… That tells me there
is something changing in the market.
Full interview via Future Money Trends:
(Watch
at Youtube)
Despite the supply demand fundamentals clearly indicating prices should be
significantly higher, Neumeyer understands that this isn’t always the driving
force behind market moves.
I don’t think it’s supply demand fundamentals… You can’t tell me for a
second that when silver was trading at $50 in April of 2011 that the demand
for silver was greater than it is today. Actually, silver demand at current
levels at $16-$17 is greater today than it was when silver was at $50.
So, if the price was impacted by supply/demand fundamentals silver would
be trading at much, much higher prices than it is today.
And fundamentally, Neumeyer doesn’t even consider silver a precious metal,
but rather, a strategic metal that is absolutely necessary for the modern age
and one that is a lot more rare than most people understand.
This is what I don’t really get and this goes to the pure rarity of the
metal… I look at silver as a strategic metal not a precious metal
because it is so required for the human race for everything we do on a daily
basis… and people don’t really understand that… nothing of yours
would work… your computer… your cell phone… everything requires silver.
Right now, for every ounce of gold we’re mining only nine
ounces of silver. So that would suggest we should be trading at
9-to-1… So at $1200 gold that would be $140 silver or so… If you just look at
what we’re mining today that’s where silver should be trading… and we’re
trading at 75-to-1.
I just don’t think that ratio can last.
Fundamentals aside, looking strictly at gold’s monetary position in the
world as the only physical currency available to central banks, Neumeyer
explains that while average investor sentiment remains muted, the big
players, including financial institutions and some of the world’s most well
known investors, are already anticipating the fall out:
I’m a big bull on gold [and silver]. I think that we’re going to see a
major reset in the world… It’s coming, maybe not to mainstream thinking, but
definitely in some of the upper circles… it’s pretty well understood that
the debt in the world is never going to be paid off.
We have to have some kind of major reset that is likely going to
include gold… The Americans have the largest hoard of gold and to
pay off their debts they’re going to need probably north of $10,000
gold, which I think will happen.
I’ve been quoted many times saying I expect to see triple digit silver…
that’s assuming gold doesn’t move. If gold goes to $10,000… silver will be
some ridiculous number… it could even be $1000 silver.
And like China, Russia and investment fund managers positioning themselves
for when this reset does come to pass, Neumeyer’s First Mining Finance has
been rapidly
acquiring gold and silver mining assets around the world, to the tune of
some 15,000,000 ounces.
As crisis accelerates and physical demand becomes so overwhelming that
paper markets can no longer contain it, the broader sentiment of market
participants will drive the next bull market, a trend that according to
Neumeyer has already started:
It was almost like it was this last capitulation of selling that took
place at the beginning of the year.
Then all of a sudden there were no sellers left. Gold started to
get a bit of a bid… then due to all the talk about negative interest
rates… and some very influential and large well known players started to come
into the sector and the press started covering some of these investors who
were coming into gold…
There were a lot of things that suggested the sector had bottomed… all
of a sudden there was this huge rush of money… it was like there was all this
money sitting on the sidelines waiting for a reason to buy gold and silver
mining stocks… and it just all happened…
I’ve never seen such a broad-based move in such a short period of time… It
was pretty dramatic.
I’m hearing from a lot of big institutions that they completely
missed this move… this correction is well welcomed by many of these big
investors because this is their opportunity to start coming into this market
in advance of the next big move.
While we may not be able to time markets, we can certainly identify
trends.
If you’ve been paying attention then you have no doubt noticed that
investors big and small are realizing that when the economic, monetary and
financial systems detonate on a global scale there will be only one safe
haven asset class left to preserve and grow wealth.
You can learn more about Keith Neumeyer’s First Mining
Finance mineral bank and the various mining
projects they are involved in by clicking here.
For more interview likes this one visit Future Money Trends.
