People ask me, "How will I sell my silver if the dollar dies, or during chaotic times?" Or, "If there are no dollars, what would I sell my silver for?" Another variation of this question is, "Why would I want silver if I can't spend it?" And advanced traders ask, "What is the exit strategy?" Good questions. I think that part of the reason this is a popular concern about silver is that it's true that we can't spend silver today, but people know that silver should be money and that we should be able to be able to spend it. But since we can't spend it, then silver is considered useless. But money (and silver in particular) is more than just a circulating medium of exchange, it's also a store of value. And this brings me to supply and demand. The reason you want silver is that nobody is using silver as money in the form of a circulating currency. There is no nation on earth that is issuing silver currency that people use to buy things on a daily basis. Therefore, monetary demand for silver as a currency is zero. This form of demand cannot get any worse than it already is. This form of potential demand, monetary demand, is huge. This dynamic can only change in one direction, up. This is an extremely important consideration. Pause and think about that for a moment. Increasing monetary demand for silver means that silver prices will move in one primary direction, which is up. Fluctuations, yes, but up, overall. Monetary demand will be the biggest driver of silver prices that there can be, and it scares the people who have the right to print our money. This is why you often will hear disparaging comments about monetary demand for silver, such as, "silver is in a surplus" meaning that investors are buying the difference that industry is not. Or they will write, "speculators must continue to buy silver to keep prices propped up", as if the paltry $2 billion per year of investor demand for silver is somehow too much. As I see it, we will see hundreds of billions of dollars of investor demand by the time a mere 1% of people wake up to the inflation that exists, and begin buying silver, at what I will believe will be the beginning of this unstoppable bull market of all bull markets in silver. In other words, since you can't spend silver today, since there is no monetary demand (as a currency) at all, then this means that the value of silver is about as cheap as it can get, making silver the perfect undervalued, and overlooked, and unloved and misunderstood investment opportunity. The additional upside for silver is that industrial demand is huge. Most of all newly mined silver, or perhaps even more, is consumed by industrial demand. Investment demand remains lower than even scrap recycling. The silver scrap market is about 200 million oz. per year, while investment demand remains a paltry 100 million ounces per year. This means that the world's remaining pile of silver just continues to get smaller and smaller, and silver becomes more and more rare with every passing day. That's the perfect set up for massively increasing values for silver. I write "values" and not "prices" because many people get confused thinking that a high price for silver might be meaningless if there is also a high price for things you need like bread and gas. A common misconception about silver that people have is that silver is doing what it will always do, which is just "hold value steady", since a quarter is worth about a gallon of gas today, just like in the past, betraying their thinking that silver will probably not outperform nearly all other forms of investment. But silver must outperform. Silver is a tiny market today. Potential monetary demand is lurking and is huge and massive. Monetary demand will not pour into gas or oil or bread like it will pour into silver, because silver is money, and gas and bread are not and cannot be money. These are two main forces that will impact silver unlike anything humanity has ever seen before in human history. Never before in human history has the entire world stopped using silver as money, everywhere, in every nation, all at once, as has happened over the last 150 years, starting with Germany and ending with the United States in 1964, the last year our government printed silver currency. Since 1964, it's now been 49 years with no silver currency anywhere in the world. During this time, the other main factor for silver has begun, and there is no historical record of something like this ever happening before in any other era in human history. In 1945, at the end of World War II, the age of electronics began. People began buying dishwashers, clothes washers and dryers, electric can openers, and all sorts of electric gadgets. This increased the industrial use of silver by a factor of ten times greater than just before World War II, to about 6 tenths of an ounce of silver per person in industrialized nations. This industrial demand has continued to this day, at about the same rate, because even as manufacturers figure out ways to save silver, other manufacturers start using more silver. So, silver prices have remained shockingly stable in our era over the last 50 years, as monetary demand has ended, because industrial demand has risen to take its place. The point is that monetary demand for silver has never hit the silver market at a time when all the world's silver has been consumed by industry. When investment demand really does hit, the results for the value of silver will be spectacular and astounding. I don't really think I can write about what it might be like, because it might take more creative capacity than I can conceive of. Think about these facts, and this point. It means that there are no historians who can point to any historic examples of what the future for silver will be like. There are no monetary experts, no investors, no newsletter writers, no creative writers, who can tell you what it will really be like in the silver market in the future when values for ultra scarce silver are recognized by the masses. There are no experts of any kind anywhere in the world who can know how spectacular and amazing the future high values of silver will reach. So, when the inevitable happens, that silver's value becomes well known, then spending silver is not going to be one of the biggest problems. It might not be "spendable" in the common sense anyway, as silver might become far too valuable. But let's consider the present. Far less than 1% of people are buying silver today; less than 1 in 1000! When 1% of money in the banks starts buying silver on an annual basis, that will drive silver prices to over $500 per ounce. At that time, there will be far more coin shops, and more places to sell silver, because between ten to one hundred times more people will be buying silver compared to today. The current number of coin shops will simply be woefully incapable and inefficient at meeting that very beginning stages of silver demand. People often hear my argument for $500/oz. silver, and they scratch their heads, wondering, who would buy silver at $500/oz., when they can get it for $23 today? The answer is in the premise. About 1% of the money in the banks will be flowing into the silver market to protect itself from inflation! Perhaps the real question is, why will people be willing to pay $500/oz. in the future, if they can get silver at $23 today? Well, nobody has a time machine. Nobody can travel back in time to get silver at $23, when silver prices will reach $500 per ounce. The other choices at $500/oz. for silver will be either gold, or copper. And gold might be $5000/oz,. or higher. And copper is not a viable alternative. See, I have a brick of copper weighing 33 pounds in my shop to make this point. Copper is $3.24 per pound. So, that heavy brick of copper is worth $106.92, at spot copper prices. But I think I paid about $300 for it, because at the time, copper was $4.50 maybe, and there was a hefty manufacturing cost. Regardless, nobody is ever going to lug those heavy copper bricks to the grocery store to buy groceries. If the customer does not want to lift it, neither will the grocer want to lift thousands of them. People complain about the wide prices to buy and sell silver, that range from 6% to 15%. The spreads on copper are more like 100% to 200%. Copper is not money, and never will be. Pennies? As ridiculously cheap and heavy as copper is, copper is too valuable to use in US pennies, which have been zinc since about the 1980's. So, that's why people will pay $500 for silver. Because by that time, 1% of people will realize that there are no reasonable alternatives; not paper money that's going down, not gold that's too expensive, and not copper that's ridiculously heavy. Well, there's also oil, and food, and guns, but similarly, those all suffer from the "too heavy to be money" problem. So, this is the answer to "how will I sell my silver". You will sell your silver to the masses of people who will be dying to buy your silver because there are no other alternatives for them, that's how, and that's to who. You won't have to sell it directly, although with ebay, you will increasingly be able to. There will probably be more and more bullion dealers. Or more and more retailers will start accepting silver, but probably not until after silver reaches about $500/oz, just for starters. As far as "exit strategy" goes? You won't need an exit strategy. The masses will need an exit strategy for their dying paper dollars. Silver is the exit strategy.
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I'm working in my two coin shops five days a week, and I now answer the phones. Please only call if you are ready to order, because I often do have customers waiting. The best time to call to catch me for a longer chat is after the morning rush, about 2-3pm, west coast time.
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