Earlier this year, as investors around the world panicked and stock
markets crashed across the board, one asset class held strong and actually
gained. It was, by all accounts, a capital flow panic out of broader stocks
and into precious metals. As a safe haven, precious metals like gold and
silver have long been sought by a panicked populace during times of crisis
and given the current economic and monetary debacle created by central banks,
we can safely forecast a continued rise over coming years for this reason
alone.
But according to Keith Neumeyer, there is another key reason for why we
could see explosive prices, specifically in silver, because major shortages
loom and current valuations for the precious metal are nowhere near where
they should be. Given his experience and current position as the CEO of billion-dollar
mining company First Majestic Silver and Chairman of mineral bank First Mining
Finance, there is no better source for understanding what’s happening in
silver markets today and where we can expect them to go in the mid to
long-term.
As Neumeyer notes in his latest interview with The Daily Coin, gold is currently selling for about 75
times the price of an ounce of silver, but from a mining and production
standpoint, the physical ratio is about 10-to-1. Coupled with growing global
supply shortages for this essential metal, that means prices for silver
should be trading significantly higher than they are today:
We are currently trading about 75-to-1 thereabouts and the mining
ratio is about 10-to-1… so for every ounce of gold we’re mining 10 ounces of
silver… so that tells you it’s way rarer than the market understands…
I think that as gold goes higher over the next couple years, the
ratio is going to collapse on a percentage basis… and that’s why I think we
will ultimately see triple-digit silver.
Watch the Full Interview via The Daily Coin:
(Watch At Youtube)
Neumeyer goes on to note that the silver shortage is already becoming
apparent in electronics markets, citing a recent discussion with a large
electronics company that was having problems acquiring the precious metal for
components in their products:
Markets go through periods of time where they’re imperfect, but they do
perfect themselves over time. What I mean by that is eventually
supply and demand will take over, particularly in the silver space
where it’s such a tight market… We have seen in 2015, lower production across
the board… and silver is a lot more rare than most people actually think it
is…
We were contacted by a a big electronics manufacturing company… a
manufacturer of televisions and cell phones looking for silver supply… In the
thirteen year history of First Majestic I have never been contacted
directly by an electronics manufacturer for supply of silver… so that’s
telling me there is something different going on in the market place…
What’s happening is that mine production slow-downs and global shortages
are finally catching up with the market and electronics companies are having
difficulty sourcing silver. This has been seen in other sectors as well,
including the U.S. Mint and Canadian Royal Mint, both of which were forced to
suspend sales of silver coins and bars respectively in 2015 as a result
of high demand and lack of supply.
These are key indicators that industries dependent on silver are already
running into problems acquiring the supplies needed to continue
operations.
And while prices have yet to catch up, the trend is clear, especially
considering the recent admission by Deutsche Bank that it has been
complicit in the suppression of precious metals prices and that other large
financial institutions are in on the scheme.
Given the dire state of the global economy, failing monetary policies from
central banks around the world, supply-demand fundamentals, and the fact that
price suppression schemes have now been exposed, one can’t help but consider
that the current gold-to-silver ratio will, as Neumeyer suggests, collapse to
its natural state in the near future.
That can only mean one thing: higher silver prices, and perhaps as the
Chairman of First
Mining Finance notes, triple digit prices that will see massive
capital flows into silver related assets.
To learn more about Keith Neumeyer and what his company First Mining
Finance is doing to take advantage of the coming boom in silver click here.
For more informative financial interviews like the one you just
watched visit The Daily
Coin.
