Silver is a key asset for the apocalypse
NOTICE: THIS TEXT WAS WRITTEN WHEN AN OUNCE OF SILVER WAS TRADED AT 15$ AND 12€
Silver is used in lots of industrial applications and it cannot be fully recovered in the recycling process. Every year tons of silver are used and then considered unrecoverable. Therefore silver is increasingly scarce. In addition, silver is currently undervalued and its price will multiply several times after the economic collapse starts. Your stockpiled silver will not make you completely unaffected by the collapse, but hopefully you and your family will be able to buy medicine and food if the anarchy is not total.
I have no interest in any company that sells silver so I try to be unbiased. I'm just a person concerned about the safety of you and your family. I would like you to survive the oncoming turmoil. Please follow my advice and buy as much silver as you can afford.
I will reproduce the main points of a scientific paper published in 'Resources, Conservation and Recycling' in 2014 written by Harald Sverdrup, Deniz Koca and Kristin Vala Ragnarsdottir called "Investigating the sustainability of the global silver supply, reserves, stocks in society and market price using different approaches". They explain silver scarcity and how this resource will deplete soon in planet Earth.
The article presents the SILVER model, which is part of a larger model called the WORLD model. It is amazing what these researchers have done. The article begins with "It is a fact beyond discussion that silver is a limited resource on the globe. Because silver always was rather rare and in short supply, it served as a measure of value".
They define the following:
A) The time of exhaustion is equal to the known reserves between the current production. Obviously, known reserves may increase in the future and actual production may change, but it is a good indicator of "how much time is left."
B) The peak production occurs about 40 years after the peak discovery.
C) They use the Hubbert model.
D) They begin simulating the past. With the information they manage, they come to the first figure. There was a peak in the year 1000BC, other in 300BC, another one in 200AD, another peak in 1000AD and another one in 1500AD. Now silver is mainly extracted from copper, zinc, deposits rich in silver and silver mines. Each of these sources will have a different silver peak, but in this long-term figure they look close to each other on the time scale.
Silver is used in lots of industrial applications and it cannot be fully recovered in the recycling process. Every year tons of silver are used and then considered unrecoverable. Therefore silver is increasingly scarce. In addition, silver is currently undervalued and its price will multiply several times after the economic collapse starts. Your stockpiled silver will not make you completely unaffected by the collapse, but hopefully you and your family will be able to buy medicine and food if the anarchy is not total.
I have no interest in any company that sells silver so I try to be unbiased. I'm just a person concerned about the safety of you and your family. I would like you to survive the oncoming turmoil. Please follow my advice and buy as much silver as you can afford.
I will reproduce the main points of a scientific paper published in 'Resources, Conservation and Recycling' in 2014 written by Harald Sverdrup, Deniz Koca and Kristin Vala Ragnarsdottir called "Investigating the sustainability of the global silver supply, reserves, stocks in society and market price using different approaches". They explain silver scarcity and how this resource will deplete soon in planet Earth.
The article presents the SILVER model, which is part of a larger model called the WORLD model. It is amazing what these researchers have done. The article begins with "It is a fact beyond discussion that silver is a limited resource on the globe. Because silver always was rather rare and in short supply, it served as a measure of value".
They define the following:
A) The time of exhaustion is equal to the known reserves between the current production. Obviously, known reserves may increase in the future and actual production may change, but it is a good indicator of "how much time is left."
B) The peak production occurs about 40 years after the peak discovery.
C) They use the Hubbert model.
D) They begin simulating the past. With the information they manage, they come to the first figure. There was a peak in the year 1000BC, other in 300BC, another one in 200AD, another peak in 1000AD and another one in 1500AD. Now silver is mainly extracted from copper, zinc, deposits rich in silver and silver mines. Each of these sources will have a different silver peak, but in this long-term figure they look close to each other on the time scale.
If we combine the productions of each silver peak we arrive at the estimated historical production. The graph also shows what the American mines meant to silver production. If we only have this information we would think that by 2150 the production would be zero but it does not seem like it is going to be this way.
The following figure reports how fine silver was produced and spent in 2012 (thousand of tons)
The following figure reports how fine silver was produced and spent in 2012 (thousand of tons)
The authors also study and incorporate into their model the causal chains between factors such as the price of silver and the quantity produced in mines, reserves and prospections, supply, costs per ton, oil price, technological improvement of processes, etc. They not only describe the present, but they also model cause-effect relationships in a reasonable way. It can be applied both in the past and the future.
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It is often said that a lot of silver is lost because the recycled percentage is very low. That is true today, but if the price went up, then a lot of the percentage recycled would increase to the percentage of recycled gold, which is very high.
This data shows how many grams per capita of available silver humanity had in different periods. The discovery of America doubled silver per capita but now we are again at average levels of about 162 grams. There are 1.25 million tons of sivler in jewellery, industrial applications and as investment, usually in lingots.
Date and grams of available silver per capita
300 BC 66 // 200 AC 133 // 800 AC 267
1490 AC 134 // 1550 AC 250 // 1720 AC 206
1840 AC 196 // 2012 AC 162 just 5 ounces!
SILVER RESERVES
Sometimes only the silver reserves are taken into account, as if silver was not extracted as a by-product of the mining of other metals. Silver also is obtained from copper, zinc, gold and lead mines. Copper mining has on average 0.032% of silver, 0.04% in the case of zinc, 0.08% in the case of lead and 6% in gold mines. If we take into account the known reserves of each mineral and multiply them by the silver that each has, there are between 2 and 3 million tons still not extracted:
Element, Silver reserve range of each source (tons) and % of total reserves of silver
Silver mining: 916,000-1,240,000 // 39%
Copper mining: 684,000-925,000 // 30%
Zinc mining: 531,000-725,000 // 22%
Lead mining: 34,000-46,000 // 8%
Gold mining: 17,000-22,000 // 1%
As I wrote before, this model is part of the WORLD model, which is truly awesome. All predictions are subject to error due to the price of oil, GDP, population. Assuming everything is "normal" and the WORLD model is more or less correct we arrive at this figure.
Date and grams of available silver per capita
300 BC 66 // 200 AC 133 // 800 AC 267
1490 AC 134 // 1550 AC 250 // 1720 AC 206
1840 AC 196 // 2012 AC 162 just 5 ounces!
SILVER RESERVES
Sometimes only the silver reserves are taken into account, as if silver was not extracted as a by-product of the mining of other metals. Silver also is obtained from copper, zinc, gold and lead mines. Copper mining has on average 0.032% of silver, 0.04% in the case of zinc, 0.08% in the case of lead and 6% in gold mines. If we take into account the known reserves of each mineral and multiply them by the silver that each has, there are between 2 and 3 million tons still not extracted:
Element, Silver reserve range of each source (tons) and % of total reserves of silver
Silver mining: 916,000-1,240,000 // 39%
Copper mining: 684,000-925,000 // 30%
Zinc mining: 531,000-725,000 // 22%
Lead mining: 34,000-46,000 // 8%
Gold mining: 17,000-22,000 // 1%
As I wrote before, this model is part of the WORLD model, which is truly awesome. All predictions are subject to error due to the price of oil, GDP, population. Assuming everything is "normal" and the WORLD model is more or less correct we arrive at this figure.
Table 11 in the article shows the time of exhaustion of the reserves with different scenarios starting from the year 2010. If everything continues as in that year the known silver reserves will end up as soon as 2041. It does not mean that the silver is depleted, nor does it mean that the production of silver is over, because new reserves would be discovered. If everything remains the same but we are at the top of the reserves the year becomes 2065. If the recycling increased to 70%, nothing unexpected if the price increases, we move to the range between 2067 and 2113. If recycled up to 90% we would be talking about the range from 2173 to 2310. Quite far ... and we are not talking about the end of silver but the end of the production of currently known reserves.
THE LAST SILVER PEAKS
Going straight to the last ones (more info in table 12) we have the industrial age silver rush in 1920. We extracted a maximum of 6000 tons to the year. Shortly before 2040 the peak of the mining of copper, zinc, lead, cadmium and gold will take place with a maximum of 25000 tons per year.
The production will decrease and the last silver, potentially under the ice of Siberia and Greenland, will peak in 2350 and the maximum production per year would be around 500 tons. The absolute peak silver will occur around 2040 except if we consider the silver that exists in asteroids, comets or other planets, sources of minerals that currently are science fiction.
In the following figure we have the production of silver. Points are observations and line predictions with the model SILVER, also compared to the simplest predictions with the Hubbert model. We can see how production increases year by year until 2030-2040, but it will fall very quickly after that date.
THE LAST SILVER PEAKS
Going straight to the last ones (more info in table 12) we have the industrial age silver rush in 1920. We extracted a maximum of 6000 tons to the year. Shortly before 2040 the peak of the mining of copper, zinc, lead, cadmium and gold will take place with a maximum of 25000 tons per year.
The production will decrease and the last silver, potentially under the ice of Siberia and Greenland, will peak in 2350 and the maximum production per year would be around 500 tons. The absolute peak silver will occur around 2040 except if we consider the silver that exists in asteroids, comets or other planets, sources of minerals that currently are science fiction.
In the following figure we have the production of silver. Points are observations and line predictions with the model SILVER, also compared to the simplest predictions with the Hubbert model. We can see how production increases year by year until 2030-2040, but it will fall very quickly after that date.
Finally I attach the data of the predicted price in pink in the chart below. The current price is between $15 and $20 and it was as little as $5 and as high as $50 just a few years ago. The SILVER model predicts a current "fair" price of about $20 that would rise to $90 in the year 2140. Of course I do not think they incorporated the QE policies or the problems that COMEX might have in the future!
BUY SILVER COINS ACCORDING TO YOUR FINANCIAL CAPACITY
In conclusion, at current prices silver cannot be a long-term bad investment. And if you don't sell it and your grandchildren find it they might be extremely grateful. However, having silver is more a safety measure for a sudden collapse of the economy than an investment.
If you live in the United States buy Eagles, if you're in Canada perhaps you prefer to buy some Maples and if you're in Germany you should have some Philharmonics . In Mexico Libertad is your coin, Kangaroos for Australia and in the United Kingdom I would advise some Britannias. It doesn't really matter because all these coins have the same silver content and usually the same prices, but local coins are more easily sold. If you don't live in any of these countries I would combine American Eagles with some local historical silver coins. For example in France I combine 0.999 silver coins with some cheap 5 Francs of the Third Republic and 50 Francs of the 70s, when the money was still real money. In Spain, where I live, I would suggest 5 peseta coins (duros) and 100 peseta (paquillos) of you can find them at a good price. They are not pure, but they are cheaper than silver ounzes.
Buy only the coins you can afford, don't get obsessed with buying too much, and let's hope you never need to use them!
If you live in the United States buy Eagles, if you're in Canada perhaps you prefer to buy some Maples and if you're in Germany you should have some Philharmonics . In Mexico Libertad is your coin, Kangaroos for Australia and in the United Kingdom I would advise some Britannias. It doesn't really matter because all these coins have the same silver content and usually the same prices, but local coins are more easily sold. If you don't live in any of these countries I would combine American Eagles with some local historical silver coins. For example in France I combine 0.999 silver coins with some cheap 5 Francs of the Third Republic and 50 Francs of the 70s, when the money was still real money. In Spain, where I live, I would suggest 5 peseta coins (duros) and 100 peseta (paquillos) of you can find them at a good price. They are not pure, but they are cheaper than silver ounzes.
Buy only the coins you can afford, don't get obsessed with buying too much, and let's hope you never need to use them!
