Silver Supply Issues, The Rise of Gold, and The Future of the Dollar
The U.S. Mint recently announced its decision to halt all production of some of its more popular silver coins. The reason? It cannot source enough silver blanks from its suppliers to meet the explosion in demand for its silver products.
When you read about total world silver production, you may wonder how that can happen. World silver production in 2021 was about 24,000 tonnes or nearly 850 million ounces. So indeed, there would seem to be enough to go around. However, It is not. Roughly over half of the world’s Silver in an average year is used for industrial purposes, electronics, medical gear, or solar panels ( Which, with Biden and the Left pushing The Gas Prices Higher: will only continue to eat into the silver supply). Much of the rest gets turned into jewelry or silverware or is refined and minted into silver coins or bars for investors.
However, before mints can use that Silver, it has to be refined to specific fineness standards, which today, for most silver coins, means refining it until it’s .999 or .9999 fine. Then that nearly pure Silver has to be formed into coin blanks of the proper size and thickness for mints to use in their presses.
That entire process takes time, and it isn’t exactly a simple process either. Furthermore, if suppliers have blanks for one type of coin but not for another, it is not easy or cost-effective to melt down those blanks and reform them. So, in other words, just because there might be a lot of Silver out there in the world, or just because there might be blanks of some sort in supply, does not mean that that Silver is in a form that is useful for mints to make available to investors.
The U.S. Mint’s recent production hiatus should impress upon silver investors that we are still dealing with potential supply chain issues regarding the availability of popular silver coin products. In the past, we have had to deal with supply issues due to COVID striking mint workforces, COVID-related shipping restrictions holding up imports of silver coins from abroad, Russia produces nearly 10% of the world’s Silver that is exported, and it seems as a new covid variant is popping up all around China and will be here in the States before we know what to do.
We may also have to deal with war-related supply issues, as Russia accounts for 5-10% of world silver production. With Russia being the target of Western sanctions and nearly cut off from world markets, that is a hit to silver supply that will most certainly result in higher silver prices. If China does support Russia with funds and military aid, we will see the prices of everything, including inflation, soar well beyond anything we have begun to see, as that would be an absolute nightmare with China being the single largest exporter to the U.S. as well as the largest importer of American goods.
If war expands or heats up in Europe, there is also a possibility of shipping issues with getting silver products from Europe to the U.S., And now with investor demand rising as people try to get not another financial vehicle before theirs collapses, there is beginning to be fewer silver products making their way across the ocean.
Do not Take Silver Supply for Granted
This is to say that silver investors or would-be investors should not take the current silver supply or silver availability for granted. What is here today could be gone tomorrow and could be gone much sooner than you think.
We have all known that Silver has a great potential for price appreciation, particularly as it has been lagging gold in recent years. With Silver’s history of making more significant gains than gold during precious metals bull markets and during times of crisis, now is the opportunity to capitalize on that by buying Silver while it is still cheap and, more importantly, available.
Many investors watched as Silver more than quintupled in price after the 2008 financial crisis when it hit $49.00 an oz. in 2011. It was one of the success stories of the crisis, a bright spot in an investment climate that otherwise looked incredibly bleak. Moreover, many who saw Silver’s performance then vowed to invest in Silver the next time a crisis came around.
This time is significantly more bullish as the war in Europe worsens by the minute , and high inflation forms a perfect storm threatening everyone’s financial health and well-being. No one could have predicted at the beginning of 2020 what has happened between now and then. Who can predict what will happen during the next two years and beyond?
Protecting Your Future with Metals
In this world of uncertainty, investors want to reconnect with sources of financial stability. With markets having recently entered correction territory, fears of a pending stock market collapse are growing. Investors want safety and security, and Silver can help offer that. If Silver was at $49.00 in 2011, you have to think that the world is in a much more uncertain and unstable place at the current time.
A Digital Dollar?
The U.S. is moving forward with creating its digital dollar; as we know them, banks could be a thing of the past. Last Wednesday, President Joe Biden ordered the Treasury Department to consider creating a government-regulated digital dollar.
It would probably be as simple as opening up an app, and you can have every banking service you have ever dreamed of right in front of you. You can also guarantee that this brings into the Great Reset that everyone has been talking about the last few years.
According to President Biden, it likely would not replace the physical dollar, but it would cut out the middle man, banks. If there is another way that we can buy and sell stuff without putting our money in the bank, where are the banks going to get the money to lend?
Current Crypto Currencies and the digital dollar are similar but different in many ways. One of the most significant differences is that current cryptocurrencies are unregulated, and U.S. digital money would be regulated. The difference with Bitcoin, in particular, is that Bitcoin comes in a limited, capped quantity. Therefore, the government could create as much as it wants.
Bitcoin’s value changes often, but a digital dollar could be tied to the actual U.S. dollar, making its value more stable, except for the fact that our adversaries are doing everything they can to get away from the dollar as the gold reserve, which would also make a digital dollar just as insignificant as the dollar backing it.
If some standard cryptocurrency had to compete with U.S. digital money, some would not last very long. It is possible that as a result of this order, you could see specific cryptocurrencies no longer be viable. Everyone will move to hold the most stable, the most viable one in the long run, which means they could lose on some of these investments.
Gold is and will always be KING
This process is still in the early stages. For the next few months, federal agencies will be looking at the risk and benefits of cryptocurrency. For sure, the future will not look like the world we have known for over the last century. A digital dollar would allow the government to have complete access to every American finances, how and what they use the money on, which party they contribute funds to, how much we give at our local Church, If and where they go to Church as well as every single detail about our lives. We think they have an overreach of power now; imagine if they controlled the currency in this type of fashion.
All of this leaves a lot of speculation in one’s mind about what and how to prepare and protect oneself for when this happens. The black market for precious metals would skyrocket. Who would want to buy a firearm, and the government knows precisely what was purchased not because of a background check but because of the tracing of their banking? Also, would the digital dollar be backed by the current collapsing currency, or would they do as has been proposed for quite some time, and back up the new currency with gold, except instead of a full backing, they only back 10% of its value with gold? It would surely make the rest of the world adopt the new currency so that America remains the superpower that we have been, and It would stabilize the current dollar fall and make gold sit around $8,000 an oz. Maybe none of this happens, and we stay on this disastrous course that we are on, or I’m correct, and they move to a digital currency; gold and Silver have solidified themselves in the future as much as they have, if not more so than they have even in the past. Don’t show up to a gunfight with a knife, Allocate a portion of your portfolio Now, While you still can.
