In Jim Cook's Archive


For the past seven years Investment Rarities, Inc. has underwritten and published research by Theodore Butler. He has seen fit to preach the gospel of silver as a means to riches. He’s done so with expertise, knowledge and originality. Mr. Butler has never failed to look out for the interest of our readers. He doesn’t tell you to buy silver because he said so; he gives you the reasons and facts and asks you to check those facts out, and then decide on your own. Those who followed this advice have been greatly rewarded.

Mr. Butler recently wrote, “I believe we are entering into a long-term era of natural resource revaluation. Only the price can regulate and balance supply and demand. There seems to be no likelihood of a let up in upside price pressure for natural resources over the long term. We have too many people joining the demand side of the equation and too few large low-cost mineral discoveries adding to the production side. Even domestic recessions should not alter this long-term trend.

“If you accept my thesis of an inevitable rise in mineral prices, how can you profit from it? The answer is to buy silver. A more complicated answer is to buy any depleting industrial metal or mineral, at the cheapest price possible. But how does the regular investor make a direct investment in real oil, natural gas, copper, lead or zinc? In reality, you can’t effectively buy them, and they’re not cheap anyway, even if they may go higher. Compare that to silver. It can be bought by anyone in any denomination. And the profits being reported by the silver producers, where they exist at all, certainly do not suggest a high price. Real silver is still do-able and not expensive.

Silver is a material known, mined, used, and valued since the dawn of civilization. It will be used and valued until civilization ends. For the past 150 years or so, tremendously varied and new uses were discovered for this age-old material, which contributed to the progress and modernization of our society. This came about because silver is the best conductor of electricity and heat, the best reflector of light, is integral in the photographic process and has important health benefits. Because of all these new, growing and unanticipated uses of this material, demand has greatly exceeded production. This has necessitated the draw down and consumption of almost all the silver that was mined and accumulated for 5000 years. Every measure of total known world inventories in the past half-century show declines of greater than 95%.

It is important for real silver investors to recognize that the past six years were merely a warm-up for the next few years. There is obvious tightness in just about all industrial metals and minerals. The long-term fundamentals and demographics greatly favor natural resources. Of all the candidates for investment, silver stands out as the best due to its ease and practicality of ownership and its relative low price, which creates a compelling risk/reward equation. However, the unique short position in silver gives the owner of physical silver an advantage of unprecedented dimensions. It does not matter how the short position is resolved, it must be resolved and that will be an astronomical windfall for the real silver investor.

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