In Jim Cook's Archive


I’ve never been fortunate enough to be in on the ground floor of an asset like Bitcoin, Dogecoin or GameStop that go up by a huge percentage. Long ago, after years of conversation with analyst Ted Butler, I began to believe that silver was the ticket to making a fortune. I began to believe it would go up twenty or thirty times. In 2008, it did rise ten times, but I didn’t sell my silver bars and coins because I thought it was going much higher. So far, it hasn’t worked out. Nevertheless, I still believe it will go up an astronomical amount. That’s because silver is not in a free market where the price is set by supply and demand from industry and investment.

To me, the current price of silver would be appropriate if there was little or no industrial demand. If it were just like gold, that has mostly investment demand, you might think it’s priced right today. On the other hand, an argument could be made that it should be selling at the historic gold/silver ratio of 16 to 1 which would make silver $200 an ounce. That’s where I think it should be with the strong industrial and investment demand of today. However, it could go much higher. The fact that its price has been artificially suppressed in the paper futures market changes the equation. The long term effect of thirty-five years of downward price momentum creates two problems. The amount of silver mined is far less than it otherwise would have been, and the amount used up by industry is higher because it’s so cheap. After enough years, the available above-ground supply diminishes to dangerously low levels. For example, the U.S. government had 4 to 6 billion ounces of silver in the 1940s and none today. Ted Butler has predicted that a shortage of silver is inevitable. He has suggested that when a tight supply of silver causes delays for the industrial users, they will respond by hoarding and stockpiling this crucial metal no matter how high the price.

That’s why I still believe that the price of silver is going even higher than what the free market price would have been. It’s why I add to my silver stash whenever I can.  The big banks have made billions shorting silver and decimating the longs. What they do is manipulative, wrong and probably illegal. But make no mistake about how powerful they have been. Nevertheless, they are the reason that the silver price is so lopsided. I believe we still have an awesome, mind-boggling profit opportunity in silver. But, just because me or somebody else believes it doesn’t mean it will be so.

One thing in our favor is the host of new silver enthusiasts that are coming from Reddit. They are buying physical silver and they are knowledgeable about the manipulative short selling of silver on the COMEX. They also know that the price of silver will scream if the big shorts are forced to cover. Also, their presence makes it harder for the regulators to look the other way as they have in the past. At no time has so much attention and interest focused on silver. The ducks are on the pond, so to speak. Everything is in place for a lift-off. I don’t see much risk from here and I’m hoping for a big win. This isn’t investment advice, it’s my own sentiments and what I believe will happen.

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