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Since I believe silver is the best possible thing you can own, I find it frustrating that most people know nothing about it and will never buy it until it’s too late. For example, at my winter home in Florida I know a lot of people, but none of them ask about gold or silver. However, past experience tells me that when silver is setting price records, I’ll be bombarded with questions. Most people I talk with in Florida have money managers or have arranged their financial affairs to provide them income. If any of these plans go haywire while silver and gold soar in price, there will be renewed interest in these metals. Unfortunately, by then people will have missed the big gains.

If one of my acquaintances were to ask me why they should buy silver now, here is what I would tell them. First of all the silver price is depressed while the price of everything else you own is inflated. You always want to sell high and buy low. What makes silver better than gold is its upside potential. You have one of the most useful metals on earth with high demand from industry and from fabrication of jewelry and coinage. It’s used in virtually every electronic device and in the manufacture of untold products. You would have a much shorter list if you wrote down what products don’t use silver. Most of the silver mined every year is used up by industry.

There isn’t much silver above ground, so this tight supply can quickly turn into a shortage with any significant increase in investment demand. The low price has actually reduced the amount of silver mined each year and kept industrial users from looking for substitutes. It also helps that such small amounts of silver are used in each smartphone, computer or automobile that it is price insensitive. Its use will stay high no matter how expensive it gets. A shortage, which silver analyst Theodore Butler insists will happen would send the price to unimaginable levels.

Why is the price so low if it’s so great, someone might ask? It’s hard to explain in a believable way that the price has been suppressed by big short sellers in the futures market. When you start talking about JPMorgan hoarding mind-boggling quantities of physical silver while holding the price down, you sew the suspicion that you’re a conspiracy nut. Nevertheless, it’s true and you can’t hammer this fact home forcefully enough. It means that a positive outcome is inevitable.

I expect that I’ll be answering a lot of questions about silver and gold in the future because difficulties with the economy, inflation and the dollar will pull the rug out from under stocks and other high priced assets. A crash of some sort is inevitable. Silver was prized as money and treasured for thousands of years when there was no industrial demand. In the past hundred years this has changed. Most of the silver ever mined is used up and gone forever.  Despite the change in use and demand, the price has failed to adjust to this fact. That’s why extraordinary value exists today in silver and it’s the reason that Mr. Butler, who is the world’s foremost silver expert, insists that the price must go astonishingly higher.

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