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[url]http://silverstockreport.com/introduction.html[/url]
Supply is price inelastic.
Higher ((silver)) prices may not cause increased supply (production). Why
not? Because most silver is produced as a by-product of mining gold,
copper, zinc, or lead. Thus, higher silver prices will not substantially
increase the amount of silver mined each year. In 1980, when silver
prices went up to $50/oz., less silver was mined than in 1979!
Demand is price inelastic. Higher prices may not cause
reduced demand (consumption). Why not? Because most silver consumed by
industry is used in such
tiny quantities
in each application, such as in film or electrical
contacts, that rising silver prices
will not easily slow down
the growing industrial
demand. Additionally, as paper money continues to fail,
people will buy silver and gold without regard to price, or they will
increasingly buy simply because prices are going up!
Almost all of the silver produced by the mines each year is consumed by
industry, which leaves little to no room for substantial investment
demand. The tiniest bit of investment demand will drive prices sky high.
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