The Shocking Reason Why China Will Send The Price Of Silver Skyrocketing Over $100!

With so much focus on the West’s massive money printing schemes, here is the shocking reason why China will send the price of silver skyrocketing over $100.

Stephen Leeb: “Whatever your views about climate change, the reality is that the world as a whole is rushing to replace fossil fuels with renewable energies (along with nuclear, which is so plentiful that for all intents and purposes it can count as renewable). And while in recent articles we’ve focused on the forthcoming massive bull market ahead in gold, the transition to renewables will mean at least comparable opportunities for investors in another metal: silver, which is destined to soar into triple-digit territory…

Stephen Leeb continues: “While gold’s rise will mainly reflect its role as a currency as commodity shortages emerge, silver – which also has a history over the millennia as a precious metal – possesses special qualities as an industrial metal that will give it an added kick. For instance, it’s one of the best conductors of both electricity and heat, giving silver a critical role in industrial applications ranging from automobiles to computers and mobile phones (and virtually all modern electronic devices).

Silver Playing A Massive Role In Renewable Enegery
And of rising importance as the world seeks to move away from fossil fuels, silver is also a critical component in photovoltaics, a renewable energy whose growth over the past decade has been spectacular at nearly 100-fold. In 2006 photovoltaics was just a twinkle in European and Middle Eastern eyes. Recently China has been leading its growth: in the past five years, China has counted for around 50 percent of solar’s gains.

Shocking Chinese Demand To Send Silver Prices Skyrocketing
Looking ahead, estimates of growth in photovoltaics between 2015 and 2020 range from about 250 gigawatts (the IEA) to well over 400 gigawatts (Bloomberg New Energy). Moreover, virtually all reputable researchers expect accelerating growth through at least the next decade. China had installed about 45 gigawatts of photovoltaics by 2015. It aims for 1000 gigawatts by 2030, nearly five times what the entire world has installed today.

Basic math shows what this means for silver consumption. Today it takes about 2.8 million ounces of silver to produce one gigawatt of solar power. If we assume that about 650 gigs will be installed worldwide by 2020, simple multiplication and division tell us that about 35,000 tons of silver, or 1 billion ounces, will be needed by 2020.

And photovoltaics constitutes just one part of the demand side for silver. Demand for silver for computers, the internet of things, and, indeed anything electronic – and for coins and jewelry, especially in the East – will also continue to grow. But solar energy will be responsible for the greatest growth in demand.

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So where will all this extra silver come from? According GFMS, a division of Thompson and Reuters, silver supplies have peaked. In its most recent analysis it sums up the supply situation as follows: “Declining total supply is expected to be a key driver of annual deficits in the silver market going forward.” In other words, when you combine the basic demand math along with supply assumptions, the world is facing a five-year supply shortage that amounts to more than one year of production, or enough to draw down to nearly zero all the aboveground silver inventories that might be used to fill the gap.

After 2020, increasing silver demand will mean increasing rationing of the metal, which can only be done by via extraordinarily high prices. Of the world’s major countries, only China seems to get the message and to be preparing for this eventuality, with China’s recent silver imports soaring to five-year highs. Meanwhile, U.S. imports have stagnated.

Barring a miracle, silver prices are going to the moon, leaving the U.S. in a very difficult position. It would not surprise us one bit if silver is confiscated much like gold was during the Depression. This means, as was the case with gold, the best investments are likely to be silver producers. Over the next decade almost all credible silver producers could see their prices multiply by anywhere from 10- to 100-fold.”

King World News
May 31, 2016