my only issue with silver is the supply elasticity (as the Hunt brothers discovered in the early 80's). there are a lot of mothballed mines out there that are uneconomic at today's price, but if the price rises, will be re-opened. sorry for the fundamentals! prefer palladium and platinum.
I think that the photographic demand is a big flag to mortgaging the house on a silver long. These theories about precious manipulation have been around a long time and there likely is some truth to them but it does not mean that there will be an imminent blow up, these stories only really come to the fore when the markets are in the bull run anyway. Look at Gold, it is now being managed around 400 yet articles continue to abound about how it should be 700+. If there really was a real shortage of Silver then buyers would take delivery and lease rates would go ballistic. If longs have not taken delivery in 15 years then they cannot have too much trouble finding the stuff. Saying that it is certainly not a market to short right now and longs have paid well since mid 2003. There is some major resistance just above here so will be a good test.
I remember reading an article about 9 months ago saying that one area that is increasing the demand for silver is greater Indian prosperity. Apparently silver jewellery is given to brides at weddings. Not a small amount either, so, as people become more prosperous, the amount of gifts increase ! Wish I could find the article .. was very interesting and prompted my first silver long, so I guess I owe the author a drink !
Good piece of work.
While I agree with the conclusion that digital will hacve little impact on demand for silver, I do think the analysis need a little (understatement) refinement to better represent the argument:
Take the sumary conclusions:
1. yes, Co-existence and not replacement but please use a better example the nail gun and hammer (eg expert intensive user vs occasional user). Digital is easy to use, gives immediate satisfaction (eg one can se pictures) etc, etc
6. Costs: Ask yourself, if you get your developed pictures (say family shots) back, how many do you really love and want to time and time again? Our experience is very few. My experience is that one can save a lot of money by just having their favourite digital pictures printed (home or via on-line service).
7. Nonsense: cost of digital photography will collapse.
Digital is easy to use and one should expect explosive growth as technology improves (don't forget only best digital camera's just match APX quality!) and PC/internet usage growths (broadband penatration is only starting and one should expect home PC usage to grow explosively - assumption). Did you hear that LG Philips and Samsung will be investing a combined $20+ bn in LCD technology. In addition to posters/pictures, soon people will have their photo's on the wall!!
Actually, I am already enjoying my digital pictuires better as they serve as screen saver on my trading station (with 4 flat panels).
Now, will that all have an impact on demand for silver. Of course not!
I enjoyed reading your site. Hope he keeps up the the good work.