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So let's do some simple math. GLD (which represents 1/10 of an ounce of gold) is trading at approximately $45 per share. So 30 million shares times $45/share equals $1.3+ billion in new gold demand generated by GLD. If silver, through its ETF, can add annually in demand what GLD did in 3 days, we are talking about an additional 180 million ounces being sucked up in one year. Add to this the preexisting silver deficit that runs around 75 million ounces per annum, and we are talking about a new annual deficit of approx 250 million ounces. 250 million ounces is roughly one-third of the world's supply of above ground silver. If silver, through its ETF, can add quarterly in demand what GLD did in 3 days, we are talking about an additional 720 million ounces being sucked up in one year. Add to this the preexisting silver deficit that runs around 75 million ounces per annum, and we are talking about a new annual deficit of 800 million ounces. This would almost certainly wipe out the entire world's supply of above ground silver in less than one year. When we read articles written by gold & silver promoters talking about how precious metals prices are going to the moon, we often groan. Serious investors do not like this "cheap" salesman talk. But if you are intellectually honest and realize that these ETFs are remarkable distribution mechanisms (similar to online brokers in the 1990s) which can expand the metals' reach to investors, then you can see how a revolution is about to take place. Our readers know that we have been bullish on gold & silver for a long time, and the ETFs are just one more reason (albeit an exciting one) to "back up the truck." November 25, 2004 For more information, go to
http://www.texashedge.com |
Silver ETF
- Shock & Awe