Silver Demand, Production Costs & Fiat

Silver’s use in industrial applications is expected to gain 7 percent to 484 million ounces in 2013 and an additional 6% to a record of 511.6 million ounces in 2014, GFMS reported Thursday for the Silver Institute, a trade group. The silver price will be propelled to rise as mining costs increase – oil will continue to rise in price alongside manufactured goods in the coming years – and a worldwide monetary policy of low interest rates have created a storm for global valuation mechanisms.

So, rising demand, rising sourcing costs and the hyperinflation of the currency markets will all spur a silver price run alongside the eventual unwinding of the silver manipulation scheme.  More than a decade into the 21st century, and although the realization might be a bit late, it seems that silver is a constituent of innovation.

The industrial production report states that the price of silver could rise due to its use in industrial applications, the biggest factor of silver fabrication demand, which includes industry,  jewelry, photography, coins and bars, and silverware. In the report global head of metals analytics at the GFMS told Reuters that silver price may climb as high as 38 percent in 2013 from current levels.

Adding to the commodity price rise,  at the most recent US Federal Reserve Federal Open Market Committee meeting, November 14, evidence was presented making the case that Fed officials are in favor of continuing an expansion of its quantitative easing program, which should be no surprise to anybody who understand that we now live in the realm of unending easing.  The Fed, it appears, is gearing up to continue stimulus through asset purchases until signs of improvement appear in the labor market.

The fiscal cliff and the possibility of Austerity 2013 all make Federal Reserve officials uncomfortable about pulling the plug QE.  Operation Twist is set to expire in December 2012, but it seems that regardless interest rates will remain low into 2013 and 2014, etc.  Securities, the stock market – all paper assets – will be artificially inflated by the quasi-demand of the Federal Reserve and the command-and-control system.

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