Last, I want to talk about demand. The silver institute gave world silver fabrication demand in 2007 to be 843.7 million ounces and total demand (including investment demand) to be 894.5 million ounces. These numbers significantly exceed mine supply and reflect additional supply from governments and the scrap market. Government supply is dwindling as the U.S ran out around the year 2000, India is nearly out and Russia and China are the only sellers left. The scrap supply is also dropping due to reduced photographic recycling supply. The Silver Institute gives world silver fabrication demand in 1985 to be 477.8 million ounces. I am not sure how accurate that number is because at that time they had to estimate communist demand. Using the 1985 number, it means that fabrication demand has increased an average of 16.63 million ounces per year over the 22 year period. More recently the Silver Institute gives 1992 world silver fabrication demand to be 702.6 million ounces. Using this number, it means that fabrication demand has increased 9.41 million ounces per year over the last 15 years.

In summary, world silver mine production is not increasing as the price increases, but has reached a plateau. Long term, silver demand has substantially increased as the world population increases and is modernized. Now investment demand is surging. How much world fabrication demand has dropped due to the current recession/depression is not yet known. Without a substantial increase in the silver price, mine supply will not be able to keep up with a growing and modernizing population.