Great interview on Bloomberg. Another 1st down for GATA. While Nadler, Jeff Christenson and others will always be bears, it looks like Jessica Cross of VM metals has “crossed” over to the bullish side on silver. Mrs. Cross gave a bullish presentation on silver at the LMBA earlier this month which is chronicled in this article http://www.miningmx.com/news/gold_and_silver/is-silver-salvation-upon-us.htm. Mrs. Cross has been issuing reports that the world silver market was in a huge surplus for year after year. Based on her history, the chance of her being bullish on silver was about equal to GW Bush saying Al Qaeda was a beneficial organization or vampires saying they like sunlight.

The article predicts that silver demand will explode in many categories that are currently small. The quantities of projected demand disagree between the article and the demand graph, but as far as I can tell, the graph shows the following silver demand projections:

The amount of increase in these currently small categories thru 2020 is 264.7 million ounces annual. This is a rate of increase in demand of 24 million ounces per year. Back in 2006 and 2007, I wrote articles on silver demand and production of large silver mines thru 2030 which can be found at these links:

http://news.silverseek.com/SilverSeek/1170992765.php. and http://news.silverseek.com/SilverSeek/1172084720.php.

The reason I reference these articles is that they show that demand increased at a rate of 14 million ounces per year from 1992 thru 2005 and that new mines coming on line can only meet this constantly increasing demand for a couple of more years. The silver demand rate of increase of 24 million ounces per year given by Mrs. Cross is for the categories in the table above only. I imagine photographic demand will continue to drop, but most of silver used in photography gets recycled so there is little net demand drop. More important, silver demand for investment, electronics, batteries, industry and a host of other uses will likely continue to increase. According to the World Silver Survey, world silver mine production in 2008 was 681 million ounces. If we get the demand increase of 24 million ounces per year in the above new categories and an increase of 6 million per year elsewhere, then annual supply will have to increase 30 million ounces per year or 360 million ounces by 2020. This would put required mine production at 1,061 million ounces per year. There is only one way that kind of production will be met and that is thru vastly higher silver prices. How much higher I do not know, but a gold silver ratio of 16:1 or less would probably be needed. That would put silver at $72 per ounce based on gold’s current price.
Regards,
Bryant