sean rakhimov writes that the price of silver will be determined, or at least influenced, by demand from third world countries as their standard of living improves. while i agree that industrial demand will grow, i think it is monetary (investment) that will drive the price of silver.

As mentioned in recent interviews, we are somewhat concerned with the flurry of publicity silver's recent break out from an 18-month consolidation pattern has been accompanied by. There's just too much attention being paid to silver in the last couple of months for our liking. Such sentiment usually results in some sort of pullback to shake off the overly enthusiastic and performance chasers. That said, there is always a chance "this time it's different". With silver being an extremely small market compared to most others, it is prudent to expect every time to "be different", for – certainly – one of them will be.

Then there's the "geo's trap" - a term we coined at least in our own mind - which we use to describe the eternal pessimism of technical people in the industry towards the upside potential of silver prices, due to what they call "mountains of silver out there", referring to mountains of silver they get to walk on for a living. They say this because they get to walk, talk, breathe and sleep silver every day and therefore cannot imagine why silver price would go high(er), when there is such an abundance of silver around (them). What they fail to remember is that some 6.5 billion people want the next i-gadget or at least electricity in their home, a car and all the other wonderful things the geo has - they couldn't care less where the metals to make them are going to come from. In our opinion worldwide consumption of silver is roughly ONE BILLION OUNCES PER YEAR and, if it ain't there yet, it's getting there and beyond fast.

By the same token we try to watch out for a similar trap in our own thinking. Maybe the fact that there is 5 times more info on silver this year than there was in the previous 5 years, should not necessarily mean that the silver story is out of the bag just because we happen to eat, breathe and sleep silver (albeit on a computer screen). At some point the silver story will break wide open and you will find yourself surrounded by silver "experts" more numerous than there were real estate agents in the heydays of the property market of the mid 2000s. We've said many times before and will say it again: ultimately silver's price will be determined by people living on $10 a day who do not know or care what you, I, the Wall Street Journal or anyone else says or writes about silver. They will flock to silver on their own accord because it works - it does what they need it to do: preserve buying power and serve as medium of exchange. But that's in the future, for now it's still an investors' market, so let us get back to that.

http://news.silverseek.com/SilverStrategies/1255617010.php