Trevor Gerszt: Supply issues could drive up the price of silver

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Over the past decades, we have come to expect to be able to buy what we want, when we want. The advent of the internet has accelerated this, with things like next day shipping or even same day delivery allowing us to get what we want when we want it. But what happens when the supply chains that enable this are disrupted and we cannot meet our needs or wants as quickly as we hoped?

Events of the past two years have shown that modern supply chains are incredibly fragile creatures. All it takes is a little disturbance and all of a sudden everything is turned upside down.

COVID lockdowns got the ball rolling in 2020, and supply chains have yet to recover. Once businesses got back to work, it was not at all easy to build up inventory where it used to be. Shortages of critical parts such as computer chips or raw materials have hampered companies at various stages of the production process. And consumers today are still feeling these effects, with periodic shortages in various industries.

From food to toilet paper to cars, there is hardly an industry in the world that has not been affected by supply chain shortages. And now, these shortages are showing up again in the precious metals industry.

US Mint silver supply issues

The US Mint recently announced its decision to suspend all 2022 production of some of its popular silver coins. The reason? It cannot source enough silver blanks from its suppliers to meet the explosion in demand for its silver products.

When you read information about the total world production of silver, you might wonder how this can happen. Global silver production in 2021 was around 24,000 tonnes, or nearly 850 million ounces. Surely there’s enough for everyone, right? Maybe not.

About half of the world’s silver in a normal year is used for industrial purposes, in electronics, medical equipment or solar panels. Much of the rest is made into jewelry or silverware, or is refined and minted into coins or silver bullion for investors.

But before silver can be used by mints, it must be refined to certain standards of fineness, which today for most silver coins means 99.9% or 99.99 purity. %. Then this near-pure silver must be made into coin blanks of the appropriate size and thickness for the mints to use in their presses.

This whole process takes time, and it’s not exactly a simple process either. And if suppliers have blanks for one type of part but not another, it’s not easy or cost-effective to melt down those blanks and reform them. In other words, just because there might be a lot of money in the world, or just because there might be blanks of any kind, doesn’t mean that money is under a useful form for currencies. available to investors.

The recent US Mint production disruption should impress upon silver investors that we still face potential supply chain issues with the availability of popular silver coin products. In the past, we have faced supply issues due to striking COVID labor or COVID-related shipping restrictions curtailing silver coin imports from the United States. ‘foreign.

Now we may also have to deal with war-related supply issues, as Russia accounts for 5-10% of the world’s silver production. With Russia the target of Western sanctions and nearly cut off from global markets, this is a blow to the silver supply that could lead to higher silver prices.

If the war spreads or heats up in Europe, there is also a possibility of shipping issues with getting silver products from Europe to the United States. And if investor demand increases in Europe as fears of conflict with Russia grow, there could also be fewer silver products crossing the ocean.

Don’t take silver supply for granted

All of this is to say that silver investors or potential silver investors should not take the current supply of silver or the availability of silver for granted. What is here today could be gone tomorrow, and could be gone much sooner than you think.

We all know that silver has great potential for price appreciation, especially since it has fallen behind gold in recent years. With silver’s history of making bigger gains than gold during bull markets for precious metals and during times of crisis, now is the opportunity to capitalize on it by buying gold. money while it is still cheap and, more importantly, available.

Many investors saw the price of silver more than quintuple in the aftermath of the 2008 financial crisis. This was one of the success stories of the crisis, a bright spot in an investment climate that otherwise looked incredibly bleak . And many who saw the performance of silver then pledged to invest in silver the next time a crisis hit.

Now may be the time, when a weakened economy, war in Europe and high inflation combine to form a perfect storm threatening everyone’s financial health and well-being. Nobody could have predicted at the beginning of 2020 what happened in the meantime. Who can predict what will happen over the next two years, and even beyond?

Protect your assets with cash

In this world of uncertainty, investors want to reconnect with the sources of financial stability. With markets recently entering correction territory, fears of an impending stock market crash are growing. Investors want safety and security, and money can help provide that.

These are the times when silver shines, and with modern investment vehicles, it can be easier than ever to protect your assets with silver. With a Silver IRA, you can protect your retirement savings while enjoying the same tax advantages as with a traditional IRA account. And you can transfer assets from an IRA, 401(k), TSP, or similar retirement account into a cash IRA tax-free, allowing you to protect your investment gains with an investment. in cash without incurring serious tax consequences.

If you want to learn more about protecting your wealth with silver, contact the precious metals experts at Goldco today. With over a decade of experience helping people like you benefit from silver, our representatives are ready to answer your questions and help you start the process of backing up your hard-earned savings with silver. .
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Trevor Gerszt is the founder and CEO of Goldco, a precious metals trader in Los Angeles. For more than 20 years, Trevor has sought ways to help people build long-term wealth through the safety and stability of precious metals and other alternative assets. Goldco is A+ rated by the Better Business Bureau, 5 time INC 500 winner and has countless 5 star reviews for its quality customer service, reliability and strong reputation.

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