By SD Contributor AGXIIK:
The price of silver is inelastic. The price of silver has little bearing on its utility. At $33 an ounce, it is still very cheap as an industrial commodity. As vital as silver is to the solar, electronic, medical and clothing industries, the amount of silver used in any product is nearly infinitesimally small. A smart phone uses no more than .2 grams of silver. That amounts to pennies of silver per item. A solar panel uses 20 grams, about $20 per panel and those panels will absorb 6% of the entire world’s supply, 60 MOZ There is no replacement to silver in that use and the solar use of silver in China, Japan and India is set in stone. They are crying for energy that is not hydrocarbon based.
If the world’s supply/production of silver is 1 billion ounces that’s $33 billion. We spend more on dog food and manicures than this world supply of silver. If silver tripled to $100 an ounce, would we blink a second that silver prices bumped the cost of a smart phone by 20 cents? I don’t think so! [Read more...]