Good old Maund! Here he is in January 2003. Saying the same...

Good old Maund! Here he is in January 2003. Saying the same thing year in and year out - and people pay for this stuff, apparently!

"The forthcoming explosion in the price of silver will not be due to an increase in industrial demand, for industrial demand is relatively steady and inelastic, and will perhaps decline somewhat in the impending slump. It is crucially important to appreciate that, although silver makes up only a small fraction of manufacturer's production costs, with the exception of film, silver is essential to many industrial processes and nothing else will do. Therefore, industry MUST HAVE IT. Now, consider these factors; industry carries virtually no inventories or stockpiles of silver, it is bought in as required. The government can no longer help in a supply crisis - the US government's silver holdings have declined to near zero from several billion ounces over the past several decades. So, picture what will happen when a tidal wave of capital, fleeing rapidly declining bond markets, real estate and stockmarkets, turns up desperate to buy into hard assets like gold and silver. The silver supply/demand equation is far more critical and finely balanced even than that for gold. There can be only one result of all this - an explosion in the price of silver.

On the charts there is a big, important difference between the gold market and the silver market at this time. The difference to which I am referring is the fact that while gold has broken out from a long-term base to enter a confirmed bull market, silver is still languishing in a base area at a very low price level. Silver's bear market since the huge spike in 1979 has been far more severe in percentage terms than gold's, and, of course, very severe indeed in opportunity cost terms. Over the long-term I am even more bullish of silver than I am of gold, for two primary reasons; the first is the inelastic demand which will result in an acute supply crisis when a large amount of investment capital turns up and wants in, as set out above. The other reason that I am very bullish of silver is that it is so cheap now, in real terms, that they are almost knocking on doors and giving it away, look at the long-term chart shown below and I think you'll understand, without further explanation, exactly what I mean. I believe that silver prices are currently at ROCK BOTTOM and, consequently, that many silver stocks are terrific bargains with huge upside potential, especially the highly geared ones.



If we look now at the shorter term chart going back to 1999, shown below, we can see what I regard as the final decline from 2000 through late 2001 to hit a low around $4.25. The subsequent price action looks to me like a double-bottom base formation, although it is still too early to be sure, and we could yet see a return to the vicinity of the lows. However, with the dollar crumbling and gold rising again, I consider that a substantial advance is becoming more and more likely.

With virtually unlimited upside and very limited downside I consider silver and silver shares to be a "dream ticket" for long-term investors. For opportunity-cost reasons, shorter-term investors and traders may prefer to go with gold and gold shares over the short to medium-term, as gold is already "on its way", while keeping a close eye on silver to see how this base formation plays out, with a view to piling in on a breakout and subsequent pullback. In the meantime, I believe that it also makes good tactical sense to accumulate silver on any dips towards the lower end of this trading range, ditto the silver stocks.

I have heard a lot of talk about the silver market being manipulated and prices being held artificially low, if there is no truth in these stories then they don't affect the arguments set out above and are therefore irrelevant. If they are true, then it simply means that when the bull market gets underway there will be a "booster rocket" affect as the shorts scramble to cover. I have also recently heard that the big short positions are being pushed into weaker hands. Finally, Warren Buffett owns a lot of silver, and Bill Gates has bought a silver mine. Whatever else may be said about them, these guys are not financially inept."

http://www.24hgold.com/english/contributor.aspx?article=660675318G10020&contributor=Clive+Maund

(Of course, Wuffitt sold all his silver shortly after that article was written).