Reason #1 - The Demand for Silver Is On The Rise
In the first two months of 2011, the US Mint sold as many dollars of silver as it did dollars of gold. The Chinese demand alone is up 20%. They now import 112 million ounces. That should tell you just how valuable silver is.
Reason #2 - Demand For Silver Is Up In The Technology Sector
Industrial production of silver was up by 18% in 2010. This was due to the demand for silver rising in the technology sector. More and more we are seeing silver being used in computers, cell phones and other electronic devices. The health care sector is also starting to use silver more because of its antibiotic properties. It is already being used in clothing and several medical devices.
Reason #3 - There Is A Shortage Of Silver
A shortage occurs when there is more demand then there is supply. Though there are millions of ounces of silver in the ground, there is currently not enough available in the market. The fact that it is taking two weeks for the silver to get minted proves that there is not enough inventory currently available.
Reason #4 - Too Much Paper Money In The Global Marketplace
The US Federal Reserve and central banks all over the world are still dealing with high debt. They are trying to fix it by pumping more and more paper money into the global marketplace. Because of this, the value of paper money will continue to decline and the value of gold and other hard assets will continue to rise. Since the Federal Reserve was established over 100 years ago, the dollar has been on a steady decline. It has lost over 90% of its value and it will continue to lose its value as time goes on. Because of this, the value of silver will continue to rise.
Reason #5 - We Are In A Financial Crisis
Inflation is often considered to be the main reason hard assets such as silver and gold rise in value. However, this is not always the case. Take for instance the 90's when inflation was between 1% and 6% annually. During that time the price of silver and gold didn't move very much. Why? Well because there was no demand. And there was no demand because during that time the US was experiencing a boom.
But right now, the US economy is not booming. In 2008 when everything seemed to collapse around us, investors realized there was a serious problem and opted to invest in safer assets such as silver and gold. So as more and more people start to realize that the Government can't manage the current crisis, the price of silver will skyrocket.
