Birch Gold Group 2021 Information Kit

Birch Gold Group
2021 Information Kit

What Makes Silver Shine?

While gold generally hits the headlines, silver offers an additional means of diversification into precious metals. According to the United States Geological Survey, there are enough silver reserves for only another 8 to 13 years of mining. Couple this with growing worldwide demand and it’s clear that the supply of silver is dwindling. Not something that anyone can say for paper assets like stocks, bonds, or even dollars, which have no intrinsic value – thus silver is a good choice to further hedge your savings!

Why is the demand for silver growing? While more than half of the demand for gold comes from just two sources (investment and jewelry), silver has much more diverse applications. Industries that use it include computers, silverware, photography, water purification – even medical creams and solar power! For just one example, each high-quality solar panel currently requires 0.64 troy oz. of silver – so as the world goes “green” silver will be in even greater demand. 

Because silver has an unreplaceable role in a wide variety of industrial applications, rising silver prices do not reduce demand as quickly as it might for other assets. This insight, combined with rapidly diminishing silver reserves, lead some analysts to predict huge gains in the coming years.

Surplus / Deficit of Physical Silver

Silver Physical Surplus - Deficit_2018-2-02

Source: GFSM, Thomson Reuters

Source: GFSM, Thomson Reuters

Why is JP Morgan Hoarding Silver?

Over the past century, there have been three instances of silver buying that rattled the market and made headlines worldwide. The first came from 1973 to 1980, when the Hunt Brothers amassed an incredible 100 million ounces of silver, which led to a price jump to $50 by 1980. Nearly two decades later, Warren Buffett, Charlie Munger and Berkshire Hathaway bought 129.9 million ounces of the metal within six months, finishing their purchases with silver prices at $6.05. They held onto the stockpile until 2006, by which time silver was trading at $13.13.

The third instance of hoarding is happening right now. JP Morgan has purchased at least 133.1 million ounces of silver between 2011 and 2018. Industry estimates place JP Morgan’s current silver holdings between 45-53% of all physical silver bullion on the COMEX (the largest commodity exchange). Opinions on JP Morgan’s motives vary widely, and JP Morgan executives remain quiet on the issue. Here’s what we know for sure: 

  • JP Morgan is the largest U.S. commercial and investment bank.
  • JP Morgan’s COMEX silver warehouse now holds the largest silver bullion position of all time.
  • In 2020, JP Morgan pleaded guilty to “manipulative and deceptive conduct and spoofing” precious metals prices from 2009-2015 and paid a record $920 million fine. Spoofing means entering orders to buy or sell with the intention of canceling them – sending false signals of supply or demand to manipulate market prices. 

Some market watchers believe JP Morgan is simply being prudent, building up inflation-resistant and debasement-proof funds. Other analysts believe JP Morgan expects a significant price increase (like Buffett, buying low today to sell higher tomorrow). The bank has frequently been accused of suppressing silver prices, especially considering silver’s historically low valuation compared to gold. 

JP Morgan sees profits. Enough profits to justify building the world’s greatest hoard of silver. What do they know that we don’t? Are we looking at a price explosion for the history books?

Some market watchers believe JP Morgan is simply being prudent, building up inflation-resistant and debasement-proof funds. Other analysts believe JP Morgan expects a significant price increase (like Buffett, buying low today to sell higher tomorrow). The bank has frequently been accused of suppressing silver prices, especially considering silver’s historically low valuation compared to gold. 

JP Morgan sees profits. Enough profits to justify building the world’s greatest hoard of silver. What do they know that we don’t? Are we looking at a price explosion for the history books?

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DISCLAIMER: The decision to purchase or sell precious metals, and which precious metals to purchase or sell, is ultimately your decision alone. Purchase and/or sale decisions are highly individual and must be a function of each customer’s individual financial situation, goals and risk tolerance. Birch Gold Group is not a financial planner, investment advisor or retirement specialist. Birch Gold Group is not responsible for your decision to purchase or sell precious metals, or the timing or results of any such act (or failure to act). Any and all assistance Birch Gold Group may offer or provide does not create a fiduciary relationship between you and Birch Gold Group. Any and all purchases and sales are made subject to your own research, prudence, and judgment. Birch Gold Group does not provide tax, investment, financial planning, retirement-specific or legal advisory services and no one associated with Birch Gold Group is authorized to render any such advice or service. Birch Gold Group is not responsible for any consequences of you purchasing precious metals for IRAs, trusts or other persons or entities, or for any changes in the laws relating to such purchases or sales. Any written or oral statements by Birch Gold Group, its principals, agents or representatives, relating to future events constitute opinions only, and are not representations of fact.