Silver is increasingly becoming accepted worldwide as a monetary metal, mostly because of inflationary concerns and the debasement of the world’s major currencies, says Marc Davis, writing for resourceinvestor.com.
Davis says that rising inflation in China and India (the world’s most populous nations), as well as Europe’s ongoing sovereignty debt crisis, are major causes of silver’s surging prices. China was a net importer of over 100 million ounces of silver last year, whereas only a few years ago China was exporting an equal amount annually.
Davis further notes that China’s growing middle classes – which now number well over 400 million people – are fueling an “explosive” growth in demand as they buy silver as a hedge against fast rising inflation. Industrial and Commercial Bank of China sold 418,000 ounces of physical silver to Chinese citizens in January, alone, compared with 1.06 million ounces for the whole of 2010.
For silver investors, the post is a good read.
Note: Davis speaks highly of Aurcana Corp, a junior mining company. I want readers to know that I have been underwater in Aurcana for years and that I am not recommending Davis’ article because I want readers to buy Aurcana Corp.
I bought the stock a few years ago on a friend’s recommendation and went underwater almost from day one. Perhaps now, though, Aurcana’s fortunes have changed and I can profit from the stock or at least break even.