According to economist David Morgan, silver will face a tight supply as demand increases. No investment, including gold and Bitcoin, will be better than silver in 10 years, Morgan said.
“Not gold, silver will shine in a spot”
According to David Morgan, founder and author of The Morgan Report, silver supply will run out and industrial demand will ‘absorb all available silver’ over the next decade. This will cause silver prices to soar, making it the best investment in decades. In this context, Morgan makes the following statement:
If you have a long time horizon like ten years or more, I can’t think of anything better than investing in silver. Silver will shine in a spot. However, it will likely take a natural corner. A natural corner is when the industry alone has absorbed all the available silver and there is no silver left.
David Morgan says the silver supply could run out in a few decades. Based on this, he makes the following assessment:
The U.S. Geological Survey said silver would be the first element on the periodic table to be so scarce. Also, that was a few years ago. Only the industrial side will likely get all available silver at some point in time.
supply shortage
Prices of commodities such as base metals, including gold, fell throughout the year. David Morgan argues that silver, which is often a byproduct of base metal mining, will suffer supply-wise from a fall in base metal prices, as there will be less incentive to mine. Morgan continues with the following statement:
70% of silver is a result of base metal mining. If there is a noticeable drop, then this takes a large supply of silver from the market.
Morgan also states that rising energy costs will limit silver mining as the world’s oil reserves are depleted. He interprets this situation as follows:
We are in an energy chasm, or perhaps we just crossed it. I have great faith in the pinnacle of oil. What we’re seeing are inefficiencies in the drilling industry. There are very few places where drilling makes economic sense. And then you see depletion happening rapidly in different parts of the world. This means higher oil prices.
demand fluctuation
David Morgan points to the increasing industrial use of silver in areas from photovoltaics to semiconductors. He says the industry’s applications of silver will continue to grow and shrink existing stock. The Morgan Report founder comments:
The Silver Institute announced that in 2019, solar energy use was about 9% of the silver industry. He noted that it is now probably around 12 and that will continue to increase. You may recall that a statement was made by the US Mint that there was a worldwide silver shortage. He quickly retracted this statement. I don’t think there is a worldwide silver shortage. If you just look at what the mint is currently producing, they’re not meeting the demand at all.
Morgan adds that it is not a good industrial substitute for silver. In this context, he says:
Nothing transmits light as well as silver. Nothing conducts electricity as well as silver. Most silver applications are absolutely necessary and irreplaceable. There is no backup.
