This Is Going To Require 30% - 50% Of Global Silver Production

Today acclaimed money manager Stephen Leeb spoke with King World News about gold and why silver is going to soar beyond a level investors can even imagine.  But first, here is what Leeb had to say about some of the recent suspect trading in the gold market:  “Somebody wants to see gold down.  There’s no doubt about that.  Gold, all of the sudden, had fallen $14.  If you look at a chart, it’s a straight line.  Now anyone that is selling into an illiquid market, which you obviously have during overnight trading, is nuts.”

“That’s just stupid selling.  So there are certain reasons that people want to see gold down.  The US obviously wouldn’t like to see gold soar while they are in the midst of a fiscal crisis.  The other (player), strangely enough, Eric, would be the Chinese because the Chinese are starting a gold ETF.

They are going to have to buy gold for that ETF....

“If you are doing that (starting a gold ETF) do you want to pay more or less?  Well, they want to pay less.  It’s blatant manipulation.  There’s no doubt.  You see this kind of thing happening over and over again. 

People are getting up, they are getting set for their trading day and somebody sells a whole bunch of gold.  That doesn’t make a lot of sense.  So yes, you can call it manipulation.  You don’t call it people selling for the sake of selling or people selling because they see something that’s changed in the fundamentals.

This is not part of that.  This is people trying to get the gold market down for whatever their reasons may be.  I guess, yes, manipulation is as good a word as any.”

Leeb also had a shocking forecast in terms of future silver demand:  “Silver is not just a medium of exchange.  It has a longer history as a medium of exchange than even gold, but it’s much more than that.  So when I talk about photovoltaics, I’m talking about just one use of this incredible metal.  But this one use, by my calculations, will consume an inordinate amount of silver within the next five to seven years.

I’m talking about the need for 700 gigs of photovoltaics between now and 2020.  The amount of silver that we are going to need just for photovoltaics will amount to 30% of all the world’s yearly supply.  In other words we will need 30% of those tons (of world silver production) just for this one use.  By 2020, the amount that we will need (is a staggering) 50% of the world’s (yearly silver) mine supply.

Now consider the fact that silver is also used for all of these other industrial uses, investment (purposes), jewelry, and so many other kinds of applications.  There is no way I can see of connecting these dots (in terms of silver supply).  I would stock up on silver.

Governments will soon wake up and realize we can’t let people hold silver as an investment because it’s just too valuable.  Governments will have to close down the silver market.  What this means is that the silver mines will have a tremendous premium placed on them.

It goes back to the 1930s, Eric, when the government didn’t allow people to own gold.  But Homestake (Mining) was a leading gold mine back in the 1930s, and was just about the best performing stock.  Homestake was producing a metal that was needed as currency.  It (gold) has a lot of roles, but it didn’t have a critical role in the functioning of the world, in people’s lives.  And silver does have that role.

For that reason, they are going to mandate stockpiles, or (as I said), preclude investors from holding it.  The government, even though they might now let the public hold silver, is going to do everything they can to encourage silver producers to produce as much silver as they possibly can.

There really are very few dedicated silver mines.  Silver usually comes as a byproduct of zinc, copper, gold, lead.  There are very few mines that produce primarily silver.  These stocks, in my opinion, I don’t what to put a number on it because I think the people in white coats will come and carry me off.  But I just cannot connect the dots without seeing silver surge beyond what anyone really has in mind.”