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If you frequent the metals and miners board, you will know I focus on PM miners for investment, and park much of my cash in gold. So please don't take me as a silver basher with what I am about to say.

I advise caution with silver bullion. For a long time, annual non-speculative silver demand exceeded annual production, but since around 2008 annual production has exceeded non-speculative demand. You can find these statistics on the web if you can wade through all the rah-rah pro-silver links. This means that speculative demand has been the sole price driver since 2008, with an impressive speculative spike in 2011. When speculation is the price driver, the potential for things to move negatively in a large, fast way is greater than usual.

Although silver is seen as cash too, most like myself when seeking merely a safe cash haven choose gold except for those preparing for TEOTWAWKI types who feel junk silver coins will be a better fallback bartering cash for daily needs.

Silver prices in many ways reflect industrial economic sentiment in a way that gold does not. So it is not surprising to see a historically wide gold:silver ratio in these uncertain times. Do you really think this is turning the corner? Prolonged economic doldrums will mean a prolonged wide gold:silver spread. Check out the Acting Man blog for some good charts and explanations in this regard.

I am not saying that SLW is not a good investment now. And it was one of my best investments ever when I bought a ton of warrants under $5 and sold when over $30. I am saying that, outside of finding specific junior silver miners with high chances of success regardless of the price of silver, silver itself is a difficult hold in my opinion.


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