Silver Investing Tips – How Supply and Demand Effects the Price of Silver

What is Supply and Demand?Supply and Demand is known as the market equalizer. It can take any product or service and create a fair market price for any item. In theory this is how the free market should really operate, without interference from manipulators. Supply and demand is more of an economic price determent than anything. It takes a market item (product) and finds the equilibrium price using demand for a product and quantity supplied by producers and creates a bisecting line that allows market makers to find the optimal production rate and price.There are 4 variants we can derive at from the use of the Supply and Demand Model:1. Demand Increases and Supply remains constant = Higher Prices2. Demand Decreases and Supply remains constant = Lower Prices3. Supply Increases and Demand remains constant = Lower Prices4. Supply Decreases and Demand remains the constant = Higher PricesAs you can see there are really only 2 variables that determine the price of items; Supply and Demand. If Supply increases and Demand remains constant then prices will come down. This is the basic model of price equilibrium using the supply and demand model. Eventually the market will settle on a price for a particular item using this model as long as there is no manipulation of either Supply or Demand.Supply and Demand – Silver MarketSilver has been a means of trade long before the Roman Empire and will continue to be a form of money till the day we find an item that can match its value and use. When it comes to Supply and Demand in the silver markets we must look at the broader picture of things. We will have to go far beyond our thinking of just the people around us purchasing and selling their jewelry at your local jeweler. We have to look at the entire world far beyond the boarder of the U.S. There are people purchasing jewelry in Asia, India and every other country. Not only does silver have an aesthetic value but silver also has a commercial use. Silver is used in the circuitry of everything from cell phones to satellites that hoover the earth.Once we look outside of the consumption of silver then we must look at the metal in another light. Silver is a store of wealth for many people. The great thing about silver is that it is a natural earth metal so humans cannot simply create it in a lab. With that in mind we look know that miners make up the supply side and consumers will make up the buyers side. If production increases and consumers want less silver, then prices will fall until consumer feel silver is at a good value. Conversely if production falls and consumers demand remain the same price of silver will increase.Supplying SilverWhen we talk about the supply side of silver we have to look at a few components. There are a few “Suppliers” that make up the supply side of the market: Miners, Government Sales, Scrap Silver and a few other sources. In 2010 the total supply was 1,056.8 Troy ounces. Most of the supply is created by miners which make up 70% of the total silver market. Supply has increased minimally year over year since 2002 which means there really isn’t much increase in selling overall. Here is a chart of the Supply for the 10 years in Troy Ounces:2001 – 8772002 – 868.32003 – 8812004 – 879.72005 – 929.52006 – 923.52007 – 9072008 – 904.52009 – 922.22010 – 1056.8Source: SilverInstitute.comDemand in SilverDemand takes a form of its own and here we will take a look at some of the areas of consumption in silver that help drive the price of silver to different levels. One thing to keep in mind when it comes to silver is that Demand = Supply. Whatever silver is mined throughout the year is eventually used to calculate demand. You may be asking how that is possible and the answer is simple; the silver must go somewhere. Silver can be sold to refineries, photograph companies or held as reserve which is considered a company’s investing asset. The selling of silver to multiple industries is the demand side of the Supply and Demand model. The price is dictated by the amount a particular industry is willing to pay to take control over the supply miners produce.There are 5 major industries that purchase silver in high quantities: Jewelry, Industrial, Photography, Silverware and Coins & Metals. The amount of demand within each of these industries drives the need for silver, higher which allows specific buyers to demand more silver for products.For example imagine silver is primarily being used in producing film from cameras in 1940 but as cell phones become more popular in 1990 they require more silver to produce more cell phones. Now that cell phone demand is increasing; cell phone manufacturers must demand more silver from the miners and are willing to pay more to get there hand on the silver. Now the price of silver must rise to match the demand. If prices were not raised cell phone manufactures could buy up all the silver overnight and leave nothing for other industries.Here is quick chart to show you how the demographics of silver have changed from 2001 – 2010. As you can see that demand in some areas have increase dramatically over the decade while other have declined greatly.232% increase in Coins and Metal (Silver Bars)40% increase in Industrial use (Electronics)-66% Decline in PhotographyFuture Outlook – SilverWhile silver has steadily increased in its commercial use in electronics and the demand for electronics will continue to increase, there is a surprising increase in coinage. With the demand increasing heavily in silver coins and metals there is bound to be price spike like we have never seen before. Why is that? Well instead of just a few private investors purchasing silver as a store of wealth and a company purchasing it for their products there has been a vast influx in private purchase by average citizens. Silver is now an internationally purchasable commodity that can be bought through world-wide coin dealers, on the internet and even at your local coin shop.More importantly as investors and institutions lose faith in the currency of their nation we will see a huge demand spike in silver bars and coins. These investors are willing to pay higher prices in order to protect their wealth. This demand for more silver will cause prices to drive higher as to prevent a repeat of what the Hunt Brothers did back in the 80′s. Not only do you have individual investors purchasing physical silver but you have stock exchanges purchasing silver as a part Futures contracts. These futures contracts allow an investor to “own” silver without having to store the silver themselves. They can demand their silver at any time by exercising their contracts. The futures market is a lot larger than you can imagine and prices will move based on the demand.Remember all this price action has occurred without the public really purchasing silver as a last resort in the event there is turmoil in their currency. Once the people of the world wake up and see that their purchasing power has greatly decreased there will run silver prices up the same way they did housing in 2003-2008 and before that the tech bubble of 1990-2000. Hold on tight because the demand in the silver market will exceed anything that happened in the real-estate and in the tech markets. The real-estate bubble was a United States problem when it occurred and so was the Technology bubble. The currency problem extends far beyond the U.S soil and now the entire world will be demanding silver; which in turn will drive prices to level never seen.

Hyip Investment Tips

In fact there is no golden rule to invest your money. Hyips come and go every day. Some hyips can last for a few years while others disappear in a few days. But I’m sure with these tips you can play the game more safe and get higher roi for your money. But remember always there is no safe investment in the world.1) Look at the returns and be realisticWhen I first invest in hyips I always joined the sites with the greatest returns. It tooks my only a few days to know that these hyips where scams and or ponzi shemes. I’m talking about hyips that promise you returns like 50% daily for ten days. These sites are ponzi shemes runned by scammers if you “invest” in these sites don’t be surprised to lose all your money.
Refund are impossible.A few weeks ago there was also a hyip promising 44% profit in only 12 days. There where generating returns by investing in real estate. However it is true that real estate investment can generate high return, but such returns are ridiculous.2) Are they paying?If you have read rule 1 I think you will not invest in unrealistic hyips. Yep at these moment there are some great hyips out there. You can’t double your money in a week wit them but they are paying for a long time. But before one cent of your own money try to get as much information as you can. Visit discussion forums, blogs, hyip monitors, hyip news websites and so on. If you are seeing that some member don’t get paid don’t invest your money here.3) Make a test spend?All right you have read points 1 and 2 and you have found a hyip that you feel comfortable wit it and you want to spend some money into it. Don’t spend hundreds of dollars directly into it. Make a test spend first. Just upgrade with a few dollars. With a test spend you can see if they are paying and if the withdrawal button works correctly.4) Never spend money that you can’t afford to lose it.I know rule number 4 is a cliché but it’s still true. Sometimes on forums I read posts like this “I have lost 2000$ on hyips x. In fact I wanted to use the money to pay my bills”.
Also never ask people to lend money, even if it’s only a few dollars. There is a great chance that you will not earn interest from the hyip and so not been available to give it back and if you do this on forums you will have a very bad reputation.5) DiversityTry to diverse your capital into at least ten different programmes. If one of them goes out of business you will have some other resources to earn money. Also don’t always invest in hyips that use the same techniques to earn money. For example invest in a hyip that is generating profit by trading forex, another by real estate investement, another that invest in the stock market and yet another that makes money with arbitrage trading.6) Secure your e-gold
Secure your e-gold is an absolutely must. There are a lot of hackers out there trying to steal your money. And know there are not only hacking big account. Even if you have only a few dollars you are a possible victim. Most hyips forums have a security related forum where you can find I want to refer you to their at this moment. There will be come a detailed article on e-gold security at this block soon.7) Attention to cheerleadersThanks to the internet (and through internet discussion forums) you can reach a lot of target people worldwide spending only a few minutes of your time. Most people in forums are honest people who gives out their experiences and tell them their success stories or mistakes.
However there are also people who are only thinking about making money. Even if a programme is not paying they are posting programme x has paid me 50 straight into my e-gold account join this programme today. The reason why they are doing this is always to earn referral commissions or perhaps they are a part of the hyip staff. There are also admins who hires posters to give out positive feedback on their hyips. Therefore always reading the meaning of different peoples and in different forums.8) AttentionPlease pay attention if ….A hyip is under DDOS (denial of service) attack.The forum of the hyip is not reachableThe admin is no more longer active in public forumsYou receive emails from the staff that there are problemsThese signs are the herald that a hyip programme is in his scam phase.