Yesterday's Underinvestment in Silver Mining Is Tomorrow's Price Spike

Finance U Public Finance U
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Originally published at: https://peakprosperity.com/dave-russel-yesterdays-underinvestment-in-silver-mining-is-tomorrows-price-spike/

In this episode of Finance U, I speak once again with David Russell, the Ceo of GoldCore.

The main topics are silver and gold, of course. We began with silver, which has been under a severe and prolonged 6-year supply deficit.

The key points were (as condensed by AI):

  • Silver Market Fundamentals: Six consecutive years of structural deficits (demand > supply); 70% of silver is a byproduct of copper/zinc mining with inelastic supply; recycling is negligible at current prices (unlike Hunt Bros. era when $50/oz = ~$208 today).
  • Demand Drivers: Industrial use dominates (~86% of mine supply in 2024, heading toward 100% by 2025–26); solar PV alone ~45% of output; non-recoverable micro-doses in electronics, medical, nuclear, and batteries; U.S., Russia, and China adding silver/copper to critical minerals lists.
  • Investment & Supply Dynamics: Investor silver sits in vaults (e.g., $700M in one Swiss facility) waiting for higher prices; psychological breakout above $42 (2011 high) triggered buying surge; strong hands refuse to sell below much higher levels.
  • Eastern Remonetization: SHFE silver vaults collapsed from 3,000t to <600t; China has quietly imported/refined vast gold/silver for decades; Shanghai Gold Exchange + “gold corridor” vaults in trade-partner nations enable yuan→gold conversion, bypassing dollar trust issues.
  • Geopolitical Stakes: China’s gold-backed trade system threatens dollar hegemony; U.S. bullying BRICS vs. China’s “trust the gold” model; shift from unipolar to multipolar world rarely peaceful.

The conclusion of all this is that the cure for low supplies is high prices. Dave expects a much higher price for silver to settle the markets out again. Personally? My silver stays in my hot little hands until triple digits; mid to high triple digits if I’m being honest.

Gold too is on the move, but its price is rising due to a stealth demonetization that has been underway since 2022. China and BRICS are now pursuing non-dollar solutions, and gold is clearly part of their plans.

India has even moved silver into the financial sphere by making it acceptable collateral for loans, which marks the first time in decades that silver has been monetized from within a sovereign monetary system.

Add it all up, and having some exposure to gold and silver not only makes sense but is a prudent part of every investment portfolio.

I recommend that people use Gold Core, with whom Peak Prosperity has an affiliate relationship, for purchasing gold or silver a jurisdiction of your choosing. GoldCore also offers secure, professional, insured, and segregated storage of gold and silver in a jurisdiction of your choosing (movable at a later time if you choose). Because GoldCore is an LBMA member, this offers great access to both buying and selling channels during moments when local coin shops and domestic refineries may be backed up, offering greater liquidity in a time of need.

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If China (and Russia) are hoarding gold, how will China avoid Triffin’s dilemma (strongest economy on earth) assuming downslide of US and west continues… that is inevitable even if US continues to be military hegemon. Then would be 2 big regional hegemons/blocks in world economically…
Isnt whole point of hoarding giant gold piles becoming economic hegemon, strong and stable economy (currency can still be trash depending on policies).

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‘4k Gold is a bubble, 125k BTC is normal and just the beginning,…’

I think this encapsulates the concept how the West has (totally) forgot what money is. But the tables are turning, the hard way.

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I don’t think a 100% of politicians understand Money, on the contrary, I suspect the amount of useful idiots surpasses the 50% mark, but that’s just me. The top bankers obviously know, but even in banks I doubt most fully grasp what Money really is, most of us are born and raised in this fiat currency scam being called Money for over half a century.

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No matter what, everybody knows that everybody knows that what you do at 8:00 a.m. ET is you sell silver.

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It’s common knowledge.

The pattern continues…the ROW buys, and the US sells silver…in a desperate attempt to remain in control and relevant I suppose, or something.

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It’s not that folks in banks dont know or didnt read school books to know what money is, but to work in that industry demands certain privilege mindset or you cant be there… that means hierarchy from BIS to local bank have some degree of this, ego that feeds why your work is valuable despite pushing numbers in screen… let alone why your bank has moral right to take houses and destroy businesses as needed for those numbers. Have to be total doofus[these are lesser amounts as they may aswell think it is nobody’s loss if they take some cash to their wallet… thus fired] or psyhopath to not care at all. Some drink a lot or start using drugs (seems quite common in “fancy banking jobs”) to cope as distraction. Especially in higher jobs need that distraction coz need to know how to cause wars and market mess chaos to make profits but psychologically normal people understand it has consequences. However worst people like in woke now use this weird black eye thing as they know it is on so shaky ground and cannot cope or rationalize anymore.

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Hell, even the mortgage manager at a mid sized branch of a large Canadian bank didn’t understand the implication of certain clauses in their mortgage agreement. Anybody under manager only knows procedures and how to fill out forms.

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It might be interesting to look at historical silver prices in one constant dollar value… although that presents a challenge too, do you use alt CPI or official CPI?

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Money is for trade. Scarce essentials are for savings. All capital does is use money to have savings produce more. Producing more is the definition of capital.
Just remember, money - currency - fiat credit, etc. are just temporary holdings needed to conduct trade. Nothing more.
Whatever is scarce and essential holds its value and is always good in the market because other people will want to buy it for the same reason you bought it: ultimate liquidity and retention of buying power.

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Chris, i use Goldcore, and i must say they are very nice to deal with…just FYI.
I do like feeling that i own physical gold…outside the US.

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Not sure i follow…but are you saying that China will gradually become the alternative to usd? I kinda think this is gonna be an economic war…i cannot see the USD competing with sound money…and i dont have a warm fuzzy about a sound money system to replace the US dollar is on the cards in the near future?
Any sound money system would have to at least be partially backed by gold…
As for military?.. i think we are already outfoxed…by Chinas belt and road initiative. I saw an astonishing China ad where the robots marched themselves into their shipping containers…and their drone displays are incredible at Chinese New Years. I thinkthe world …the one i knew, anyway is gone. I dont think there is a way back.

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I am tired of losing money…to inflation. I know i have to be out of cash to stop the marauding…and although im in corporate bonds…not govt, at the end of the day every dividend is worth less and less. Been worried about this for a long time.
And now i find my slab they just exavated (4 months to even get here they are pouring cement tmr) is substandaed and to build is gonna cost me more…i am re-arranging my portfolio. I want right now to be liquid but still earning interest at least, and i want to make sure i stop some of the constant decrease in the value of the dollar. What is wrong with taking a leaf out of Warren Buffets portfolio? And i like the idea of holding more gold. Yes, it might go down…but my feeling is the dollar will continue to lose purchasing power as we start printing more money.so thank you Chris and goldcore.
Fingers crossed…i figure if im lucky enough to live another 20 years…i might not lose it all…and i might see a return to some kind of sound money…now i got to think what to do with the other portfolio/broker…

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if “they” the elite know then I would expect they are loading up on Gold now…like China. Consistently and silently until one day gold is revalued and “they” again have tremendous amounts of wealth behind the gated communities. So they win either way and do not really care about much of this discssion.
Has anyone been able to get a handle on the gold purchases of the top 1%?

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Still I believe what you are saying applies to the (top) managers, most just specialise in certain aspects and perform their duties as requested, without caring too much.

My stepmother works for one the biggest bank in the Netherlands and she still believes that when banks loan ‘money’ they take it from peoples deposits…

I told her to simply ask her boss, but that will never happen :rofl::rofl::rofl:

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I agree lowest level customer service people regardless of company dont know much about actual business. Managers are then only slightly above those lowest staff employees. Im not familiar how banks hire and promote to higher levels who know how to run that business, albeit giant banks departments are similar that someone could make career there specializing only in tiny tiny niche of bank activity.
I’d think banks also spread propaganda as they have lawers and marketing department and sales… so if lies about how money is made benefits them somehow, I bet sales folks are using it.
Nowadays banks are highly technical, so even bank director may not know all nittygritty but some software architects who designed it. Usually we humans dont need to know something if it works, only very general principle(which also can be wrong, as long as details dont conflict with our tasks and that principle). Same applies to highest level execs in bank.

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