Silver Price: Attention All Crybabies, Get the Checkbook Out!

The tears stream from the faces of the silver bugs.  Boo-hoo!  Where’s my $100 silver?

Toughen up!  Better yet, go buy a 10-year Treasury, then.  I hear Greek 1-year paper is even better, paying out 150 percent.  What a deal!

Look! The Fed wants you OUT of precious metals.  Understand?  Sign-up for my 100% FREE Alerts

But before you hit that sell button, there are some pretty smart fellas who’ve done a lot of legwork and research on the subject of silver and see $100 as chump change when the dust settles from these manipulating bankers.  Keep the faith.

Physical buyers will break the cartel, and not by Max Keiser’s gang of JP Morgan haters getting together to clean out the COMEX, though Keiser’s laudable efforts will aid the cause of protecting investors from the Fed’s insanity.

No sir.  It will be China who will drive the silver price higher for all silver bugs.  So relax, be patient and enjoy.

One man who provides the silvery details to the China story, Stephen Leeb Ph. D, economist, NY Times best-selling author, and promoter of his latest book, Red Alert, is back to remind silver bugs of the bright future for the silver price in his latest  interview on GoldSeek Radio (GRS).  (Previous BER articles about Leeb and silver, click here and here.)

“Silver is an utterly critical metal when it comes to renewable energies, solar panels; there’s no other game in town,” Leeb told GSR.  “ . . . Silver-based solar is going to play a major part in our energy future . . . China used to export silver, now they’re importing, and they are very big importers.  And they [China] went on to say that they’re not going export any silver what so ever.”  Though China recently relaxed its strict export quota of rare earths, silver was not included in the increased export quota.  And for good reason, according to Leeb.

Who is Stephen Leeb.  He’s not the marquee name in Google’s search results.  He is not as well-known as Jim Rogers; he’s not Marc Faber; and he’s not Peter Schiff.

Leeb is, however, a prolific author and researcher who’s looked at China’s multi-decade economic plans—plans that require a monstrous amount of critical industrial metals, including silver, to fulfill a national, strategic goal of reducing fossil fuels consumption within the People’s Republic.  Leeb predicted the oil price would top $100 when it traded at $27.  Now, he’s more alarmed at what he has discovered about China’s future consumption needs for the new energy commodity, silver.  (See Robert Hirsch interview (audio) on the subject of Peak Oil on Financial Sense Newshour of Dec. 15.)

Leeb’s emphasis on detailed points about silver and its importance to renewable energy projects in China is ahead of the curve from most precious metals advocates—though, Rogers, in a broader sense, has already taken Leeb’s thesis regarding China voracious needs to include almost any commodity.  And according to Leeb (echoed by Jim Rogers), the supply and demand characteristics for silver in the renewable energy sector must include a much, much higher price.

“I do believe [$200] is not an unreasonable target” for silver, Leeb told GoldSeek Radio host Chris Waltzek.

Leeb believes the silver’s industrial usage for renewable energy will greatly outweigh its usefulness as protection against central banker monetary profligacy.  The need for silver will become a global security issue at some point, especially in the US, but the America must “wake up” to, first, address the issue of Peak Oil and publicly recognize the vital commodity for the next decade or two will be silver.

“But the problem is,” Leeb continued, “once it reaches one hundred [dollars], people start getting very, very nervous.  It’s a very, big broad round number and they [bankers and/or government] start taking action; they might consider outlawing the ownership of silver as a monetary metal.”

The future must include breaking from fossil fuels as a source of energy; there’s just not enough cheap oil to go around, and China doesn’t want to take on the U.S. military to get the amount of oil it needs to increase its own GDP, according to Leeb in an earlier interview on Financial Sense Newshour of Nov. 10.

Wind and solar power are the future, and China “gets it,” he said.

“Along with rare earths, which are obviously so vital, so critical, you also have copper, which is on no one’s radar screen as a potentially scarce metal,” Leeb said in his most recent GSR interview.  “And you have silver, which is on some people’s radar screen, but they don’t know if it’s like gold, a precious metal, or whether it’s an industrial metal. Well, it’s both.

“But I do believe that its primary purpose over the next five to 10 years is going to be as an industrial metal; it’s going to be critical to defining our energy future.  And China really does get this.  They’ve written about peak oil and they’ve written about peak coal.  So they’re preparing.”

Shedding some light on the probably plans for China’s $3.2 trillion reserve, Leeb expects a lot of that money as well as future reserves will be spent on stockpiling strategic metals instead of using the cash to build a powerful war machine to match Russia to collectively compete directly against the U.S. and its allies during the remainder of the decade—speculatively speaking, a sort of a Sun Tzu tactic inspired by the book, The Art of War (English translation & Wiki synopsis), which has been reported by several sources as required reading for all Beijing senior officials.

“Their major expenditures . . . they have cited seven industries, of which, the most important, are energy based industries, which they plan to spend, I would guess, nearly $5 trillion to the end of the decade.  That’s the equivalent to two world wars . . . and they’re going to spend that over the next eight or nine years.”

How much silver will be needed during this $5 trillion outlay in renewable energy projects in China?  “Mind-boggling” amounts, according to Leeb.  And as far as price, Leeb steps up his $200 per ounce easy layup prediction to venture into much bigger price levels as possibilities for the white metal.

“There’s no way of saying how high it [silver] will go; it’s dramatically high[er],” according to Leeb, when taking into account, too, central banks opting to inflate out of a debt bubble gone popped.

At $27 silver, the price is “ridiculous,” he said, and added, “I’m a believer of $10,000 gold. . . but I would not be surprised, if we avoid a Depression between now and the end of this decade, I would not be surprised if gold doesn’t touch $10,000.”

Given Leeb’s prediction of a gold/silver ratio touching at least 7.5, that calculates to a silver price north of $1,000 by the end of the decade, making a $200 prediction seem easily attainable, indeed, under a Leeb scenario.  Sign-up for my 100% FREE Alerts

Silver So Critical, “Government may even Ban Public Ownership”

In an interview with GoldSeek Radio Chris Wolzcak, Dr. Steven Leeb, the co-author of the upcoming book, Red Alert: How China’s Growing Prosperity Threatens the American Way of Life, began the interview somewhat loathed in his strong recommendation for owning precious metals at this time, noting that a rise in the price of gold, especially, denotes the dollar’s expected fall from grace—which he said will turn “tragic” to citizens of “our great nation.”

As dire as the future of the U.S. economy may turn out, however, he told listeners the only way out of becoming a victim of the vicious currency war to the bottom is to hold gold.

But, when Wolzcak steered the conversation to the potential for the silver price during Leeb’s expected continuation of the precious metals rally, Leeb raised his level of enthusiasm a notch, and stated, “silver is going to triple-digits, I mean, I think there’s little doubt of it, because, you know, it’s a monetary metal with probably a longer history than gold’s.”

But here’s where the Leeb interview went beyond the overcooked reasoning behind silver’s expected rise as a hedge to the world’s currencies debasement war.  Leeb continued, “I emphasize this, [silver is] a critical . . . the best thermal conductor in the world, the best electric conductor in the world, and one of the best reflectors in the world.”

“And as a result, silver is a critic ingredient in solar panels. . . so silver is critical to making the transition to renewable energy . . . in computers . . . it’s critical in many, many areas,” he added.  “So silver has the potential to truly go exponential.”

Leeb builds a compelling case for owning silver by citing China’s plan to spend up to $1 trillion in renewable energy projects each year for the foreseeable future, which will destroy replenishing stocks from mining and recycling activities.  He then surmises that alarms will trip in Washington to a point of near panic level.

And World Gold Council data back Leeb up. The WGC reported China imported 3,500 tons of silver in 2010, and that’s in addition to India’s growing demand (and China’s) for the metal as an alternative to gold’s demand as an inflation hedge.  Further increases of silver imports, not only into China, but into India, too, could choke silver supplies a lot faster than people now think.

“I mean, once the Chinese build out their solar energy, and they haven’t up to this point, but they will, they’ll start accumulating silver, added Leeb.  “In fact, I wouldn’t be surprise right now if they weren’t accumulating a lot of silver.”

“And my prediction is that silver will go high enough, and if we recognize it’s so critical, that the government may even ban public ownership of it, like the government banned public ownership of gold during the Depression,” Leeb continued.  “I think, well, silver over $100 per ounce—I almost think it’s inevitable, that silver hits three digits to be honest with you.”

And it gets better for the silver junkies.  Leeb said, though the price of silver has soared nearly ten-fold during the bull market, mining activity during the decade-long run has been abysmally low, because, he said, silver has begun to move into the category of rare-earths.

And because of the powerful mismatch between expected world supplies and demand for gold’s kissing cousin, silver will become increasingly more rare, according to Leeb.  The Chinese, he speculates, “know they’re going to need more than there is to build out their solar energy.”  As crazy as the fundamentals sound for the outlook for silver, he said, “It’s documentable.”